4.7. SR 12-19-2016 EGty1� ,.,�� Request for Action
River
To Item Number
Mayor and City Council 4.7
Agenda Section Meeting Date Prepared by
Consent December 19, 2016 Amanda Othoudt,EDD
Item Description Reviewed by
Purchase Agreement Amendment between E&R Cal Portner, City Administrator
Investments,LLC and the City of Elk River Reviewed by
Action Requested
1. Approve,by motion, an amendment to the purchase agreement between the City of Elk River
and E&R Investments,LLC for the purchase of real property located at the intersections of
Highway 10,Joplin Avenue and Business Center Drive.
2. Adopt,by motion, a resolution authorizing conveyance of several properties located at the
southeast corner of US HWY 10 and Joplin Street.
Background/Discussion
On November 2, 2015, the City Council approved the sale of real property located at the intersections of
Highway 10,Joplin Avenue and Business Center Drive to E&R Investments,LLC.
The developer is proposing up to three commercial/retail buildings on the site. Staff continues to work
through some of the details leading up to a December 291h closing on the Joplin Property project with
Ebert Construction.
An amendment to the purchase agreement addresses the revised legal descriptions in order to provide
additional right-of-way for Business Center Drive to be retained by the city.
Financial Impact
None
Attachments
■ City Council Staff Report dated November 2,2015
■ Executed Purchase Agreement between the city of Elk River and E&R Investments
■ Purchase Agreement Amendment between the city of Elk River and E&R Investments,LLC
■ Resolution
■ Exhibit A
■ Exhibit B (distributed Monday)
POWERED 6T
Template Updoted 4/14 INAWRE1
EOty1 ,., Request for Action
River
To Item Number
Mayor and City Council 4.3
Agenda Section Meeting Date Prepared by
Consent November 2, 2015 Amanda Othoudt,EDD
Item Description Reviewed by
Purchase Agreement between E&R Investments, Cal Portner, City Administrator
LLC and the City of Elk River Reviewed by
Action Requested
Approve,by motion, a purchase agreement between the City of Elk River and E&R Investments,LLC
for the purchase of real property located at the intersections of Highway 10,Joplin Ave, and Business
Center Drive.
Background/Discussion
Staff has worked with a developer on a complex land assembly project that includes four parcels. The
city owns two parcels while Sherburne County and the heirs of Hogan A. Wingness and heirs of Harry
and Sue Lakoduk own the others.
The developer proposes up to three commercial/retail buildings on the site for a national client with a
drive thru, a regional client, and an opportunity for local business development in a multi-tenant building.
The Council approved the Letter of Intent to purchase real property and authorized a property appraisal
on June 15, 2015. The purchase agreement reflects the appraised-value purchase price and the seller's
acquisition costs,including,but not limited to, appraisal fees, court filing fees, and attorneys' fees.
Purchase agreement between the city of Elk River and E&R Investments,LLC
Purchase Price: $81,000
Earnest Money: $1,000
Escrow:10,000
Upon execution of the purchase agreement, the developer will deposit$10,000 into an escrow account
for reimbursement of the city's acquisition costs. Any remaining funds will be returned without interest.
The developer is required to deposit additional escrow if the acquisition costs exceed $10,000.
Financial Impact
None
Attachments
Appraisal dated 7/21/2015 prepared by Nagell Appraisal& Consulting,Inc.
City Council Staff Report dated June 15, 2015
Parcel Exhibit
Draft Survey
Purchase Agreement between the city of Elk River and E&R Investments,LLC
POWERED 6T
Template Updoted 4/14 INAWRE1
Report Type
Appraisal Report
Effective Date
7/21/2015
Client Submect Propert
RiverCityofElkCommercial
Amanda • Business0. Orono PRiver, MN 55330
Elk River, MN 55330
s
1U
75 X28-0102
ti 75-597-0115
75-132-2428
Prepared By:
Molly J. Lewis, Appraiser
75-,32310,1 4 William R. Waytas, Appraiser
75-1323106
F
Nagell Appraisal & Consulting, Inc
12805 Highway 55, Suite 300
File # Plymouth, MN 55441
G1507003 Tel: 952.544.8966/ Fax: 952.544.8969
Nagell Appraisal & Consulting
12805 Highway 55, #300 Minneapolis: 952.544.8966
Plymouth, MN 55441 St. Paul: 651.209.6159
Established in 1968 Central Fax: 952.544.8969
City of Elk River July 28, 2015
13065 Orono Parkway
Elk River, MN 55330
Attn: Amanda Othoudt
In accordance with your request, an appraisal report has been made on the following described property:
Subject Property: Commercial Land
NEC of Joplin & Business Ctr Dr
Elk River, MN 55330
The property is legally described herein. The appraisal assumes that the property meets all current
environmental standards. The appraisal analysis and conclusions are subject to certain limiting conditions
and assumptions described herein.
Final Value Opinion 81,000
July 21, 2015
Appraised value reflects real estate only. No business value, FF&E or personal property is included.
Our company has 12 employees, has been in business since 1968 and has sufficient knowledge,
education, experience, resources and/or contacts to competently complete this assignment. The
accompanying report contains data secured from my personal investigation and from sources considered
to be reliable; however, correctness is not guaranteed. To the best of my knowledge and belief, the
statements contained in this report are true and correct. Neither my employment to make this appraisal, nor
the compensation, is contingent upon the value reported. This report has been prepared in conformity with
the code of professional ethics and standards of professional appraisal practice of the Appraisal Institute
and appraisal standards set forth by Uniform Standards of Professional Appraisal Practice.
Sincerely,
Molly J. Lewis William R. Waytas
Certified General MN 20391975 Certified General MN 4000813
www.nagelimn.com
TABLE OF CONTENTS
General Information Page
Summary of Important Facts and Conclusions 1
Introduction 2
Intended Use of Report, Date of the Appraisal 2
Scope of the Appraisal 3
Property Rights Appraised, Property Components Appraised 4
Identification, Real Estate Taxes 5
Subject Sales, Building & Lease History 6
Descriptive Data
Regional Data 7
Regional Map 18
City & Neighborhood Description 19
Neighborhood Map 22
Market Conditions Overview 23
Site Description 26
Zoning Description & Map 27
Flood Map 28
Plat Map 29
Aerial Plat Map 30
Aerial Map Surroundings 31
Subject Photographs 32
Valuation
Highest and Best Use 34
Cost Approach 36
Income Approach 36
Sales Comparison Approach 37
Reconciliation 48
Exposure/Marketing Time 49
Definition of Market Value, Environmental & Building Conditions 49
Certification 50
Extraordinary Assumptions & Hypothetical Conditions 51
Assumptions and Limiting Conditions 51
Qualifications 54
Addenda 57
SUMMARY OF IMPORTANT FACTS & CONCLUSIONS
General Information
Street Address NEC of Joplin&Business Ctr Dr City/State/Zip Elk River, MN 55330
County Sherburne Report Type Appraisal Report
Current Property Use Vacant Land Effective Date 7/21/2015
Proposed Property Use Commercial Dev. Inspection Date 7/21/2015
Property Owner City of Elk River Report Date 7/28/2015
Interest Appraised: Fee Simple Prosp Date/Completion N/A
Site Information
Useable Site Area (SF) 32,670 Topography/Shape Mostly Level /Very Irregular
Gross Site Area (SF) 103,237 Low Yes
Building Improvements None Frontage/Access Average
Flood Zone/Map Appears No;See Flood Map Visibility Above Average
Utilities Assumed Available Location Rating Average
Governmental Information
Assessing Authority Sherburne Current Zoning BP, Business Park
Property ID# 751323101 & 755750010 Land Use Plan Highway Business
Current Tax Year Payable 2014 Current Use Permitted? Yes
Assessor's Value 71,900 Zoning Change? None Reported
Taxes Payable 0 Zoning Variance None Reported
Delinquent Taxes?None Noted Tax Grievance None Noted
Assessed Value
The subject is tax exempt. The assessed value appears in line with the
market given the property characteristics.
Highest& Best Use
As Vacant
Commercial Development
Extraordinary Assumptions/Limiting Conditions Yes; See Rear of Report
Cost Approach Not Applied Not Applied
Income Approach Not Applied Not Applied
Sales Comparison Approach 81,000 2.48 per SF
Final Value Opinion 81,000 2.48 per SF
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INTRODUCTION
This report reflects the data found and the opinions concluded from an appraisal of a property
located at the Northeast Corner of Joplin Street and Business Center Drive in Elk River,
Minnesota. The property is a vacant land parcel guided for commercial development.
VALUE TYPE, CONDITION & STABILITY OF PROPERTY
Market Value
Type of Value:
See Definitions Section for Market Value Defined
As-Is Value
Condition of Value:
As of the effective date of the appraisal.
Stabilized
Stability of Property:
The subject is considered vacant land.
INTENDED USE OF THE APPRAISAL
Decision-Making
This appraisal assignment was requested by the named client for its sole use. No party,
Intended Use: other than the named client, may use or rely upon any part of this report without the prior
written authorization of both the named client and the appraiser. This report is not valid
unless it contains the original signatures in blue ink. Any unauthorized third party relying
upon any portion of this report does so at its own risk.
Intended User: City of Elk River
City of Elk River
Attn:Amanda Othoudt
Client:
13065 Orono Parkway
Elk River, MN 55330
DATES OF APPRAISAL
Effective Date:7/21/2015
Inspection Date: 7/21/2015
Date of Report: 7/28/2015
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SCOPE OF THE APPRAISAL REPORT
USPAP defines Scope of Work as: The type and extent of research and analyses in an
assignment.
For each appraisal, appraisal review and appraisal consulting assignment, an appraiser
must:
1) Identify the problem to be solved,
2) Determine and perform the scope of work necessary to develop credible
assignment results; and
3) Disclose the scope of work in the report.
1) Provide a reasonably supported value opinion as it relates to the intended use & scope.
Per assignment request (see addenda for engagement letter), the following degree of
2)
research and analysis has been made. The narrative format used is an Appraisal
Report, which is intended to comply with the reporting requirements set forth under
Standards Rule 2-2 of USPAP. See individual approaches for further detail.
The scope of work for this appraisal includes:
a) Property Identification: Public record, plat maps, zoning maps and aerial
photographs were used to identify the subject property.
b) Property Inspection: A viewing of the subject property and neighborhood by the
appraiser. Financial factors: The appraiser requested from the property
representative income, rental and expense information on the property. Physical
factors: The appraiser requested from the property representative building/site
plans, and property issues. Based on property viewing and conversations with the
client, city and county officials. Lot size is based on county information. Economic
Factors: Consisted of gathering of information from market experts, city and/or
county offices, and internet about the region, community, neighborhood, zoning,
utilities, and any pending projects in the area that may affect the subject property.
3) •
c) Extent of Data Researched: Sales data of competing properties within the
subject market area were given primary consideration. The most relevant data is
used in this report. Sources include, appraiser data files, assessor, internet,
developers, agents, MLS, periodicals, in-office library, etc. In addition, during the
course of appraisal practice and of this appraisal process, the appraiser has had
ongoing discussions with market participants (buyers, sellers, property managers,
real estate agents/brokers, appraisers, etc.) and/or viewed market data in relation
to how the current real estate market may impact the subject value. The appraiser
has not researched the title or ownership records.
d) Type and Extent of Analysis Applied at Opinions or Conclusions: An extensive
review of market data was performed. The most recent, similar and proximate data
has been used. The data used will be adjusted on a grid. Reasonable and
appropriate collection, verification, analysis and viewing has been performed in the
valuation approaches, given the purpose and intended use of the report. A final
value opinion will be discussed and correlated.
The data used was obtained from sources considered credible, yet its accuracy is not
guaranteed. If found otherwise the value could differ.
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PROPERTY RIGHTS APPRAISED
Real property ownership consists of a group of distinct rights. There are two primary property
rights, Fee Simple and Leased Fee (as defined by The Appraisal of Real Estate, 13th Edition,
Appraisal Institute).
Fee Simple Interest: Absolute ownership unencumbered by any other interest or estate,
subject only to the limitations imposed by the governmental powers of taxation, eminent
domain, police power, and escheat.
Note: This would typically reflect an owner-occupied property. When the property rights
appraised are the unencumbered fee simple interest of the real estate, the appraised value is
subject to normal easements for drainage, public streets and utilities, if any. The effect of any
existing mortgage or delinquent taxes on the subject property has not been considered in this
appraisal.
Leased Fee Interest: The ownership interest held by a lessor (landlord), which includes the
right to the contract rent specified in the lease plus reversionary right when the lease expires.
The lessor's interest in a property is considered a leased fee interest regardless of the
duration of the lease, specified rent, the parties to the lease, or any of the terms in the lease
contract.
A leased property, even one with rent that is consistent with market rent, is appraised as a
leased fee interest, not as a fee simple interest. Even if the rent of the lease terms are not
consistent with market terms, the lease fee interest must be given special consideration and
is appraised as a leased fee interest. (The Appraisal of Real Estate, 13th Edition, Page 114)
The subject is vacant land. As such, the property rights appraised are the Fee Simple
Interest of the real estate.
PROPERTY COMPONENTS APPRAISED
Real Estate: The appraised value includes the real estate value opinion. The methods
utilized for the real estate valuation include:
Sales Comparison Approach
FF&E: The appraised value does not include FF&E or personal property value.
Business Value: The appraised value does not include business value.
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IDENTIFICATION
Address:
NEC of Joplin & Business Ctr Dr
Elk River, MN 55330
County: Sherburne
PID: 751323101 & 755750010
Legal: Lengthy; See Addenda.
Fee Owner: City of Elk River
Interest Appraised:Fee Simple
Report Type:Appraisal Report
REAL ESTATE TAXES
Taxes, per County Records
Payable 2015 Payable 2016
Tax 0.00 N/A
Tax Ratio 0.0% N/A
Assessments, Fees, Other 0.00 N/A
Total Tax&Assessments 0.00 N/A
Delinquent Taxes None Noted
Tax Grievance None Noted
COUNTY ASSESSOR'S VALUE
Payable 2015 Payable 2016
Land 71,900 71,900
Building 0 0
TOTAL 71,900 71,900
SF (useable) 2.20 2.20
The subject is tax exempt. The assessed value appears in line with the market given the property
characteristics.
Typical Tax Ratios by Property Type
Commercial retail,office, industrial, hotel,other,etc. 1.5%-4.0%
Residential multi-family, apartment,etc.) 0.9%-1.5%
Single-family dwellings 0.8%-1.5%
The appraised value given in this report assumes any/all special assessments, and/or liens are paid in
full and that there are no delinquent taxes, deferred taxes, fees, payments, association dues, etc.
Should it be found that any of these exist the amount should be deducted from the appraised value.
Appraiser did not research these items; typically, a title search would reveal any of these.
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SUBJECT SALES & BUILDING HISTORY
Listing History No listings for the subject property.
Sale Price: N/A
Sale Price/Acre: N/A
Sale Date: N/A
Buyer: N/A
Sales History: Seller: N/A
Terms: N/A
Source: N/A
No known or reported sales of the subject property within the past 3 years.
Building History: None;the subject is vacant land.
Lease History: None;the subject is vacant land.
Leasehold Interest: None;the subject is vacant land.
Association Dues:None;the subject is not part of a common interest community.
6 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
REGIONAL DATA
Metro Area
Minneapolis-Saint Paul is the most populous urban area in Minnesota, and is composed of
186 cities and townships. Built around the Mississippi, Minnesota and St. Croix rivers, the
area is also nicknamed The Twin Cities for its two largest cities, Minneapolis and Saint Paul.
Saint Paul is the second largest city in Minnesota, as well as the state capital.
The area is part of a larger U.S. Census division named Minneapolis-St. Paul-Bloomington, MN-
WI, the country's 16th-largest metropolitan area, composed of eleven counties in Minnesota and
two counties in Wisconsin. This larger area, in turn, is enveloped in the U.S. Census combined
statistical area called Minneapolis-St. Paul-St. Cloud, MN-WI with an estimated population of
3.5 million people in 2006, ranked the 13th most populous in the U.S.
In both of the fully developed central cities--Minneapolis and St. Paul--the population has
declined due to smaller household sizes, yet growth in other areas of their counties has been
more than offsetting. Below is detailed where this growth has occurred:
POPULATION
Census Census Census Forecast Growth Growth
County 1990 2000 2010 2015 2000-2010 2010-2015
total annual total annual
Hennepin 1,032,431 1,116,200 1,152,425 1,165,830 3.3% 0.3% 1.2% 0.2%
cu
Ramsey 485,765 511,035 508,640 491,820 -0.5% -0.1% -3.3% -0.7%
Dakota 275,227 355,904 398,552 437,520 12.0% 1.2% 9.8% 2.0% m'
N
Anoka 243,641 298,084 330,844 374,350 11.0% 1.1% 13.2% 2.6% 3N
Washington 145,896 201,130 238,136 257,760 18.4% 1.8% 1 8.2% 1.7%
Scott 57,846 89,498 129,928 186,820 45.2% 4.5% 43.8% 8.8%
Wright 68,710 89,986 124,700 159,640 38.6% 3.9% 28.0% 5.6%
ci
Carver 47,915 70,205 91,042 114,870 29.7% 3.0% 26.2% 5.2%
Sherburne 41,945 64,417 88,499 119,040 37.4% 3.7% 34.5% 6.9% 0
Chisago 30,521 1 41,101 53,887 67,880 31.1% 3.1% 26.0% 5.2%
Isanti 25,921 31,287 37,816 51,730 20.9% 2.1% 36.8% 7.4%
Total 2,455,818 2,868,847 3,116,653 3,427,260 9.8% 1.0% 10.0% 2.0%
Overall, the area has experienced moderate to good income growth. Annualized income
growth of 2.5% to 3.5% is consistent with national averages.
MEDIAN HOUSEHOLD INCOME
Census Estimate Growth
County 2000 2012 2000-2012
total annual
Hennepin 51,711 63,559 22.91% 1.91%
Ramsey 45,722 53,152 16.25% 1.35% m'
N
Dakota 61,863 73,288 18.47% 1.54% H
Anoka 57,754 69,916 21.06% 1.76%
Washington 66,305 80,747 21.78% 1.82%
Scott 66,612 84,571 26.96% 2.25%ci
Wright 53,945 70,930 31.49% 2.62% 2
Carver 1 65,540 1 83,275 27.06% 2.26% 0
Sherburne 57,014 72,041 26.36% 2.20%
Chisago 52,012 66,592 28.03% 2.34%
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Regional Data -continued
Economic Trends
Interest rates for a typical 30-year residential mortgage are around 4-5%. Commercial rates
are around 5-7%. Rates are expected to be relatively stable over the next year.
The current state of the macro economy (international, national, state, etc.) is fair since its
peak in 2006, with ongoing signs of stabilization. "The Great Recession" is considered to
be over. However, recovery timing is uncertain, and could span several years. Some
property types experienced significant decline, particularly special use, recreational, high-end
and outlying development properties. Currently, most property types are experiencing
relatively stable values. Certain market segments/areas are experiencing growth, particularly
the multi-family residential market. Although well diversified, the TCMA and surrounding
Minnesota economy is not immune to the recent soft/declining trends of the overall economy.
Minnesota Index and U_S_ Index
17E1.0
165.0
160.0
155.0
150.0
145.0
140.0
135.0 MN -tl,S_
130.0
125.0
rn
Source:Minnesota DEED
Minnesota's index plunged along with the national index during the worst months of the
recession but bottomed out earlier and dropped less than the national index. Minnesota's
economy seems to be recovering at a similar rate as the national index.
f
Economic
The rerlional economic climate is boomina 5.0 5.3 21? 21.1 17.4
The regional economic climate is level 23.8 25.3 23.1 9.9 17.8
The regional economic climate is mode-ately positive 48.8 55.8 40.4 61.2 52.6
Tlieregiontal ec:onorniCclimaleis slagiidnl 10.0 3.2 1.9 0.7 1.5
The regional economic climate is weak 12.5 9.5 13.5 7.2 11.1
Source=CCIM Institute.NATIONAL ASSOCIATION OF REALTORS'
8 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Regional Data —continued
TWIN CITIES LABOR FORCE, EMPLOYMENT UNEMPLOYMENT
0 EMPLOYMENT •LABOR FORCE UNEMPLOYMENT RATE
L9 8
2 &8 AW —
1.8 5-3
3
1.75 14.8 A I
1.7 R 7 3.4 3.0 —
0 w
11. 5 2 d
ua
1.6 P CL
Nov'04 wpe'05 Nov% Nov'07 Nov'OB faa+`09 NaV110 raov'11 Ncy'12 wN'I3 N(N'14
So+jrr'r+ngL-wa Nprtmcrm of Empcym m and ftommic-C'F**oDTe--
Source: Northmarq July 2014
Over the past ten years, unemployment rates have gone from near historical lows in 1999 to
at/near historical highs by year end 2009. Overall, unemployment has gradually decreased
since 2009.
Unemployment Rates
12.0
11.0
1{1.0
9.0
8.
I
IL0
7.0
6-0 em
5.t}
4.0 i'd 1 17% 11A L Ir WJVM
3.0 h rl I I"
A
I
2.0
1.0
U.{1
p M1 pp pp r N ['] lfY ib r td di O r N M M iO fx M M O r N M L'] M M W M O N C2 xt L2nnnnooco000ocommoommrnrnmrnrnmmmrnmo000000000
rn m rn rn rn m rn en en os m rn Fs rn Fn rn m rn F m m m rn m R 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0rrrrrrrrrrrrrrrrrrrrrrrrNNNNNNNNNNNNNNNN
us
Source:DEED LaborMarket Information Offce Minnesota
Loco kee UnemploynnentStatistics f L4J$
The Minnesota unemployment rate is typically lower than the national rate
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 9
Regional Data —continued
METROMULTI-FAMILY TWIN CITIES RENTANDVACANCY
AVERAGE MONTHLY RENT VACANCY
1,200
9
1,000
1,007 -_
8
7
800
6
600 5 1—
Z
4 Q
400 3 Q
2.3% 7
Q 200 w
O
1
p w
0 1L.
04 05 '06 '07 108 109 '10 11 1 '12 113 14
e•.M ara er e Advi scrs
Source:Northmarq January 2015
After years of decline, multi-family rates are starting to stabilize somewhat.
RETAIL ABSORPTION, •
ABSORPTION CONSTRUCTION VACANCY
55 II
10.1
5 10
4.5 8.3 9
4
7.9
8
3.5
6.9
6.3
7
3
3.1 3.105.7
6
Z
2.90
O 2.5 5
J 2.04
J 2 4
Z Z
1.5 I. 3 d
LU 0.93
I
E
U
LU I 074 2 7
Lu 5
O.
0 051
I
I—
0.17 0.18 Z
LUQp0U
CY (0.05)
cn (S)
0.20)
1) wct
104 105 '06 '07 108 109 110 '1 1 '12 13 '14
Sc r e:Cls a- 1J 01eld
Source:Northmarq January 2015
After years of decline, retail rates are starting to stabilize somewhat.
10 Nagell Appraisal&Consulting 1 952-544-8966 www.callnagell.com
Regional Data -continued
OFFICE ABSORPTION, •AND VACANCY
ABSORPTION CONSTRUCTION i VACANCY
5 18:3 196 _ 19.9
2018.0 17.416.1 15.2 15.2 15.9 16.6
4 Ib
Z
3 12
O
J
Z
2 8
1.47 1 35 Z
0.95 0.97 4
Q
I
3 0.I b
0.33 0.48 0.62 U0.52
0.18
0.52
0.27 Q
LL 0
0.00 0.00 0.02 0.00 E 0.00 0
LU
015)
0.00) Z
Lii
I) 4) U
CLUY1.83) 8)
04 105 '06 '07 08 109 '10 '1 1 '12 '13 '14
N kefield l Nortl N[ -
Source: Northmarq January 2015
Office vacancy is still the highest of the four major building sectors. New construction is
typically limited when vacancy is over 10%. Although current vacancy is high, vacancy has
been gradually trending downward over the past four years.
