4.4. SR 08-07-2107N
. . . ........ . .....
To
Item Number
Mayor and CNZ C
i�ouncil =4,.
4'
Agenda Section
Meeting Date
Prepared by
Consent
August 7, 2017
Amanda Othoudt, Econorimic Development
Director
Item Description
Reviewed by
Approve Purchase Agreements for 706 Quinn and
Ca] Portner, Cit)r Administrator
709 Proctor
Reviewed by
Action Requested
Approve, by motion, the purchase agreements for 706 Quinn Avenue NW and 709 Proctor Avenuc NW
Background/Discussion
In conjunction with thcTruck Shop project and the creation of the redcvclopmcnt'I'll District, staff has
finalized the purchase agrcenients for 706 Quinn Avenue and 709 Proctor Avenue NW.
The drafted purchase agreernents reflect the purchase of 706 Quinn Avenue for $282,500 with the clt%l
paying all closing costs.
The city-,,7fll purchase 709 Proctor for 5275,000 plus an additional $37,240 in storage and i-noving
Thc city will pay all closing costs. The ci" will enter into a lc,,.tscback agreement with the sellers
expenses. , 1 7 wil 1
at closing to use the house on the property until September 15, 2017, and the shop on the property° until
Novcinber 1, 2017. Possession of the undeveloped portion of the property will be delic%,crd to the city at
closing.
Financial Impact
Flarnest money of $1,000 for 706 Guinn and $1,000 in earnest money foi- 709 Proctor to be deposited
with Sherburne C;ounty Abstract and 'fitle.
Attachments
Purchase Agreement for 709 Proctor Avenue NW
Purchase Agreement for 706 Quinn Avenue NW
p 0 W �f �fiflovoEy
NATURE
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is made as of this day of
August_, 2017, by and between Quinn Avenue, LLC, a limited liability company in the state of
Minnesota (the "Seller") and the City of Elk River, a public body corporate and politic under the
laws of the State of Minnesota (the "Buyer").
119 11FAM
The Seller is the owner of property located at 706 Quinn Avenue NW, Elk River, Minnesota,
which is legally described on the attached Exhibit A (the "Property").
AGREEMENT
I. Offer/Acceptance for Sale of Property. The Seller agrees to sell to Buyer the
Property and Buyer agrees to purchase the same, according to the terms of this Agreement.
2, Purchase Price for Property and Terms.
A. PURCHASE PRICE: The total purchase price for the Property is Two Hundred
and Eighty Two Thousand, Five Hundred and 00/1 OOtbs Dollars ($282,500) (the
"Purchase Price").
I
(1): EARNEST MONEY, The sum of One Thousand Dollars ($1,000) (the
"Earnest Money") shall be paid by the Buyer to the Seller, receipt of
which is hereby acknowledged by the Seller.
(2): BALANCE DUE SELLER. The Buyer agrees to pay by check or electronic
transfer of funds on the date of closing on the Property (the "Closing
Date") any remaining balance of the Purchase Price due to Seller
according to the terms of this Agreement.
(3): DEED/MARKETABLE TITLE. Subject to performance by the Buyer,
the Seller agrees to execute and deliver a Warranty Deed conveying
marketable title to the Property to the Buyer, subject only to the following
exceptions:
a. Building and zoning laws, ordinances, state and federal
regulations.
b. Reservation of minerals or mineral rights to the State of
Minnesota, if any.
C. Public utility and drainage casements of record which will not
505045v3 SJS ELI 85-13
interfere with the Buyer's intended use of the Property.
(4): DOCUMENTS TO BE DELIVERED AT CLOSING BY THE SELLER. In
addition to the Warranty Deed required at paragraph 213(3) above, the
Seller shall deliver to the Buyer:
a. Standard form Affidavit of Seller.
b. A "bring -down" certificate, certifying that all of the warranties made
by Seller in this Agreement remain true as of the Closing Date.
C. Certificate that the Seller is not a foreign national.
d. If an environmental investigation by or on behalf of the Buyer
discloses the existence of petroleum product or other pollutant,
contaminant or other hazardous substance on the Property,
either (i) a closure letter from the Minnesota Pollution Control
Agency (MPGA) or other appropriate regulatory authority that
remediation has been completed to the satisfaction of the MPGA or
other authority; or (ii) Agreement for remediation/indemnification
and Security as the Buyer may require.
e. Well disclosure certification, if required, or, if there is no well on the
Property, the Warranty Deed given pursuant to paragraph 2B(3,)
above must include the following statement: "The Seller certifies
that the Seller does not know of any wells on the described real
property."
f Methamphetamine Disclosure Certificate.
9. Any other documents reasonably required by the Buyer's title
insurance company or attorney to evidence that title to the
Property is marketable and that the Seller has complied with the
terms of this Agreement.
3. Contingencies. The Buyer's obligation to buy is contingent upon the following:
a. The Buyer's determination of marketable title pursuant to paragraph 4 of this
Agreement;
b. The Buyer's determination, in its sole discretion, that the results of any
environmental investigation of the Property conducted pursuant to this
Agreement are satisfactory to the Buyer; and
c. Approval of this Agreement by the City Council.
50' 3
The Buyer shall have until the Closing Date to remove the foregoing contingencies. The
contingencies at a. and b. are solely for the benefit of the Buyer and may be waived by the Buyer.
The contingency at c. may not be waived by either party. If the Buyer or its attorney gives written
notice to the Seller that the contingencies at a., b. and c. are duly satisfied or waived, the Buyer and
the Seller shall proceed to close the transaction as contemplated herein.
