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4.6. SR 09-21-2020 Request for Action To Item Number Mayor and Council 4.6 Agenda Section Meeting Date Prepared by Consent September 21, 2020 Amanda Othoudt, EDD Item Description Reviewed by Exclusive Listing Agreement for Activity Center Peter Beck, City Attorney Property at 413 Proctor Avenue Reviewed by Cal Portner, City Administrator Action Requested Approve, by motion, an exclusive listing agreement for the property located at 413 Proctor Ave, with IAG Commercial. Background/Discussion At their July 6, 2020, meeting, the City Council directed staff to engage a real estate broker to list for sale the former Activity Center located at 413 Proctor Avenue. On September 8, 2020, Council directed staff to engage in an exclusive listing agreement with IAG Commercial, adding certain exclusions to the listing agreement, where in the event the sale of the property would result from a contract or an agreement with any person or entity from a protected list that the city provides, the city would pay a lower rate. The term of the agreement commences on September 21, 2020, and expires and terminate on March 31, 2021, subject to the protective period provided in Section 4 of this agreement. Unless otherwise notified in writing, the term of this agreement will automatically renew and extend for a period of six (6) months from April 1, 2021 through September 30, 2021. SALE COMMISSION SCHEDULE: If the city executes any purchase agreement or other contract concerning the sale of all or any portion of the property during the term of this agreement, or enters into such an agreement during the Protective Period with a person or entity not identified on the protective list, the city will pay the broker a sale commission in an amount determined as follows: 5% of sales price at closing if sale is direct. 6% of sales price at closing if a co-broker is involved. The city must provide the broker a “Seller Protected List”. Seller Protected List is defined as any party who has inquired with the City of Elk River concerning the availability of the Property prior to September 14, 2020. The city will provide Broker the Seller Protected List with three (3) days of the date of this Agreement. The city must agree that none of the parties on the Seller Protected List are represented by a broker and thus that any sale to any party on the “Seller Protected List” is a direct sale. The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity. Updated: August 2020  In the event a Purchase Agreement is entered into with a party identified on the Seller Protected List within 30 days of the date of the Agreement which ultimately closes, the Sale Commission due Broker will be reduced to 3%.  In the event a Purchase Agreement is entered into with a party identified on the Seller Protected List within 60 days of the date of the Agreement which ultimately closes, the Sale Commission due Broker will be reduced to 4%.  In the event a Purchase Agreement is entered into with a party identified on the Seller Protected List after 60 days of the date of the Agreement which ultimately closes, the Sale Commission due Broker will be 5%. If the city grants an option or options to sell all or any portion of the property during the term of the agreement or grants an option during the protective period to a person or entity described in Section 4 hereof, a sale commission in the amount determined as follows shall be paid: 6% of sales price at closing if a co-broker is involved and 5% if direct. Financial Impact N/A Mission/Policy/Goal Council Short-term Goal: Activity Center Future Attachments  Exclusive Listing Agreement (will be distributed at meeting) N:\\Public Bodies\\Agenda Packets\\09-21-2020\\Final\\Laserfiche\\x4.6 sr Exclusive Listing Agreement with IAG Commercial.docx 211840v2 IAG Commercial 222 South 9th Street • Suite 1600 • Minneapolis, Minnesota 55403 • (612) 868-7429 EXCLUSIVE REPRESENTATION AGREEMENT (LISTING AGREEMENT - SALE) THIS AGREEMENT ("Agreement") is made this 21st day of September, 2020, by and between Integrust Advisory Group, LLC, a Minnesota Limited Liability Company doing business as IAG Commercial (hereinafter referred to as "Broker"), and The City of Elk River, with a business address of 13065 Orono Parkway, Elk River, MN 55330, (hereinafter referred to as "Owner"). 