INDUSTRIAL ABSORPTION, •ANDVACANCY
ABSORPTION CONSTRUCTION VACANCY
5 20
Ib.4 16.1
4
15.6
177,
15.2
16
13.2 12.9 128
11.8 12.a
3
2.52 9 12
v, 2.16
Z 2 1..92
O 1.24 1.09 9 1.04 1.01
0.61
4 ~
0.43
0.27 0.30 Z
0.04 0.00 0.00
0 Q
0 J
Ld Q
1) 7Fj 4)
Lu Z
Q (2) 8) U
d (2.38)
12)3) '
04 105 '06 '07 08 109 0 '1 1 '12 '13 '14
Source. _c ar&Wakefield!NorthMarq
Source: Northmarq January 2015
The industrial market continues to show signs of recovery with the larger drop in vacancy of
the four major building sectors. The vacancy rate is sub-10%, which has been met with
increasing new construction around the Twin Cities Metro Area.
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Regional Data —continued
SALIESVOLUMEAND CAPITALIZATION F
Twin Cities Office,Industrial, Retail Properties
M MARKETHOLUME s CAP RATE
5 11
45 103
S4- 10
33 43
3 7 9
V5 2.5 8.4
8.2 8S
Z
2 7 7.8 B
J 755
J
IS 1
7.3 7.3 75
7.0
W $1 6.7 -46 7 z
OS 6.5 d
0 6 rL
JUNE'04 JUNE'05 JUNEW JUNE'07 JUNE'08 JUNE'09 "U"E'ID JUNE'!I JUNE'17 JUNE'13 JUNE'14
rad xsl ArW t,s Im
In general and for most properties types, capitalization rates have been steadily declining
since 2010. Recent data is showing stabilizing rates.
The Twin Cities commercial real estate market enjoyed continued success in first half 2014
as the vacancy rate remained stable at 11.8%, which is equal to pre-recession levels.
Further, the market recorded 384,000 SF of positive absorption, pushing activity into the next-
tier cities for land, residential and industrial sectors.
Commercial real estate investors are increasingly coming to the Twin Cities in search of
yields higher than those available in larger, more expensive top tier markets. Investor
demand in the Twin Cities continues to chase multiple offerings in the market. The most in
demand product types include class A core office buildings in downtown Minneapolis and
select suburban locations. Capital is also chasing apartment properties, grocery-anchored
retail centers and modern industrial distribution buildings with minimal office finish.
Outlook: The U.S. economy added 288,000 jobs in June, making it the fifth consecutive
month that employment growth has exceeded 200,000. This marks the first time since 1999-
2000 that the U.S. economy has generated such sustained strong job growth. This is great
news for the commercial real estate sector. More than 2.9 msf of space is expected to be
added to the overall market in second-half 2014 thanks to multiple industrial, medical office
and retail projects currently under construction coming on line. If the majority of the
completion dates are met, the Twin Cities will enjoy its highest historical construction level
since 2007.
Source: The Compass, Northmarq, July 2014
12 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Regional Data —continued
2414 Annual Report on the Twin Cities Housing Market
QUiGk Facts MINNEAv4LIT AREA A,So[ialion
FlonkilgsimIudo geogrsFieawrdi i5mIK or more.CLutbs,frwnft6and hinrlcerwlis ncigttcrtwods we rmtincludod. l REA LTO RS'
New Listings I Pending Sales
52.915
68.884 7`'.':_:- _. .-:49,360 49••,510
x5,910 42.059
39.193
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
TDp5 Areas-Change in New Lisdngs from 2415 Top 5Awn:Change in Pending Sales iron 2013
Saint Francis z 81.5% Arnbrota 61.1%
OeIhVood 53.856 Circle Pines 53.0%
Zumbrota 46.796 Li3ydala 40.996
Watertown 4x:156 Newport 38.246
Tonka Bay 44.7% Wayzata 34.2%
Button 5 Areas:Mange in New Listings from 2013 Battem 5 Areas:Change in Pending Sales iron 2013
Lauderdale 222% Long Lake 37.5%
Saint Bonifacius 23-6% Greenfield 40.546
Loretta 33-3% Spring Park 47.1346
Stacy 37.3% Grant 57.1%
assert 426% Lauderdale 80.846
Closed Sales Inventory of Homes for Sale
At the end of the yees
5315 22,575
4x,914 41}.541
38,287
41.9ox 17,472
13.050 12.748 11.22
22-416
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Tap 5 Areas:Change in Closed Sales tram 2013 Top 5 Areas:Change in Holes for Salo from 2013
Wayzata 37.746 Excelsicr 250.09x'
Maple Lake 33.91/. Lauderdale 100.0%
Zumbrota 29.546 or ka ay 80.046
Circle Pines 27.89/. Spring Park 75.046
Mayer 22.246 Sion ng Lake Park 83.6%
Button 5 Areas Change in Closed Sales fron 2013 Bottum 5 Areas Change ht gemos far Sale from 2013
Lakeland 35.4% Ztrrlbrota 44.93::
Marina on St.Croix 3a1% Satire Paul-Wcgt Seventh 46.2%
Lauderdale 41.9% Stacy 51.8%
Greenfield 44-7% Saint Paul-Como Park 53.8%
Spdng Pads 52246 Minneapolis-Phillips 19.294
C.,,t 2IMMdid®1—narraderML&laarercdby 1OK Aesearch"Ming. 3
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 13
Regional Data —continued
20141 Annual Report on Vie Twin Cities Housing Markt
Quick Facts MINNEAPOLIS AREA Assodaiium
lanki}gs rdude geograx es ms-,h 15 a1w.or more.Umbes•tow E ps snd Mnn apoIisr&gNxd*Ddeare notineluded. f REALTORS'
Median Sales Price A {overage Sales Price
192,000 $
205.739 236285 $
252,6A=.
51 9.9 7fY 147,9[9(9 211,338 $.
193.341 $
210.726
A 50,000
2010 2011 2012 2413 2014 2010 2011 2012 2013 2414
Tug 5 Areae Change in Median Sales Price from 2013 Top 6Arsas:Change in Avg.Sales Price from 2413
Wayzata 60.3% Wayzata 48.3%
Spring Park 63.796 Lilydale 47.6%
Dollwood 50.7% Greenfield 43.6%
Cologne 44.996 6ellwood 42.6%
Greertfeld 41.5% Lakeland 40.0%
Bottom 5 Areas:Change in Median Sales Puce from 2013 Button 5 Areas:Change in Avg.Sales Prins trum 2013
Arden Hills 1&1% GrocmNrod 12.8%
Greemv4od 1&996 Loretto 14.596
Dayton 24.3% orowoed 15.896
Loretto 21.596 aaephaven 16.8%
Lauderdale 32.7% Lauderdale 17.2%
Cumulative Days on Market Until Salle Percent of Original List Price Received
647
95.7%
949
A 3C1
117
92.3%
83 78
1% +3896 .2296 :.
2WO 2011 2012 2413 2014 2010 2011 2012 2013 2014
Tog 5 Aram Change in Cumulative Days on Markel from 2063 Top 5Areas:Change in PCL of Ong.Price Received from 2013
airchwood Village 74.1% Marine on St.Croix 13.695
Dayton 22.2% BirohwoodVllage 5:9x5
Saint Paul-StmmitHill 16.596 Norwood YoungAn2rica 5.2%
Careoran 13.696 Bayport 4.0%
Paribault 12.756 Osseo 3.845
Bottom 5 Aram Change in Cumulative Days an Markel from XIS Button 5Areoit Changa it Pee of Orig_Price Rec*d from 2063
Mayor 49-0% 1 owth10rt 3.7%
OSsw 40.4% Laudecdala 3.6%
Lake Elmo 49-5% C*ato 5.195
ognrs 50.8% Excelsior 5.3%
ockford 61.4% Grant 6.6%
0--t-d.-,yy e,2015.M dotle ern 1,.t..rML&Powered by 1 On P--h and Mario n
14 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Regional Data —continued
2914 Annual Report on the Twin Cities Housing Market
Property Type Review IFt gLIS AREA R€setlel or
lianac.gs,rcluda gmgmPacs a-h 16mi cr maE LCULCa,mw m,x and hfnr pnlis r>AHMmodnare notinducted. f REALTORS
Top Areas:Townhouse-Und®Attached Market Share in 2014
81 f Twin C ias RegiIm 24496
f Minneapolis-Central 99-9%
Saint Paul-Downtown 97-696
Average Cumulative Days on Average Cumulative Days on Lilydale a9-756
Market SinglL Family Market Townhouse-Cando Minneapolis-University 75.1%
Hugo 55.4%
SprDaysonMarketUntilSaleMi
ng Park 54
Cumulative Da Y M-..:: :-= II as 54..3563%
Thad...—r 1dnq 12-reonth v ge[a h dm paie.M.-.--_,_ :- )Gun-Isle 5i 556
5&yle-F.rrr —icrx m—C-16 LL.:::--J31a 5o-496
m Salr:.maul-St Arit"Pad[ 48-496
I
l
I I
Wayzata 48-496
m --t— -- ---t----t----
Apple Valley 44-496
Vadnais Heights 43.7%
Hopkins 42.7%
SaimPaul-Summit-University 42-756
Little Canada 41-596
m ---- ------ Inver Grove Heights 41596
I I
Burnsville 41.0%
Oakdale 40.5%
m
I I I Woodbury 40-496
I I Maple Grove 4o-a%
m ---- ---- ---- -- Eden Prairie 2969GYr—
I I I Rowninou rr 38.3%
I I I Chart m s-i- 37396
i-win 1-011 1-2512 1-mg 1-MIA Eagan 37.5%
6.6% 8.2%9J.6"lfv 196.0'°10
Orte-Year Change in Price one-Year Change in Price Pct.of Ong.Price Received Pct.of Ong.Price Received
Singla-Family Detached Townhouse-Condo Attached Single.Family Detached Tmnhouse-Cortin Attached
Median Sales Price Percent of Original List Price Received.
E2010 02011 m2012 m2613 2314 r_na m3611 m2]12 X2013 2615
S=K
969%32t7K 92.r•#
9'..7 -..... ...
z..
51.3.1E oe-,m 56.3%
3187K85216'
MK
1ir671L 31e8K
11'k'
K11
514 16
Sr13K3125K
11
Single-Family Detached Townhouse-Condo Attached Single-Family Detached Townhouse-CondoAttached
cursrt d.r.,Jery 5,2RP15.ew ddn herr,rt y o:;:-., :_r 1 nK a drsh„d r.ert,c,;
Nagell Appraisal&Consulting 952-544-8966 1 www.callnagell.com 15
Regional Data —continued
2014 Ann uaI Report on the Twin Cites Housing Market
Distressed Homes Review MINNEAPOUS AREA.A-6I—
la o ro s r.-133.}--q Vr K-n x r _-n if-um e res &,O hl s-y-_MrnespDiIs m4yr8atrDow.3rew lnd"J f REALTORS'
Top Ames:Uistrwwd Market Share in 2414
15.5% 41 .8% Saaint
P -Daaygt'
onn'
s Bluff 1A
stecy 34.4%
Percent of Closed Sales in Cw*-Veer Change in Sales or Suint Paul-Thomas-Dale 34.D%
3094 That were Distressed istsssed Properties Rush City 32.896
Spring Lake Park 31.996
Seim,Paul-Payne-Phalan 31296
Percent of Sales That Were distressed
Mira 31.
0%mMinneapolis-Caden. 31.fl96
Brooklyn Center 30.996
BC AY
Marine on St.Crom 30.8%
47.9% Saint Paul-+'eater Eam Side 30.896
Princeton 29.$96
Saint Paul-Banle Creek 1 Higkma d 29.896
Saint Paul-North End I South Como 29.1%
Minneapolis-Near Nonh 29.0%
3B: Greenfield 28.6%
0EIERO 28.13%
14.596
Pine City 28.6%
Saint Francis 28.896
Altertuille 28.4%
North Branch 27.9%
Harr.nxd 27.9%INS South Saint Paul 27A%
2010 2011 2012 2013 2014 Newport 27.9%
Lots&-& 27.096
37.2% 10.5% 17.0% 27.4%
Foix-Year Change in Price Four-Year Change in Price FCur-'Year Change in Prise Four-Year Change in Rice
All Ftopertiea Traditional Propubes Shan Sales Foreclusures
Median Sales Price m20r, 2012 .2013 2014
V--on.aw Kul,"
9164."
181.
806ilil[i
F132 W $137A25
5115800
t6.5%I it
Traditional Short Saks Foreclosures
16 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Regional Data —continued
2014Ann uaI Report on the Tinrin Cities Housing Market
New Construction Review MIt1NEARgtIS AREA A550-6,n-
ramlrm.n iuce NDT:pnk:wm l i sj-i x.-mre.1.;,rru2€Iunrincs ax Mi-nespoiE mwdurxss are nm innumv 7 R E A LTO R S`
Top Areas_New Construction Market Share in 2414
Aar '101D Twin Cities Region
bled re 38.1968.1%
Hanover 35.3%
Peak ce Drop in New f rcbm 45ctca E 33.3%
New Ccnstructicn Inventory Inventory from Paek Colo 30.8%
Chisago 29.7%
cuega 29.5%
North
New Construction Hames for Sale Rogers 24.3396%
ala 26.
R
oak trove 22.996
Delano 21.11%
Minneapolia-Central 20.896
Blaine 20.9%
2:399 I 1_— ----
Elko New Umket 19.7%
IBWport 19.5%
I Oayzingcrt 19.496
r---i----t----i--Minnetriste 16.096
I I Monticello 17.7%
1,999
Lakeville 17.1%
I I woo&ury 16.5%
Stacy 16A%
hum 15.596
Ramsey 15.1%
North Brench 14A%
s90
I Greenfield 14.2%
13om 1-Ym1 113"2 1-mia 13014 Ham Lake 13.6%
6 2.6 100.2% 95.3%
Yemr-End Mancha Supply Year-Erd Months Supoi Pct.of Drig.Noe Received Pct.c!Cry.Price Received
New Consiruclicn Previously Owned New Constuction Previously Owned
MI itIiS Supply of Ilnventory Percent of Original List Price Received
r}c.crarl..:..s noseca 12.h a R r-n m.A p[NL
N0019 02911 2012 E2913®2044
pLyy GalEit1167ar1 PdYMalG/f
8.1
7A 7.2 ms
fS
5.3 53
vas
3.0 v,pc
ars
Now Consbuction PrBMID my OwrmdDamm ami ria 1® ami
c'taranl cr Jevaay 4.2915.Al m Txn Mrtltcieill&.Fcvnarad tilt 1011 reas rr.ae tl MaYs9rtg. ?
Nagell Appraisal&Consulting 952-544-8966 www.callnagell.com 17
REGIONAL MAP
Location Map
4
West Lake Francis Shores North Branch g5
5 Oxlip ° Is nti 5 Qranc
Bodum
10 Weber
I S A I
Orrock 4 Crown
47
12 14
H E R B U E 30 CHISAG 20
11 169
72 ethel 76 Sta57028 Lin
651 '
15 Franci East B hel
85 Chisago City
Salida
1 SUBJECT j
74
Li c
75
25
Oa Gr ve
Wyomi
a ile 13 88 24
icello iver Cedar
22
81J
8
7 58
39
sego
5
78 18 f
g3 A r 17 orest Lake
82 Candia37
R H T 56 ¢
Ramse am Lake 19
97
Albertvil
101 AMd01le 23
5
3
St.Michael¢ _ 144
4'
Ana i
242
116
14
Ln
4Da
35 R s, 10
Hanover amplin° 12
pt
enter I
Circ
ugo 55
117 116 81 121
Pi21 8A
20 30 Qsseo Brooklyn blain
7
10 T al rk Park
gI
1 4}ite BW'- j5 11
ockfor 50 Cor ran 252 Lake Park
Qeach19
109 o V_
Maple Gro re oremew
eighton Fridley White Bear L 96
12 Brooklyn Center Hilltop Vadnais He hts 12 J
92 ew Brighton a Pa 9"Loretto 55
New Hope Crystal 'bDe]ano <-v, 90 Maple PlyH th 47 Riose iille
6'
Ind pen en Plain ,-t North St.Paul WASHINGTON
H E N N E P I rd Golden Lauderdale: Falcon
6
ono Valley Heights
30
Maplewood .
Lyndale' Ong Lake Wayzata 40 (D
65
Saga Hill
Woodland 100
Minneapolis St Paul O
24 15, Minnetonka ° 48Mound
a
Spring Park St.Louis Landfall
Minuet istaU Hopkins Park o dbu
Tonka Bay- West St:.Pau4. f,
Deephaven
169
Shorewood,. .i4E Qel ior 50
Edina 35 Lilydale
212 62 Richfield .' 14 South St Pa I 18
Maple`11 Mendota
Eden Prairie 13 Heights 52 New+po
Victoria Chanhassen
5 °
C
55 St.Paul Park
10
43 41 101
1
77 10 o r
95
28a
Bloomington :'
E gaper Grove H- .
nal re
r
oatCA
N
t ',
Benton
140 o ee
0&
32
71
Dahlgren"— 118
Burnsville
13 fipple 3fCarv` 15 11
i
13
42 Valley f Hastings....:
53 14 17 semou
i—
GothaDO 40
45 j pring keq
ke Coates
5olitf7
k
46
31
48 91
1
27 23
D A K O A g5 47
52 S T 2 1
5 81 erm on
Jardarr
61
zxuirc
Cep+rt River 66 Emp re
18 Nagell Appraisal&Consulting 1 952-544-8966 www.callnagell.com
CITY& NEIGHBORHOOD DESCRIPTION
Type of Neighborhood: Outlying Northwestern Suburban Community
Percent Built-Up: 60% Developed
Stage of Development: Stable
Subject Neighborhood: City Limits
Major Transportation: Highway 169/101, US Highway 10
Single Family Residential 45%
Two- & Multi-Family 5%
Commercial/Industrial 10%
Predominant Type & Conformity:
Other/Vacant Land 40%
Total 100%
Average Conformity
Reputation of the Area: Average
Typical Property Age: New to 65 + Years; Predominant Under 20 Years
Single-Family Home Sales: 100,000 to $400,000+
Apartment Sales: 30,000 to $75,000+ per Unit
Office Property Sales: 40.00 to $150.00+ per SF
Retail Property Sales: 75.00 to $200.00 + per SF
Industrial Property Sales: 30.00 to $100.00+ per SF
Capitalization Rates: 8% to 12% Historic
Detrimental Influences: No Major Apparent
Comments: The subject is located in Elk River, which is an outer-ring suburban community
about 45 minutes northwest of Downtown Minneapolis. Due to the expanding Metro Area,
the city experienced significant commercial, industrial and residential growth from 2000-2008.
However, due to declining economy, rising gas prices, and an oversupply of residential and
commercial properties, outer-suburban communities, including Elk River, experienced
significant drops in property values.
The Northstar Commuter Rail, a commuter train that connects the Northwest Suburban
Community (beginning in Big Lake) to Downtown Minneapolis, runs through the city. Most
major shopping is within the city.
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City & Neighborhood Description -- continued
Subject County & City: The subject is located in Elk River, which is in the southern portion
of Sherburne County.
City Data
c Population in 2x13: 23,447 (82% urban, 18% rural;,. PDpulaticn change since 20x0: +42.6%
ca
Q Males: 11.702 49.9%)
a° Females: 11,745 50.1%)
Q
0 Estimated median house or condo value in 2013: $105,526 (it was $146,000 in 2000)
Elk River:5106,526
MN: 5180,100
as
Unemployment in June 2014:
Here: 4.6%
Minnesota: 4.6%
Unemployment by year{' )
y 10
Q
0
CL
E
Source:City-Data
20 Nagell Appraisal&Consulting 1 952-544-8966 www.callnagell.com
City & Neighborhood Description -- continued
Home Sales in Elk River, MN
cores Priee
500 S2av,00o
450 A 180,000
400 S160,000
350 140,000
CauN of
300 120,000 How Solea
250 100,000 Pef Ommler
200— — — — 580,000
150—
I— - - — - -
560,000
100- - - - — - - - - — - - - - - - - - - — - - — -$4t1,000
50— — — — — — — — — — — — — — — — — — — — — — —520,000
Med"Price
N 0 SO
ry 41 4243 44 41 42 4344 41 4243 4441 42 4344 41 42 43 4441 42 43
C
2009 2010 2011 2012 2013 2014 ,.
2
ca
E
Single-family new house construction building permits:
Q 1997-219 buildings,average cost:$109,500
a 1998-223 buildings,average cost:$126,600
0 1999-204 buildings,average cost:$125,000
2000-230 buildings,average cost:$142,900
IM
2001-178 buildings,average cost:$182,100
2002-252 buildings,average cost:$177,900
2003:542 buildings,average cost:$159,500
2004-546 buildings,average cost:$174,800
2005-344 buildings,average cost:$166,000
2006-250 buildings,average cost:$182,200
2007-113 buildings,average cost:$170,100
2008-24 buildings,average cost:$175,500
2009:20 buildings,average cost:$187,300
2010:15 buildings,average cost:$205,900
2011:10 buildings,average cost:$226,400
2012:36 buildings,average cost:$183,000
Comments: Home sale prices are on the rise. Although gradual, the number of new construction
building permits is also increasing.
m
d
y CollegelUniversity in Elk River:
L • Minnesota School of Business-Elk River 0(Full-time enrollment:104,Location:11580 193rd Ave NW;Private,for-profit,Website:elkriver.msbcollege.edu!)
d
Collegesluniversities with over 2000 students nearest to Elk River:
Anoka-Ramsey Community College(about 16 miles.Coon Rapids,MN;Full-time enrollment_4,104)
Hennepin Technical College(about 18 miles;Brooklyn Park,MN,FT enrollment 2,552)
06 North Hennepin Community College(about 18 miles,Brooklyn Park,MN;FT enrollment:2,985)
W Bethel University(about 28 miles;Saint Paul,MN;FT enrollment:3,411)
Q Northwestern College(about 28 miles;Saint Paul,MN;FT enrollment_2,046)
Minneapolis Community and Technical College{about 28 miles;Minneapolis,MN;FT enrollment:4,477)
y Capella University(about 29 miles,Minneapolis,MN;FT enrollment 2;361)
O
U
Source:City-Data
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NEIGHBORHOOD MAP
Location Map
d
186th Ave NW f+
jp gSm Ln 90
Orono Pa+Jolpin Rd 10 b:
rDyr
Jp 6 Westbound Liquor Store Elk River YMCA
1~
r
u Orono Rd NMI
a
Metal Craft Machine Eiusires u
8 Engineering,Inc Subway Z4_7
PfOr NW
Faribault food ti
Slrerburrw County Fair
7-
z
c
CL
183rd Ave NW
Pkwy NW
aLn t
183rd
I
Country Crossings Park
2
c 0
8?0 z x r 182nc
4q a =N m Fresno Parl
r
to
S z n
u"h Avp Nti^; Z. a
22 Nagell Appraisal&Consulting 1 952-544-8966 www.callnagell.com
MARKET CONDITIONS OVERVIEW
Market Listings
Location SF List Date List Price SF
Hwy 10 & 171st,
Elk River
43,560 May-15 259,000 5.95
Elk
Comments: Commercial lot with frontage along US Highway 10. Access to city sewer and
water.
000(Business Center Dr,
264,845 Current 397,777 1.50
Elk River
Comments: Nearby lot--larger site. City sewer and water available. Zoned commercial.
Fronts on US Highway 10.
0=Main Avenue NE,
Albertville
21,780 Current 80,000 3.67
Comments: Small commercial lot with access to city sewer and water.
Development Land Market
Development Land Sales: 0.50 to 5.00 plus per SF
Commercial Building Sales: 50 to 125 plus per SF
Market Balance
Market Area: 7-County Metro, Wright & Sherburne Counties
Scope: Commercial Lots (0 to 2 acres)
Supply: 80 Listings (MLS)
Demand: 19 2014 Sales (MLS)
Market Balance:4.2 Year Supply Over Supply
Market Participant Comments&Observations
In general, raw(development)land value spiked up significantly between 2000 and 2007. However, in 2007 to
2010, the market was correcting for atypical increases. Development costs remained somewhat stable as costs
for raw materials for construction were increasing and labor costs were declining.