If one or more of the Buyer's or the Seller's contingencies is not satisfied, or is not satisfied on time,
and is not waived, this Agreement shall thereupon be void at the written option of the Buyer and
the Seller shall return the Earnest Money to the Buyer, and the Buyer and the Seller shall execute
and deliver to each other a termination of this Agreement. As a contingent Agreement, the
termination of this Agreement is not required pursuant to Minnesota Statutes, Section 559.21, et.
seq.
4. Title Examination/Curing Title Defects. As soon as reasonably possible after
execution of this Agreement by both parties,
(a) The Seller shall surrender any abstract of title and a copy of any owner's title
insurance policy for the property, if in the Seller's possession or control, to the Buyer or to the
Buyer's designated title service provider; and
(b) The Buyer shall obtain the title evidence determined necessary or desirable by the
Buyer.
The Buyer shall have 20 days from the date it receives such title evidence and a fully
executed Purchase Agreement to raise any objections to title it may have. Objections not made
within such time will be deemed waived. The Seller shall have 90 days from the date of such
objection to affect a cure; provided, however, that the Seller shall have no obligation to cure any
objections, and may inform the Buyer of such. The Buyer may then elect to close
notwithstanding the uncured objections or declare this Agreement null and void, and the parties
will thereby be released from any further obligation hereunder.
5. Environmental Investigation. The Seller warrants that the Property has not
been used for production, storage, deposit or disposal of any toxic or hazardous waste or
substance, petroleum product or asbestos product during the period of time the Seller has owned
the Property. The Seller further warrants that the Seller has no knowledge or information of any
fact which would indicate the Property was used for production, storage, deposit or disposal of
any toxic or hazardous waste or substance, petroleum product or asbestos product prior to the
date the Seller purchased the Property. Notwithstanding the above, the Seller's warranty
regarding petroleum products does not preclude the presence of heating oil or other similar
products used as a heating fuel for the dwelling but the Seller does warrant that if there was a
fuel tank on the Property used for the storage of heating oil or other similar product, the Seller
has no knowledge of any leak in the tank or contamination caused thereby.
The Seller hereby grants to the Buyer and the Buyer's agents a license to enter and evaluate the
Property for the purpose of conducting an environmental assessment. Further, the Buyer or the
Buyer's agent shall have the right pursuant to the license to bring persons and equipment onto
3
5050450 SJS EL185-13
the Property, make inspections and perform tests and analyses as the Buyer may deem
reasonable to determine the presence of any toxic or hazardous waste, substance, or petroleum
product or asbestos product, and ascertain soil conditions on the Property. The Buyer shall bear
the cost of the environmental assessment. If the results of the environmental assessment are not
to the satisfaction of the Buyer, the Buyer at its sole discretion may cancel this Agreement. If the
Buyer cancels this Agreement pursuant to this provision, the Buyer shall restore the Property to
its original condition or nearly so as is reasonably practicable.
1
6. Real Estate Taxes and Special Assessments. Real estate taxes payable in the
year of closing will be pro -rated between the Buyer and the Seller to the Closing Date. The Seller
shall pay all real estate taxes payable in previous years, the entire unpaid balance of special
assessments, and all installments of special assessments levied and pending, including special
assessments installments payable after the year of closing. The Seller also agrees to pay all
assessments related to service charges furnished to the Property prior to the Closing Date (e.g.,
delinquent water or sewer bills, removed or diseased trees), including those charges levied,
pending, or certified to taxes payable in the year of closing. If closing occurs prior to the date the
amount of real estate taxes due in the year of closing are available from Sherburne County, the
current year's taxes will be pro -rated based on the amount due in the prior year.
7. Closing Date. The Closing Date will be on or before -—, 2017. Delivery
of all papers and the closing shall be made at the offices of Buyer, 13065 Orono Parkway, Elk
River, MN 55330, or at such other location as is mutually agreed upon by the parties. All
deliveries and notices to the Buyer shall be made to the above address and marked to the
attention of Amanda Othoudt.
8. Possession/Utilities/Removal of Property/Escrow.
(a) Possession. The Seller agrees to deliver possession not later than the Closing
Date.
(b) Utilities. City water and sewer charges, electricity and natural gas charges, fuel
oil and liquid petroleum gas shall be pro -rated between the parties as of the Closing Date. The
Seller shall arrange for final readings as of the Closing Date.
(c) Fixtures and Materials. The Seller shall have the opportunity to salvage any
fixtures or materials from the building on the Property provided that the building is left secure
and provided that the removal does not create any hazardous conditions. The Seller assumes all
risk in undertaking any salvage operations. The Seller shall pay for all costs of salvage
operations in full prior to closing and shall not permit the attachment of any lien or encumbrance
on the Property as a result of this or other work thereon.
(d) Personal Property and Debris. The Seller must remove all debris and personal
property not included in this sale, including, all window treatments, appliances, and furniture
from the Property prior to closing. The Buyer may inspect the Property immediately prior to
closing in order to ensure that removal of all debris and personal property has been completed.
5050450 SJS ELI 85-13
9. Seller Warranties. The Seller hereby represents and warrants to the Buyer as
of the Closing Date that:
(a) Title. The Seller has good, indefeasible and marketable fee simple title to the
Property.
(b) Condemnation. There is no pending or, to the actual knowledge of the Seller,
threatened condemnation or similar proceeding affecting the Property or any portion thereof,
and the Seller has no actual knowledge that any such action is contemplated.
(c) Legal Compliance. The Seller has complied with all applicable laws,
ordinances, regulations, statutes, rules and restrictions Pertaining to and affecting the
Property and the Seller shall continue to comply with such laws, ordinances, regulations,
statutes, rules and restrictions,
(d) Legal Capacity. The Seller has the legal capacity to enter into this
Agreement. The Seller has not filed, voluntarily or involuntarily, for bankruptcy relief within the
last year under the United States Bankruptcy Code, nor has any petition for bankruptcy or
receivership been filed against the Seller within the last year.
