9.1 SR 12-21-2020Request for Action
To Item Number
Mayor and City Council 9.1
Agenda Section Meeting Date Prepared by
Work Session December 21, 2020 Zack Carlton, Planning Manager
Item Description Reviewed by
License Agreement: Proctor Road – Aggregate Justin Femrite, Public Works Director
Industries
Reviewed by
Cal Portner, City Administrator
Action Requested
Provide staff and the applicant with direction regarding the license agreement authorizing mineral extraction
beneath Proctor Road, north of County Road 33.
Background/Discussion
In September, the City Council discussed entering into a license
agreement with Aggregate Industries and Plaisted Companies to allow
extraction of the aggregate beneath the segment of Proctor Road that is
between the two applicants. Proctor Road in this area is higher than the
adjacent properties, which have been mined for their existing aggregate.
Allowing the mining beneath the city street will bring the future road
grade down to an elevation that is close to the adjacent parcels to better
serve future development in the area. City Council was comfortable
with the proposal and directed staff to work with the applicants on a
license agreement allowing the use.
Staff and the applicant have reviewed the draft agreement and there are
two questions to discuss with Council. First, the initial agreement was
for five years and allowed an extension if both parties agreed. The
applicant requested a ten-year initial agreement with an option for a
five-year extension, provided all parties agree. Staff is comfortable with
this change.
Second, the agreement, as drafted, requires replacement of the road at
the end of the license agreement. The applicant has requested that this
requirement be removed as they do not want to re-construct the road
at the end of the agreement. They note that their mining operations will bring the road grade down to the
elevation of the surrounding parcels at no cost to the city and that replacement of the road could make the whole
operation cost prohibitive.
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
Staff notes that the road is a public asset that exists prior to entering into the license agreement permitting removal
of the street. Replacement of the street should be required as it is a public asset that is intended to be returned to a
functional status at the end of the agreement. The impacts authorized by the agreement are intended to be a
temporary change, and the city infrastructure should function the same at the end of the agreement as it did prior.
Staff also notes that future improvements in the area would be publicly bid, and a contractor would consider the
potential use/re-use of any aggregate removed during the construction process.
Financial Impact
None
Mission/Policy/Goal
Council goals include responsible growth.
Attachments
Draft License Agreement
N:\\Public Bodies\\Agenda Packets\\12-21-2020\\Final\\9.1 sr Agg Industries - Proctor Road.docx
N:\\Public Bodies\\Agenda Packets\\12-21-2020\\Final\\9.1 sr Agg Industries - Proctor Road.docx
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (“Agreement”) is made this _____ day of
_______________, 2020 (“Effective Date”), by and between the CITY OF ELK RIVER,
MINNESOTA, a Minnesota municipal corporation (“Licensor”) and AGGREGATE
INDUSTRIES MWR, INC., a Minnesota corporation, and PLAISTED COMPANIES, INC., a
Minnesota corporation (together referred to as “Licensees”).
BACKGROUND
Licensees are gravel mine operators that own and mine gravel pursuant to City-approved
permits and licenses from properties located on either side of that portion of Proctor Avenue
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located between 205 and 213 Avenues NW (the “Property”). Each licensee has mined its side
of the Property, to the point that Proctor Avenue is presently significantly above the grade of the
adjacent properties. Licensees believe that the Property contains significant amounts of gravel,
and have requested that the City vacate the Property so that each Licensee can mine one-half of
the existing right-of-way. City does not believe that vacation of the Property is in the best interest
of the public, due to the potential future need for a City street in this area of the City. However,
the City does not see a public need to keep Proctor Avenue open in the short term, and is willing
to grant Licensees a license to mine the Property pursuant to the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the agreements contained
herein, Licensor and Licensee agree as follows:
1. License.
A. License. Licensor hereby grants to Licensees, their Agents, Contractors and
Employees, subject to the terms and conditions of this Agreement, a license (the “License”)
to enter upon the Property for the purpose of removing Proctor Avenue, mining the
Property, and replacing reclaiming Proctor Avenue, as provided in this Agreement.
B. Term. The License granted by this Agreement shall take effect on the
Effective Date and shall terminate:
(i) On the tenth anniversary of the Effective Date, unless Licensor and
both Licensees agree, prior to this expiration date, to extend the term of the
Agreement; or
(ii) Upon acceptance by Licensor of the new Proctor Avenue, as
provided in Section 2(B) of this Agreement; or
(iii) Upon default by either Licensee as provided in Section 3 of this
Agreement.
2. Permitted Uses.
A. Mining. Licensees shall determine which Licensee will mine which portion
of the Property. Each Licensee shall amend its Mining Conditional Use Permit and License
to incorporate in its approved and licensed mining area that potion of the Property which
it will mine. The amended conditional use permits and licenses shall comply in all respects
with City of Elk River requirements.
