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4.12 SR 04-19-2021Request for Action To Item Number Mayor and Ci T Council 4.12 Agenda Section Meeting Date Prepared by Consent April 19, 2021 Cal Portner, City Administrator Item Description Reviewed by Purchase Agreement Addendum First Step Due Peter Beck, City Attorney Diligence Extension Reviewed by Action Requested Approve, by motion, an addendum to the purchase agreement with First Step Preschool. Background/Discussion First Step Preschool has entered into a purchase agreement with the City of Elk River for the purchase of the Activity Center property located at 413 Proctor Ave. NW. They are nearing their final loan approval and are in the process of getting city approvals of a Conditional Use Permit. They are requesting to extend the purchase agreement through June 21, 2021, to ensure approval of the CUP. Financial Impact N/A Mission/Policy/Goal The Elk River Mission Attachments • Addendum to Purchase Agreement The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires pi ospei l_ y. M TUREJ Updated.• August 2020 Authentisign ID: 6485D5F3-C36A-4AF3-BE10-42CDABFESOC8 ADDENDUM TO COMMERCIAL PURCHASE AGREEMENT: DUE DILIGENCE This form approved by the Minnesota Association of REALTORS®, which disclaims any liability arising out of use or misuse of this form. © 2020 Minnesota Association of REALTORS®, Edina, MN 1. Date April 15th, 2021 2. Page 1 3. Addendum to Purchase Agreement between parties, dated February _ 4. (Date of this Purchase Agreement), pertaining to the purchase 413 Proctor Ave NW, Elk River, MN 55330 2ad 2021 and sale of the Property at In the event of a conflict between this Addendum and any other provision of the Purchase Agreement the language in this Addendum shall govern. This Purchase Agreement is contingent upon Buyer's reasonable approval of due diligence matters as agreed to in this Addendum. 10. Title and examination and title corrections and remedies are excluded from this Addendum and shall be handled in 11. accordance with terms specified in the Examination of Title and Title Corrections and Remedies section of this 12. Purchase Agreement. 13. Buyer shall satisfy himself/herself/itself with respect to the physical condition of the Property and the feasibility 14. and suitability of the Property for Buyer's intended purpose within the respective time period(s) specified herein. Buyer 15. acknowledges that any information provided by Seller, a third panty, or broker representing or assisting Seller regarding 16. dimensions, square footage, or acreage of land or improvements is approximate. Buyer shall verify the accuracy of 17. information to Buyer's satisfaction, at Buyer's sole cost and expense. 18. Buyer may declare this Purchase Agreement canceled by providing written notice to Seller, or licensee representing 19. or assisting Seller, within the respective time period(s) specified herein, in which case this Purchase Agreement is 20. canceled. Buyer and Seller shall immediately sign a written cancellation confirming said cancellation and directing 21. all earnest money paid hereunder to be refunded to Buyer, unless provided otherwise in this Purchase Agreement. 22. Buyer's failure to give written notice of cancellation of this Purchase Agreement, within the respective time period(s 23. specified herein shall conclusively be deemed Buyer's election to proceed with the transaction without correction of 24. any disapproved items that Seller has not agreed in writing to correct or remedy. 25. Buyer's Responsibility Regarding Due Diligence: Buyer shall keep the Property free and clear of all liens, shall 26. indemnify, defend, and hold Seller harmless from all liability, claims, demands, damages, costs or expenses, incurred 27. by Seller by reason of any physical damage to the Property or injury to persons caused by Buyer or its agents or 28. contractors in exercising its rights under this Addendum, and shall return the Property to the same condition it was 29. in prior to Buyer's testing. Buyer shall not disturb any tenants, employees or occupants of the Property. 30. Seller's Responsibility Regarding Due Diligence: Seller agrees to allow reasonable access to the Property for 31. performance of any surveys, due diligence or inspections agreed to herein. Seller understands that the inspections 32. may require that all utilities be on and the Seller is responsible for providing same at Seller's expense. If the Property 33. is occupied by someone other than Owner, Owner shall comply with Minnesota law and existing Owner's lease, if 34. any, to provide tenant with proper notice in advance of any Property showing. 