(e) Sewer and Water. The Seller warrants that the Property is connected to City
sewer and City water.
(f) Mechanics' Liens. The Seller warrants that, prior to the closing, the Seller shall pay
in full all amounts due for labor, materials, machinery, fixtures or tools furnished within the 120
days immediately preceding the closing in connection with construction, alteration or repair of any
structure upon or improvement to the Property.
(g) Legal Proceedings. There are no legal actions, suits or other legal or
administrative proceedings, pending or threatened, that affect the Property or any portion
thereof; and the Seller has no knowledge that any such action is presently contemplated,
(h) Leases. The Seller represents that the Property is currently being ]eased to
. The Seller has provided the tenant with the required notice of its intent to
terminate the lease. The Seller represents that the lease will be terminated prior to the Closing
Date. With the exception of this lease, the Seller represents that there are no other third parties in
possession of the Property, or any part thereof; and that there are no other ]cases, oral or written
affecting the Property or any part thereof.
(i) Broker Commission. The Buyer represents to the Seller that it has not utilized
the services of any real estate broker or agent in connection with this Agreement or the
transaction contemplated by this Agreement. The Seller represents to the Buyer that the Seller
has not utilized the services of any real estate broker or agent in connection with this Agreement or
the transaction contemplated by this Agreement. Each party agrees to indemnify, defend, and
hold harmless the other party against and in respect of any such obligation and liability based in
any way upon agreements, arrangements, or understandings made or claimed to have been made by
k,
5050450 SJS ELI 8 5-13
the party with any third person.
6) Structures. The Seller warrants that the buildings, if any, are entirely within the
boundary lines of the Property. The parties acknowledge that the Property is being sold in "as
is" condition relating to the structural, operational, and mechanical systems.
(k) Foreign Status. The Seller is not "foreign person" as such term is defined in the
Internal Revenue Code.
(1) Methamphetamine Production. To the best of the Seller's knowledge,
methamphetamine production has not occurred on the Property.
(in) Refuse and Hazardous Materials. The Seller has not performed and has no
actual knowledge of any excavation, dumping or burial of any refuse materials or debris of any
nature whatsoever on the Property. To the Seller's best actual knowledge and belief, there are no
"Hazardous Materials" (as hereinafter defined) on the Property that would subject the Buyer to
any liability under either federal or state laws, including, but not limited to, the disposal of any
foreign objects or materials upon or in the Property, lawful or otherwise. Without limiting the
generality of the foregoing, the Seller represents and warrants to, the Buyer that, to the Seller's
best actual knowledge and belief:
1. The Property is not now and has never been used to generate, manufacture, refine,
transport, treat, store, handle, dispose, transfer, produce, process Or in any manner
deal with Hazardous Materials;
2. No Hazardous Materials have ever been installed, placed, or in any manner
handled or dealt with on the Property,
3. There are no underground or aboveground storage tanks on the Property;
4. Neither the Seller nor any prior owner of the Property or any tenant, subtenant,
occupant, prior tenant, prior subtenant, prior occupant or person (collectively,
"Occupant") has received any notice or advice from any governmental agency or
any other Occupant with regard to Hazardous Materials on, from or affecting the
Property.
The term "Hazardous Materials" as used herein includes, without limitation, gasoline,
petroleum products, explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, polychlorinated biphenyls or related or similar materials, asbestos
or any material containing asbestos, or any other substance or material as may be defined as a
hazardous or toxic substance by any federal, state or local environmental law, ordinance, rule, or
regulation including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the
Hazardous Materials Transportation Act, as amended (42 U.S.C. Section 1801, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S. C. Section 1251, et seq.), the
Clean Air Act, as amended (42 U.S.C. Section 7401, et seq.) and in the regulations adopted and
publications promulgated pursuant thereto.
5050450 SJS ELI 85-13
10. "AS IS, WHERF, IS." The Buyer acknowledges that it has inspected or has had
the opportunity to inspect the Property and agrees to accept the Property "AS IS" with no right of
set off or reduction in the Purchase Price, Such sale shall be without representation of
warranties, express or implied, either oral or written, made by the Seller or any officer,
employee, or agent of the Seller with respect to the physical condition of the Property, with
respect to the compliance of the Property or its operation with any laws, ordinances, or
regulations of any government or other body, except as stated above. The Buyer acknowledges
and agrees that the Seller has not made and does not make any representations, warranties, or
covenants of any kind or character whatsoever, whether expressed or implied, with respect to
warranty of income potential, operating expenses, uses, habitability, tenant ability, or suitability
for any purpose, merchantability, or fitness of the Property for a particular purpose, all of which
warranties the Seller hereby expressly disclaims, except as stated above.
11. Closing Costs/Recording Fees/Deed Tax. The Buyer will pay: (a) title
insurance premium costs; (b) the recording fee for the deed transferring title to the Buyer; and (c)
any survey or environmental investigation costs incurred by it. The Buyer will also pay all other
fees normally paid by sellers, including (a) any transfer taxes, recording fees and Well
Disclosure fees required to enable the Buyer to record its deed from the Seller under this
Agreement; (b) fees and charges related to the filing of any instrument required to make title
marketable; and (c) title evidence and updating costs. The Buyer will also pay all closing fees
charged by the title insurance or other closing agent, if any, utilized to close the transaction
contemplated by this Agreement. Each party shall pay its own attorney fees.
12. Inspections. From the date of this Agreement to the Closing Date, the Buyer, its
employees and agents, shall be entitled to enter upon the Property to conduct such surveying,
inspections, investigations, soil borings and testing, and drilling, monitoring, sampling and
testing of groundwater monitoring wells, as the Buyer shall elect; provided, that the Seller is given
at least 24 hours' notice.