B. Replacement Reclamation of Proctor Avenue. Upon expiration of the term
of this Agreement, Licensees shall replace reclaim Proctor Avenue, in the location and to
the standards subject to post mining development plans offered by third party developers.
Elevation and grade for the future alignment will be determined by mining and
development plans.
(i) If Licensor determines that Proctor Avenue shall be relocated,
Licensees will work with Licensor to relocate the existing Proctor Avenue right-of-
way to the new location and will replace Proctor Avenue in the new right-of-way.
The parties will cooperate to vacate those portions of the existing right-of-way and
to dedicate new right-of-way as necessary to relocate Proctor Avenue.
(ii) The new Proctor Avenue shall be installed by Licensees to the City
of Elk River standard then in place for a nine ton city street.
(iii)(i) Failure of Licensees to replace reclaim Proctor Avenue in the
location and to the standard required by Licensorunder this Agreement shall be a
default under this Agreement and shall authorize Licensor to replace Proctor
Avenue on its own initiative and to assess the costs to do so to the adjacent
properties as provided herein.
C. Security for Replacement Reclamation of Proctor Avenue. To secure
Licensees’ obligation to replace Proctor Avenue upon the expiration or termination of the
License granted by this Agreement, each Licensee shall deposit with the City a cash escrow
or letter of credit in the amount of $______________, to be maintained in that amount and
held by the City until Proctor Avenue has been replaced and accepted by Licensor.
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3. Default.
A. Licensor may terminate this Agreement if, upon providing written notice to
the Licensees of any of the following occurrences, Licensee(s) fail(s) to cure said
occurrence within 60 days of receipt of such notice of default. Licensee shall default with
respect to its obligations under this Agreement, for instances including, but not limited to:
Failure to obtain the required approvals to mine the Property;
Failure to comply with all ordinances, conditional use permits and
mining license requirements;
Failure to maintain the security required by Section 2(C) of this
Agreement; or
Failure to replace Proctor Avenue as required by this Agreement.
B. Upon termination of this Agreement under Section 3, Licensees shall
immediately replace reclaim Proctor Avenue on the Property to the City of Elk River
standard then required for a nine ton city streetas required herein.
C. Failure of a Licensee to replace reclaim Proctor Avenue as required by this
Agreement shall authorize City to:
(i) Replace Reclaim Proctor Avenue on its own initiative and assess the
adjacent properties;
(ii) Withhold renewal of the Licensees’ mining license until each
Licensee has met its obligations under this Agreement; or
(iii) Draw on the Security provided by Section 2(C) of this Agreement.
D. In addition to, or in lieu of, termination of this Agreement in the event of a
default by a Licensee, City may also pursue specific performance of this Agreement,
damages for violation of this Agreement or any other remedy available to City.
4. Liability and Indemnification.
A. Compliance With Laws. Licensees covenant, represent and warrant to
Licensor: (i) that they will not use or permit the Property to be used, whether directly or
through contractors or agents of Licensees, other than in full compliance with all federal,
state or local laws, regulations, ordinances or requirements governing Licensees’ use of the
Property; and (ii) that Licensees’ operations on the Property will have all required federal,
state and local approvals will not be in violation of any insurance policy carried on the
Property by Licensor.
B. Limitation of Liability. Licensees acknowledge that they are solely
responsible for their respective uses of and activities on the Property, and that Licensor
shall not be responsible or liable to Licensees, or anyone claiming by or through a Licensee,
for any loss or damage to a Licensee or its property, and that Licensees assume all risk of
loss or damage to Licensees’ property located in the Property.
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C. Indemnity. Without a waiver of the City’s statutory immunities pursuant to
Minnesota Statutes, Chapter 466 or other applicable law, Licensees shall defend, indemnify
and save Licensor and its officers, employees and agents harmless from and against all
liabilities, losses, obligations, claims, suits, damages, penalties, causes of action, costs and
expenses (including without limitation, court costs and reasonable attorneys’ fees) arising
from or relating to Licensees’ respective use, occupancy or operations within the Property,
or any failure on the part of Licensees to perform or comply with any terms of this
Agreement or the Licensees’ permits and approvals, or any injury, death, disability or
damage to any person or property occurring in or on the Property in connection with
Licensees’ use of the Property, or any act or omission by Licensees or its officers,
employees, contractors or agents or anyone claiming by or through them. The foregoing
indemnification only applies to the extent of each Licensee’s respective negligence or
willful misconduct, and does not apply to any liability, cause of action, expense or cost
suffered or incurred by Licensor as a result of the gross negligence or willful misconduct
of Licensor, its officers, employees, agents or contractors. Notwithstanding anything
contained herein, in no event shall Licensee’s liability exceed its Security provided by
Section 2(C).