35. A. ENVIRONMENTAL ASSESSMENTS/INSPECTIONS: 36. (i) Phase : This Purchase Agreement Fg] IS ❑ IS NOT contingent upon 0 BUYER ❑ SELLER --------(Check one.)--------- ---------------- (Checkone.)---------------- 37. obtaining a Phase I environmental site assessment of the Property at 0 BUYER'S ❑ SELLER'S expense -----------------(Check one.)-------------- 38. within 45 Days days of Final Acceptance Date of this Purchase Agreement. 39. Buyer shall provide reasonable approval of the Phase I environmental site assessment within 40. days of either: 41. (a) Final Acceptance Date of this Purchase Agreement if the Phase I environmental site assessment is 42. obligated to be obtained by Buyer; or 43. (b) receipt of the Phase I environmental site assessment if Seller is obligated to obtain. MN-ACPA:DD-1 (8/20) Minnesota Realtors® TRANSACTIONS hamxlianDesk EtlAlon AuthentisignID: B485D5F3-C36A-4AF3-6E10.42CDABFE50CB ADDENDUM TO COMMERCIAL PURCHASE AGREEMENT: DUE DILIGENCE 44. Page 2 45. Property located at 413 Proctor Ave NW, Elk River, MM 55330 46. (ii) Phase II: This Purchase Agreement ❑ IS ❑ IS NOT contingent upon ❑ BUYER ❑ SELLER -------- Check one. 47. obtaining a Phase II environmental site assessment of the Property at ❑ BUYER ❑ SELLER --------------- 48. expensewithin days of Final Acceptance Date of this PurchaseAgreement. 49. Buyer shall provide reasonable approval of the Phase II environmental site assessment within 50. days of either: 51. (a) Final Acceptance Date of this Purchase Agreement if the Phase II environmental site assessment is 52. obligated to be obtained by Buyer; or 53. (b) receipt of the Phase II environmental site assessment if Seller is obligated to obtain. 54. (iii) Other Testing: This Purchase Agreement ❑ IS ❑ IS NOT contingent upon ❑ BUYER ❑ SELLER ------(Check one.)-------- -___-_,}__------ 55. obtaining other Intrusive Testing of the Property at ❑ BUYER'S ❑ SELLER'S expense within -------------------(Check one.)--.r --------------- 56. days of Final Acceptance Date of this Purchase Agreement. 57. Buyer shall provide reasonable approval of the assessment/inspection within 58. days of either: 59. (a) Final Acceptance Date of this Purchase Agreement if the assessment/inspection is obligated to be obtained 60. by Buyer; or 61. (b) receipt of the assessment/inspection if Seller is obligated to obtain. 62. For purposes of this form, "Intrusive Testing" shall mean any testing, inspection(s) or investigation(s) that 63. changes the Property from its original condition or otherwise damages the Property. 64. Buyer ❑ SHALL ❑ SHALL NOT be required to provide Seller with a copy of any assessment/inspection - ---------------(Check one.)-------------- 65. reports obtained by Buyer. 66. (iv) Seller's Representations on Environmental Concerns: To the best of Seller's knowledge, there are no 67. hazardous substances or underground storage tanks except herein noted: 68. 69. 70. 71. B. GOVERNMENTAL APPROVAL: The following items, if applicable, shall be completed within 72. 67 (sixty seven) days of Final Acceptance Date of this Purchase Agreement. 73. (i) This Purchase Agreement ❑ IS ❑ IS NOT contingent upon Buyer obtaining approval of governing body of -------(Check one.)------ 74. development or subdivision plans, as described below, at ❑ BUYER ❑ SELLER expense. If IS, Seller shall -------------(Check one.)----------- 75. cooperate with Buyer to obtain such approval. 76. 77. (ii) This Purchase Agreement © IS ❑ IS NOT contingent upon Buyer obtaining approval of governing body for ------(Check one.)----- 78. rezoning or use permits, as described below, at ❑X BUYER ❑ SELLER expense. If IS, Seller shall ---------------(Check one.)------------- 79. cooperate with Buyer to obtain such approval. 80 Approval of Conditional Use Permit on June 21, 2021 81. MN-ACPA:DD-2 (8/20) Minnesota 1911ealtorso TRANSACTIONS Ira-kionDeA EdWon Authentisign ID: B485D5F3-C36A-4AF3-6E10-42CDABFE50C6 ADDENDUM TO COMMERCIAL PURCHASE AGREEMENT: DUE DILIGENCE 82. Page 3 83. Property located at 413 Proctor Ave NW, 81k River, MN 55330 84. C. OTHER CONTINGENCIES: This Purchase Agreement is contingent upon Buyer's reasonable approval of the 85. following items, if checked. Buyer shall approve the items within days of either: 86. (a) Final Acceptance Date of this Purchase Agreement if Buyer is obligated to obtain the item; or 87. (b) receipt of the item if Seller is obligated to obtain the item. 88. (Select appropriate options i-vi.) 89. ❑ (i) ❑ BUYER ❑ SELLER obtaining a certificate of survey of the Property, at ❑ BUYER ❑ SELLER -------------(Check one.)