13. Relocation Benefits; Indemnification. The Seller acknowledges that the Seller
and its tenant are being displaced from the Property as a result of the transaction contemplated by
this Purchase Agreement and that the Seller and its tenant are eligible for relocation assistance
and benefits and that the Purchase Price includes compensation for any and all relocation
assistance and benefits for which the Seller and its tenant may be eligible and the Seller agrees to
waive any and all further relocation assistance benefits. The Seller agrees to provide a waiver of
relocation benefits signed by its tenant prior to the Closing Date. The provisions of this
paragraph shall survive closing of the transaction contemplated by this Purchase Agreement.
14. Risk of Loss. If there is any loss or damage to the Property between the date
hereof and the Closing Date, for any reason including fire, vandalism, flood, earthquake or act of
God, the risk of loss shall be on the Seller. If the Property is destroyed or substantially damaged
before the Closing Date, this Agreement may become null and void, at the Buyer's option, At the
request of the Buyer, the Seller agrees to sign a cancellation of Agreement.
15. Default/Remedies. If the Buyer defaults in any of the covenants herein, the
Seller may terminate this Agreement, and on such termination all payments made hereunder shall
7
5050450 SJS EL185-13
be retained by the Seller as liquidated damages, time being of the essence. This provision shall
not deprive either party of the right to enforce specific performance of this Agreement, provided
this Agreement has not terminated and action to, enforce specific performance is commenced
within six months after such right of action arises. In the event the Buyer defaults in its
performance of the terms of this Agreement and Notice of Cancellation is served upon Buyer
pursuant to Minn. Stat. Section 559.21, the termination period shall be thirty (30) days as
permitted by Minn. Stat., Section 559.2 1, Subd. 4.
16. Notice. Any notice, demand, request or other communication which may or shall
be given or served by the parties, shall be deemed to have been given or served on the date the same
is personally served upon one of the following indicated recipients for notices or is deposited in
the United States Mail, registered or certified, return receipt requested, postage prepaid and
addressed as follows:
SELLER: Quinn Avenue, LLC
Attn: Nathan Snyder
4679 137' Street W
Apple Valley, MN 55124
BUYER: City of Elk River
Attn: Amanda Othoudt
13065 Orono Parkway
Elk River, MN 55330
AGENT: Kennedy & Graven, Chartered
ATTN: Jenny Boulton
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
17. Entire Agreement. This Agreement, Exhibit, and other amendments signed by the
parties, shall constitute the entire Agreement between the Seller and the Buyer and supersedes any
other written or oral agreements between the parties relating to the Property. This Agreement
can be modified only in a writing properly signed on behalf of the Seller and the Buyer; except
that the Closing Date may be extended up to six months by written agreement of the Seller and the
Buyer without further approval by the City Council. The Buyer's staff is hereby authorized to
execute agreements to extend the Closing Date up to six months from the Closing Date at paragraph
7 above.
18. Survival. Notwithstanding any other provisions of law or court decision to the
contrary, the provisions of this Agreement shall survive closing.
18. Binding Effect. This Purchase Agreement binds and benefits the parties and their
heirs, successors and assigns.
IN WITNESS, WHEREOF, the undersigned have executed this Agreement on the date and year
above.
Buyer:
City of Elk River
By:
Its Mayor
And by:
Its City Clerk
5050450 SIS ELI 85-13
Seller:
Quin.n. Avenue, LLC
IWria, fflyin
Legal Desai tion of the Pro ert
Lot 6 of Auditors Subdivision No. 3, according to the recorded plat thereof, Sherbune County,
Minnesota.
A-]
5050450 SJS ELI 85-13
THIS PURCHASE AGREEMENT (the "Agreement") is made as of this day of
August _, 2017, by and between Wayne Scott and Teresa Scott, married to each other (the
"Sellers") and the City of Elk River, a Minnesota municipal corporation (1he"Buyer").
10"NITAIN
The Sellers are the owners of property located at 709 Proctor Avenue NW, Elk River,
Minnesota, which is legally described on the attached Exhibit A (the "Property").
AGREEMENT
1. Offer/Acceptance for Sale of Property. The Sellers agree to sell to Buyer the
Property and Buyer agrees to purchase the same, according to the terms of this Agreement.
2. Purchase Price for Property and Terms.
A. PURCHASE PRICE: The total purchase price for the Property is Two Hundred
and Seventy Five Thousand and 00/100ths Dollars ($275,000) (the "Purchase
Price").
B. STORAGE AND MOVING EXPENSES: The Buyer shall pay the Sellers
Thirty Seven Thousand and Two Hundred and Forty Dollars ($37,240) for
storage and moving expenses ("Storage and Moving Expenses").
(1): EARNEST MONEY. The sum of One Thousand Dollars ($1,000) (the
"Earnest Money") shall be paid by the Buyer to the Sellers, receipt of
which is hereby acknowledged by the Sellers.
(2): BALANCE DUE SELLER. The Buyer agrees to pay by check or electronic
transfer of funds on the date of closing on the Property (the "Closing
Date") any remaining balance of the Purchase Price due to Seller
according to the terms of this Agreement and the Storage and Moving
Expenses.
(3): DEED/MARKETABLE TITLE. Subject to performance by the Buyer,
the Sellers agree to execute and deliver a Warranty Deed conveying
marketable title to the Property to the Buyer, subject only to the following
exceptions:
a. Building and zoning laws, ordinances, state and federal
regulations.
5033260 JSB ELI 8 5-52
b. Reservation of minerals or mineral rights to the State of
Minnesota, if any.
C. Public utility and drainage easements of record which will not
interfere with the Buyer's intended use of the Property.
(4): DOCUMENTS TO BE DELIVERED AT CLOSING BY THE SELLER. In
addition to the Warranty Deed required at paragraph 2B(3) above, the
Sellers shall deliver to the Buyer:
a. Standard form Affidavit of Seller.
b. A "bring -down" certificate, certifying that all of the warranties made
by Seller in this Agreement remain true as of the Closing Date.