Demand for land in closer-in communities (Plymouth, Maple Grove, Chanhassen, Woodbury, Blaine, Lakeville,
etc.)is average to good. Demand continues to be soft in more outlying locations closer to the development fringe
Albertville, Otsego, Lino Lakes, Elko/New Market, Ramsey, etc.). Due to the availability of land in secondary
locations, demand is much slower to recover. Demand continues to be highly variable depending upon use and
location.
Demand for office land is generally fair in the subject location and across the TCMA. Demand for retail and
industrial land has shown improvement in recent months, and is considered average.
Overall Market Condition: Somewhat Stable
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Subject Market Overview -- continued
LAND
e
Land Market Driven by Industrial Users as Residential Cools
Throughout 2014,residential and bulk distribution facilities.Developers United Properties purchased 22 acres
industrial uses were the primary drivers are now being forced to expand of land in Maple Grove for a planned
of activity in the Twin Cities land geographically in their search for 320,000-sf building.
market.Specialty users,like hotels and potential sites,including cities like wurth Adams purchased IS acres of
automotive,are also actively purchasing Shakopee,Lakeville,Rosemount,and land in Brooklyn Park for a planned
well-located sites as the strengthening Lake Elmo to name a few. 165,000-sf building,
economy translates into increased
tourism and car sales.Other land uses, Knowing how strong demand is,cities • United Properties purchased 36
such as office and agriculture,have gone have eased their requirements.Some acres of land in Brooklyn Park for a
quiet.Overall,though,it was a very cities now requiring a lower percentage
planned redevelopment.
productive year,of office finish,especially in cities like Scannell Properties purchased 76
Maple Grove,Arden Hills and Brooklyn acres of land in Rogers for a new
INDUSTRIAL Park.The demand is pushing buyers to industrial park.
The market saw a sharp increase put hard money into deals. Liberty Property Trust purchased
In speculative land purchases by 24 acres of land in Dayton for a
developers.The Northwest market is Some notable industrial Pard sale 240,000-sf distribution budding,
driving activity due to its connection to transactions in second-half 2014 currently under construction,and an
the interstate and high concentration included the following additional 80,000-sf building.
of potential employees for industrial Roberts Management Group
businesses.Most of the premier sites
purchased 27 acres of land in Arden Several large space users are looking forhavealreadybeentaken,mainly for Mills for a planned business park.500,000 to 2,000,000 sf of industrial
space.A requirement ofthis size is
expected to drive more activity in
TRANSACTIONSLANDNOTABLEINDUSTRIALLANDthelandmarketsincefewoptionsof
that size are available in the current
Rotas inventory.It is anticipated that at least
DAYTON
half of these users could successfully
acquire sites,which would drive up
eio industrial land prices across the metro.
OSSEO
RESIDENTIAL
BROOKLYN Residential land sales were strong
PARK in the second half,but the end of
MAPLE 169. increasingresidential values is near.GROVE
Single-family developers have slowed
r their plans significantly.Some are
r N trying to renegotiate pricing for deals
that they put under contract 6-12
Submarket reports available at www.northmargcompass.corn 111116 CUSHMAN& NORTHMAR44; WAKEFIELD
24 Nagell Appraisal&Consulting 952-544-8966 www.callnagell.com
Subject Market Overview -- continued
Helping You Navigate Today's Commercial Real Estate Market THE COMPASS f JANUARY 2015
months ago by almost 30%.Land paying a premium for the"A'areas OUTLOOK
values have come down as things have in the Twin Cities market.Some of In 2015,land sales for industrial users
slowed.With the significant increase these areas include Robert Street are expected to remain strong.More
In construction costs but lack of home in Inver Grove Heights,Brooklyn speculative industrial projects are
price increases,developers are cautious. Boulevard Brooklyn Center,along anticipated,and land sales activity
While development in the"A'markets I-394 in Minnetonka and St.Louis Park, will likely accelerate outside ofthe
is expected to continue,the majority and along 1-494 in Bloomington.For Northwest market.In comparison,
of single-family land is expected to be example,Kia will open a new 26,000- developers are more cautious on
stagnant until spring. sf dealership in St.Louis Park along the residential side.Values for both
1-394 next summer.If dealerships multi-family and single-family land have
In comparison,the multi-family are not pursuing new sites,they are plateaued,and many developers will
market has been at full throttle with expanding on their existing sites.This wait until the Parade of Homes in the
approximately 5,000 units delivered is the case with Richfield Bloomington spring to see what demand there is.
In 2014—the highest concentration of Honda,where construction is
which have been in the North Loop underway on a 160,000-sf expansion
and Uptown areas of Minneapolis at its location on 77th Street between
and the West End area in St.Louis Nicollet and Penn avenues.
Park.Rents are good and leasing is
strong,but build costs and deal costs HOTEL
are high for developers.Most believe In the"A"areas,hotel chains and
there is still more room for growth in investors are aggressively pursuing
stronger suburban communities like sites.Occupancy levels and average
Woodbury,Maple Grove,Eden Prairie daily rates are up across the metro.
and Plymouth. One example that demonstrates the
strength of the Twin Cities market is
Overall,the residential land sector is the entrance of Value Place,the largest
forecast to recalibrate in 2015,but economy extended-stay hotel chain in
select deals in well-located markets will the United States.The Wichita,Kansas-
continue as planned. based chain is pursuing a few sites in the
Twin Cities metro.
AGRICULTURAL
The market saw few land sales for MEDICAL OFFICE
agriculture use in second-half 2014,The land market for medical office
With the limited sales,most buyers properties has been active in pockets
were neighbors of adjacent farms. throughout the metro,Parcels sold in
Values continue to decline—by 5-10%in several communities,including Maple
the past year,The price for agricultural Grove,Lakeville Woodbury,Plymouth
land is tied to commodity prices,which and the Mirneapolis CBD as the major
declined significantly in 2014.As a result, healthcare providers and other private
land values have trended down. practices position to open sites closer
to their patients.One example is of CUSHMAM6AUTOMOTIVEParkNicciletclosingonasiteInThet•r WAKEFIELD, NQRTHMaRq
Building on the momentum from first- Grove,Ryan Companies'mixed-use 3500 American Blvd W,Suite 200
half 2014,land sales for automotive development off 1-94 and Maple Grove Minneapolis,MN 55431
use continue to be active in the Twin Parkway in Maple Grove,across from 952.831.1000
Cities market Auto dealerships are the Maple Grove Hospital.info@cushwakenm.com
www.cushwakenm.com
ISGWM€AThis report was crcarcd by Cwhman&VJakef Id hWrthMarq evperts us,ng Twm Crtks rornmercia prolxrty data from the ion soe momhs of 2014 The tlata used forth¢rep—has heen oba ed from
wu es which we deem relit able.Whie eery elPor2 Fns been made w reparc accura[e data Cushman&Wakefie:a NorlhMlarq eannotguaaantee me acaracy ofths mvrket yart Furti,ernvrc.we cannot assume
responsmJrty for amY omss m Mdata wh¢h may ottur.h a ourntem to pro-hde the beet posse nformmion mgarding etre off e,mwstrial,hand,2tail,multi-Wrvy.and evest,rdvet mvkets whiff eeamg Me reahrthe
espttair of tl e o f avon holo e u g h ¢port kr trwiness aMlarf a de io
The Compass eatom mdeom nrrmation kr muld,e mo9tee.'indusval and-al projects greater than 20000 sa it and n.,,t"i for em pvnpe,wes.Nat mcs,M are owner-occuped g>verranem or 4nge-tcnam
baiidieV Not au inhrma and mst[r we've colktt d wn be published in any gin wlu
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 25
SITE DESCRIPTION
Dimensions: Irregular; See Plat
Useable Site Size (est.):
SF: 32,670
Acres: 0.75
Non-Useable Site Size (est.):
SF: 70,567
Acres: 1.62
Gross Site Size (per county):
SF: 103,237
Acres: 2.37
Topography/Shape /Low: Nbstly Level/Very Irregular/Yes
Soil Conditions/Drainage: Assumed Stable in Upland Areas/Appears Average
Utilities:
Electricity/Gas Assumed Available
Water/Sanitary Sewer Assumed Available
Off-Site Improvements:
Street/Curb/Gutter:Bituminous/Concrete/Concrete
Sidemalk/Alley: Concrete/None
Street Lights: Standard
Storm Sewer: Storm
Access to Site: Assumed Average
Frontage: Joplin&Business Center Drive
Ingress/Egress: Average
Visibility/Exposure:
Above Average (although no direct frontage, the subject site has
visibility/exposure to US Highway 10)
Flood Hazard Zone:Appears No; See Flood IVlap
Apparent Easements: Typical Utility&Drainage, Access Easement
Encroachments/Conditions: None Apparent
Use: Commercial Land
Building Improvements: None
N: Commercial, US Highway 10
Surrounding Uses:
S: Sherburne County Fairgrounds
E: Business Park
W: Commercial
Distance to Major Road: The subject is located 1 lot south of US Highway 10.
Comments:The subject is located just south of the US Highway 10/Joplin Street intersection. Although no direct
frontage,the site has visibility/exposure from US Highway 10.
Due to a recent road realignment project,the subject is very irregularly shaped and includes a large amount of
ROW, overhead powerline easement and low area. The useable site area is estimated to be around 0.75 acres or
32,670 SF. If found to be otherwise,value could differ.
The subject is city-owned. The owner is in the process of assembling the subject site with an adjacent property to
the north,which is state-owned. The city also indicated that adjacent strips of land located north of the site will likely
be vacated to the subject site in the future. Appraised value does not consider the future assemblage and/or
vacation. Appraised value reflects the subject site as-is.
Although no formal access easement exists,the gas station/c-store to the north has an access driveway across the
subject property. Not considered adverse. Value assumes the continuation of the existing access arrangement
now and into the future.
26 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
ZONING
BP, Business Park
I j
L R4
AYE
C 1
DE
PARK
LAKE
165th A COY PC
PRif`
pD3
O ONO
TER OR
pAv= fl S
Wam=MER on ANO:.R ypK6ATiLETI
TY CCMLE
co sIN ca
CRQ jpfis
nur.or a 8,,prER
AT
OA{SAVANNA.kkIAll
L
11Z I
Purpose
a) Purpose.
1) The business park district is established to encourage a planned,integrated environment for certain industrial,office,and commercial uses,which are compatible with
and complement each other as well as the surrounding land uses.The underlying land use designation within the district may vary and may be either light industrial or
highway business.Development within the business park district will correspond with the land use designation,Industrial and office uses are allowed where the land use
designation is light industrial,and commercial uses are allowed where the land use designation Is highway business.
2) It is the intent of this section that development reflect common themes using compatible architectural design and consistency in signage,landscaping and lighting.It is
also the intent to encourage businesses,which generate a high number ofjobs per square foot rather than predominantly warehouse type uses
Permitted Uses
Light manufacturing, R&D labs, business/professional offices,warehouse, showroom, etc.
Site Requirements
Minimum Lot Size =43,560 SF Minimum Lot Width = N/A
Parking
Parking requirements vary with use.
Land Use Plan
The subject is guided commercial.
Comments
The subject is currently zoned business park. However, given the subject's proximity and
visibility to US Highway 10, surrounding uses, small site size and land use plan designation of
commercial, a commercial use appears more likely.
Current Use Permitted? Yes
Zoning Change Applied For? None Reported
Zoning Variance Applied For? None Reported
Source:City of Elk River Zoning Code,Zoning Map and Land Use Map.
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 27
FLOOD MAP
Pre,pared for:Nagetl Appraisal&Consulting
In}e r F l o o d Business Center Dr
Elk River,MN 55330
k
pit n
tj
182-,Lf Ave NV
LP b,ng
1Q
rr.
MAP DATA VAn t EGENp
FEMA Special Flood Hazard Area.No areas inundated by 506-year flooding arntecled Areas
Map Numher:27141C0304F
zone,X
Areas inundated by t 00•year rxm nO Fibpdway
Map Dais:November 16,2011 Vaiocity Hazard 0 Subject Area
TIPS-W141
Per I nterFlood
28 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
AERIAL PLAT MAP
f
175-547=0115 i
75-1322425 F.
75-132 2426 r'1 ,
ai' ~ ' 75-1
i 1 F-
xlift
75-132100
Fy W.,qb
W
75$16-0110 r
t' 75-132105
PL
Per Sherburne County GIS (subject outlined in yellow/ est. useable site area outlined in red)
Nagell Appraisal&Consulting 1 952-544-8966 www.callnagell.com 29
Idke
eN4y 8IhLYViNN f
Orono narkv_ vlpr Rd-
w
2' Westbound Lrquor Sloree!Elk River YMCA
O
0 aIRd NW i'kD
chine`
ng.Inc SubwaY
r
faribaul F
I
r
y
r
4
Sherburne CountyiFyir y
Ile
183rd Ave NW w_
41
Pk HW
i
0106100,
1
ra Ln AF ," .: '-
s
183rd Ave NW
St
uir;s r.,k
t
C F J
x
187nd Ave NW
r. c 4
81st Ln`NWL181st Crr•NW° 181st Ln NW
c
y I
I
y
Mississippi"d
18ti',
t",
3
SUBJECT PHOTOGRAPHS
Opp Mo
Site View from the Northeast Corner
p
aka
p .'
i..
xn.._Y..lw. __ ._.
Site View from the North Edge
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 31
Subject Photographs —continued
ti
Storm Water Retention Pond
r
owl
n. .".
fp yy YAW.fi. •- 4.. ...
Access Easement
32 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Subject Photographs —continued
Street Scene Looking Southwest on Business Center Drive
ro,
1
I
r
Street Scene looking North on Joplin Street
Nagell Appraisal&Consulting 1 952-544-8966 www.callnagell.com 33
HIGHEST & BEST USE
Highest and best use as defined in The Appraisal of Real Estate, 13th Edition, by the
Appraisal Institute is: "The reasonably probable and legal use of vacant land or an improved
property, that is physically possible, legally permissible, appropriately supported, financially
feasible, and that results in the highest value." Highest and best use is analyzed in two ways,
site as vacant and site as improved. Since the subject is vacant land, only the site as vacant
is analyzed.
Typically there are four criteria in highest and best use analysis:
Legally permissible use: What uses are allowed by zoning?
Physically possible use: What uses are physically possible on the site?
Financially feasible use: Which possible & permissible uses produce a positive return?
Maximally productive use: Of the financially feasible uses, which use produces the
highest return warranted by the market (the ideal improvements)?
Site as Vacant: "Among all reasonable, alternative uses, the use that yields the highest
present land value, after payments are made for labor, capital and coordination. The use of a
property based on the assumption that the parcel of land is vacant or can be made vacant by
demolishing any improvements."The Dictionary of Real Estate Appraisal 5"'Edition
Legally Permissible Uses: The current BP, Business Park, zoning allows for light industrial
and office uses. The subject is guided for commercial, which is more logical given the
subject's proximity/visibility to US Highway 10 and small size of the site. Minimum site size is
43,560 SF.
Physically Possible Uses: The physical characteristics of the site appear suitable for
development. City sewer and water are assumed available. The site has average access
and above average visibility/exposure. The site will allow for a number of potential uses.
Financially Feasible Uses: Surrounding uses, market demand and the availability of
financing typically drive financial feasibility.
Surrounding Uses: The subject is located in a small commercial district that is situated at
the intersection of US Highway 10 and Joplin Street. Surrounding uses include
commercial to the north and west, the Sherburne County fairgrounds to the south and
recreational to the east. Given the site's location, proximity to commercial and the
Highway 10/Joplin Street intersection, a commercial use is considered logical.
Financing: Availability of financing is currently average. Value assumes the subject has no
site issues that would restrict typical financing for well qualified buyers. As market demand
recovers, positive economic returns on new development should return.
Market Demand: Demand for commercial in the subject area is improving. Although
development in outlying locations has been more gradual, demand is rated average for
locations with good appeal (convenient access, highway exposure, stable site conditions,
etc.).
Maximally Productive Use: Given the above discussion and keeping in mind market
demand, financing, site amenity, zoning and the subject's surrounding uses, commercial
development is considered most feasible.
34 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
COST APPROACH
Since the subject is vacant land, the Cost Approach is not applicable.
INCOME APPROACH
Very limited rental data of vacant land renders the Income Approach an unreliable indicator.
Therefore, the Income Approach is not included.
SALES COMPARISON APPROACH
The Sales Comparison Approach to Value is predicated upon sales of properties with
similar characteristics as the subject. The primary premise of this approach is that the market
value of the subject is directly related to the prices of competing properties after adjustment.
Adjustments are made to competing properties for significant differences.
Land Value: Land value is estimated as if the land were vacant and available for
development to its highest and best use. There are several different methods to analyze land
values: sales comparison, allocation, extraction, subdivision development, land residual, and
ground rent capitalization. One or more of these methods may be applicable depending on
market conditions and the type of land.
The preferred and most reliable approach is the sales comparison; however, when sales data
is very limited, some of the other methods may be employed if appropriate data is available.
For purposes of this appraisal, the sales comparison method has been utilized.
A number of sales were reviewed in the subject's marketing area. Of the data analyzed, the
most relevant sales were selected and used on the following pages.
The Following Outline Is Used In The Sales Comparison Approach:
A location map of the comparable sales.
Comparable sales are listed.
An adjustment grid using the comparable sales.
A discussion of adjustment and conclusion of value.
Primary Data Selection Criteria/Scope:
Emphasis on similar Northwest Metro communities.
Small commercial lots with access to city sewer and water.
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 35
Sales Comparison Approach -- continued
Comparable Location Map
West a e
Francis
Shores
5 Oxlip East Lake
Francis
OYeS
I S AIT I10
47
Orrock 4
Crown
4 7
5 SALE 3
R5HERBU E
11 72
j 16970 28 24 —I
Franci
1 24
Salida
arn lus
66 ISUB3ECTial
10 Oa Grove
Big La 22 Cedar
Bailey N E SALE 1
onticello r39
c River,_
64 A 50~fpr •..'
25
segos
A
5 Lang h Park
Heights SALE 2
59
SALE 7
q. : 03 20 70
37 SALE 4 42 SALE 6 18
SALE 5
56
r -
Alberts le 57 47 9 j
10 116
36 hado Wood Park
St.Michael
144
rning Mi Dayto
35 raw-Has Galloway ark
242'
oun#y P k gers
169
19 203 121
n .p
Hanover am 10
117 116
109th e N 12
14 R.3
123 Hidd n Teal L 202 1
Bu chvllle 30 P r 103
20 PE rk 610
o s
10
o
109
ook"Parik
Cor ran
101 81
Palmer
13
ckford 50 152 252;
4
61
H E N E I 169
36 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Sales Comparison Approach -- continued
COMPARABLE 1
75E790240
756]9-0110
rsbT4-0zafi
75-674-0416
11 79-0234
T56T4-0144 4 1q v_ .
714 1
TsbT40210
111
50190420 "
1 Ftl„ItP14 @INV
40
7.
TSfiT9022fi ; T5-0]90106
5079-0224 R
75-079-0111
75-079-0[10
4' 75874-0104 y
e
170th r..e NJY
95t''
NG
OIse00 h 3rl M Ln.MIN:
maven
91sr Sr.ve
s14
un se Ne
w 89[N 5.NE 1.
BTIh 51 N4=
ESM S[NE 10];h 4n NN
O
8' 83rd A N 83rd -
a
kamsey
1-51 NE
w
Property Data
17175 Yale Street NW,
Address: PID/Legal: 756790106
Elk River
Property Use:Commercial Physical Characteristics: Average
Site Size (SF): 43,560 Utilities: Available
Comments: Sale of a commercial lot in the City of Elk River.
Sale Data
Sale Price: 50,000 Price per SF: 1.15
Sale/Close Date: 7/22/2015
Property Rights: Fee Simple Buyer: N/A
Financing: Cash Seller:Shadymoon Properties, LLC
Conditions: Typical Source/Verification: MLS
Comments: Appears to be a typical market transaction. Openly marketed.
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 37
Sales Comparison Approach -- continued
COMPARABLE 2
r
s-sol-0zua
f252
11 v f
71
u
181st Ave NN eaInvcfi 'Rs`
18GM u'NW
A
iPC'_
158CM1 M Nw
5gth Ln NW
1!E NE h''..
n i551M1 Ave M'4
541M1 In rnw Ln MryrX
iSGll'i Ave MN,
I I
m
a I
AlPlne Dr FJJV nl ntl I`rtl Ln MN m55
152nd Awe M^f Plne m
In SY NE 15'isl Ln XNV 1 ar -
I.
2l at st.Ave MNw
5
@M1 L' x w'Lake @Ivtl K S 5)
Property Data
97XX US Hwy 10,
Address: PID/Legal: 750241107
Elk River
Property Use:Commercial Physical Characteristics: Storage Bldg
Site Size (SF): 50,530 Utilities: 1 Not Available
Commercial lotlocated in Elk River. The propertincludes a small storage building. LocationComments:
is not serviced with municipal utilities.
Sale Data
Sale Price: 95,500 Price per SF: 1.89
Sale/Close Date: 10/1/2014
Property Rights: Fee Simple Buyer: B&D Holdings Co, LLC
Financing: Cash Seller:RM &CJ Atkins
Conditions: Typical Source/Verification: CREV, MLS
Comments: Appears to be a typical market transaction. Openly marketed.
38 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Sales Comparison Approach -- continued
COMPARABLE 3
95L17-1 ZeH HH91T=13Q] 94
T
F T
85 1-01ffi 952Ti-x105 55-d]iLOIU W4)F`-WW
9S
9$-0t]-x F08
88d30ONp E- T.SZ
tHd 93ax9c115 9s-azao+as
a
9s-uT-03Hs 9s-dzr-ol5s
45-43T-0135
83633-03053
106 i,. l0ii 51 i3T-0130 y5_
I 1 s[Ave
69th Ave 691N ve
2681h 81h A
s
86[66th v
o° 651N Ave MN
t Ave
SALE 3
25 st A mortl Ave 81 s1 Ave
Zi r L
5
A
55th Ave MN 54[N e
G 45
53rd Rve
54nd
Property Data
XXXX Fremont Avenue,
Address: PID/Legal: 954710105
Zimmerman
Property Use:Commercial Physical Characteristics: Average
Site Size (SF): 47,044 Utilities: Available
Comments: Commercial lot located in a more outlying community.
Sale Data
Sale Price: 120,000 Price per SF:1$2.55
Sale/Close Date: 4/10/2015
Property Rights: Fee Simple Buyer: Casey's Retail
Financing: Cash Seller:The Bank of Elk River
Conditions: Bank-Owned Source/Verification: CREV, Buyer's Rep.
Comments: Bank-owned sale price appears to be somewhat discouted. Openly marketed.
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 39
Sales Comparison Approach -- continued
COMPARABLE 4
a r.
z A
1
a
w s
a A
F
111 rn
Da
L 5 7545 :1G1
5Q0 7 tl'
Z
w
w
t T18b7800'1'470
He 1;a1M1
9.5t Sl NE
6ise90
r
c
9+NE / 17-Ln
i5
SPLE4 1,
1 9tl Au MV I
Bta g
z BCtlM1 St Nf 88tH 51 YE
B]Ih 5[Pff
C
3ai:.'[NE 2 83rd l NE 831d
1ES1M Avs NW I
f CneN'1 f
IF—
fill
Y&IN S] 18 8A4e MY
75IM1 4
Property Data
XXXX Quantrelle Ave NE,
Address: PID/Legal: 118217000110
Otsego
Property Use:Commercial Physical Characteristics: Average
Site Size (SF):105,000 Utilities: Available
Comments: Commercial property located in close proximityto the City of Elk River.
Sale Data
Sale Price: 260,000 Price per SF: 2.48
Sale/Close Date: 11/4/2014
Property Rights: Fee Simple Buyer: WFCIII, LLC
Financing: Cash Seller:GCI Capital, Inc.
Conditions: Bank-Owned Source/Verification: CREV, Buyer's Rep.
Comments: Bank-owned sale price appears to be somewhat discouted. Openly marketed.
40 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Sales Comparison Approach -- continued
COMPARABLE 5
za,
t
a F
Y A
R,Iliclpel •
CBI1V
241 .