1. Agency. In consideration of its efforts and expenditures, and its agreement to list in its offices the real property and improvements hereinafter described and to provide the services referred to herein, Owner hereby appoints Broker as Owner's exclusive real estate agent during the term of this Agreement and grants Broker the exclusive right to sell the real property and improvements, if any, described as follows (the "Property") or any portion thereof: ADDRESS: 413 Proctor Avenue NW CITY, STATE, ZIP: Elk River, MN 55330 COUNTY: Sherburne PARCEL SIZE: (Acres) 1.16 acres PROPERTY TYPE: Special Use Building PROPERTY ID # 75-409-0205, 75-409-0255 AND 75-409-0250 LEGAL DESCRIPTION: EXEMPT LOTS 1 & 2 BLK 2 E 50 FT OF LOT 3 BLK 2 SALE PRICE: Sale Price to be determined within 14 days of the date of this agreement based on Broker assessment of property condition. OTHER TERMS: Broker shall be entitled to a Sale Commission for any Sale transaction entered into by Owner in accordance with the provisions of this Agreement, whether such Sale transaction is negotiated directly by Owner or another broker or whether such Sale is at the price and upon the terms contained herein, or at a different price or upon other terms as may be accepted in writing by Owner. 2. Commissions. "NOTICE: THE COMMISSION RATE FOR THE SALE, LEASE, RENTAL OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER AND ITS CLIENT." See attached Commission Schedule, the terms of which are incorporated herein by reference. 3. Term. Term of this Agreement shall commence on September 21, 2020 and shall expire and terminate on March 31, 2021 subject to the Protective Period provided in Section 4 of this Agreement. Unless otherwise notified in writing, the Term of this Agreement will automatically renew and extend for a period of six (6) months from April 1, 2021 through September 30, 2021 subject to the Protective Period provided in Section 4 of this Agreement. 4. Protective Period. Owner further agrees that in the event any Sale of the Property resulting from any contract or agreement entered into by Owner within six (6) months after the expiration or termination of this Agreement ("Protective Period") is consummated with any person or entity for which a Sale Commission would otherwise be payable by Owner hereunder, Owner will pay the Sale Commission to Broker. If, at the end of the six (6) month period, the property is under contract with a party on the original “protective list” as defined herein, the Protective Period shall be extended another six (6) months or to close, if sooner. Owner shall furnish Broker with all relevant information received by Owner during the Protective Period regarding any purchase offers or inquiries from such persons or entities promptly after receiving same. The Broker's Protective Period shall only be applicable to persons or entities with whom Broker has negotiated during the term of this Agreement. Broker shall identify such persons or entities by providing Owner with a written "protective list" within 72 hours of the expiration or termination of this Agreement, time being of the essence. Broker shall be conclusively deemed to have "negotiated" with a party, if Broker (or any outside broker acting at the direction of Broker) has shown the Property to such party or prepared an offer/Letter of Intent on behalf of Owner to sell the Property to such party or submitted written information to such party concerning the Property specifically at the request of such party. 5. Representations and Agreements. a. Owner represents that Owner has full legal right to sell the Property. b. Owner represents that as of the date of this Agreement, no notices, except as herein noted, pertaining to the Property have been received by Owner from any municipality or other governmental agency. Owner agrees to promptly furnish Broker with copies of any such notices received during the term of this Agreement. c. Owner agrees to comply with the terms and conditions of any Purchase Agreement or other agreement to which it is a party in a timely fashion. d. Owner agrees to permit Broker to erect a "For Sale" sign on the Property and to remove all other "For Sale" signs from the Property during the term of this Agreement. Owner further agrees to permit Broker to erect a "Sold" sign on the Property for a period of thirty (30) days following execution of a purchase agreement for the Property. e. Owner agrees to refer to Broker all inquiries regarding the Property received from prospective purchasers. f. Owner agrees that any member of Broker's sales force may immediately offer the Property for sale under the terms hereof. Owner agrees to cooperate with and assist Broker in making the Property available for inspection by prospective purchasers and their agents. Owner agrees to permit Broker to share part of its Sale Commission with other real estate brokers, including brokers only representing purchasers of the Property. g. Owner agrees to provide Broker with all material information concerning the financial, physical, legal or environmental status of the Property presently in Owner's possession or subsequently received by Owner. 2 h. The Broker and its employees and agents shall market the property and undertake the Broker’s tasks as identified in the Broker’s Proposal dated August 31, 2020. 