C. Certificate that the Sellers are not foreign nationals.
d. If an environmental investigation by or on behalf of the Buyer
discloses the existence of petroleum product or other pollutant,
contaminant or other hazardous substance on the Property,
either (i) a closure letter from the Minnesota Pollution Control
Agency (MPGA) or other appropriate regulatory authority that
remediation has been completed to the satisfaction of the MPCA or
other authority; or (ii) Agreement for remediation/indemnification
and security as the Buyer may require.
C. Well disclosure certification, if required, or, if there is no well on the
Property, the Warranty Deed given pursuant to paragraph 213(3)
above must include the following statement: "The Sellers certify
that the Sellers do not know of any wells on the described real
property."
The Sellers agree to have all wells located on the Property, which
arc not in use, sealed by a licensed well contractor at the Sellers'
expense.
The Sellers agree to escrow funds on the Closing Date for the
purpose of locating and sealing wells if circumstances prohibit
locating and sealing wells prior to closing.
f. Methamphetamine Disclosure Certificate.
9. Any other documents reasonably required by the Buyer's title
insurance company or attorney to evidence that title to the
Property is marketable and that the Sellers have complied with
the terms of this Agreement.
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5033260 JSB EL185-52
3. Contingencies. The Buyer's obligation to buy is contingent upon the following:
a. The Buyer's determination of marketable title pursuant to paragraph 4 of this
Agreement;
b. The Buyer's determination, in its sole discretion, that the results of any
environmental investigation of the Property conducted pursuant to this
Agreement are satisfactory to the Buyer; and
c. Approval of this Agreement by the Buyer's City Council.
The Buyer shall have until the Closing Date to remove the foregoing contingencies. The
contingencies at a. and b. are solely for the benefit of the Buyer and may be waived by the Buyer.
The contingency at c. may not be waived by either party. If the Buyer or its attorney gives written
notice to the Sellers that the contingencies at a., b. and c. are duly satisfied or waived, the Buyer and
the Sellers shall proceed to close the transaction as contemplated herein.
If one or more of the Buyer's or the Sellers' contingencies is not satisfied, or is not satisfied on time,
and is not waived, this Agreement shall there -upon be void at the written option of the Buyer and
the Sellers shall return the Earnest Money to the Buyer, and the Buyer and the Sellers shall execute
and deliver to each other a termination of this Agreement. As a contingent Agreement, the
termination of this Agreement is not required pursuant to Minnesota Statutes, Section 559.21, et.
seq.
4. Title Examination/Curing Title Defects. As soon as reasonably possible after
execution of this Agreement by both parties,
(a) The Selters, shall surrender any abstract of title and a copy of any owner's title
insurance policy for the property, if in the Sellers' possession or control, to the Buyer or to the
Buyer's designated title service provider; and
(b) The Buyer shall obtain the title evidence determined necessary or desirable by the
Buyer.
The Buyer shall have 20 days from the date it receives such title evidence and a fully
executed Purchase Agreement to raise any objections to title it may have. Objections not made
within such time will be deemed waived. The Sellers shall have 90 days from the date of such
objection to affect a cure; provided, however, that the Sellers shall have no obligation to cure any
objections, and may inform the Buyer of such. The Buyer may then elect to close
notwithstanding the uncured objections or declare this Agreement null and void, and the parties
will thereby be released from any further obligation hereunder.
5. Environmental Investigation. The Sellers warrant that the Property has not
been used for production, storage, deposit or disposal of any toxic or hazardous waste or
substance, petroleum product or asbestos product during the period of time the Seller has owned
5033260 JSB ELI 85-52
the Property. The Sellers further warrant that the Sellers have no knowledge or information of
any fact which would indicate the Property was used for production, storage, deposit or disposal
of any toxic or hazardous waste or substance, petroleum product or asbestos product prior to the
date the Sellers purchased the Property. Notwithstanding the above, the Sellers' warranty
regarding petroleum products does not preclude the presence of heating oil or other similar
products used as a heating fuel for the dwelling but the Sellers do warrant that if there was a fuel
tank on the Property used for the storage of heating oil or other similar product, the Sellers have
no knowledge of any leak in the tank or contamination caused thereby.
The Sellers hereby grants to the Buyer and the Buyer's agents a license to enter and evaluate the
Property for the purpose of conducting an environmental assessment. Further, the Buyer or the
Buyer's agent shall have the right pursuant to the license to bring persons and equipment onto
the Property, make inspections and perform tests and analyses as the Buyer may deem
reasonable to determine the presence of any toxic or hazardous waste, substance, or petroleum
product or asbestos product, and ascertain soil conditions on the Property. The Buyer shall bear
the cost of the environmental assessment. If the results of the environmental assessment are not
to the satisfaction of the Buyer, the Buyer at its sole discretion may cancel this Agreement. If the
Buyer cancels this Agreement pursuant to this provision, the Buyer shall restore the Property to
its original condition or nearly so as is reasonably practicable.
6. Real Estate Taxes and Special Assessments. Real estate taxes payable in the
year of closing will be pro -rated between the Buyer and the Sellers to the Closing Date. The Sellers
shall pay all real estate taxes payable in previous years, the entire unpaid balance of special
assessments, and all installments of special assessments levied and pending, including special
assessments installments payable after the year of closing. The Sellers also agree to pay all
assessments related to service charges furnished to the Property prior to the Closing Date (e.g.,
delinquent water or sewer bills, removed or diseased trees), including those charges levied,
pending, or certified to taxes payable in the year of closing. If closing occurs prior to the date the
amount of real estate tares due in the year of closing are available from Sherburne County, the
current year's taxes will be prorated based on the amount due in the prior year.