3tY.S:p
401h St NE
t R<1$E
I
Mfpes!Ck
3
370 e!ME w
Property Data
14-2nd Street SE, 1 1 45001 32224,1 1 40 1 201 1 062,
Address: PID/Legal:
St. Michael 114012011061,114012011063
Property Use:Commercial Physical Characteristics: Average
Site Size (SF):19,000 Utilities: Available
The property appears to be the result of an assemblage by the city after a roadComments:
realignment project.
Sale Data
Sale Price: 30,000 Price per SF: 1.58
Sale/Close Date: 5/15/2015
Property Rights: Fee Simple Buyer: Central Ave RE, LLC
Financing: Cash Seller:City of St. Michael EDA
Conditions: Gvt. Sale Source/Verification: CREV, Buyer's Rep.
Comments: Sale price appears to have been somewhat discounted due to government ownership.
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 41
Sales Comparison Approach -- continued
COMPARABLE 6
dz
I...r.. i 1v-
Ir, xe—
y Pa1rk
ra ah
NW ,Ah Ln NWan
to Mw
1391h Ave MN " c 13*4 Ln
c"
NW N Ate NW
Bek r ePark `z Bunker Leke EW NW >, Bunker Lake Blyd NW z Bunker Lak®81,q NW i
Biatien pkva
z TParke
a 133rA le s R r+i I 341 Ave NE< T,Nyy Sa A.NW a
y Rinker ne
y k glonal NrPark m
z N _
Rew 132nd Are NE.
191st Ave NW n My P"/k ahE
Property Data
1730-139th Lane NW,
Address: PID/Legal: 343224110011
Andover
Property Use:Commercial Physical Characteristics: Average
Site Size (SF): 57,064 Utilities: Available
Comments: Superior proximity to the TCMA.
Sale Data
Sale Price: 203,400 Price per SF:1$3.56
Sale/Close Date: 5/5/2015
Property Rights: Fee Simple Buyer: Griffen Property Holdings,LLC
Financing: Cash Seller:Andover EDA
Conditions: Gvt. Sale Source/Verification: MLS, CREV
Sale price appears to have been somewhat discounted due to government ownership.Comments:
Openly marketed.
42 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Sales Comparison Approach -- continued
COMPARABLE 7
eta
7161h Sk N
lesih aye rvw
sartlrt„
NE C—ty
6`
a
8
15 6larrteeb
W WF $
f o-9t yO
m
yy
71h 51 W VZi L aN 1nrn
Ak,,,tlkx 4.
r a me
Chelsea Rd „ sx Or _..._
Property Data
XXXX-7th Street E,
Address: PID/Legal: 155029002050
Monticello
Property Use:Commercial Physical Characteristics: Average
Site Size (SF):123,275 Utilities: Available
Comments: Located in a competing community outside the TCMA.
Sale Data
Sale Price: 290,000 Price per SF:1$2.35
Sale/Close Date: 10/21/2014
Property Rights: Fee Simple Buyer: Nu\ision Mgt, LLC
Financing: Cash Seller:KG& ML Maus
Conditions: Typical Source/Verification: CREV, Buyer's Rep.
Comments: Appears to be a typical market transaction. Openly marketed.
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 43
Sales Comparison Approach —continued
Listed below is the adjustment grid for the comparables listed on the previous pages.
Comparable items of significant difference are adjusted for.
SALES COMPARISION ADJUSTMENT GRID
Subject Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Sale 6 Sale 7
NEC of Joplin& 17175 Yale 97X(US Hwy )0=Fremont )0=Quantrelle 14-2nd Street 1730-139th )0=-7th
Address Business Ctr Dr, Street NW, 10, Avenue, Ave NE, SE, Lane NW, Street E,
Elk River Elk River Elk River Zimmerman Otsego St.Michael Andover Monticello
Proximity Subject 4 miles SE 6 miles SE 12 miles N 4 miles SE 7 miles SW 16 miles SE 12 miles W
Property Rights Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple Fee Simple
Financing Market Cash Cash Cash Cash Cash Cash Cash
Conditions Typical Typical Typical Bank-Owned Bank-Owned Gvt.Sale Gvt.Sale Typical
Sale Date Current Jul-15 Oct-14 Apr-15 Nov-14 May-15 May-15 Oct-14
Location Average Avg/Good Avg/Good Fair/Avg Average Average Good Avg/Good
Use Commercial Commercial Commercial Commercial Commercial Commercial Commercial Commercial
Site Size 32,670 43,560 50,530 47,044 105,000 19,000 57,064 123,275
Phys,Char. Average Average Storage Bldg Average Average Average Average Average
Utilities Available Available Not Available Available Available Available Available Available
Sale Price Current 50,000 $95,500 $120,000 $260,000 $30,000 $203,400 $290,000
Price/SF 1.15 1.89 2.55 2.48 1.58 3.56 2.35
Adj ustme nts
Property Rights Fee Simple
Financing Market
Conditions Typical 5% 5% 5% 5%
Net Adjust 0% 0% 5% 5% 5% 5% 0%
Part Adj.$/SF 1.15 1.89 2.68 2.60 1.66 3.74 2.35
Sale Date Current
Equalized$/SF 1.15 1.89 2.68 2.60 1.66 3.74 2.35
Location Average 10% 10° 10%
Use Commercial
Site Size(SF) 32,670 5% 10%
Phys,Char. Average 5%
Utilities Available 15%
Net Adjust 10% 0% 10% 5% 0% 20% 0%
Adjusted Price/SF 1.03 1.89 2.95 2.73 1.66 2.99 2.35
Note: Wide variation in sale price is not uncommon given the current market and outlying
location.
44 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Sales Comparison Approach —continued
Discussion of Adjustments
Property Rights: Refers to the ownership interest conveyed at the time of sale. Properties
with leases or other encumbrances in place can sell for more or less than a comparable
property that sells fee simple interest. All sales, regardless of leased fee or fee simple interest
appear to have sold at market.
Financing: The impact financing may have had on the sale price, favorable interest rate or
term. All sales were cash or estimated to be near or at market rates.
Conditions of Sale: Reflects non-market conditions which may or may not impact market
value, such as differing motivations of buyer or seller (related parties, distressed or liquidation
sale, assemblage, listings, pending sales, etc.), impending eminent domain proceedings,
influence due to tax ramifications, lack of market exposure, vacancy, or leased-fee and fee-
simple adjustments. Comparables 3, 4, 5 and 6 sale prices appear to have been discounted
somewhat due to bank-ownership or government sale.
Market Conditions: The market has been relatively stable starting in 2011 through year-to-
date 2015.
Location: This adjustment is based on the appraiser's judgment. It takes into consideration
surrounding land uses, intended use, neighborhood characteristics and access. Comparables
1, 2, 6 and 7 adjusted for superior highway frontage. Comparable 3 adjusted for more outlying
location. Comparable 6 also adjusted for closer proximity to the TCMA.
Intended Use: All comparables rates similar. No adjustment necessary.
Site Size: Adjustments recognize smaller parcels of land typically sell for more per SF than
larger sites. Comparables adjusted accordingly.
Physical Characteristics: Comparable 2 adjusted for having a small storage building on site
at the time of sale.
Utilities: Comparable 2 adjusted for no access to municipal sewer/water.
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 45
Sales Comparison Approach —continued
Conclusion: Comparables used are rated to be the most indicative of data analyzed and
bracket the subject regarding overall appeal. Other sales reviewed were older, more distant,
and/or needed more adjustment. The comparables utilized in this analysis each have several
characteristics in common with the subject. While none are totally identical to the subject, each
represents a viable alternative to a prospective buyer of the subject property and, after
adjustment, can be utilized as an indicator of market value for the subject property. Variance in
sale price is common in the current market.
Data Summary Minimum Maximum Average Median
Before Adjustment 1.15 3.56 2.22 2.35
After Adjustment 1.03 2.99 2.23 2.35
The adjusted figures are similar to the unadjusted figures. All comparables given about equal
weight, as together, they bracket the subject characteristics.
Useable Site Area: The subject's irregular shape and somewhat limited development potential
due to location of easement and low areas is off-set by the site's above average
visibility/exposure, but no frontage. Therefore, a rate near the mid-range is concluded for the
subject, say $2.25 per SF.
Non-Useable Site Area: Value attributable to non-useable site area typically ranges from 5%
to 15% of useable site area value, depending on overall amenity. Based on concept drawings
for the site, it appears the low areas have the potential to be filled in and developed. However,
a significant portion of the non-useable area is ROW. As such, a rate at the lower end of the
range is considered appropriate. Therefore, a rate of approximately 5% will be applied ($2.25
per SF x 15% _ $0.11 per SF).
Useable Site Area 32,670 SF x $2.25 per SF = 73,508
Non-Useable Site Area 70,567 SF x $0.11 per SF = 7,7623
Total (rnd)81,000
FINAL VALUE OPINION BY SALES COMPARISON APPROACH 81,000
46 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
RECONCILIATION
Value Opinion by Cost Approach Not Applied
Value Opinion by Income Approach Not Applied
Value Opinion by Sales Comparison Approach 81,000 2.48 per SF
The subject is vacant land. Therefore, the Cost Approach is not applicable.
The Income Approach is not used. Very limited rental data of vacant land renders the
Income Approach an unreliable indicator.
The Sales Comparison Approach to value analyzed recent sales of properties as compared
with the characteristics of the subject property. Adjustments were made to the comparables to
make them as similar to the subject as possible. This results in an indication of market value at
which the typical buyer would be willing to pay for the subject property. The comparables used
are all competing properties located in the subject market and are considered to provide a
reliable estimate of market value. Sales data for the subject property was average.
Conclusion: The Sales Comparison Approach is considered the only relevant indicator of
value. Therefore, the appraised value opinion is:
Final Value Opinion
Final Value Opinion 81,000 2.48 per SF
Note: Properties that are unstable, distressed, or have unusual condition and/or motivated
sellers tend to sell below market value. Based on market observations and discussions with
various market experts, discounts for such properties can range from 10 to 50% + when
compared to normal market transactions.
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 47
EXPOSURE TIME/MARKETING TIME
Final values reflect "market exposure" time of under 1 year before the
Exposure Time:
effective date of the appraisal. Changes in the market, use, lease
and/or building subsequent to the effective appraisal date could impact
value.
Marketing Time: Marketing times for appropriately priced properties is generally 6 to 18
months
DEFINITIONS
MARKET VALUE - The most probable price which a property should bring in a competitive
and open market under all conditions requisite to a fair sale, the buyer and seller each acting
prudently, knowledgeably, and assuming the price is not affected by undue stimulus. Implicit
in this definition is the consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
a) buyer and seller are typically motivated;
b) both parties are well informed or well advised, and each acting in what they consider
their own best interest;
c) a reasonable time is allowed for exposure in the open market;
d) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and
e) the price represents the normal consideration for the property sold, unaffected by
special or creative financing or sales concessions granted by anyone associated with
the sale.
Source: The Dictionary of Real Estate Appraisal,51h Addition. Appraisal Institute
ENVIRONMENTAL & STRUCTURAL ISSUES
Regarding any adverse environmental and/or improvement structural conditions (such as, but
not limited to, hazardous wastes, toxic substances, mold, construction defects or
inadequacies etc.) present in the improvements, on the site, or in the immediate vicinity of the
subject property, none are apparent, however, appraiser is not an expert in this field, value
assumes no hazardous or significant structural conditions exist. Value assumes any
abandoned wells will be properly sealed. If any of these conditions exist the appraised value
could differ significantly.
48 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
CERTIFICATION
I certify that, to the best of my knowledge and belief:
1) The statements of fact contained in this report are true and correct.
2) The reported analyses, opinions, and conclusions are limited only by the reported assumptions and
limiting conditions, and are my personal, impartial and unbiased professional analysis, opinions, and
conclusions.
3) 1 have no (or specified) present or prospective interest in the property that is the subject of this
report, and no (or the specified) personal interest with respect to the parties involved.
4) 1 have no bias with respect to the property that is the subject of this report or to the parties involved
with this assignment.
5) My engagement in this assignment was not contingent upon developing or reporting predetermined
results.
6) My compensation for completing this assignment is not contingent upon the development or
reporting of predetermined value or direction in value that favors the cause of the client, the amount of
the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event
directly related to the intended use of this appraisal.
7) My analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice.
8) For William R. Waytas, the reported analyses, opinions and conclusions were developed, and this
report has been prepared in conformity with the requirements of the Appraisal Institute's Code of
Professional Ethics and Standards of Professional Appraisal Practice, which includes the Uniform
Standards of Appraisal Practice.
9) Molly J. Lewis has made a personal viewing of the property that is the subject of this report.
William R. Waytas has been by the property (If more than one person signs the report, this
certification must clearly specify which individuals did and which individuals did not make a personal
viewing of the appraisal property).
10) No one provided significant professional assistance to the person signing this report. (If there are
exceptions, the name of each individual providing significant professional assistance must be stated.)
11) In accordance with the competency provision of the USPAP, we have verified that our knowledge,
experience and education are sufficient to allow us to competently complete this appraisal. See
attached qualifications.
12) As of the date of this report, William R. Waytas had completed the requirements of the continuing
education program of the Appraisal Institute.
13) The use of this report is subject to the requirements of the Appraisal Institute relating to review by
its duly authorized representative.
14) I/we have performed no services, as an appraiser or otherwise, regarding the property that is the
subject of this report within the three-year period immediately preceding acceptance of this
assignment.
Molly J. Lewis William R. Waytas, SRA, CRP
Certified General MN 20391975 Certified General MN 4000813
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 49
EXTRAORDINARY ASSUMPTIONS & HYPOTHETICAL CONDITIONS
As stated by USPAP;
Extraordinary Assumption: An assumption, directly related to a specific assignment,
which, if found to be false, could alter the appraiser's opinions of conclusions.
Appraised value makes the following assumptions:
The useable site area is around 0.75 acres (32,670 SF).
The continuation of the existing access arrangement across the subject property
now and into the future.
Commercial development is permitted.
If any of the above are found to be otherwise, value could differ.
Hypothetical Condition: That which is contrary to what exists but is supposed for the
purpose of analysis.
None
ASSUMPTIONS AND LIMITING CONDITIONS
1. The appraisers assume no responsibility for matters of a legal nature affecting the
property appraised or the title thereto, nor do the appraisers render any opinion as to the title,
which is assumed to be good and marketable. The property is appraised as though under
responsible ownership and good management.
2. The furnished legal description is assumed to be correct.
3. Any sketch in the report may show approximate dimensions and is included to assist the
reader in visualizing the property. The appraisers have made no survey of the property. It is
assumed unless otherwise noted that no survey has been viewed and that all improvements
are located within the legally described property.
4. The appraisers are not required to give testimony or appear in court because of having
made the appraisal with reference to the property in question, unless arrangements have
been previously made therefore.
5. The distribution of the total valuation in this report between land and improvements applies
only under the reported highest and best use of the property. The allocations of value for
land and improvements must not be used in conjunction with any other appraisal and are
invalid if so used.
6. The appraisers assume that there are no hidden or unapparent conditions of the property,
subsoil, or structures, which would render it more or less valuable. The appraisers assume
no responsibility for such conditions, or for engineering, which might be required to discover
such factors.
50 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Assumptions & Limiting Conditions —continued
7. Unless otherwise stated in this report, the existence of hazardous materials, which may or
may not be present on the property, was not observed by the appraiser. The appraiser has
no knowledge of the existence of such materials on or in the property. The appraiser,
however, is not qualified to detect such substances. The presence of substances such as
asbestos, urea-formaldehyde foam insulation, radon gas, or other potentially hazardous
materials may affect the value of the property. The value estimate is predicated on the
assumption that there is no such material on or in the property that would cause a loss in
value. No responsibility is assumed for any such conditions, or for any expertise or
engineering knowledge required to discover them. The client is urged to retain an expert in
this field, if desired.
8. Information, estimates, and opinions furnished to the appraisers, and contained in the
report, were obtained from sources considered reliable and believed to be true and correct.
However, the appraisers can assume no responsibility for accuracy of such items furnished
the appraisers.
9. Disclosure of the contents of the appraisal report is governed by the Bylaws and
Regulations of the professional appraisal organizations with which the appraisers are
affiliated. No part of the contents of this report, or copy thereof (including conclusions as to
the property value, the identity of the appraiser, professional designations, reference to any
professional appraisal organizations, or the firm with which the appraiser is connected), shall
be disseminated to the public through advertising, public relations, news, sales, or any other
public means of communications without the prior written consent and approval of the
appraisers.
10. The appraisers have no present or contemplated future interest in the property
appraised; and neither the employment to make the appraisal, nor the compensation for it, is
contingent upon the appraised value of the property. The appraisers have no personal
interest or bias with respect to the parties involved.
11. The appraiser has personally inspected the subject site (unless noted otherwise). The
comparable sales data has been viewed via aerial maps, photographs and/or online street
views along with file pictures, when available. To the best of the appraiser's knowledge and
belief, all statements and information in this report are true and correct, and the appraisers
have not knowingly withheld any significant information.
12. The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and is our personal, unbiased professional analyses,
opinions, and conclusions. Our analyses, opinions, and conclusions were developed, and
this report has been prepared, in conformity with the Uniform Standards of Professional
Appraisal Practice.
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 51
Assumptions & Limiting Conditions —continued
13. The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We
have not made a specific compliance survey and analysis of the property to determine
whether or not it is in conformity with the various detailed requirements of the ADA. It is
possible that a compliance survey of the property, together with a detailed analysis of the
requirements of the ADA, could reveal that the property is not in compliance with one or more
of the requirements of the Act. If so, this fact could have a negative effect upon the value of
the property. Since we have no direct evidence relating to this issue, we did not consider
possible non-compliance with the requirements of ADA in estimating the value of the
property.
14. No one provided significant professional assistance to the person(s) signing this report.
15. This appraisal assignment was not based on a requested minimum valuation or specific
valuation or approval of a loan.
16. To the best of our knowledge and belief, the reported analysis, opinions, and conclusions
were developed, and this report was prepared in conformity with the requirements of the
Code of Professional Ethics and the Standards of Professional Appraisal Practice of the
Appraisal Institute.
17. The appraised value opinion assumes all leases (if any) are current and paid in full as of
the effective date of the appraisal.
18. Excel grids and tables may have slight deviations due to rounding, which may have a
nominal impact on value.
19. The appraised value opinion assumes all formulas used in the Excel grids throughout the
report are accurate.
20. Unless noted, value assumes no apparent adverse site, building or zoning issues or
conditions.
21. Site and building sizes are based on public record, data services, client and/or appraiser
measurement at the time of appraisal and are considered reliable, but not guaranteed.
22. If any of the above if found to be different, value could change.
52 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
CURRICULUM VITAE
Appraisal Experience: Presently, and since July of 2003, Molly J. Lewis has been employed
as a full time real estate appraiser. Currently a commercial appraiser at Nagell Appraisal &
Consulting, an independent appraisal firm (8 appraisers) who annually prepares 1,500 +/-
appraisal reports of all types. Ms. Lewis was employed with Paul Folland of Eagle Appraisal for
part of 2003.
Education:
Graduate of Northwestern College, St. Paul, MN.
B.S. Degree in Business Administration.
Prosource Educational Services
Appraisal 100 Introduction to Construction Principles
Appraisal 101 Introduction to Appraisal Principles I
Appraisal 102 Introduction to Appraisal Principles 11
Appraisal 103 Introduction to Appraisal Practices I
Appraisal 104 Introduction to Appraisal Practices 11
Appraisal 105 Introduction to Appraisal Standards and Ethics
Appraisal Institute, Pre-licensure and Continuing Education Courses
Basin Income Capitalization
Income Valuation of Small, Mixed-Use Properties
General Applications
Numerous courses covering USPAP, trends and various real estate and
appraisal topics
Fundamentals of Separating Real Property, Personal Property & Intangible
Business Assets
Licenses Held:
Resident Appraiser: Certified General
License #20391975
Appraisals Performed:
Commercial Appraisal
Agricultural, Residential and Commercial Land
Retail
Restaurant
Office
Industrial
Mixed-Use
New Construction
Residential Subdivision
Special Use Properties: Marina, Golf Dome, Church, Airplane Hangar
Eminent Domain, Condemnation
Residential Appraisal
Single Family
Two-Family
Multi Family
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 53
Curriculum Vitae -- continued
Appraisal Experience
Presently and since 1985, William R. Waytas has been employed as a full time real estate appraiser.
Currently a partner and President of the Nagell Appraisal & Consulting, an independent appraisal firm
12 employees) who annually prepare 1,500 +/- appraisal reports of all types. Mr. Waytas was
employed with Iver C. Johnson &Company, Ltd., Phoenix, AZ from 1985 to 1987.
Properties appraised:
Commercial - low and high-density multi-family, retail, office, industrial, restaurant, church,
strip-mall, fast-food, convenience stores, auto-service and repair, hotel, hotel water park, bed
breakfast, cinema, marina, numerous special use properties, and subdivision analysis.
Residential — single-family residences, hobby farms, lakeshore, condominiums, townhouses,
REO and land.
Eminent Domain — extensive partial and total acquisition appraisal services provided to
numerous governmental agencies and private owners.
Special Assessment — numerous street improvement and utilities projects for both
governmental and private owners.
Review—residential, commercial and land development.
Clients - served include banks, savings and loan associations, trust companies, corporations,
governmental bodies, relocation companies, attorneys, REO companies, accountants and
private individuals.
Area of Service - most appraisal experience is in the greater Twin Cities Metro Area (typically
an hour from downtown metro). Numerous assignments throughout Minnesota.
Professional Membership,Associations &Affiliations
License: Certified General Real Property Appraiser, MN License#4000813.
Appraisal Institute: SRA, Senior Residential Appraiser Designation,
General Associate Member
Employee Relocation Council: CRP Certified Relocation Professional Designation.
International Right-Of-Way Association: Member
HUD/FHA: On Lender Selection Roster and Review Appraiser
DNR: Approved appraiser for Department of Natural Resources
Testimony
Court, deposition, commission, arbitration &administrative testimony given.
Mediator
Court appointed in Wright County.
Committees
President of Metro/Minnesota Chapter, 2002, Appraisal Institute.
Chairman of Residential Admissions, Metro/MN Chapter, Al.
Chairman Residential Candidate Guidance, Metro/Minnesota Chapter, Al.
Elm Creek Watershed Commission, Medina representative 3 years.
Medina Park Commission, 3 years.
54 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
Curriculum Vitae -- continued
Education
Graduate of Bemidji State University, Minnesota. B.S. degree in Bus. Ad.
During college, summer employment in building trades (residential and commercial).
Graduate of Cecil Lawter Real Estate School. Past Arizona Real Estate License.
General & Professional Practice Courses & Seminars
Course 101-Introduction to Appraising Real Property.
Numerous Standards of Professional Practice Seminar.
Fair Lending Seminar.
Eminent Domain &Condemnation Appraising.
Eminent Domain (An In-Depth Analysis)
Property Tax Appeal
Eminent Domain
Business Practices and Ethics
Scope of Work
Construction Disturbances and Temporary Loss of Going Concern
Uniform Standards for Federal Land Acquisitions (Yellow Book Seminar)
Partial Interest Valuation Divided (conservation easements, historic preservation easements,
life estates, subsurface rights, access easements, air rights, water rights, transferable
development rights)
Commercial/Industrial/Subdivision Courses & Seminars
Capitalization Theory&Techniques
Highest& Best Use Seminar
General & Residential State Certification Review Seminar
Subdivision Analysis Seminar.
Narrative Report Writing Seminar(general)
Advanced Income Capitalization Seminar
Advanced Industrial Valuation
Appraisal of Local Retail Properties
Appraising Convenience Stores
Analyzing Distressed Real Estate
Evaluating Commercial Construction
Fundamentals of Separating Real Property, Personal Property and Intangible Business Assets
Residential Courses &Seminars
Course 102-Applied Residential Appraising
Narrative Report Writing Seminar(residential)
HUD Training session local office for FHA appraisals
Familiar with HUD Handbook 4150.1 REV-1 &other material from local FHA office.