------------- -------------- (Checkone.) —------- 90, expense. 91. ❑ (ii) ❑ BUYER ❑ SELLER obtaining soil tests which indicate that the Property may be improved without -------------(Check one.)------------ 92. extraordinary building methods or costs, at ❑ BUYER ❑ SELLER expense. -------------(Check one.)----------- s 93. ❑ (iii) ❑ BUYER ❑ SELLER obtaining copies of all covenants, reservations and restrictions affecting the Property, - ---------(Check one.)------------ 94. at ❑ BUYER ❑ SELLER expense. ---------------(Check one.)------------- 95. ❑ (iv) ❑ BUYER ❑ SELLER obtaining and approving copies of Association documents at ❑ BUYER [—]SELLER -------------(Check one.)------------- ------------- (Checkone.)------------- 96. expense. 97. ❑ (v) Buyer obtaining from Seller copies of all documents in Seller's possession or control relating to the rights 98. of tenants, including but not limited to, rent rolls, leases, common area maintenance fees, and estoppel 99. certificates. 100. Seller assigns all right, title, and interest in and to the tenant security deposits and the interest earned, if 101. any, and credited thereon (collectively, the Security Deposits) for the Property at closing. Seller warrants 102. that the Security Deposits being assigned are all of the Security Deposits being held for tenants at the 103. Property. Seller shall, immediately after closing, notify tenant of the Security Deposit transfer and of Buyer's 104. name and address as required under MN Statute 50413.178, Subd. 5. Buyer agrees to hold and apply all 105. of the Security Deposits in accordance with the terms of the leases of the Property pursuant to MN Statute 106. 50413.178 and indemnify and agree to hold and defend Seller, its legal representatives, successors and 107. assigns harmless from and against any and all claims, actions, suits, proceedings, demands, assessments, 108. judgments, liabilities and costs including, without limitation, reasonable attorney's fees and expenses of 109. any kind whatsoever, arising from and after the date of closing asserted by said tenants or any person 110. or persons claiming under any of them with respect to any of the Security Deposits. 111. ❑ (vi) Buyer obtaining from Seller copies of all permits applicable to the Property, operating statements for the 112. last . years, vendor contracts, and any other documents in Seller's possession or 113. control and relating to the Property. 114. Buyer acknowledges that Seller makes no representations or warranties by providing any documents to 115. Buyer. Buyer agrees to return all such documents to Seller upon Seller's written request. MWACPA:DD-3 (8/20) Minnesota Realtors® TRANSACTIONS TranaaetionOesk Editlon Authentisign ID: B485D5F3-C36A-4AF3.8E10.42CDABFESOC8 117. Property located at 413 116 Proctor Ave NW, Elk River, MN ADDENDUM TO COMMERCIAL PURCHASE AGREEMENT: DUE DILIGENCE Page 4 55330_ 118. D. BUYER INVESTIGATIONS: This Purchase Agreement R] IS ❑ IS NOT contingent upon Buyer's investigations -------(Check one.)------ 119. of the Property for Buyer to satisfy himself/herself/itself with respect to the physical condition of the Property and 120. the feasibility and suitability of the Property for Buyer's intended purpose. Any Buyer investigations shall be 121. completed within days of Final Acceptance Date of this Purchase 122. Agreement. All Buyer investigations shall be at Buyer's sole cost and expense. 123. SELLER 124 City of Elk River (Business Entity or Individual Name) 125. By: (Seller) 126. Its: (Title) 127 (Date) 128. SELLER 129. City of Elk River BUYER First Step Preschool & Childcare LLC (Business Entity or Individual Name) By: r.Gaa Ea#= 04"-14:44:16 PM CDT Its: (title) 04115/2021 (Date) BUYER (Business Entity or Individual Name) (Business Entity or Individual Name) 130. By: By: (Seller) (Buyer) 131. Its: Its: (Title) (title) 132. (Date) (Date) 133. THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S). 134. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. MN-ACPAOD-4 (8/20) Minnesota Realtors® TRANSACTIONS T--tionNA Etlilion