7. Closing Date. The Closing Date will be on or before September 1, 2017. Delivery
of all papers and the closing shall be made at the offices of Buyer, 13065 Orono Parkway, Elk
River, MN 55330, or at such other location as is mutually agreed upon by the parties. All
deliveries and notices to the Buyer shall be made to the above address and marked to the
attention of Amanda Othoudt.
8. Possessio tilities/Removal of Property/Escrow.
(a) Possession. Possession of the undeveloped portion of the Property will be
delivered at closing. The Buyer agrees to enter into a lease agreement at closing with the Sellers
to allow the Sellers to use house on the Property until September 15, 2017 and the shop on the
Property until November 1, 2017. The Sellers understand and agree that the lease will require
that the Sellers maintain property damage and liability insurance on the Property and adding the
Buyer to the certificate of insurance as an additional insured and will also require that the Buyer
be able to enter the Property upon providing reasonable notice. The Buyer agrees that it will not.
5033260 JSB EL185-52
charge the Sellers rent for the lease of the Property. The lease will be executed by the Buyer and
the Sellers at closing.
(b) Utilities. City water and sewer charges, electricity and natural gas charges, fuel
oil and liquid petroleum gas shall be pro -rated between the parties as of the Closing Date. The
Seller shall arrange for final readings as of the Closing Date. The Sellers shall be responsible for
utility charges during the lease term.
(c) Fixtures and Materials. The Sellers shall have the opportunity to salvage any
fixtures or materials from the buildings on the Property provided that the building are left secure
and provided that the removal does not create any hazardous conditions. The Sellers assume all
risk in undertaking any salvage operations. The Sellers shall pay for all costs of salvage
operations in full prior to closing and shall not permit the attachment of any lien or encumbrance
on the Property as a result of this or other work thereon.
(d) Personal Property and Debris. The Sellers must remove all debris and personal
property not included in this sale, including, all window treatments, appliances, and furniture
from the Property prior to the end of the lease term. The Buyer may inspect the Property in order
to ensure that removal of all debris and personal property has been completed.
(e) Escrow. In the event that removal of debris and personal property has not been
completed by the Sellers by the end of the lease term, the Buyer may require that funds be
retained from the purchase price for the Property as an escrow for payment of the estimated cost
of debris and personal property removal and disposal charges. The Buyer may also require that
funds be retained from the purchase price for payment of utility charges. The retained
amount(s), less deductions provided for this in paragraph 8, will be delivered to the Sellers no
later than 60 days following the Closing Date or delivery of possession, whichever is later. Said
funds shall be held by Kennedy & Graven, Chartered, as Escrow Agent, pursuant to the terms of
the Escrow Agreement attached here as Exhibit B. The provisions of this paragraph shall not
merge with the deed and shall survive closing on the Property.
(f) Amounts Due. The Buyer's ability to deduct amounts due under this paragraph
from the retained escrow is not exclusive but is in addition to the Buyer's rights at law and equity
to collect such amounts from the Sellers. The Sellers are responsible for the amounts due under
this paragraph even if. (i) the Buyer neglects to deduct the amount from escrow; or (ii) the
escrowed amount is insufficient to pay all amounts due under this paragraph 8.
9. Sellers' Warranties. The Sellers hereby represent and warrant to the: Buyer
as of the Closing Date that:
(a) Title. The Sellers have good, indefeasible and marketable fee simple title to
the Property.
(b) Condemnation. There is no pending or, to the actual knowledge of the Sellers,
threatened condemnation or similar proceeding affecting the Property or any portion thereof,
and the Sellers have no actual knowledge that any such action is contemplated.
503326v3 JSB EL185-52
(c) Defects. The Sellers are not aware of any latent or patent defects in the
Property, such as sinkholes, weak soils, unrecorded easements and restrictions.
(d) Legal Compliance. The Sellers have complied with all applicable laws,
ordinances, regulations, statutes, rules and restrictions pertaining to and affecting the
Property and the Sellers shall continue to comply with such laws, ordinances, regulations,
statutes, rules and restrictions.
(e) Legal Capacity. The Sellers has the legal capacity to enter into this
Agreement. The Sellers have not filed, voluntarily or involuntarily, for bankruptcy relief within
the last year under the United States Bankruptcy Code, nor has any petition for bankruptcy or
receivership been filed against the Sellers within the last year.
(f) Sewer and Water. The Sellers warrant that the Property is connected to City
sewer and City water.
(g) Mechanics' Liens. The Sellers warrant that, prior to the closing, the Sellers shall
pay in full all amounts due for labor, materials, machinery, fixtures or tools furnished within the
120 days immediately preceding the closing in connection with construction, alteration or repair of
any structure upon or improvement to the Property.
(h) Legal Proceedings. There are no legal actions, suits or other legal or
administrative proceedings, pending or threatened, that affect the Property or any portion
thereof-, and the Sellers have no knowledge that any such action is presently contemplated.
(i) Leases. The Sellers represent that there are no third parties in possession of the
Property, or any part thereof; and that there are no leases, oral or written affecting the Property or
any part thereof.
0) Broker Commission. The Buyer represents to the Sellers that it has not utilized
the services, of any real estate broker or agent in connection with this Agreement or the
transaction contemplated by this Agreement. The Sellers represents to the Buyer that the Sellers
have not utilized the services of any real estate broker or agent in connection with this Agreement or
the transaction contemplated by this Agreement. Each party agrees to indemnify, defend, and
hold harmless the other party against and in respect of any such obligation and liability based in
any way upon agreements, arrangements, or understandings made or claimed to have been made by
the party with any third person.
(k) Structures. The Sellers warrants that the buildings, if any, are entirely within the
boundary lines of the Property. The parties acknowledge that the Property is being sold in "as
is" condition relating to the structural, operational, and mechanical. systems.