Appraiser/Underwriter FHA Training
Residential Property Construction and Inspection
Numerous other continuing education seminars for state licensing &Al
Speaking Engagements
Bankers
Auditors
Assessors
Relocation (Panel Discussion)
Publications
Real Estate Appraisal Practice (book): Acknowledgement
Articles for Finance &Commerce and Minnesota Real Estate Journal
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 55
ADDENDA TO APPRAISAL REPORT
56 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
NAGELL APPRAISAL & CONSULTING
12805 Highway 55 Minneapolis: 952-544-8966
Plymouth, MN 55441 St.Paul 651-209-5959
Established in 1968 Central Fax 952-544-8969
Client:City of Elk River June 23.2015
Attn:Amanda Othoudt
1W65 Orono Parkway
Elk River,MN 55330
RE: Appraisal of a commercial land lbuslnems park zoning}
NEC of Joplin street&Business Center Drive
Elk River,MH 55330
tear Amanda
Thank you for your Interest in obtaln.ng appraisal services regard+ng the propery above Per our
conversation,you indicated a report with the following research and analysis is needed
Report Use: The report use is for decision making.
Value Type:Curren',market value as it relates to the acquisition reflecting highest and best use per Uniform
Standards of Professional Appraisal Practice will be provided
Properly Description: A triangular piece of land on the NEC of Joplin Street&Suslress Center Drive The
site contains about 2 37 acres
Contact for access:
Scope of Report:(1)View the property and neighborhood. fly Report the physical andior economic tactors
that could affect the properly (3) Appropriate reuarch, collection. verification. analysis and viewing of
pertinent market data will be Conducted. The appropriate approach(es)to value wiff be applied. (4)
Report findings and conclusions.
Report Format:An Appraisal Report(narrative formal will be used. It has a summary of statements of
the data analysis and conclusions. Appropriate photos, maps and exhibits are included. An electronic
PAF)copy wN be providod.
add'ionat meetings,appraisal reports,any discovery,preparation and testifying
would be extra and Client named above is responsible for payment in a timely
manner
Due Date. The report can be completed in
Information needed by the appraiser: Ste survey,if available
Our Company: has 12 employees and has been in business since 1968 and has sufficient knowledge,
experience, education, contacts and resources to competently complete this assignment. Neither the
employment to make the appraisal,nor the compensation for it is contingent upon the appraised value of
the property. It you agree to the above terms,please sign below and return by fax or mail. If you have any
additional questions,please do not hesitate to contact me
Sincerely t
Signa wre _Y
William R Waylas r]r }'Cert F-IifiedGanera14000813.MN Date m 17
www.nagLilmn.com
Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com 57
Legal Descriptions:
Parcel ID 75-132-3.01
Pa-cel nr'a
Parcel Type RE
Property Address
Plat nla
Sec-T;vp-Rn8 Sec32T33N R26W
Legal Description THAT PT OF W 1-2 OF NE1-4OFSW1-4 DES AS FOLLOWS:COM AT NW CO RN ER OFW1-2OFNE
1,4 OF SW 1-4.THENCE S 00 DEG 48 MIN 04 SEC E,AN ASSUMED BEARING ALONG W LI VEA C
OF 377.74 FT TO PT OF BEG OF LAND TO BE DES,THENCE N 64 DEG 33 MIN 16 5 E C EA DIS OF
205.29 FT,THENCE NE LY 142.39 FT ALONG A TANGENTIAL CURVE CON CAVE TO'1W HAVING A.
RADIUS OF 513 FT&CENTRAL ANGLE OF 21 DEG 29 MIN 15 SEC,THENCE NELY&ELY,ALON_..-.
REVERSE CURVE CONCAVE TO SE-TOTHEINTERSECTIONWITH WLYEKTOFSLY ROFWLINE
OF MAIN SFAS DEDICATED IN THE PLAT OF GOSPODDRSORO NG LAKE ADDACCORDING To
SAID PLATON FILE&OF RECORD IN OFFICE OFTHE COUNTY RECORDER,SHERBURNE COUNTY-
SAID CIJRVE BEl NG TANGENT TO LAST DES CURVE&TAN GE NT TO SAID WLY E KTDf SLY ROFW
LI ME,TH ENCE N 88 DEG 33 M I N 43 SEC W,ALONG SAI D WLYE?CFOFSLYROFWLINE-A DIS OF
548.71 FT TO THE INTER SECTION WITH SAID W LI VE OF W 1-2 OF NE 1-4 OF SW 1-4,THENCE S
00 DEG 48 MIN 04 SEC E,ALONG W LINE A DIS DF 300.67 FT TO PT OF BEG-
Note:Legal descriptions here are for tax
pu rposes only.Do not use them for recording
purposes.)
Parcel ID 75-575-0010
Parcel rk'a
Parcel Type RE
Property Address
Plat 575-COUNTRY CROSS VG E.I_S 14 ESS CENTER
Set-Tvrp-Rn3 5ec-32 T3 3N R26W
Legal Description OUTLOTA
Note:Lega I descriptions here are for tax
purposesonly-Do not use them for recording
purposes.)
Last Recordi ng NIA
Class 776-M unici pa I-Al I Other
Occupancy NON-HOMESTEAD
Deeded Acres 0.59
Tax District ELK RIVER CITY
School District 728-E LIC RIVER
58 Nagell Appraisal&Consulting 1 952-544-8966 1 www.callnagell.com
City ol
Request for Action
RiVeor"
To Item Number
Mavorand City Council 43T
Agenda Section Meeting Date Prepared by
0:)nsent June 15, 2015 Arnanda Othoudt, F"conornic Development
Director
Item Description Reviewed by
Letter of Intent to PurchArSC Propertyr
and Cal Fortner, City Administrator
Authorize Appraisal on Real Propetty Iodated at Reviewed by
Corner ofJoplin Street and Highway'10
Action Requested
Approve, by motion, the letter ofintentto 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 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 tip
to three cornryiercl-al/retail buildings. The developer has indicated that these cornmercial/ret-all buildings
may include a national client with a drive thru, a regional*onal client, and alloxv 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 I titter 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
Elbert Construction Letter of Intent to Purchase
P (11 W I H I P fli T
Template V 1pcfaed<}/1W INATURE
I
June 10, 2015
Amanda Othoudt
Econornic Development Director
City of Elk River
13065 Orono Parkway
Elk River,N4N 55330
RE: City owned property I-]Nvy 10&Joplin SE Comer
City of Elk River:
We are pleased to present an offer to purcluise the attached referenced properties for site asserriblage &
development.
Purchaser:Ebert Coustruction
233541 County Road 10
Corcoran,NN 55357
Phone 763-498-7844
Seller: City of Elk River
A Minnesota Municipal Corporation
13065 Orono Parkway
Elk River,MN 55330
Phone 763-635-10(10
Property-, Approxiniatelv 88.000 square of land, net of roads and easernents, located at the SE
corner of Hwy 10 and Joplin St (Legal to conform), Site sketch attached,
Purchase Price: MD by appraisal prepared by city
The Purchase Price will be adjusted to reflect the actual square footage as determined by
survey provided by Seller.
AMMOMM
Initial Earnest
monev: 1.000-00 to be deposited with escrow agent, Conimercial 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 froiri the date of a fully executed purchase
agreement to satisfy, or waive the following Conditions to Closing:
i) Seller entering into with MnDOTa rigIrt to purchase excess ROW
n) Purchaser having authorization to purchase City Parcels, remnam M"DOT
parcel,inisc. 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/cornmercial& 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 Ifirifted 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 Inforniation as defined below,
Purchaser must satisfy or waive the above Conditions to Purckise within the one year
time period oaf 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 frarnes arc: subject to Purchaser actively pursuing redevelopment of the
property. Defined as applications Nvith the City/.EDA for assembly & redevelopincirt, In
no event shall the Purchase Agreement be (ennimated if Purchaser is still actively
pursuing and waiting on City schedules for final review approvals(planning commission,
EDA,City Council or MriDOT)
AdM111M
if Purchaser does not send Seller a written notice of Purchaser's waiver of the Conditions
to Purchase, or right to exterid, the purchase agreement sliall be deemed temlifulted.
Purchaser's Earnest Money shall be returned to Purchaser and the parties shall have 110
further rights,or obligations to each other. Seller sliall cooperate Yvithand reasonably aid
Purchaser in the satisfaction of the aforementioned contingencies.
Seller Information: Wiflun thirty (30) days of execution of the purclmse agreement, Seller shall provide
Purchaser with the following:
i) All inforniation Seller has related to the conditions of the site including
environmental and soil conditions. Seller will provide Purcliaser with copies of
any reports previously obtained or information previously received, including
without limitation any information or reports of any goverrunental agency
concerning the property that are in the Seller's possession or control.
ii) A copy of any current suncy,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 ivaiver of the Conditions to Purchase,
Title Inspection.- Within tliirt-v (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 corrunimient 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 agreenicut and upon
Closing that the following are true and correct:
I) 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 niarketable tide.
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 em-ironinental issues other than those that are disclosed,
Real Estate"Faxes: Real estate taxes payable in the year of`closing shall be pronated 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 faxes.
Assessments: Seller sliall pay all levied,pending and/or deferred special assessnleots at Closing,
Assignment of
Purchase
Agreement:Prior to Closing, the Purchaser irwy assign the obligations of the purchase agreement to
in affiliate of Purchaser provided the assignee has sufficient FinancO 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 partiessignjug,or accepting this letter to the transaction
herein. Notwithstanding anything to the contrary', in no event shall this letter be deemed to be or constifine 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& DevOopment
IPuirchaser: Seller:
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement") is made and entered into as of the Effective Date (as
defined below in Section by and between E&R Investments, LLC, a Minnesota limited liability
company ("Purchaser") and the City of Elk River, a Minnesota municipal corporation ("Seller"). In
consideration of the mutual covenants and agreements contained herein, including the costs and expenses
incurred by Purchaser to perform due diligence related to the acquisition of the Property, and for other
good and valuable consideration, Purchaser and Seller do hereby make and enter into this Agreement
upon the following terms and conditions:
ARTICLE 1 -PURCHASE AND SALE
1.1 Agreement of Purchase and Sale. Seller agrees to sell to Purchaser, and Purchaser agrees to buy
from Seller, the real property that Seller owns, or will own or have control over, within the land located in
the City of Elk River, County of Sherburne, State of Minnesota, as depicted in Exhibit A, together with
any improvements thereon, and all easements and rights benefitting or appurtenant to the property
collectively the "Property"). The Property is identified in this Agreement by reference to four different
parcels. Purchaser acknowledges that Seller is not the current owner of Parcels 1 and 3 of the Property
and that Seller is in the process of acquiring these parcels from their current owners. The Property and
the parcels are depicted in Exhibit A and further described as follows:
Parcel 1: Hogen A. Wingness is the fee owner of Tract B of Parcel 1 and Harry R. Lakoduk and
Sue Lakoduk are the fee owners of the other portion of Tract A of Parcel 1. This parcel is also
encumbered by a Minnesota Department of Transportation ("MnDOT") right-of-way easement.
Seller shall use reasonable efforts to obtain deeds from the fee owners of the parcels or their heirs,
or in the event that Seller is unable to locate the fee owners or the fee owners are not willing to
convey Parcel 1 to Seller, Seller shall acquire Parcel 1 through eminent domain. Seller shall also
use reasonable efforts to obtain a release from MnDOT of the right-of-way easement. Timing of
the conveyance from the fee owners and the release of the easement from MnDOT shall be
consistent with the timing under this Agreement.
Parcel 2: Seller is the fee owner of Parcel 2.
Parcel 3: Sherburne County ("County") is the fee owner of Parcel 3. The County has represented
to Seller that it is willing to convey Parcel 3 to Seller. Seller shall reasonable efforts to obtain a
deed from the County for Parcel 3. Timing of the conveyance from the County shall be
consistent with the timing under this Agreement.
Parcel 4: Seller is the fee owner of Parcel 4.
1.2 Purchase Price and Manner of Pam. The purchase price for the parcels of the Property shall
be as follows:
a) For Parcels 1 and 3 the purchase price shall be the consideration amount that the fee
owners agree to convey these parcels to Seller in any offer letter or other agreement with
Seller or, in the event that Seller must obtain the property using eminent domain, the
amount paid by Seller to the fee owners as compensation and the amount charged by
MnDOT for releasing its easement. There shall be no mark-up or additional cost charged
for the purchase price of these parcels, but Purchaser shall be responsible for paying
Seller's acquisition costs, including, but not limited to, appraisal fees, court filing fees,
469680v2 SJS EL185-36
and attorneys' fees. Such fees are estimated at$10,000.00.
b) For Parcels 2 and 4, the Purchase Price shall be $81,000.00.
collectively, the"Purchase Price"). The Purchase Price, subject to prorations and adjustments set forth in
this Agreement, shall be payable in full at Closing in cash, by wire transfer of immediately available
funds or by a Title Company check to Seller.
1.3 Earnest Money. Within five days after this Agreement is fully executed, Purchaser shall deposit
with the Title Company (as defined below) the sum of$1,000.00 ("Earnest Money") in good funds, either
by certified bank or cashier's check or by wire transfer. The Title Company shall hold the Earnest Money
in accordance with the terms and conditions of this Agreement and any escrow agreement entered into by
Seller, Purchaser and Title Company. Interest, if any, accruing on such sum shall become a part of the
Earnest Money and shall be distributed as Earnest Money in accordance with the terms of this Agreement.
The Earnest Money shall be refundable as set forth in this Agreement. The Earnest Money shall be
applied towards payment of the Purchase Price for Parcels 2 and 4.
1.4 Subdivision. Parcel 3 is part of a larger parcel owned by the County that needs to be subdivided.
The parties understand that the subdivision is necessary to procure a legal description of the Property for
Seller's deed, Purchaser's mortgage, if any, and obtaining acceptable title insurance for the Property.
Purchaser may also wish to combine the parcels into a fewer number of parcels or plat the Property. The
subdivision or platting of the Property shall be done in compliance with applicable state, county and
municipal laws, ordinances and regulations relating to the subdivision or platting of property. Purchaser
shall, at its cost, be responsible for the subdivision of the Property and obtaining such platting and
subdivision approvals as are necessary so that the Property will be a legally subdivided tax parcel or
parcels as of the date of Closing. All costs assessed or charged (whether by special assessment or
otherwise) or incurred for offsite improvements, utility improvements or other public improvements
required by the City of Elk River or other governmental authority related to the subdivision or
development of the Property as part of the Closing shall be the responsibility of Purchaser. Purchaser
shall also be responsible, at its cost, to select a surveyor to assist in the subdivision of the Property, and
for the filing documents creating the subdivision contemporaneously with the Closing. Purchaser shall
not complete any subdivision of the Property and shall not file the plat or other subdivision documents
until the Closing. The obligations of Purchaser contained in this Section shall survive and be enforceable
after Closing and delivery of the deed.
1.5 Acquisition Cost Escrow. As stated in Section 1.2 of this Agreement, Purchaser shall be
responsible for reimbursing Seller for its acquisition costs in acquiring Parcels 1 and 3, which include,
but are not limited to, appraisal fees, court filing fees and attorneys' fees. Seller shall be entitled to
reimbursement of these costs, regardless of whether or not the parcels are acquired by Seller, Purchaser
decides not to purchase one of the parcels or the Property or this Agreement is terminated. Upon
execution of this Agreement, Purchaser shall deposit $10,000.00 into an escrow account with Seller for
reimbursement of Seller's acquisition costs as outlined above. If any funds held under this Agreement
remain after payment of the above, such funds will be returned to Purchaser without interest. If it
appears that the actual costs incurred will exceed $10,000.00, Purchaser and Seller will review the costs
required to complete the acquisition(s) and Purchaser agrees to deposit additional sums in escrow with
Seller.
ARTICLE 2—TITLE AND SURVEY
2.1 Title Examination. Purchaser has obtained an ALTA title insurance commitment ("Title
Commitment") from Commercial Partners Title ("Title Company") covering the entire Property. The
Purchase Agreement Page 2 of 13
469680v2 SJS EL185-36
Title Commitment shows all matters affecting title to the Property and binds the Title Company to issue at
Closing an ALTA 2006 form B owner's title insurance policy to Purchaser in the full amount of the
Purchase Price ("Title Policy"). The Title Commitment includes copies of all recorded documents
affecting the Property with proper searches for bankruptcies,judgments, liens and assessments. Purchaser
shall pay the cost of the premium for the Title Policy and any endorsements required by Purchaser.
2.2 Survey/Plat. Purchaser shall, at its option and cost, employ a surveyor, licensed or registered by
the state where the Property is located, to prepare an ALTA survey or plat of the Property
Survey/"). The Survey/Plat shall include the requirements and items determined by Purchaser,
including the proposed square footage of the Property and any proposed lots/outlots. A copy of the
Survey/Plat shall be delivered to Seller when obtained by the Purchaser.
2.3 Title Objections, Cure of Title Objections. Purchaser shall have until the later of the expiration of
the Due Diligence Period or the date that is 10 days after receipt of both the Title Commitment and
Survey to notify Seller in writing of such objections as Purchaser may have to anything contained in the
Title Commitment or Survey ("Objections"). Purchaser's failure to make Objections within such time
period will constitute a waiver of Objections. However, any matter which is not referenced in the
Title Commitment and is first recorded, discovered or disclosed after the effective date of the Title
Commitment, whichever is later may be objected to by Purchaser in the manner described herein.
Purchaser need not object to mortgages or other liens. If not sooner satisfied, Seller shall cause the
Property to be released from any mortgages or other liens against the Property at the closing. Any
matter shown on the Title Commitment, other than a mortgage or other lien and not objected to by
Purchaser shall be a "Permitted Encumbrance" hereunder. Within seven days after receipt of
Purchaser's Objections, Seller shall notify Purchaser in writing if Seller elects not to cure the
Objections. If such notice is given within said seven day period, Purchaser may either waive the
Objections or terminate this Agreement by giving written notice of termination to Seller within 10
days after Seller's notice is given to Purchaser. If written notice by Seller is not given within the 10
day period, Seller shall use commercially reasonable efforts to correct any Objections within 30
days after the expiration of the 10 day period ("Cure Period"). If the Title Company is willing to
issue a title insurance policy to Purchaser that does not except from title insurance coverage an item
Purchaser has objected to, the objection relating to such item shall be deemed cured. If the
Objections are not cured within the Cure Period, Purchaser shall have the option to do any of the
following:
a) Terminate this Agreement by giving written notice to Seller within 10 days after
the expiration of the Cure Period and neither Seller nor Purchaser shall have
further rights or obligations hereunder. In such event Seller shall return all
Earnest Money to Purchaser.
b) Waive the objections and proceed to close without reduction in the Purchase
Price.
ARTICLE 3 - INSPECTION AND CONTINGENCIES
3.1 Right of Inspection. As of the Effective Date, Purchaser and its agents shall have the right to
access the Property to make physical and visual inspections, investigations, surveys and testing as the
Purchaser deems necessary. Purchaser agrees that its on-site activities at the Property shall be conducted
at reasonable times and shall not unreasonably interfere with the use of the Property by Seller. Seller
agrees to meet with the parties conducting any inspections, investigations, surveys and testing and to
Purchase Agreement Page 3 of 13
469680v2 SJS EL185-36
cooperate in answering questions concerning the Property as requested. Purchaser shall pay all costs and
expenses of such inspections, investigations, surveys and testing conducted by Purchaser. Purchaser shall
repair and restore any damage to the Property caused by Purchaser's activities at the Property to
substantially the same condition as existed prior to such entry. Purchaser agrees to indemnify and hold
Seller and the Property harmless from all claims, costs, expenses or damages, including reasonable
attorneys' fees, for injuries or damages resulting from such activities. Seller agrees to hold Purchaser
harmless from all claims, costs or damages, including reasonable attorneys' fees, for damages resulting
from Purchaser's reporting of any hazardous substances revealed by Purchaser's actions under this
Section. These obligations of Purchaser shall survive Closing or any termination of this Agreement.
3.2 Due Diligence Period. The "Due Diligence Period" shall be from the Effective Date through the
date that is 180 days after the Effective Date.
3.3 Extension of Due Diligence Period. Purchaser shall have the right to obtain up to two
consecutive 60 day extensions of the Due Diligence Period upon written notice to Seller. Upon such
extension by the Purchaser the definition of Due Diligence Period shall be changed to such extended date.
To exercise the first 60 day extension, Purchaser shall provide written notice to Seller prior to the
expiration of the Due Diligence Period. To exercise the second 60 day extension, Purchaser shall provide
written notice to Seller prior to expiration of the first extension period. The consideration for these
extensions shall be the due diligence costs that Purchaser has incurred in the development of the Property,
and no additional monetary consideration shall be required. In the event one of the parcels needs to be
acquired by eminent domain or a release of the easement over one of the parcels has not been obtained
from MnDOT or the County has yet to approve the conveyance of Parcel 3, the Due Dilligence period
shall automatically be extended an additional 30 days after the conclusion of the eminent domain action,
receipt of the MnDOT release letter or date of approval by the County, whichever occurs last. Purchaser
and Seller understand MnDOT can only release its easement upon request by the fee owner or the City of
Elk River.
3.4 Purchaser's Contingencies. The obligations of Purchaser under this Agreement are contingent
upon each of the following:
a) Title and Survey. Title and Survey shall have been found acceptable by Purchaser as
provided in Article 2.
b) Testing and Inspection. Purchaser shall have determined, in its sole discretion, on or
before the expiration of Due Diligence Period, that it is satisfied with the condition of the
Property and the results of all inspections and testing of the Property, including, but not
limited to, all soil tests, well tests, engineering inspections, property condition reports,
hazardous waste and environmental reviews of the Property.
c) Due Diligence Materials and Other Documents Provided By Seller. Purchaser shall have
determined, in its sole discretion, on or before the expiration of the Due Diligence Period,
that it is satisfied with the Due Diligence Materials and other documents and information
concerning the Property provided by Seller under this Agreement.
d) Government Approvals. Purchaser shall have determined, in its sole discretion, on or
before the expiration of Due Diligence Period, that it is satisfied that all governmental
approvals, permits or authorizations necessary or desired by Purchaser for the Property
have or will be obtained. Purchaser shall have determined, in its sole discretion, on or
before the expiration of the Due Diligence Period, that all applicable zoning ordinances,
Purchase Agreement Page 4 of 13
469680v2 SJS EL185-36
building and use restrictions and codes, required building permits, and any requirements
with respect to licenses, permits and agreements necessary for the lawful use and
operation of the Property as Purchaser elects, have been or will be issued or complied
with.
e) Third PartyApprovals. Purchaser shall have obtained from any third party, on or before
the expiration of the Closing, all agreements, covenants, approvals, easements and
adequate assurance that Purchaser, in its sole discretion, deems necessary or appropriate
for use of the Property as contemplated by Purchaser.
f) Flood Plain. Purchaser shall have determined, in its sole discretion, on or before the
expiration of the Due Diligence Period, that the Property is not located within an flood
area unacceptable to Purchaser.
g) Development Feasibility. Purchaser shall have determined, in its sole discretion, on or
before the expiration of Closing, that it is satisfied with the feasibility of its development
of the Property.
h) Anchor Tenant. Purchaser shall have obtained, on or before the Closing, a signed non-
contingent lease or sale agreement for the Property from a third-party user that is
acceptable to Purchaser in its sole discretion.
i) Financing. Purchaser having obtained a financing commitment in order for Purchaser to
purchase and develop the Property, on or before the Closing, at market rates and terms
acceptable to Purchaser, in its sole discretion.
j) Subdivision. Purchaser, on or before the final Closing, shall have received all approvals
for the subdivision of the Property and met all conditions imposed to subdivide the
Property, all so such subdivision is acceptable to Purchaser in its discretion.
k) Purchase Price. Purchaser, on or before any Closing, shall have determined, in its sole
discretion, on or before the Closing, that it is satisfied with the consideration being paid
to the County for Parcel 3, to the fee owners for Parcel 1 and to MnDOT to release the
easement over Parcel 1.
3.5 Right of Termination. Seller agrees that in the event Purchaser determines in its sole discretion
that a contingency contained in Section 3.4 has not been satisfied on or before the date specifically set
forth for the contingency, Purchaser shall have the right to terminate this Agreement by written notice to
Seller on or before three days after the expiration of Due Diligence Period, or three days after the date
specifically set forth for the contingency, as applicable. Upon such termination, the Earnest Money shall
be returned to Purchaser. If Purchaser acknowledges the satisfaction or waiver of a contingency by
written notice to Seller, or if Purchaser does not provide a written notice of termination by the date
required, Purchaser shall no longer have a right to terminate this Agreement under this Section because of
such contingency. All the contingencies set forth in Section 3.4 are specifically for the benefit of the
Purchaser.