D. Insurance. Each Licensee shall maintain commercial general liability
insurance against claims for personal injury, death or property damage occurring upon, in
or about the Property, such insurance to afford protection to the limit of not less than
$2,000,000.00 in respect to injury or death to a single person, and to the limit of not less
than $3,000,000.00 in respect to any one accident, and to the limit of not less than
$500,000.00 in respect to any property damage, and shall name Licensor as an additional
insured.
All policies of insurance shall be written in companies that are qualified to do
business in the State of Minnesota with a minimum AM Best Rating of at least A-. Each
Licensee shall procure and deliver to Licensor certification from the respective insurance
companies indicating that the insurance to be maintained by the Licensees is in force.
During the term of this Agreement, upon request by Licensor, each Licensee shall procure
and deliver to Licensor updated certifications from the respective insurance companies
indicating that the insurance to be maintained by Licensees is in force. Each Licensee shall
notify Licensor if any of the required coverage is cancelled or terminated.
5. Miscellaneous Provisions.
A. No Interest in Property. Licensees acknowledge and agree that this
Agreement does not grant either Licensee any estate or other interest in the Property or any
part thereof, except the License expressly described herein.
B. Assignability. This Agreement, and the License herein granted, may not be
assigned or transferred to any third party by a Licensee without the prior written approval
of Licensor, and shall automatically terminate if any assignment is executed without
written approval; provided, however, a Licensee may assign and/or transfer this Agreement
and the License herein granted to its parent, subsidiary, affiliate, mortgage lender or
successor-in-interest pursuant to a third party sale.
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C. Entire Agreement. This Agreement, including the recitals, embodies the
entire understanding between the parties and supersedes all prior understandings and
agreements related to the subject matter. This License cannot be amended, altered or
modified, and no provisions can be waived, unless the amendment, change or modification
is in writing and signed by all parties.
D. Benefit. This Agreement shall bind and inure to the benefit of the parties
and their respective successors and permitted assigns.
E. No Waiver. No waiver of any breach or any agreement, covenant or
restriction contained herein shall be construed to be a waiver of any other or future breach
of the same or other covenants or restrictions.
F. Notice Addresses. All notices shall be sent by registered or certified mail
addressed as follows:
Licensor: Public Works Director
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
Licensee: Aggregate Industries
th
12001 213 Avenue NW
Elk River, MN 55330
Lafarge Holcim
8700 W. Bryn Mawr Ave. Suite 300
Chicago, IL 60631
Attn: Legal
Licensee: Plaisted Industries, Inc.
th
11555 205 Avenue NW
Elk River, MN 55330
Any party may, by such notice, designate a new or other address to which notice may be
mailed.
G. Heading and Captions. The headings and captions of the paragraphs and
subparagraphs of this Agreement are inserted for convenience and reference only and shall
not constitute a part of this Agreement or a limitation on the scope of any paragraph or
subparagraph.
H. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable under any
applicable law or rule in any jurisdiction, such provision will be ineffective only to the
extent of such invalidity, illegality or unenforceability in such jurisdiction without
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invalidating the remainder of this Agreement in such jurisdiction or any provision hereof
in any other jurisdiction.
I. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same document.
J. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Minnesota and the exclusive jurisdiction for any claim
or action arising out of this Agreement shall be the state or federal courts located in
Sherburne County, Minnesota.
K. Authority. The parties each warrant and represent that the person executing
this Agreement on its behalf has the authority to do so and to bind said party to the terms
of this Agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first written above.
LICENSOR:
CITY OF ELK RIVER
By: John J. Dietz
Its: Mayor
By: Tina Allard
Its: City Clerk
STATE OF MINNESOTA )
) SS
COUNTY OF SHERBURNE )
The foregoing instrument was acknowledged before me this ____ day of __________,
20___, by ______________________, its Mayor and _________________________ its City
Manager for the CITY OF ELK RIVER, a Minnesota municipal corporation, on behalf of the
corporation.
Notary Public
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LICENSEE:
AGGREGATE INDUSTRIES MWR, INC.
By:
its:
STATE OF MINNESOTA )
) SS
COUNTY OF SHERBURNE )
The foregoing instrument was acknowledged before me this ____ day of __________,
2020, by ______________________, the ____________________ of Aggregate Industries MWR,
Inc., a Minnesota corporation.
Notary Public
My commission expires: ___________________
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LICENSEE:
PLAISTED INDUSTRIES, INC.
By:
its:
STATE OF MINNESOTA )
) SS
COUNTY OF SHERBURNE )
The foregoing instrument was acknowledged before me this ____ day of __________,
2020, by ______________________, the ____________________ of Plaisted Industries, Inc., a
Minnesota corporation.
Notary Public
My commission expires: ___________________
Drafted by:
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
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