(1) Foreign Status. The Sellers are not "foreign persons" as such term is defined in
the Internal Revenue Code.
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503326v3 JSB EIA 85-52
(in) Methamphetarnine Production. To the best of the Sellers' knowledge,
methamphetamine production has not occurred on the Property.
(n) Refuse and Hazardous Materials. The Sellers have not performed and has no
actual knowledge of any excavation, dumping or burial of any refuse materials or debris of any
nature whatsoever on the Property. To the Sellers' best actual knowledge and belief, there are no
"Hazardous Materials" (as hereinafter defined) on the Property that would subject the Buyer to
any liability under either federal or state laws, including, but not limited to, the disposal of any
foreign objects or materials upon or in the Property, lawful or otherwise. Without limiting the
generality of the foregoing, the Sellers represent and warrant to the Buyer that, to the Sellers'
best actual knowledge and belief:
I The Property is not now and has never been used to generate, manufacture, refine,
transport, treat, store, handle, dispose, transfer, produce, process or in any manner
deal with Hazardous Materials;
2. No Hazardous Materials have ever been installed, placed, or in any manner
handled or dealt with on the Property;
3. There are no underground or aboveground storage tanks on the Property;
4. Neither the Sellers nor any prior owner of the Property or any tenant, subtenant,
occupant, prior tenant, prior subtenant, prior occupant or person (collectively,
"Occupant") has received any notice or advice from any governmental agency or
any other Occupant with regard to Hazardous Materials on, from or affecting the
Property.
The term "Hazardous Materials" as used herein includes, without limitation, gasoline,
petroleum products, explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, polychlorinated biphenyls or related or similar materials, asbestos
or any material containing asbestos, or any other substance or material. as may be defined as, a
hazardous or toxic substance by any federal, state or local environmental law, ordinance, rule, or
regulation including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the
Hazardous Materials Transportation Act, as amended (42 U.S.C. Section 1801, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S. C. Section 1251, et seq.), the
Clean Air Act, as amended (42 U.S.C. Section 7401, et seq.) and in the regulations adopted and
publications promulgated pursuant thereto.
The Sellers' representations and warranties set forth in this Section shall be continuing and are
deemed to be material to the Buyer's execution of this Purchase Agreement and the Buyer's
performance of its obligations hereunder. All such representations and -warranties shall be true
and correct on and as of the Closing Date with the same force and effect as if made at that time;
and all of such representations and warranties shall survive the closing and any cancellation or
termination of this Purchase Agreement, and shall not be affected by any investigation,
verification or approval by any party hereto or by anyone on behalf of any party hereto. The
7
503326v3 JSB ELI 85-52
Sellers agree to defend, indemnify and hold the Buyer harmless for, from, and against any loss,
costs, damages, expenses, obligations and attorneys' fees incurred should an assertion, claim,
demand, action or cause of action be instituted, made or taken, which is contrary to or
inconsistent with the representations or warranties contained herein.
10. Closing Costs/Recording Fees/Deed Tax. The Buyer will pay: (a) title
insurance premium costs; (b) the recording fee for the deed transferring title to the Buyer; (b) any
survey or environmental investigation costs incurred by it; (c) any transfer taxes, recording fees
and Well Disclosure fees required to enable the Buyer to record its deed from the Sellers under
this Agreement; (e) fees and charges related to the filing of any instrument required to make title
marketable; (0 title evidence and updating costs; and (g) the closing fees charged by the title
insurance or other closing agent, if any, utilized to close the transaction contemplated by this
Agreement. Each party shall pay its own attorney fees.
11, Inspections. From the date of this Agreement to the Closing Date, the Buyer, its
employees and agents, shall be entitled to enter upon the Property to conduct such surveying,
inspections, investigations, soil borings and testing, and drilling, monitoring, sampling and
testing of groundwater monitoring wells, as the Buyer shall elect; provided, that the Sellers are
given at least 24 hours' notice.
12. Relocation Benefits; Indemnification. The Sellers acknowledges that the
Sellers are being displaced from the Property as a result of the transaction contemplated by this
Purchase Agreement and that the Sellers are eligible for relocation assistance and benefits and
that the Storage and Moving Expenses being paid by the Buyer include compensation for any
and all relocation assistance and benefits for which the Sellers may be eligible. In consideration
for the Buyer's payment of the Sellers' Storage and Moving Expenses, the Sellers agree to waive
any and all further relocation assistance benefits. The provisions of this paragraph shall survive
closing of the transaction contemplated by this Purchase Agreement.
13. Risk of Loss. If there is any loss or damage to the Property between the date
hereof and the Closing Date, for any reason including fire, vandalism, flood, earthquake or act of
God, the risk of loss shall be on the Sellers. If the Property is destroyed or substantially
damaged before the Closing Date, this Agreement may become null and void, at the Buyer's
option. At the request of the Buyer, the Sellers agree to sign a cancellation of Agreement.
14, Default/Remedies. If the Buyer defaults in any of the covenants herein, the
Sellersmay terminate this Agreement, and on such termination all payments made hereunder
shall be retained by the Seller as liquidated damages, time being of the essence. This provision
shall not deprive either party of the right to enforce specific performance of this Agreement,
provided this Agreement has not terminated and action to enforce specific performance is
commenced within six months after such right of action arises. In the event the Buyer defaults in
its performance of the terms of this Agreement and Notice of Cancellation is served upon Buyer
pursuant to Minn. Stat. Section 559.21, the termination period shall be thirty (30) days as
permitted by Minn. Stat., Section 559.2 1, Subd. 4.