3.6 Conditions to Close. In the event Seller cannot obtain the fee interest in Parcel 1 or 3 or MnDOT
is unwilling to release its right-of-way easement over the parcel, then Purchaser shall have the right to
either elect to not purchase such parcel or terminate this Agreement. Purchaser must provide Seller
written notice of its intent. In the event that Purchaser elects not to purchase a particular parcel, it shall no
longer have any right to purchase such parcel under this Agreement and all relevant provisions shall be
Purchase Agreement Page 5 of 13
469680v2 SJS EL185-36
adjusted to account for such parcel not being purchased. In the event Purchaser elects to terminate this
Agreement, upon such termination, neither party shall have any further rights or obligations under this
Agreement, except to the extent any rights or obligations expressly survive such termination.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES
4.1 "As Is" Sale and Release. Subject only to the express representations and warranties made under
this Agreement, Purchaser is purchasing the Property "as is" and "where is" based on its own
investigation and inquiry and is not relying on any representation or warranty of Seller. Subject only to
the express representations and warranties made under this Agreement, Purchaser waives any and all
warranties pertaining to the Property whether express, implied, statutory or other. Subject only to the
express representations and warranties made under this Agreement, Purchaser hereby forever waives,
releases and covenants not to bring any demand, claim, cost recovery action or lawsuit it may now or
hereafter have or accrue against Seller, its officials, employees, agents, contractors and assigns arising
from any environmental release or matter related to the Property, including, but not limited to: (a) any
hazardous substances currently located or which come to be located within the Property; or(b) the release
of any hazardous substances into, from or through the Property, whether or not attributable to the
handling, storage, generation, transportation or disposal of hazardous substances or the mere presence of
hazardous substances within the Property; or (c) any hazardous substances which have migrated, leached
or traveled onto or off of the Property from any source. This section shall survive and be enforceable for
an unlimited period after the date of Closing and delivery of the deed.
4.2 Representations and Warranties of Seller. Seller represents and warrants to Purchaser as follows:
a) Organization and Authority. Seller is a municipal corporation duly organized and validly
existing in good standing under the laws of Minnesota. Seller has the requisite power and
authority to enter into and perform this Agreement. Seller has or will have the requisite
power and authority to transfer all of the Property in accordance with this Agreement.
The persons signing this Agreement and Seller's closing documents on behalf of the
Seller are authorized to do so.
b) Exclusive Right to Purchase. With the exception of discussions with the fee owners of
Parcels I and 3, Seller and its agents shall not conduct any discussions or negotiations or
respond in writing to any solicitations by third parties relating to the purchase of the
Property during the term of this Agreement. Seller has not entered into any other
contracts for the sale of the Property, nor has Seller granted any rights of first refusal or
options to purchase the Property or any other rights to others that might prevent the
consummation of this Agreement, and Seller will not enter into any such contracts
relating to the sale of the Property with any other parties.
c) Due Diligence Materials and Other Documents Provided by Seller. Seller shall deliver to
Purchaser, within five days after the Effective Date, copies of all of the following relating
to or affecting the Property which Seller has access to or are in Seller's possession or
control: soil and environmental reports and tests; inspection notices, reports and results;
surveys; site plans; title work;property tax and special assessment bills together with any
notices concerning assessment, valuation or property tax or special assessment;
agreements with any governmental authority; notices of violation from and other
correspondences with governmental authority; governmental authority and third party
consultants responses and conclusions with respect to review of the Property; and any
other material correspondences and documents, notices and items relating to or affecting
Purchase Agreement Page 6 of 13
469680v2 SJS EL185-36
the Property.
Seller shall also deliver to Purchaser, within five days after the Effective Date, correct
and complete copies of all existing agreements or contracts related to or affecting the
Property, including, but not limited to: any MnDOT, maintenance, management and
service contracts, whether or not being assumed by Purchaser.
The obligation of Seller to provide the above referenced items is ongoing through
Closing in the event that Seller gains access to, or possession or control of, any additional
or updated above referenced items after the Effective Date. Seller shall cooperate in all
reasonable respects with Purchaser's due diligence efforts. Seller shall not be entitled to
any compensation in connection with such cooperation.
d) Proceedings. There is no action, litigation, investigation, condemnation, eminent domain
or proceeding of any kind pending or threatened against the Property to Seller's actual
knowledge. Seller has not received any notice from any governmental authority as to the
violation of any law, ordinance or regulation or from any third party as to the breach of
any covenants or easements affecting the Property.
e) Wells, Individual Sewage Treatment Systems and Storage Tanks. There are no wells or
individual sewage treatment systems, whether in use or abandoned, at the Property. To
the Seller's actual knowledge, there are no underground or above ground storage tanks of
any size or type at the Property.
f) Seller Activities shall not Change the Property. Seller shall not perform or authorize any
activities that change the physical characteristics of the Property from its existing state as
of the date of the Effective Date. Seller shall not perform or authorize any removal or
alteration of any improvements, trees or vegetation at the Property and shall not perform
or authorize any excavation or earth moving after the Effective Date.
g) Seller's Cooperation. Seller shall cooperate in all reasonable respects and in good faith
with Purchaser in obtaining governmental and third party approvals, consents and
agreements, and shall execute such applications, permits, agreements and other
documents as may be reasonably required by Purchaser,provided that such items may be
effective as of the Closing. This obligation shall include, but not be limited to, the
cooperation of Seller in the subdivision of the Property by Purchaser so that the Property
is legally subdivided tax parcels and the execution of any plat and other governmental
agreements and documents required for this subdivision. Seller shall not be entitled to
any compensation or reimbursement of costs in connection with such cooperation.
The representations and warranties contained in this Section shall survive and shall be true and correct on
the Effective Date and as of the Closing. Seller shall indemnify and hold Purchaser harmless from, any
expenses or damages, including reasonable attorneys' fees, that Purchaser incurs by reason of, or arising
out of, any breach of any of the above representations and warranties, whether such breach is discovered
before or after Closing. This indemnification obligation of Seller shall survive Closing or any termination
of this Agreement.
ARTICLE 5 - CLOSING
5.1 Time and Place. The parcels of the Property may be purchased in multiple closings at different
times. Each closing ("Closing") shall occur as follows. Purchaser shall be required to purchase both
Parcels 2, and 4 together in one Closing, but may purchase one, all or none of Parcel 1 in the same or
Purchase Agreement Page 7 of 13
469680v2 SJS EL185-36
separate Closings. The Closing for Parcel 2, Parcel 3 and Parcel 4 shall occur 30 days after the expiration
of Due Diligence Period; provided that any extension of the Closing under this subsection shall be only
allowed for administrative issues or final city approvals as needed for any closing and shall not be greater
than 10 days or upon such earlier date agreed upon by the parties. The Closing for Parcel 1 may be
extended by Purchaser in the event that an eminent domain or related action has been initiated by Seller to
attempt to obtain the fee interest in this parcel. Seller shall provide notice to Purchaser of the extension of
the Closing for Parcell, the reasons for the extension, and an estimated date of Closing. The Closing for
Parcel 1 may be extended by Purchaser for up to one year after expiration of Due Diligence Period if
Seller is pursuing an eminent domain or related action to attempt to obtain the fee interest in these parcels.
Seller shall use reasonable efforts to give at least 10 days' notice to Seller of the extended Closing for
Parcel 1. This Closing may occur by deed and money escrow.
5.2 Seller's Obligations at Closing. At each Closing of a parcel of Property, Seller shall deliver to
Purchaser a duly executed quit claim deed in recordable form, conveying to Purchaser fee simple
marketable title to the parcel of the Property being conveyed to Purchaser and all rights appurtenant, free
and clear of all mortgages, liens and encumbrances together with a seller's affidavit, FIRPTA affidavit,
evidence as to the authority of the persons executing documents on behalf of Seller, well certificate and
all other documents reasonably necessary to consummate the transaction contemplated by this
Agreement. Seller shall also deliver possession of the parcel of Property being purchased to Purchaser at
the Closing.
5.3 Purchaser's Obligations at Closing. At each Closing of a parcel of Property, Purchaser shall pay
to Seller that portion of the Purchase Price for the parcel of Property being purchased as set forth in
Section 1.2, as increased or decreased by prorations or adjustments set forth in this Agreement, and shall
deliver to Seller all other documents reasonably necessary to consummate the transaction contemplated
by this Agreement. Purchaser and Seller agree that the Earnest Money shall be delivered to Seller at the
Closing of the first parcel of Property being purchased and applied towards payment of the Purchase Price
for the first parcel.
5.4 Closing Costs. Seller and Purchaser agree to the payment of costs in connection with each
Closing as follows: (a) Seller and Purchaser each will pay one-half of any reasonable and customary
closing fees or charges imposed by the Title Company for the Closing; (b) Seller shall pay all state deed
tax for the recording of the deed; (c) Seller shall pay the cost of recording all documents necessary to
place record title in the condition warranted by Seller in this Agreement and Purchaser will pay the cost of
recording the deed conveying the Property to Purchaser; and (d) any other costs required to be paid by
Purchaser or Seller at Closing pursuant to this Agreement.
ARTICLE 6 - REAL ESTATE TAXES AND SPECIAL ASSESSMENTS
6.1 Real Estate Taxes and Special Assessments. On or before the Closing, Seller shall pay all general
real estate taxes for the parcel of the Property being purchased due and payable in years prior to the year
of Closing. General real estate taxes for the parcel of the Property being purchased due and payable in the
year of Closing shall be apportioned between Purchaser and Seller based on a 365 day calendar year as if
Purchaser were vested with title to the Property on the Closing. Purchaser shall pay or assume all special
assessments levied or pending against the Property as of the Closing.
General real estate taxes for the parcel of the Property being purchased shall be calculated by uniformly
allocating the general real estate taxes for the Property and the other property being subdivided that is
retained by Seller on a square foot basis. Seller shall remain responsible for the payment of all general
real estate taxes, all levied and pending special assessments and all deferred taxes for that portion of the
property being subdivided that is retained by Seller. If required as a result of the subdivision, Purchaser
Purchase Agreement Page 8 of 13
469680v2 SJS EL185-36
and Seller agree to prepay at the Closing their share of the general real estate taxes and special
assessments allocated to their property for the entire year of Closing.
The obligations of Purchaser and Seller contained in this Section shall survive Closing and delivery of the
deed.
ARTICLE 7 - COMMISSIONS
7.1 Brokerage Commissions. Seller represents and warrants that it has not been involved with any
real estate brokers or agents on its behalf in connection with the transaction contemplated under this
Agreement and that no commissions or costs are owed or being paid to any real estate broker or agent in
connection with this transaction. Purchaser represents and warrants that it has not been involved with any
real estate brokers or agents on its behalf in connection with the transaction contemplated under this
Agreement and that no commissions or costs are owed or being paid to any real estate broker or agent in
connection with this transaction. Purchaser and Seller agree to indemnify and hold harmless the other
party from any loss, liability, cost, damage or expense resulting from, or relating to, the breach of its
representation under this Section and any claim for real estate commissions or costs resulting from the
indemnifying party's actions in connection with this transaction not provided for above. These
obligations of Purchaser and Seller shall survive Closing or any termination of this Agreement.
ARTICLE 8 EMINENT DOMAIN
8.1 Eminent Domain. If eminent domain proceedings, other than any eminent domain proceedings
that the Seller may decide is necessary for Seller to acquire Parcel I are commenced prior to the Closing
against all or any part of the Property prior to it being conveyed to Purchaser, Seller shall immediately
give written notice to Purchaser, together with a legal description of the property being taken, and
Purchaser shall have the right, at its option, to terminate this Agreement by giving written notice within
15 days of Seller's notice. If Purchaser gives notice of termination of the Agreement under this Section,
the Agreement shall terminate and the Earnest Money shall be returned to Purchaser. If Purchaser does
not give notice of termination, then the parties shall proceed to Closing, with no reduction in the
Purchase Price, and Seller shall assign to Purchaser all of Seller's right, title and interest to appear in and
receive any award from such proceeding. In the event any awards are made prior to Closing, Seller shall
place such awards in escrow with the Title Company, which will release such awards to Purchaser upon
Closing or to Seller upon termination of this Agreement.
ARTICLE 9 - DEFAULT AND REMEDIES
9.1 Default. Purchaser or Seller shall be in default under this Agreement if either fails to observe,
perform or comply with any term, condition or obligation of this Agreement and such failure continues
for a period of 10 days after written notice of the failure to the Purchaser or Seller from the other party.
9.2 Remedies. Upon default by a Purchaser or Seller, the other party shall have the following
remedies:
a) Purchaser's Remedies. Upon Seller's default under this Agreement, then the remedies
available to Purchaser shall be (1) to terminate this Agreement pursuant to law by written
notice to Seller and to receive the return of the Earnest Money prior to the Closing of the
first parcel of Property, and (2) to seek specific performance of this Agreement on or
before six months after Seller's default during which time the Closing will be postponed
until such time as Seller has cured its default, and (3) to seek any remedy or damages
available at law or in equity. All rights, powers, options or remedies available to
Purchase Agreement Page 9 of 13
469680v2 SJS EL185-36
Purchaser pursuant to this Agreement shall be cumulative and not alternative, and the
exercise of one right, power, option, or remedy shall not bar any other rights, powers,
options or remedies allowed hereunder or by applicable law. The rights and remedies of
this Section shall survive Closing or any termination of this Agreement.
b) Seller's Remedies. Upon Purchaser's default under this Agreement prior to the Closing
of the first parcel of Property, then the sole and exclusive remedy available to Seller shall
be to terminate this Agreement pursuant to law by written notice to Purchaser and upon
such termination to receive the Earnest Money as liquidated damages. Upon Purchaser's
default under this Agreement after the Closing of the first parcel of Property, then the
sole and exclusive remedy available to Seller shall be to terminate this Agreement
pursuant to law by written notice to Purchaser without payment of any additional
liquidated damages. Upon such termination, Purchaser shall be released from all liability
hereunder and neither party shall have further rights or obligations under this Agreement.
Seller expressly waives its rights to seek damages in excess of the liquidated damage
amount in the event of Purchaser's default. Seller has agreed to these liquidated damages
because of the difficulty of ascertaining Seller's actual damages given the uncertainties of
the real estate market, fluctuating property values and differences of opinion with respect
to such matters. The rights and remedies of this Section shall survive Closing or any
termination of this Agreement.
ARTICLE 10 - MISCELLANEOUS
10.1 Successors or Assigns. This Agreement shall be binding upon and inure to the benefit of the
parties, and their respective successors and assigns.
10.2 Severability. In the event any provision of this Agreement shall be held to be invalid,
unenforceable or in conflict with the law of the jurisdiction, the remaining provisions of this Agreement
shall continue to be valid, enforceable and not be affected by such holding.
10.3 Waiver. No term or condition of this Agreement will be deemed waived or amended unless
expressed in writing. The waiver of any condition or the breach of any term will not be a waiver of any
subsequent breach of the same or any other term or condition.
10.4 Assignment. Purchaser may not assign its rights under this Agreement, without prior written
consent of Seller, such consent will not unreasonably withheld,provided that the Purchaser is transferring
its rights to an entity owned or controlled by the Purchaser. In the event that the Seller approves an
assignment by the Purchaser, in no event shall the Purchaser be released from liability hereunder.
10.5 Notices. Any notice required or permitted pursuant to this Agreement shall be in writing and
delivered by (a) personal delivery, (b) reputable overnight delivery service, or (c) United States mail,
postage prepaid, either certified or first class mail,. All notices shall be sent to a party at the address set
forth below, or to such other address or person as the party shall have designated in writing. Notices shall
be deemed given upon the earlier of the date of actual receipt or(i) as of the earlier of the date of delivery
or the date of first attempted delivery if by personal delivery or overnight delivery, or (ii) as of the earlier
of the date of delivery or the date the post office first leaves notice of the mailing if by certified mail.
If to Purchaser: E&R Investments, LLC
Attn: Gregory R. Ebert
23350 County Road 10
Purchase Agreement Page 10 of 13
469680v2 SJS EL185-36
Corcoran, MN 55357
Fax: (763) 498-9951
Email: gebert@ebertconst.com
With a copy to:
If to Seller:City of Elk River
Attn: City Administrator
13065 Orono Parkway NW
Elk River, MN 55330-5600
With a copy to: Kennedy& Graven, Chartered
Attn: Sarah Sonsalla
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
10.6 Further Assurances. Each party agrees that it will execute and deliver such other documents and
take such other action, whether prior or subsequent to Closing, as may reasonably be requested by the
other party, to further consummate the transaction contemplated by this Agreement, without further
consideration.
10.7 Termination. If this Agreement is terminated by either Purchaser or Seller pursuant to a right of
termination expressly set forth in this Agreement, neither party shall have any further rights or obligations
under this Agreement, except for the obligations concerning the Earnest Money and to the extent any
rights or obligations expressly survive such termination.
10.8 Time of Essence. Time is of the essence of this Agreement.
10.9 Calculation of Time Periods. Except as specifically set forth in this Agreement, in computing any
period of time described in this Agreement, the day of the act or event after which the designated period
of time begins to run is not to be included and the last day of the period so computed is to be included,
unless such last day is on a Saturday, Sunday or legal holiday, in which event the period shall run until
the end of the next business day following such Saturday, Sunday or legal holiday. As used herein, the
term "legal holiday" means any state or federal holiday for which financial institutions or post offices are
generally closed in the state where the Property is located.
10.10 Governing Law. This Agreement shall in all respects be interpreted, construed and enforced
according to the laws of the state where the Property is located.
10.11 Counterparts. This Agreement may be executed separately and independently in any number of
counterparts and each and all of which together shall be deemed to have been executed simultaneously
and regarded as one agreement dated the Effective Date.
10.12 Captions. The captions and headings contained in this Agreement are for convenient reference
only and shall not affect the interpretation of this Agreement.
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469680v2 SJS EL185-36
10.13 Attorneys' Fees and Costs. Purchaser and Seller will pay their own attorneys' fees for the
transaction contemplated by this Agreement, except as outlined in this agreement for the purchase of the
parcels. .
10.14 Survival. All of the terms of this Agreement, including, without limitation, the representations
and warranties contained herein, shall survive and be enforceable after the Closing and delivery of the
deed.
10.15 Entire Agreement/Amendment. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter herein and fully supersedes all prior written or oral agreements
between the parties with respect to such matters. No other agreement, statement or promise made by any
party and no amendment, modification or other change of any provision of this Agreement shall be
effective unless in writing signed by the parties.
10.16 Effective Date. The date that the last party executed this Agreement as evidenced by the dates in
the signature block of this Agreement. If either party fails to date this Agreement by its signature, the
date by the signature of the other party shall constitute the Effective Date. Upon execution, a party shall
promptly forward a signed original to the other party.
signature page follows
Purchase Agreement Page 12 of 13
469680v2 SJS EL185-36
IN WITNESS WHEREOF, Purchaser and Seller have executed this Purchase Agreement as of the
Effective Date.
PURCHASER:
E&R Investments, LLC
a Minnesota Limited Liability Company
By:
Print: Gregory R. Ebert
Title: President
Dated:
SELLER:
CITY OF ELK RIVER
By:
Print: John Dietz
Title: Mayor
By:
Print: Tina Allard
Title: City Clerk
Dated:
Purchase Agreement Page 13 of 13
469680v2 SJS EL185-36
Exhibit A to Purchase Agreement
Depiction of Property
to be added]
469680v4 SJS EL185-36
Exhibit B to Purchase Agreement
Description of Parcels 1,2,3 &4
Parcel 1 (Wingness/Lakoduk Parcel)
Part of the following described Land, which description must be determined by a survey:
Tract A (Wingness Parcel):
That part of the South half of the Northwest Quarter of Section 32, Township 33 North, Range 26
West, Sherburne County, Minnesota,which lies within a distance of 112.5 feet on each side of the
following described line:
Beginning at a point on the center line of High Street, distant 353.5 feet North of its
intersection with the center line of Line Street in the Village of Elk River, according to
the plat thereof of on file and of record in the office of the Registrar of Deeds in and for
Sherburne County; thence run westerly at an angle of 89 degrees 54 minutes with said
center line of High Street (when measured from South to West) for a distance of 545.6
feet; thence deflect to the right at an angle of 26 degrees 01 minutes for a distance of
2,118.7 feet; thence deflect to the left at an angle of 28 degrees 21 minutes for a distance
of 2,251.8 feet; thence deflect to the left on a 2 degree 30 minutes curve, delta angle 28
degrees 12 minutes for a distance of 1,128 feet; thence on a tangent to said curve for a
distance of 1,459.2 feet; thence deflect to the right on a 2 degree 30 minute curve, delta
angle 30 degrees 51 minutes, for a distance of 1,234.0 feet; thence on a tangent to said
curve for a distance of 250 feet and there terminating;
Together with all that part of the Southwest quarter of the Northwest quarter of said Section 32
lying Southeasterly of the above described strip, excepting therefrom the right of way of existing
highway.
AND
Tract B (Lakoduk Parcel):
That part of the Northwest Quarter of the Southwest Quarter of Section 32, Township 33 North,
Range 26 West, Sherburne County, Minnesota; which lies Northwesterly of a line run parallel
with and distant 112.5 feet Southeasterly of the following described line:
Beginning at a point on the center line of High Street, distant 353.5 feet North of its
intersection with the center line of Line Street in the Village of Elk River, according to
the plat thereof now on file and of record in the office of the Register of Deeds in and for
Sherburne County; thence run westerly at an angle of 89 degrees 54 minutes with said
center line of High Street (when measured form South to West) for a distance of 545.6
feet; thence deflect to the right at an angle of 26 degrees 01 minutes for a distance of
2,118.7 feet; thence deflect to the left at an angle of 28 degrees 21 minutes for a distance
of 2827.5 feet; thence deflect left at an angle of 28 degrees 12 minutes for a distance of
2,034.9 feet; thence deflect to the right on a 2 degree 30 minute curve, delta angle 30
degrees 51 minutes for a distance of 1,234.0 feet; thence on a tangent to said curve for a
distance of 250 feet and there terminating;
469680v4 SJS EL185-36
Together with all that part of the above described track lying Southeasterly of the above described
strip and Northerly of the Southerly right of way line of Temporary Trunk Highway No. 10, as
same is now located and traveled over and across the above described tract; excepting therefrom
the right of way of existing highway.
Parcel 2 (City of Elk River Parcel)
Outlot A, Country Crossing Business Center, Sherburne County, Minnesota.
Parcel 3 (County of Sherburne Parcel)
All that part of the West Half of the Northeast Quarter of the Southwest Quarter of Section 32, Township
33, Range 26, Sherburne County, Minnesota lying Southerly of the center line of Old U.S. Highway No.
10 and Northerly of the Southerly right-of-way line of Main Street as dedicated in the plat of Gospodor's
Orono Lake Addition.
Parcel 4 (City of Elk River Parcel)
All that part of the West Half of the Northeast Quarter of the Southwest Quarter of Section 32, Township
33, Range 26, Sherburne County, Minnesota, described as follows:
Commencing at the Northwest corner of said West Half of the Northeast Quarter of the Southwest
Quarter; thence South 00 degrees 48 minutes 04 seconds East, assumed bearing, along the West line of
said West half of the Northeast Quarter of the Southwest Quarter, a distance of 377.74 feet to the point of
beginning of the land to be hereinafter described; thence North 64 degrees 33 minutes 16 seconds East a
distance of 205.29 feet; thence Northeasterly a distance of 192.39 feet along a tangential curve concave to
the Northwest having a radius of 513 feet and a central angle of 21 degrees 29 minutes 15 seconds; thence
Northeasterly and Easterly along a reverse curve concave to the Southeast, to the intersection with the
Westerly extension of the Southerly right of way line of Main Street as dedicated in the plat of
Gospodor's Orono Lake Addition according to said plat on file and of record in the office of the County
Recorder, Sherburne County, Minnesota, said curve being tangent to the last described curve and tangent
to said Westerly extension of the Southerly right of way line; thence North 88 degrees 33 minutes 43
seconds West, along said Westerly extension of the Southerly right of way line a distance of 548.71 feet
to the intersection with said West line of the West Half of the Northeast Quarter of the Southwest Quarter;
thence South 00 degrees 48 minutes 04 seconds East, along said West line, a distance of 300.67 feet to
said point of beginning.