6. Indemnity. a. Owner agrees to indemnify Broker from and against any and all liability, loss, cost, damage and expense, including reasonable consultant and attorney's fees, resulting from or due to claims made by any party arising out of the release or threatened release of hazardous substances, hazardous waste, pollutants or contaminants which were, or are claimed or alleged to have been, deposited, stored, disposed of, placed or otherwise located or allowed to be located on the Property by Owner or its agents, employees or contractors. As used herein, the term "hazardous substances," "hazardous waste," "pollutants" and "contaminant" mean any substances, waste, pollutant or contaminant now or hereafter included within such terms under any federal, state or local statute, ordinance, code or regulation now existing or hereafter enacted or amended. Owner agrees to indemnify and hold Broker harmless from any liability or damages arising from any incorrect information supplied by Owner or any information which Owner fails to supply. b. Broker agrees to defend, indemnify and hold the City, its officers, and employees harmless from any liability, claims, damages, costs, judgments, or expenses, including reasonable attorney's fees, resulting directly or indirectly from a negligent act or omission (including without limitation professional errors or omissions) of the Broker, its agents or employees in the performance of the services provided by this Agreement and against all losses by reason of the failure of said Broker fully to perform, in any respect, all obligations under this Agreement. c. Broker shall defend actions or claims charging infringement of any copyright or patent by reason of the use or adoption of any designs, drawings or specifications supplied by it, and it shall hold harmless the City from loss or damage resulting there from. 7. Dual Agency Disclosure. If a purchaser represented by Broker becomes interested in the Property, a dual agency will be created. This means that Broker will represent both Owner and the purchaser and owes the same duties to the purchaser that Broker owes to Owner. This conflict of interest will prohibit Broker from advocating exclusively on Owner's behalf. Dual agency will limit the level of representation which Broker can provide. If a dual agency should arise, Owner will need to agree that confidential information about price, terms and motivation will still be kept confidential unless Owner instructs Broker in writing to disclose specific information about Owner. All other information will be shared. Broker cannot act as a dual agent unless both Owner and the purchaser agree to it. By agreeing to a possible dual agency, Owner will be giving up the right to exclusive representation in an in-house transaction. However, if Owner should decide not to agree to a possible dual agency, and Owner wants Broker to represent Owner, Owner may give up the opportunity to sell the Property to purchasers represented by Broker. OWNER'S INSTRUCTIONS TO BROKER Having read and understood this information about dual agency, Owner now instructs Broker as follows: X Owner will agree to a dual agency representation and will consider offers made by purchasers represented by Broker. Owner will not agree to a dual agency representation and will not consider offers made by purchasers represented by Broker. Owner: (signature) Broker: (signature) Agent: (signature) 8. Termination. The City may terminate this Agreement upon 10 days’ notice to Broker, if Broker has failed to perform in accordance with the terms of this Agreement subject to the obligations provided under Paragraph 4 of this Agreement. 9. Limitation on Broker's Authorization. Broker is not authorized to render any tax or legal advice with respect to the Sale of the Property and Owner agrees to look to accountants, attorneys and/or other professionals of its choosing for specific advice with respect to any such transactions. 10. Miscellaneous. a. In the event either Party breaches the terms of this Agreement and the non-breaching party engages legal counsel to enforce its rights hereunder, the non-breaching party shall be entitled to recover from the breaching party all attorneys' fees and related costs.In the event Owner breaches the terms of this Agreement and Broker engages legal counsel to enforce its rights hereunder, Broker shall be entitled to recover from Owner all attorneys' fees and related costs. b. This Agreement is intended as the complete and final agreement of the parties and, as such, merges with and supersedes any and all prior communications between the parties, written or oral. This Agreement shall not be changed, altered or modified, and no provision may be waived except by an instrument in writing signed by the party against whom such change, modification or waiver is sought. c. This Agreement shall bind Owner, Broker and their respective successors and/or assigns. d. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. e. Broker must comply with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to (1) all data provided by the City pursuant to this Agreement, and (2) all data, created, collected, received, stored, used, maintained, or disseminated by the Broker pursuant to this Agreement. Broker is subject to all the provisions of the Minnesota Government 3 Data Practices Act, including but not limited to the civil remedies of Minnesota Statutes Section 13.08, as if it were a government entity. In the event Broker receives a request to release data, Broker must immediately notify City. City will give Broker instructions concerning the release of the data to the requesting party before the data is released. Broker agrees to defend, indemnify, and hold City, its officials, officers, agents, employees, and volunteers harmless from any claims resulting from Broker’s officers’, agents’, partners’, employees’, volunteers’, assignees’ or subcontractors’ unlawful disclosure and/or use of protected data. The terms of this paragraph shall survive the cancellation or termination of this Agreement. f. Except as otherwise provided herein, neither party shall assign this Agreement, nor any interest arising herein, without the written consent of the other party. Receipt is acknowledged of a copy of this Agreement. BROKER: OWNER: Integrust Advisory Group, LLC, a Minnesota Limited Liability Company dba IAG Commercial The City of Elk River By: By: Jeffrey L. LaFavre, CCIM, MCR, SIOR Its: President Its: Date: September 21, 2020 Date: COMMISSION SCHEDULE SALE COMMISSION SCHEDULE: If Owner executes any purchase agreement or other contract concerning the sale of all or any portion of the Property during the term of this Agreement, or enters into such an agreement during the Protective Period with a person or entity described in Section 4 hereof, Owner will pay Broker a sale commission ("Sale Commission") in an amount determined as follows: 5% of sales price at closing if sale is direct. 6% of sales price at closing if a co-broker is involved. Broker will cover the cost of marketing the propery. See “Other Terms” on the first page. The “Seller Protected List” is attached hereto as Exhibit A attached to this Exclusive Representation Agreement. Seller Protected List is defined as any party who has inquired with the City of Elk River concerning the availability of the Property prior to September 14, 2020. Seller will provide Broker the Seller Protected List with three (3) days of the date of this Agreement. Seller agrees that none of the parties on the Seller Protected List are represented by a broker and thus that any sale to any party on the Seller Protected List” is a direct sale. • In the event that a Purchase Agreement is entered into with a party identified on the Seller Protected List within 30 days of the date of the Agreement which ultimately closes, the Sale Commision due Broker will be reduced to 3%. • In the event that a Purchase Agreement is entered into with a party identified on the Seller Protected List within 60 days of the date of the Agreement which ultimately closes, the Sale Commision due Broker will be reduced to 4%. • In the event that a Purchase Agreement is entered into with a party identified on the Seller Protected List after 60 days of the date of the Agreement which ultimately closes, the Sale Commision due Broker will be 5%. Such Sale Commission shall be payable upon Owner's consummation of any "Sale" transaction. As used herein, the term "Sale" shall include any transaction involving a voluntary conveyance and disposition of the Property by Owner including without limitation, a like- kind exchange transaction under §1031 of the Internal Revenue Code, any transaction in which the Property is contributed by Owner as capital to a partnership, corporation, limited liability company or other investment entity, acquisition of the Property by a public authority in eminent domain proceedings or by deed in lieu thereof, or if Owner is a business entity, the transfer by merger, acquisition or otherwise of the equity interest in Owner in lieu of a conveyance of the Property. If Owner grants an option or options to sell all or any portion of the Property during the term of this Agreement or grants such an option during the Protective Period to a person or entity described in Section 4 hereof, a Sale Commission in the amount determined as follows shall be paid: 6% of sales price at closing if a co-broker is involved and 5% if direct. "IF YOU RELIST WITH ANOTHER BROKER WITHIN THE OVERRIDE PERIOD AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME APPEARS ON THIS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS TO BOTH BROKERS. IF THIS NOTICE IS NOT FULLY UNDERSTOOD, SEEK COMPETENT ADVICE." 4 EXHIBIT A SELLER PROTECTED LIST Craig G Prange Glory of Christ Fellowship 14312 215th CT NW Elk River MN 55330 Barry Hohlen, Carrie Brummer, Rick Foster, Gary Santwire, Tina Meeker, Mel Beaudry Barry’s Phone number: 763-218-4143 Todd Roskaft 22068 Brook Road Elk River, MN 55330 Tim Dolan and/or Annie Deckert 13467 212th Ave NW Elk River, MN 55330 763-331-1923