15. Notice. Any notice, demand, request or other communication which may or shall
5033260 JSB ELI 85-52
be given or served by the parties, shall be deemed to have been given or served on the date the same
is personally served upon one of the following indicated recipients for notices or is deposited in
the United States Mail, registered or certified, return receipt requested, postage prepaid and
addressed as follows:
SELLERS:
BUYER: Elk River Economic Development Authority
Attn: Amanda Othoudt
13065 Orono Parkway
Elk River, MN 55330
AGENT: Kennedy & Graven, Chartered
ATTN: Jenny Boulton
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
16. Entire Agreement. This Agreement, Exhibits, and other amendments signed by
the parties, shall constitute the entire Agreement between the Sellers and the Buyer and supersedes
any other written or oral agreements between the parties relating to the Property. This
Agreement can be modified only in a writing properly signed on behalf of the Sellers and the
Buyer; except that the Closing Date may be extended up to six months by written agreement of the
Sellers and the Buyer without further approval by Buyer's City Council. The Buyer's staff is hereby
authorized to execute agreements to extend the Closing Date up to six months from the Closing Date
at paragraph 7 above.
17. Survival. Notwithstanding any other provisions of law or court decision to the
contrary, the provisions of this Agreement shall survive closing.
18. Binding Effect. This Purchase Agreement binds and benefits the parties and their
heirs, successors and assigns.
9
503326v3 JSB ELI85-52
IN WITNESS WHEREOF, the under -signed have executed this Agreement on the date and year
above.
Buyer: Sellers:
City of Elk River
M
Its Mayor
Teresa Scott
And by:
Its City Clerk. Wayne Scott
10
5033260 JSB ELI 85-52
Legal Description of the Propert
Lots 8 and 9, Block 7, W H Houlton's Addition, according to the recorded plat thereof, Sherbune
County, Minnesota.
A-1
5033260 JSB ELI 85-52
EANUU11-TW111-11
Escrow Agreement
THIS AGREEMENT entered into this _ day of...........®, 2017, by and between Teresa
Scott and Wayne Scott, married to each other (the "Sellers"), the CITY OF ELK RIVER, a
Minnesota municipal corporation (die "Buyer"), and KENNEDY & GRAVEN, CHARTERED
("Escrow Agent" or "Agent").
A. The Sellers and the Buyer have entered into a Purchase Agreement dated July
2017 (the "Purchase Agreement") for the sale of property located at 709
Proctor Avenue NW, Elk River, Minnesota and legally described on the attached
Exhibit One (the "Property").
B. The parties desire to close the sale of the Property on or before
AGREEMENT
The parties agree as follows:
1. Delivery of Possession. The Seller shall deliver possession of the Property to the
Buyer in accordance with the Purchase Agreement entered into by the parties.
2. Escrow. (a) Upon closing and execution of this Agreement, the Sellers agree to
deposit into escrow the sum of —(the "Escrowed Funds") from the purchase
price, to be held by Agent in a non-interest bearing account.
(b) Within seven days after requested by Agent, the Buyer shall provide to
Agent (with copy to the Sellers) evidence of expenses incurred for the
removal and disposal of any personal property and debris and for payment of
utility charges for services provided to the Property prior to date of possession, if
any. Agent shall reimburse the Buyer for the incurred expenses from the Escrowed
Funds within 7 days following receipt of such evidence from the Buyer.
(c) Agent shall deliver to the Sellers the balance of the Escrowed Funds on
deposit, less deductions provided for in paragraph 2(b) above, no later than 30
days following vacation of the Property by the Sellers.
(d) The sole duties of Agent shall be those described herein, and Agent shall be
under no obligation to determine whether the other parties hereto are
complying with any requirements of law or the terms and conditions of any other
agreements among said parties. Agent shall have no duty or liability to verify any
B -I
5033260 JS13 ELI 85-52
amounts deducted from the retained amount and Agent's sole responsibility shall be
to act expressly as set forth in this Escrow Agreement.
3. Escrow Agent LiabilitL The sole duties of Escrow Agent shall be those described
herein, and Escrow Agent shall be under no obligation to determine whether the
other parties hereto are complying with any requirements of law or the terms and
conditions of any other agreements among said parties. Escrow Agent may
conclusively rely upon and shall be protected in acting on any notice believed by it to
be genuine and to have been signed or presented by the proper party or parties,
consistent with reasonable due diligence on Escrow Agent's part. Escrow Agent
shall have no duty or liability to verify any such notice, and its sole responsibility
shall be to act expressly as set forth in this Escrow Agreement.
The Sellers and the Buyer understand that Agent is legal counsel to the Buyer and
each consents to Agent's serving as Escrow Agent notwithstanding such
representation. In the event Agent determines, in its sole discretion, that it cannot
continue to serve as Escrow Agent herein, Agent shall deposit the funds with Old
Republic National Title Insurance Company or such other Escrow Agent
acceptable to the Seller and the Buyer. The Sellers consents to Agent's continued
representation of the Buyer after a deposit is made, and the Buyer agrees to pay all
escrow fees charged by the substitute Escrow Agent.
4. Notices to be sent to the parties to this Agreement shall be sent by mail or
personal delivery to:
BUYER: Elk River Economic Development Authority
Attn: Amanda Othoudt
13065 Orono Parkway
Elk River, MN 55330
AGENT: Kennedy & Graven, Chartered
ATTN: Jenny Boulton
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
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5033260 JSB EL185-52
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
written above.
M"' 'Niel '19
CITY OF ELK RIVER
By:
Its Mayor
And by: _
Its City Clerk
ESCROW AGENT:
KENNEDY & GRAVEN, CHARTERED
ME
B-3
5033260 JSB ELI 85-52
Exhibit One
Legal Description of the Property
Lots 8 and 9, Block 7, W H Houlton's, Addition, according to the recorded plat thereof,
Sherburne County, Minnesota.
B-4
5033260 JSB ELI 85-52