And
The right-of-way of Business Center Drive.
469680v4 SJS EL185-36
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement') is made and entered into as of the Effective Date (as
defined below in Section by and between E&R Investments, LLC, a Minnesota limited liability
company ("Purchaser") and the City of Elk River, a Minnesota municipal corporation ("Seller"). In
consideration of the mutual covenants and agreements contained herein, including the costs and expenses
incurred by Purchaser to perform due diligence related to the acquisition of the Property, and for other
good and valuable consideration, Purchaser and Seller do hereby make and enter into this Agreement
upon the following terms and conditions:
ARTICLE 1 - PURCHASE AND SALE
1.1 Ai4reement of Purchase and Sale. Seller agrees to sell to Purchaser, and Purchaser agrees to buy
from Seller, the real property that Seller owns, or will own or have control over, within the land located in
the City of Elk River, County of Sherburne, State of Minnesota, as depicted in Exhibit A, together with
any improvements thereon, and all easements and rights benefitting or appurtenant to the property
(collectively the "Prope '). The Property is identified in this Agreement by reference to four different
parcels. Purchaser acknowledges that Seller is not the current owner of Parcels 1 and 3 of the Property
and that Seller is in the process of acquiring these parcels from their current owners. The Property and
the parccls are dcpictcd in Exhibit A and furthcr dcscribed as follows:
Parcel 1: Hogen A. Wingness is the fee owner of Tract B of Parcel 1 and Harry R. Lakoduk and
Sue Lakoduk are the fee owners of the other portion of Tract A of Parcel 1. This parcel is also
encumbered by a Minnesota Department of Transportation ("MnDOT") right-of-way easement.
Seiler shall use reasonable efforts to obtain deeds from the fee owners of the parcels or their heirs,
or in the event that Seller is unable to locate the fee owners or the fee owners are not willing to
convey Parcel 1 to Seller, Seller shall acquire Parcel 1 through eminent domain. Seller shall also
use reasonable efforts to obtain a release from MnDOT of the right-of-way easement. Timing of
the conveyance from the fee owners and the release of the easement from MnDOT shall be
consistent with the timing under this Agreement.
Parcel 2: Seller is the fee owner of Parcel 2.
Parcel 3: Sherburne County ("County') is the fee owner of Parcel 3. The County has represented
to Seller that it is willing to convey Parcel 3 to Seller. Seller shall reasonable efforts to obtain a
deed from the County for Parcel 3. Timing of the conveyance from the County shall be
consistent with the timing under this Agreement.
Parcel 4: Seller is the fee owner of Parcel 4.
1.2 Purchase Price and Manner of Payment. The purchase price for the parcels of the Property shall
be as follows:
(a) For Parcels 1 and 3 the purchase price shall be the consideration amount that the fee
owners agree to convey these parcels to Seller in any offer letter or other agreement with
Seller or, in the event that Seller must obtain the property using eminent domain, the
amount paid by Seller to the fee owners as compensation and the amount charged by
MnDOT for releasing its easement. There shall be no mark-up or additional cost charged
for the purchase price of these parcels, but Purchaser shall be responsible for paying
Seller's acquisition costs, including, but not limited to, appraisal fees, court filing fees,
46968W SJS EL185-36
and attorneys' fees. Such fees are estimated at $10,000.00.
(b) For Parcels 2 and 4, the Purchase Price shall be $81,000.00.
(collectively, the "Purchase Price"). The Purchase Price, subject to prorations and adjustments set forth in
this Agreement, shall be payable in full at Closing in cash, by wire transfer of immediately available
funds or by a Title Company check to Seller.
1.3 Earnest Money. Within five days after this Agreement is fully executed, Purchaser shall deposit
with the Title Company (as defined below) the sum of $1,000.00 ("Earnest Money") in good funds, either
by certified bank or cashier's check or by wire transfer. The Title Company shall hold the Earnest Money
in accordance with the terms and conditions of this Agreement and any escrow agreement entered into by
Seller, Purchaser and Title Company. Interest, if any, accruing on such sum shall become a part of the
Earnest Money and shall be distributed as Earnest Money in accordance with the terms of this Agreement.
The Earnest Money shall be refundable as set forth in this Agreement. The Earnest Money shall be
applied towards payment of the Purchase Price for Parcels 2 and 4.
1.4 Subdivision. Parcel 3 is part of a larger parcel owned by the County that needs to be subdivided.
The parties understand that the subdivision is necessary to procure a legal description of the Property for
Seller's deed, Purchaser's mortgage, if any, and obtaining acceptable title insurance for the Property.
Purchaser may also wish to combine the parcels into a fewer number of parcels or plat the Property. The
subdivision or platting of the Property shall be done in compliance with applicable state, county and
municipal laws, ordinances and regulations relating to the subdivision or platting of property. Purchaser
shall, at its cost, be responsible for the subdivision of the Property and obtaining such platting and
subdivision approvals as are necessary so that the Property will be a legally subdivided tax parcel or
parcels as of the date of Closing. All costs assessed or charged (whether by special assessment or
otherwise) or incurred for offsite improvements, utility improvements or other public improvements
required by the City of Elk River or other governmental authority related to the subdivision or
development of the Property as part of the Closing shall be the responsibility of Purchaser. Purchaser
shall also be responsible, at its cost, to select a surveyor to assist in the subdivision of the Property, and
for the filing documents creating the subdivision contemporaneously with the Closing. Purchaser shall
not complete any subdivision of the Property and shall not file the plat or other subdivision documents
until the Closing. The obligations of Purchaser contained in this Section shall survive and be enforceable
after Closing and delivery of the deed.
1.5 Acquisition Cost Escrow. As stated in Section 1.2 of this Agreement, Purchaser shall be
responsible for reimbursing Seller for its acquisition costs in acquiring Parcels 1 and 3, which include,
but are not limited to, appraisal fees, court filing fees and attorneys' fees. Seller shall be entitled to
reimbursement of these costs, regardless of whether or not the parcels are acquired by Seller, Purchaser
decides not to purchase one of the parcels or the Property or this Agreement is terminated. Upon
execution of this Agreement, Purchaser shall deposit $10,000.00 into an escrow account with Seller for
reimbursement of Seller's acquisition costs as outlined above. If any funds held under this Agreement
remain after payment of the above, such funds will be returned to Purchaser without interest. If it
appears that the actual costs incurred will exceed $10,000.00, Purchaser and Seller will review the costs
required to complete the acquisition(s) and Purchaser agrees to deposit additional sums in escrow with
Seller.
ARTICLE 2 — TITLE AND SURVEY
2.1 Title Examination. Purchaser has obtained an ALTA title insurance commitment ("Title
Commitment") from Commercial Partners Title ("Title Company") covering the entire Property. The
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46968Ov2 SIS ELI 85-36
Title Commitment shows all matters affecting title to the Property and binds the Title Company to issue at
Closing an ALTA 2006 form B owner's title insurance policy to Purchaser in the full amount of the
Purchase Price ("Title Policy'). The Title Commitment includes copies of all recorded documents
affecting the Property with proper searches for bankruptcies, judgments, liens and assessments. Purchaser
shall pay the cost of the premium for the Title Policy and any endorsements required by Purchaser.
2.2 Surve,+�/Plat. Purchaser shall, at its option and cost, employ a surveyor, licensed or registered by
the state where the Property is located, to prepare an ALTA survey or plat of the Property
("Survey/Plat'). The Survey/Plat shall include the requirements and items determined by Purchaser,
including the proposed square footage of the Property and any proposed lots/outlots. A copy of the
Survey/Plat shall be delivered to Seller when obtained by the Purchaser.
2.3 Title Objections; Cure of Title Objections. Purchaser shall have until the later of the expiration of
the Due Diligence Period or the date that is 10 days after receipt of both the Title Commitment and
Survey to notify Seller in writing of such objections as Purchaser may have to anything contained in the
Title Commitment or Survey ("Objections'). Purchaser's failure to make Objections within such time
period will constitute a waiver of Objections. However, any matter which is not referenced in the
Title Commitment and is first recorded, discovered or disclosed after the effective date of the Title
Commitment, whichever is later may be objected to by Purchaser in the manner described herein.
Purchaser need not object to mortgages or other liens. If not sooner satisfied, Seller shall cause the
Property to be released from any mortgages or other liens against the Property at the closing. Any
matter shown on the Title Commitment, other than a mortgage or other lien and not objected to by
Purchaser shall be a "Permitted Encumbrance" hereunder. Within seven days after receipt of
Purchaser's Objections, Seller shall notify Purchaser in writing if Seller elects not to cure the
Objections. If such notice is given within said seven day period, Purchaser may either waive the
Objections or terminate this Agreement by giving written notice of termination to Seller within 10
days after Seller's notice is given to Purchaser. If written notice by Seller is not given within the 10
day period, Seller shall use commercially reasonable efforts to correct any Objections within 30
days after the expiration of the 10 day period ("Cure Period"). If the Title Company is willing to
issue a title insurance policy to Purchaser that docs not cxccpt from fitic insurance coverage an item
Purchaser has objected to, the objection relating to such item shall be deemed cured. If the
Objections are not cured within the Cure Period, Purchaser shall have the option to do any of the
following:
(a) Terminate this Agreement by giving written notice to Seller within 10 days after
the expiration of the Cure Period and neither Seller nor Purchaser shall have
further rights or obligations hereunder. In such event Seller shall return all
Earnest Money to Purchaser.
(b) Waive the objections and proceed to close without reduction in the Purchase
Price.
ARTICLE 3 - INSPECTION AND CONTINGENCIES
3.1 Ri t of Inspection. As of the Effective Date, Purchaser and its agents shall have the right to
access the Property to make physical and visual inspections, investigations, surveys and testing as the
Purchaser deems necessary. Purchaser agrees that its on-site activities at the Property shall be conducted
at reasonable times and shall not unreasonably interfere with the use of the Property by Seller. Seller
agrees to meet with the parties conducting any inspections, investigations, surveys and testing and to
Purchase Agreement Page 3 of 13
469680v2 SJS ELI 85-36
cooperate in answering questions concerning the Property as requested. Purchaser shall pay all costs and
expenses of such inspections, investigations, surveys and testing conducted by Purchaser. Purchaser shall
repair and restore any damage to the Property caused by Purchaser's activities at the Property to
substantially the same condition as existed prior to such entry. Purchaser agrees to indemnify and hold
Seller and the Property harmless from all claims, costs, expenses or damages, including reasonable
attorneys' fees, for injuries or damages resulting from such activities. Seller agrees to hold Purchaser
harmless from all claims, costs or damages, including reasonable attorneys' fees, for damages resulting
from Purchaser's reporting of any hazardous substances revealed by Purchaser's actions under this
Section. These obligations of Purchaser shall survive Closing or any termination of this Agreement.
3.2 Due Diligence Period. The "Due Diligence Period" shall be from the Effective Date through the
date that is 180 days after the Effective Date.
3.3 Extension of Due Diligence Period. Purchaser shall have the right to obtain up to two
consecutive 60 day extensions of the Due Diligence Period upon written notice to Seller. Upon such
extension by the Purchaser the definition of Due Diligence Period shall be changed to such extended date.
To exercise the first 60 day extension, Purchaser shall provide written notice to Seller prior to the
expiration of the Due Diligence Period. To exercise the second 60 day extension, Purchaser shall provide
written notice to Seller prior to expiration of the first extension period. The consideration for these
extensions shall be the due diligence costs that Purchaser has incurred in the development of the Property,
and no additional monetary consideration shall be required. In the event one of the parcels needs to be
acquired by eminent domain or a release of the easement over one of the parcels has not been obtained
from MnDOT or the County has yet to approve the conveyance of Parcel 3, the Due Dilligence period
shall automatically be extended an additional 30 days after the conclusion of the eminient domain action,
receipt of the MnDOT release letter or date of approval by the County, whichever occurs last. Purchaser
and Seller understand MnDOT can only release its easement upon request by the fee owner or the City of
Elk River.
3.4 Purchaser's Contingencies. The obligations of Purchaser under this Agreement are contingent
upon each of the following:
(a) Title and Survey. Title and Survey shall have been found acceptable by Purchaser as
provided in Article 2.
(b) Testing and Inspection. Purchaser shall have determined, in its sole discretion, on or
before the expiration of Due Diligence Period, that it is satisfied with the condition of the
Property and the results of all inspections and testing of the Property, including, but not
limited to, all soil tests, well tests, engineering inspections, property condition reports,
hazardous waste and environmental reviews of the Property.
(c) Due Diligence Materials and Other Documents Provided By Seller. Purchaser shall have
determined, in its sole discretion, on or before the expiration of the Due Diligence Period,
that it is satisfied with the Due Diligence Materials and other documents and information
concerning the Property provided by Seller under this Agreement.
(d) Government Approvals. Purchaser shall have determined, in its sole discretion, on or
before the expiration of Due Diligence Period, that it is satisfied that all governmental
approvals, permits or authorizations necessary or desired by Purchaser for the Property
have or will be obtained. Purchaser shall have determined, in its sole discretion, on or
before the expiration of the Due Diligence Period, that all applicable zoning ordinances,
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469680v2 SJS EL185-36
building and use restrictions and codes, required building permits, and any requirements
with respect to licenses, permits and agreements necessary for the lawful use and
operation of the Property as Purchaser elects, have been or will be issued or complied
with.
(e) Third Party Approvals. Purchaser shall have obtained from any third party, on or before
the expiration of the Closing, all agreements, covenants, approvals, casements and
adequate assurance that Purchaser, in its sole discretion, deems necessary or appropriate
for use of the Property as contemplated by Purchaser.
(f) Flood Plain. Purchaser shall have determined, in its sole discretion, on or before the
expiration of the Due Diligence Period, that the Property is not located within an flood
area unacceptable to Purchaser.
(g) Development Feasibility. Purchaser shall have determined, in its sole discretion, on or
before the expiration of Closing, that it is satisfied with the feasibility of its development
of the Property.
(h) Anchor Tenant. Purchaser shall have obtained, on or before the Closing, a signed non -
contingent lease or sale agreement for the Property from a third -party user that is
acceptable to Purchaser in its sole discretion.
(i) Financing. Purchaser having obtained a financing commitment in order for Purchaser to
purchase and develop the Property, on or before the Closing, at market rates and terms
acceptable to Purchaser, in its sole discretion.
(�) Subdivision. Purchaser, on or before the final Closing; shah have received all approvals
for the subdivision of the Property and met all conditions imposed to subdivide the
Property, all so such subdivision is acceptable to Purchaser in its discretion.
(k) Purchase Price. Purchaser, on or before any Closing, shall have determined, in its sole
discretion, on or before the Closing, that it is satisfied with the consideration being paid
to the County for Parcel 3, to the fee owners for Parcel 1 and to MnDOT to release the
easement over Parcel 1.
3.5 Right of Termination. Seller agrees that in the event Purchaser determines in its sole discretion
that a contingency contained in Section 3.4 has not been satisfied on or before the date specifically set
forth for the contingency, Purchaser shall have the right to terminate this Agreement by written notice to
Seller on or before three days after the expiration of Due Diligence Period, or three days after the date
specifically set forth for the contingency, as applicable. Upon such termination, the Earnest Money shall
be returned to Purchaser. If Purchaser acknowledges the satisfaction or waiver of a contingency by
written notice to Seller, or if Purchaser does not provide a written notice of termination by the date
required, Purchaser shall no longer have a right to terminate this Agreement under this Section because of
such contingency. All the contingencies set forth in Section 3.4 are specifically for the benefit of the
Purchaser.
3.6 Conditions to Close. In the event Seller cannot obtain the fee interest in Parcel 1 or 3 or MnDOT
is unwilling to release its right-of-way easement over the parcel, then Purchaser shall have the right to
either elect to not purchase such parcel or terminate this Agreement. Purchaser must provide Seller
written notice of its intent. In the event that Purchaser elects not to purchase a particular parcel, it shall no
longer have any right to purchase such parcel under this Agreement and all relevant provisions shall be
Purchase Agreement Page 5 of 13
469680.2 SJS EL185-36
adjusted to account for such parcel not being purchased. In the event Purchaser elects to terminate this
Agreement, upon such termination, neither party shall have any further rights or obligations under this
Agreement, except to the extent any rights or obligations expressly survive such termination.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES
4.1 "As Is" Sale and Release. Subject only to the express representations and warranties made under
this Agreement, Purchaser is purchasing the Property "as is" and "where is" based on its own
investigation and inquiry and is not relying on any representation or warranty of Seller. Subject only to
the express representations and warranties made under this Agreement, Purchaser waives any and all
warranties pertaining to the Property whether express, implied, statutory or other. Subject only to the
express representations and warranties made under this Agreement, Purchaser hereby forever waives,
releases and covenants not to bring any demand, claim, cost recovery action or lawsuit it may now or
hereafter have or accrue against Seller, its officials, employees, agents, contractors and assigns arising
from any environmental release or matter related to the Property, including, but not limited to: (a) any
hazardous substances currently located or which come to be located within the Property; or (b) the release
of any hazardous substances into, from or through the Property, whether or not attributable to the
handling, storage, generation, transportation or disposal of hazardous substances or the mere presence of
hazardous substances within the Property, or (c) any hazardous substances which have migrated, leached
or traveled onto or off of the Property from any source. This section shall survive and be enforceable for
an unlimited period after the date of Closing and delivery of the deed.
4.2 Representations and Warranties of Seller. Seller represents and warrants to Purchaser as follows:
(a) Organization and Authority. Seller is a municipal corporation duly organized and validly
existing in good standing under the laws of Minnesota. Seller has the requisite power and
authority to enter into and perform this Agreement. Seller has or will have the requisite
power and authority to transfer all of the Property in accordance with this Agreement.
The persons signing this Agreement and Seller's closing documents on behalf of the
Seller are authorized to do so.
(b) Exclusive Right to Purchase. With the exception of discussions with the fee owners of
Parcels 1 and 3, Seller and its agents shall not conduct any discussions or negotiations or
respond in writing to any solicitations by third parties relating to the purchase of the
Property during the term of this Agreement. Seller has not entered into any other
contracts for the sale of the Property, nor has Seller granted any rights of first refusal or
options to purchase the Property or any other rights to others that might prevent the
consummation of this Agreement, and Seller will not enter into any such contracts
relating to the sale of the Property with any other parties.
(c) Due Diligence Materials and Other Documents Provided by Seller. Seller shall deliver to
Purchaser, within five days after the Effective Date, copies of all of the following relating
to or affecting the Property which Seller has access to or are in Seller's possession or
control: soil and environmental reports and tests; inspection notices, reports and results;
surveys; site plans; title work; property tax and special assessment bills together with any
notices concerning assessment, valuation or property tax or special assessment;
agreements with any governmental authority; notices of violation from and other
correspondences with governmental authority; governmental authority and third party
consultants responses and conclusions with respect to review of the Property; and any
other material correspondences and documents, notices and items relating to or affecting
Purchase Agreement Page 6 of 13.
46968Ov2 SJS EL185-36
the Property.
Seller shall also deliver to Purchaser, within five days after the Effective Date, correct
and complete copies of all existing agreements or contracts related to or affecting the
Property, including, but not limited to: any MnDOT, maintenance, management and
service contracts, whether or not being assumed by Purchaser.
The obligation of Seller to provide the above referenced items is ongoing through
Closing in the event that Seller gains access to, or possession or control of, any additional
or updated above referenced items after the Effective Date. Seller shall cooperate in all
reasonable respects with Purchaser's due diligence efforts. Seller shall not be entitled to
any compensation in connection with such cooperation.
(d) Proceedings. There is no action, litigation, investigation, condemnation, eminent domain
or proceeding of any kind pending or threatened against the Property to Seller's actual
knowledge. Seller has not received any notice from any governmental authority as to the
violation of any law, ordinance or regulation or from any third party as to the breach of
any covenants or easements affecting the Property.
(e) Wells. Individual Sewage Treatment Systems and Storage Tanks. There are no wells or
individual sewage treatment systems, whether in use or abandoned, at the Property. To
the Seller's actual knowledge, there are no underground or above ground storage tanks of
any size or type at the Property.
(f) Seller Activities shall not Change the Property. Seller shall not perform or authorize any
activities that change the physical characteristics of the Property from its existing state as
of the datc of the Effective Date. Seller shall not perform or authorize any removal or
alteration of any improvements, trees or vegetation at the Property and shall not perform
or authorize any excavation or earth moving after the Effective Date.
(g) Seller's Cooperation. Seller shall cooperate in all reasonable respects and in good faith
with Purchaser in obtaining governmental and third party approvals, consents and
agreements, and shall execute such applications, permits, agreements and other
documents as may be reasonably required by Purchaser, provided that such items may be
effective as of the Closing. This obligation shall include, but not be limited to, the
cooperation of Seller in the subdivision of the Property by Purchaser so that the Property
is legally subdivided tax parcels and the execution of any plat and other governmental
agreements and documents required for this subdivision. Seller shall not be entitled to
any compensation or reimbursement of costs in connection with such cooperation.
The representations and warranties contained in this Section shall survive and shall be true and correct on
the Effective Date and as of the Closing. Seller shall indemnify and hold Purchaser harmless from, any
expenses or damages, including reasonable attorneys' fees, that Purchaser incurs by reason of, or arising
out of, any breach of any of the above representations and warranties, whether such breach is discovered
before or after Closing. This indemnification obligation of Seller shall survive Closing or any termination
of this Agreement.
ARTICLE 5 - CLOSING
5.1 Time and Place. The parcels of the Property may be purchased in multiple closings at different
times. Each closing ("Closing") shall occur as follows. Purchaser shall be required to purchase both
Parcels 2, and 4 together in one Closing, but may purchase one, all or none of Parcel 1 in the same or
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469680x2 SJS EL185-36
separate Closings. The Closing for Parcel 2, Parcel 3 and Parcel 4 shall occur 30 days after the expiration
of Due Diligence Period; provided that any extension of the Closing under this subsection shall be only
allowed for administrative issues or final city approvals as needed for any closing and shall not be greater
than 10 days or upon such earlier date agreed upon by the parties. The Closing for Parcel 1 may be
extended by Purchaser in the event that an eminent domain or related action has been initiated by Seller to
attempt to obtain the fee interest in this parcel. Seller shall provide notice to Purchaser of the extension of
the Closing for Parcell, the reasons for the extension, and an estimated date of Closing. The Closing for
Parcel 1 may be extended by Purchaser for up to one year after expiration of Due Diligence Period if
Seller is pursuing an eminent domain or related action to attempt to obtain the fee interest in these parcels.
Seller shall use reasonable efforts to give at least 10 days' notice to Seller of the extended Closing for
Parcel 1. This Closing may occur by deed and money escrow.
5.2 Seller's Obligations at Closing. At each Closing of a parcel of Property, Seller shall deliver to
Purchaser a duly executed quit claim deed in recordable form, conveying to Purchaser fee simple
marketable title to the parcel of the Property being conveyed to Purchaser and all rights appurtenant, free
and clear of all mortgages, liens and encumbrances together with a seller's affidavit, FIRPTA affidavit,
evidence as to the authority of the persons executing documents on behalf of Seller, well certificate and
all other documents reasonably necessary to consummate the transaction contemplated by this
Agreement. Seller shall also deliver possession of the parcel of Property being purchased to Purchaser at
the Closing.
5.3 Purchaser's Obligations at Closing. At each Closing of a parcel of Property, Purchaser shall pay
to Seller that portion of the Purchase Price for the parcel of Property being purchased as set forth in
Section 1.2, as increased or decreased by prorations or adjustments set forth in this Agreement, and shall
deliver to Seller all other documents reasonably necessary to consummate the transaction contemplated
by this Agreement. Purchaser and Seller agree that the Earnest Money shall be delivered to Seller at the
Closing of the first parcel of Property being purchased and applied towards payment of the Purchase Price
for the first parcel.
5.4 Closing Costs. Seller and Purchaser agree to the payment of costs in connection with each
Closing as follows: (a) Seller and Purchaser each will pay one-half of any reasonable and customary
closing fees or charges imposed by the Title Company for the Closing; (b) Seller shall pay all state deed
tax for the recording of the deed; (c) Seller shall pay the cost of recording all documents necessary to
place record title in the condition warranted by Seller in this Agreement and Purchaser will pay the cost of
recording the deed conveying the Property to Purchaser; and (d) any other costs required to be paid by
Purchaser or Seller at Closing pursuant to this Agreement.
ARTICLE 6 - REAL ESTATE TAXES AND SPECIAL ASSESSMENTS
6.1 Real Estate Taxes and Special Assessments. On or before the Closing, Seller shall pay all general
real estate taxes for the parcel of the Property being purchased due and payable in years prior to the year
of Closing. General real estate taxes for the parcel of the Property being purchased due and payable in the
year of Closing shall be apportioned between Purchaser and Seller based on a 365 day calendar year as if
Purchaser were vested with title to the Property on the Closing. Purchaser shall pay or assume all special
assessments levied or pending against the Property as of the Closing.
General real estate taxes for the parcel of the Property being purchased shall be calculated by uniformly
allocating the general real estate taxes for the Property and the other property being subdivided that is
retained by Seller on a square foot basis. Seller shall remain responsible for the payment of all general
real estate taxes, all levied and pending special assessments and all deferred taxes for that portion of the
property being subdivided that is retained by Seller. If required as a result of the subdivision, Purchaser
Purchase Agreement Page 8 of 13
46968Dd2 S]S ELI 85-36
and Seller agree to prepay at the Closing their share of the general real estate taxes and special
assessments allocated to their property for the entire year of Closing.
The obligations of Purchaser and Seller contained in this Section shall survive Closing and delivery of the
deed.
ARTICLE 7 - COMMISSIONS
7.1 Bro_ kerage Commissions. Seller represents and warrants that it has not been involved with any
real estate brokers or agents on its behalf in connection with the transaction contemplated under this
Agreement and that no commissions or costs are owed or being paid to any real estate broker or agent in
connection with this transaction. Purchaser represents and warrants that it has not been involved with any
real estate brokers or agents on its behalf in connection with the transaction contemplated under this
Agreement and that no commissions or costs are owed or being paid to any real estate broker or agent in
connection with this transaction. Purchaser and Seller agree to indemnify and hold harmless the other
party from any loss, liability, cost, damage or expense resulting from, or relating to, the breach of its
representation under this Section and any claim for real estate commissions or costs resulting from the
indemnifying party's actions in connection with this transaction not provided for above. These
obligations of Purchaser and Seller shall survive Closing or any termination of this Agreement.
ARTICLE 8 EMINENT DOMAIN
8.1 Eminent Domain. If eminent domain proceedings, other than any eminent domain proceedings
that the Seller may decide is necessary for Seller to acquire Parcel 1 are commenced prior to the Closing
against all or any part of the Property prior to it being conveyed to Purchaser, Seller shall immediately
give written notice to Purchaser, together with a legal description of the property being taken, and
Purchaser shall have the right, at its option, to tcrminatc this Agrecment by giving written notice within
15 days of Seller's notice. If Purchaser gives notice of termination of the Agreement under this Section,
the Agreement shall terminate and the Earnest Money shall be returned to Purchaser. If Purchaser does
not give notice of termination, then the parties shall proceed to Closing, with no reduction in the
Purchase Price, and Seller shall assign to Purchaser all of Seller's right, title and interest to appear in and
receive any award from such proceeding. In the event any awards are made prior to Closing, Seller shall
place such awards in escrow with the Title Company, which will release such awards to Purchaser upon
Closing or to Seller upon termination of this Agreement.
ARTICLE 9 - DEFAULT AND REMEDIES
9.1 Default. Purchaser or Seller shall be in default under this Agreement if either fails to observe,
perform or comply with any term, condition or obligation of this Agreement and such failure continues
for a period of 10 days after written notice of the failure to the Purchaser or Seller from the other party.
9.2 Remedies. Upon default by a Purchaser or Seller, the other party shall have the following
remedies:
(a) Purchaser's Remedies. Upon Seller's default under this Agreement, then the remedies
available to Purchaser shall be (1) to terminate this Agreement pursuant to law by written
notice to Seller and to receive the return of the Earnest Money prior to the Closing of the
first parcel of Property, and (2) to seek specific performance of this Agreement on or
before six months after Seller's default during which time the Closing will be postponed
until such time as Seller has cured its default, and (3) to seek any remedy or damages
available at law or in equity. All rights, powers, options or remedies available to
Purchase Agreement Page 9 of 13
469680v2 SJS EL185-36
Purchaser pursuant to this Agreement snail be cumulative and not alternative, and the
exercise of one right, power, option, or remedy shall not bar any other rights, powers,
options or remedies allowed hereunder or by applicable law. The rights and remedies of
this Section shall survive Closing or any termination of this Agreement.
(b) Seller's Remedies. Upon Purchaser's default under this Agreement prior to the Closing
of the first parcel of Property, then the sole and exclusive remedy available to Seller shall
be to terminate this Agreement pursuant to law by written notice to Purchaser and upon
such termination to receive the Earnest Money as liquidated damages. Upon Purchaser's
default under this Agreement after the Closing of the first parcel of Property, then the
sole and exclusive remedy available to Seller shall be to terminate this Agreement
pursuant to law by written notice to Purchaser without payment of any additional
liquidated damages. Upon such termination, Purchaser shall be released from all liability
hereunder and neither party shall have further rights or obligations under this Agreement.
Seller expressly waives its rights to seek damages in excess of the liquidated damage
amount in the event of Purchaser's default. Seller has agreed to these liquidated damages
because of the difficulty of ascertaining Seller's actual damages given the uncertainties of
the real estate market, fluctuating property values and differences of opinion with respect
to such matters. The rights and remedies of this Section shall survive Closing or any
termination of this Agreement.
ARTICLE 10 - MISCELLANEOUS
10.1 Successors or Assigns. This Agreement shall be binding upon and inure to the benefit of the
parties, and their respective successors and assigns.
10.2 Severability. In the event any provision of this Agrcemcnt shall be held to be invalid,
unenforceable or in conflict with the law of the jurisdiction, the remaining provisions of this Agreement
shall continue to be valid, enforceable and not be affected by such holding.
10.3 Waiver. No term or condition of this Agreement will be deemed waived or amended unless
expressed in writing. The waiver of any condition or the breach of any term will not be a waiver of any
subsequent breach of the same or any other term or condition.
10.4 Assignment. Purchaser may not assign its rights under this Agreement, without prior written
consent of Seller, such consent will not unreasonably withheld, provided that the Purchaser is transferring
its rights to an entity owned or controlled by the Purchaser. In the event that the Seller approves an
assignment by the Purchaser, in no event shall the Purchaser be released from liability hereunder.
10.5 Notices. Any notice required or permitted pursuant to this Agreement shall be in writing and
delivered by (a) personal delivery, (b) reputable overnight delivery service, or (c) United States mail,
postage prepaid, either certified or first class mail,. All notices shall be sent to a party at the address set
forth below, or to such other address or person as the party shall have designated in writing. Notices shall
be deemed given upon the earlier of the date of actual receipt or (i) as of the earlier of the date of delivery
or the date of first attempted delivery if by personal delivery or overnight delivery, or (ii) as of the earlier
of the date of delivery or the date the post office first leaves notice of the mailing if by certified mail.
If to Purchaser: E&R Investments, LLC
Attn: Gregory R. Ebert
23350 County Road 10
Purchase Agreement Page 10 of 13
469680v2 SJS EL185-36
Corcoran, MN 55357
Fax: (763) 498-9951
Email: gebert@ebertconst.com
With a copy to:
If to Seller: City of Elk River
Attn: City Administrator
13065 Orono Parkway NW
Elk River, MN 55330-5600
With a copy to: Kennedy & Graven, Chartered
Attn: Sarah Sonsalla
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
10.6 Further Assurances. Each party agrees that it will execute and deliver such other documents and
take such other action, whether prior or subsequent to Closing, as may reasonably be requested by the
other party, to further consummate the transaction contemplated by this Agreement, without further
consideration.
10.7 Termination. If this Agreement is terminated by either Purchaser or Seller pursuant to a right of
terminationexpressly set forth in this Agreement, neither party shall have any further rights or obligations
under this Agreement, except for the obligations concerning the Earnest Money and to the extent any
rights or obligations expressly survive such termination.
10.8 Time of Essence. Time is of the essence of this Agreement.
10.9 Calculation of Time Periods. Except as specifically set forth in this Agreement, in computing any
period of time described in this Agreement, the day of the act or event after which the designated period
of time begins to run is not to be included and the last day of the period so computed is to be included,
unless such last day is on a Saturday, Sunday or legal holiday, in which event the period shall run until
the end of the next business day following such Saturday, Sunday or legal holiday. As used herein, the
term "legal holiday" means any state or federal holiday for which financial institutions or post offices are
generally closed in the state where the Property is located.
10.10 Governing Law. This Agreement shall in all respects be interpreted, construed and enforced
according to the laws of the state where the Property is located.
10.11 Counterparts. This Agreement may be executed separately and independently in any number of
counterparts and each and all of which together shall be deemed to have been executed simultaneously
and regarded as one agreement dated the Effective Date.
10.12 Ca_ _ ptions. The captions and headings contained in this Agreement are for convenient reference
only and shall not affect the interpretation of this Agreement.
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46968Ov2 SJS ELI 85-36
10. 13 Attorneys' Fees and Costs. Purchaser and Seller will pay their own attorneys' fees for the
transaction contemplated by this Agreement, except as outlined in this agreement for the purchase of the
parcels. .
10.14 Survival. All of the terms of this Agreement, including, without limitation, the representations
and warranties contained herein, shall survive and be enforceable after the Closing and delivery of the
deed.
10.15 Entire Agreement/Amendment. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter herein and fully supersedes all prior written or oral agreements
between the parties with respect to such matters. No other agreement, statement or promise made by any
party and no amendment, modification or other change of any provision of this Agreement shall be
effective unless in writing signed by the parties.
10.16 Effective Date. The date that the last party executed this Agreement as evidenced by the dates in
the signature block of this Agreement. If either party fails to date this Agreement by its signature, the
date by the signature of the other party shall constitute the Effective Date. Upon execution, a party shall
promptly forward a signed original to the other party.
signature page follows
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46968Ov2 SJS ELI 85-36
IN WITNESS WHEREOF, Purchaser and Seller have executed this Purchase Agreement as of the
Effective Date.
PURCHASER:
E&R Investments, LLC
a Minnesota Limited Liability Company
By: f
Print: Gregory . Ebert
Title: President
f)
Dated: G l
SELLER:
CITYYELK R
By:
Print:etz
Title: Mayors
By:
Print: Tina Allard
Title: City Clerk
Dated: l ` 1,4 — 1 S
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469680v2 SJS ELI 85-36
Exhibit A to Purchase Agreement
Depiction of Property
[to be added]
469680v4 SJS EL185-36
Exhibit B to Purchase Agreement
Description of Parcels 1,2,3 &4
Parcel 1 (Wingness/Lakoduk Parcel)
Part of the following described Land, which description must be determined by a survey:
Tract A (Wingness Parcel):
That part of the South half of the Northwest Quarter of Section 32, Township 33 North, Range 26
West, Sherburne County, Minnesota, which lies within a distance of 112.5 feet on each side of the
following described line:
Beginning at a point on the center line of High Street, distant 353.5 feet North of its
intersection with the center line of Line Street in the Village of Elk River, according to
the plat thereof of on file and of record in the office of the Registrar of Deeds in and for
Sherburne County; thence run westerly at an angle of 89 degrees 54 minutes with said
center line of High Street (when measured from South to West) for a distance of 545.6
feet; thence deflect to the right at an angle of 26 degrees 01 minutes for a distance of
2,118.7 feet; thence deflect to the left at an angle of 28 degrees 21 minutes for a distance
of 2,251.8 feet; thence deflect to the left on a 2 degree 30 minutes curve, delta angle 28
degrees 12 minutes for a distance of 1,128 feet; thence on a tangent to said curve for a
distance of 1,459.2 feet; thence deflect to the right on a 2 degree 30 minute curve, delta
angle 30 degrees 51 minutes, for a distance of 1,234.0 feet; thence on a tangent to said
curve for a distance of 250 feet and there terminating;
Together with all that part of the Southwest quarter of the Northwest quarter of said Section 32
lying Southeasterly of the above described strip, excepting therefrom the right of way of existing
highway.
O
Tract B (Lakoduk Parcel):
That part of the Northwest Quarter of the Southwest Quarter of Section 32, Township 33 North,
Range 26 West, Sherburne County, Minnesota; which lies Northwesterly of a line ran parallel
with and distant 112.5 feet Southeasterly of the following described line:
Beginning at a point on the center line of High Street, distant 353.5 feet North of its
intersection with the center line of Line Street in the Village of Elk River, according to
the plat thereof now on file and of record in the office of the Register of Deeds in and for
Sherburne County; thence run westerly at an angle of 89 degrees 54 minutes with said
center line of High Street (when measured form South to West) for a distance of 545.6
feet; thence deflect to the right at an angle of 26 degrees 01 minutes for a distance of
2,118.7 feet; thence deflect to the left at an angle of 28 degrees 21 minutes for a distance
of 2827.5 feet; thence deflect left at an angle of 28 degrees 12 minutes for a distance of
2,034.9 feet; thence deflect to the right on a 2 degree 30 minute curve, delta angle 30
degrees 51 minutes for a distance of 1,234.0 feet; thence on a tangent to said curve for a
distance of 250 feet and there terminating;
469680v4 SJS ELI 85-36
Together with all that part of the above described track lying Southeasterly of the above described
strip and Northerly of the Southerly right of way line of Temporary Trunk Highway No. 10, as
same is now located and traveled over and across the above described tract; excepting therefrom
the right of way of existing highway.
Parcel l (City of Elk River Parcel)
Outlot A, Country Crossing Business Center, Sherburne County, Minnesota.
Parcel 3 (County of Sherburne Parcel)
All that part of the West Half of the Northeast Quarter of the Southwest Quarter of Section 32, Township
33, Range 26, Sherburne County, Minnesota lying Southerly of the center line of Old U.S. Highway No.
10 and Northerly of the Southerly right-of-way line of Main Street as dedicated in the plat of Gospodor's
Orono Lake Addition.
Parcel 4 (City of Elk River Parcel)
All that part of the West Half of the Northeast Quarter of the Southwest Quarter of Section 32, Township
33, Range 26, Sherburne County, Minnesota, described as follows:
Commencing at the Northwest corner of said West Half of the Northeast Quarter of the Southwest
Quarter; thence South 00 degrees 48 minutes 04 seconds East, assumed bearing, along the West line of
said West half of the Northeast Quarter of the Southwest Quarter, a distance of 377.74 feet to the point of
beginning of the land to be hereinafter described; thence North 64 degrees 33 minutes 16 seconds East a
distance of 205.29 feet; thence Northeasterly a distance of 192.39 feet along a tangential curve concave to
the Northwest having a radius of 513 feet and a central angle of 21 degrees 29 minutes 15 seconds; thence
Northeasterly and Easterly along a reverse curve concave to the Southeast, to the intersection with the
Westerly extension of the Southerly right of way line of Main Street as dedicated in the plat of
Gospodor's Orono Lake Addition according to said plat on file and of record in the office of the County
Recorder, Sherburne County, Minnesota, said curve being tangent to the last described curve and tangent
to said Westerly extension of the Southerly right of way line; thence North 88 degrees 33 minutes 43
seconds West, along said Westerly extension of the Southerly right of way line a distance of 548.71 feet
to the intersection with said West line of the West Half of the Northeast Quarter of the Southwest Quarter;
thence South 00 degrees 48 minutes 04 seconds East, along said West line, a distance of 300.67 feet to
said point of beginning.
And
The right-of-way of Business Center Drive.
46968Ov4 SJS ELI 85-36
AMENDMENT TO PURCHASE AGREEMENT
This agreement is made as of December , 2016, between CITY OF ELK RIVER,
MINNESOTA, a Minnesota municipal corporation ("Seller") and E&R INVESTMENTS, LLC,
a limited liability company under the laws of Minnesota("Purchaser").
RECITALS
1. Purchaser and Seller have entered into a purchase agreement with an Effective Date of
November 4, 2016 (the "Agreement") which provides for the purchase and sale of property
located in Elk River, Minnesota, legally described on Exhibit A attached hereto.
2. The parties desire to amend Exhibits A and B the Agreement.
AGREEMENT
For valuable consideration, Seller and Buyer agree as follows.
1. Exhibit A of the Agreement shall be stricken and substituted with First Amended Exhibit
A attached hereto.
2. Exhibit B of the Agreement shall be stricken and substituted with First Amended Exhibit
B attached hereto.
3. Except as amended by this amendment, the Agreement shall remain in full force and
effect.
The parties have caused this Agreement to be duly executed as of the day and year first
above written.
PURCHASER SELLER
E&R Investments, LLC City of Elk River, Minnesota
By: By:
Gregory R. Ebert John Dietz
Its: President Its: Mayor
By:
Tina Allard
Its: City Clerk
491943v1 CBR ELI 85-43
Exhibit A
Description of Parcels 1,2,3 &4
Parcel 1 (Wingness/Lakoduk Parcel)
Part of the following described Land, which description must be determined by a survey:
Tract A (Wingness Parcel):
That part of the South half of the Northwest Quarter of Section 32, Township 33 North, Range 26
West, Sherburne County, Minnesota,which lies within a distance of 112.5 feet on each side of the
following described line:
Beginning at a point on the center line of High Street, distant 353.5 feet North of its
intersection with the center line of Line Street in the Village of Elk River, according to
the plat thereof of on file and of record in the office of the Registrar of Deeds in and for
Sherburne County; thence run westerly at an angle of 89 degrees 54 minutes with said
center line of High Street (when measured from South to West) for a distance of 545.6
feet; thence deflect to the right at an angle of 26 degrees 01 minutes for a distance of
2,118.7 feet; thence deflect to the left at an angle of 28 degrees 21 minutes for a distance
of 2,251.8 feet; thence deflect to the left on a 2 degree 30 minutes curve, delta angle 28
degrees 12 minutes for a distance of 1,128 feet; thence on a tangent to said curve for a
distance of 1,459.2 feet; thence deflect to the right on a 2 degree 30 minute curve, delta
angle 30 degrees 51 minutes, for a distance of 1,234.0 feet; thence on a tangent to said
curve for a distance of 250 feet and there terminating;
Together with all that part of the Southwest quarter of the Northwest quarter of said Section 32
lying Southeasterly of the above described strip, excepting therefrom the right of way of existing
highway.
AND
Tract B (Lakoduk Parcel):
That part of the Northwest Quarter of the Southwest Quarter of Section 32, Township 33 North,
Range 26 West, Sherburne County, Minnesota; which lies Northwesterly of a line run parallel
with and distant 112.5 feet Southeasterly of the following described line:
Beginning at a point on the center line of High Street, distant 353.5 feet North of its
intersection with the center line of Line Street in the Village of Elk River, according to
the plat thereof now on file and of record in the office of the Register of Deeds in and for
Sherburne County; thence run westerly at an angle of 89 degrees 54 minutes with said
center line of High Street (when measured form South to West) for a distance of 545.6
feet; thence deflect to the right at an angle of 26 degrees 01 minutes for a distance of
2,118.7 feet; thence deflect to the left at an angle of 28 degrees 21 minutes for a distance
of 2827.5 feet; thence deflect left at an angle of 28 degrees 12 minutes for a distance of
2,034.9 feet; thence deflect to the right on a 2 degree 30 minute curve, delta angle 30
degrees 51 minutes for a distance of 1,234.0 feet; thence on a tangent to said curve for a
distance of 250 feet and there terminating;
491943vl CBR ELI 85-43
Together with all that part of the above described track lying Southeasterly of the above described
strip and Northerly of the Southerly right of way line of Temporary Trunk Highway No. 10, as
same is now located and traveled over and across the above described tract; excepting therefrom
the right of way of existing highway.
Parcel 2 (City of Elk River Parcel)
Outlot A, Country Crossing Business Center, Sherburne County, Minnesota.
Parcel 3 (County of Sherburne Parcel)
All that part of the West Half of the Northeast Quarter of the Southwest Quarter of Section 32, Township
33, Range 26, Sherburne County, Minnesota lying Southerly of the center line of Old U.S. Highway No.
10 and Northerly of the Southerly right-of-way line of Main Street as dedicated in the plat of Gospodor's
Orono Lake Addition.
Parcel 4 (City of Elk River Parcel)
All that part of the West Half of the Northeast Quarter of the Southwest Quarter of Section 32, Township
33, Range 26, Sherburne County, Minnesota, described as follows:
Commencing at the Northwest corner of said West Half of the Northeast Quarter of the Southwest
Quarter; thence South 00 degrees 48 minutes 04 seconds East, assumed bearing, along the West line of
said West half of the Northeast Quarter of the Southwest Quarter, a distance of 377.74 feet to the point of
beginning of the land to be hereinafter described; thence North 64 degrees 33 minutes 16 seconds East a
distance of 205.29 feet; thence Northeasterly a distance of 192.39 feet along a tangential curve concave to
the Northwest having a radius of 513 feet and a central angle of 21 degrees 29 minutes 15 seconds; thence
Northeasterly and Easterly along a reverse curve concave to the Southeast, to the intersection with the
Westerly extension of the Southerly right of way line of Main Street as dedicated in the plat of
Gospodor's Orono Lake Addition according to said plat on file and of record in the office of the County
Recorder, Sherburne County, Minnesota, said curve being tangent to the last described curve and tangent
to said Westerly extension of the Southerly right of way line; thence North 88 degrees 33 minutes 43
seconds West, along said Westerly extension of the Southerly right of way line a distance of 548.71 feet
to the intersection with said West line of the West Half of the Northeast Quarter of the Southwest Quarter;
thence South 00 degrees 48 minutes 04 seconds East, along said West line, a distance of 300.67 feet to
said point of beginning.
And
The right-of-way of Business Center Drive.
491943vl CBR ELI 85-43
FIRST AMENDED EXHIBIT A
[attached]
491943vl CBR ELI 85-43
FIRST AMENDED EXHIBIT B
[attached]
491943vl CBR ELI 85-43
City of
Elk
River
Resolution 16-
A Resolution of the City of Elk River Authorizing Conveyance of Several
Properties Located at the Southeast Corner of US HWY 10 and Joplin Street
WHEREAS, on November 2, 2015, the City entered into a purchase agreement
(Attachment 1) (the "Agreement"),with E&R Investments, LLC ("E&R") to convey several
vacant properties located at the Southeast corner of US Hwy 10 &Joplin Street NW (the
"Properties"); and
WHEREAS, under the Agreement, the City was required to acquire by eminent domain
several of the Properties that were encumbered by highway easements and obtain the release
of such easements from the State of Minnesota•, and
WHEREAS, the City has acquired such parcels by eminent domain and obtained the
release of the highway easements; and
WHEREAS, under the Agreement, the City was also required to acquire one of the
Properties from the County of Sherburne (the "County"); and
WHEREAS, by Resolution No. , adopted contemporaneously with this resolution,
the City has authorized the acquisition of the County-owned property; and
WHEREAS, with the above preconditions fulfilled or ready to be fulfilled, the City and
E&R desire to close on the sale of the Properties; and
WHEREAS, prior to closing, the parties must execute an Amendment to the Agreement
(Attachment 2), to reflect certain changes to the Properties'legal descriptions.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk
River,Minnesota, as follows:
1. The Council hereby authorizes the conveyance of the Properties, as legally defined
in Exhibit B of the Amendment to the Agreement(Attachment 2);and
2. City staff and the law firm of Kennedy & Graven, Chartered, are authorized and
directed to take all steps necessary to convey the Properties pursuant to the
Agreement including, without limitation, to execute the Amendment to the
NATUREJ
Passed and adopted this 191h day of December 2016.
John J. Dietz,Mayor
ATTEST:
Tina Allard, City NATUREI
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