6.1. EDSR 08-15-2022Request for Action
To Item Number
Economic Development Authority 6.1
Agenda Section Meeting Date Prepared by
Public Hearings August 15, 2022 Brent O’Neil, Economic Development Director
Item Description Reviewed by
Sale of Property at 17610 Tyler Street NW Cal Portner, City Administrator
Reviewed by
Action Requested
Open the public hearing for public comments. Following the public hearing, approve, by motion, the resolution
authorizing the execution of a purchase agreement for sale of property at 17610 Tyler Street NW.
Background/Discussion
The EDA has received an offer to purchase property at 17610 Tyler Street NW from Onyx Strategic Partners,
LLC. Staff and legal counsel have negotiated a purchase agreement with the buyer. The sales price is $900,000,
which is in line with prevailing market conditions for the approximately 12-acre site.
The buyer is proposing to build a multi-tenant building on the site targeted to small manufacturing businesses and
compatible uses. Their plans indicate the likely possibility of a second building on the site as well.
At the buyer’s request, the agreement includes a 150-day due diligence period to further evaluate the site and
finalize their development program. The buyer indicated they may request property tax abatement as their
program is fully planned out, of which any application and consideration of, would occur within the due diligence
period. Under EDA statute the property must be substantially developed within one year of the buyer acquiring
the property or the property reverts back to the EDA. This provision is reiterated in the agreement as is a
requirement that the project be fully completed within two years.
Financial Impact
The sale of this property will net approximately $850,000 for the EDA, net of closing expenses and broker fees.
Mission/Policy/Goal
Attract new business development to Elk River to build the City’s economic vibrancy, job offerings and tax base.
Attachments
Resolution Authorizing Sale
Purchase Agreement
Draft Site Concept Plan
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
THE ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF ELK RIVER, MINNESOTA
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION NO. 2022-01
RESOLUTION APPROVING A PURCHASE AGREEMENT BETWEEN THE
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF ELK RIVER
AND ONYX STRATEGIC PARTNERS LLC, AND APPROVING THE
CONVEYANCE OF LAND CONTAINED THEREIN.
WHEREAS, The Economic Development Authority of the City of Elk River, Minnesota (the
“EDA”) is the fee owner of real property located in Elk River, Sherburne County, Minnesota, (the
“City”) and consisting of land containing approximately 12.13 acres legally described in Exhibit A
attached hereto and located at 17610 Tyler Street NW in the City (the “Real Property”); and
WHEREAS, the EDA has reviewed a proposal by Onyx Strategic Partners LLC, a Minnesota
limited liability company, or an entity related thereto or affiliated therewith (the “Developer”), to
purchase the Real Property from the EDA; and
WHEREAS, the EDA and the Developer have negotiated a certain Real Estate Purchase
Agreement (the “Purchase Agreement”) in connection with the conveyance of the Real Property; and
WHEREAS, on July 18, 2022, the EDA conducted a duly noticed public hearing regarding the
sale of the Real Property to Developer, at which all interested persons were given an opportunity to be
heard; and
WHEREAS, the EDA finds and determines that conveyance by the EDA of the Real Property
to the Developer is for a public purpose and is in the best interests of the City and its residents because
it will further the objectives of the EDA’s general plan of economic development for the City, will help
increase the tax base in the City, and will create new jobs in the City.
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (“Board”) of
The Economic Development Authority of the City of Elk River as follows:
1. The Board approves the Purchase Agreement in substantially the form presented to the
Board, including the provisions for the conveyance of the Real Property therein, together with any
related documents or certifications necessary in connection therewith, including without limitation all
documents and certifications referenced in or attached to the Purchase Agreement, and any deed or
other documents necessary to convey the Real Property to Developer, all as described in the Purchase
Agreement (collectively, the “Purchase Documents”) and the President and the Executive Director are
hereby authorized and directed to execute the Purchase Documents on behalf of the EDA and to carry
out, on behalf of the EDA, the EDA’s obligations thereunder when all conditions precedent thereto
have been satisfied.
2. EDA staff and officials are authorized to take all actions necessary to perform the
EDA’s obligations under the Purchase Documents as a whole, including without limitation execution of
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any documents or certifications to which the EDA is a party referenced in or attached to the Purchase
Agreement, and any deed or other documents necessary to convey the Real Property to Developer.
3. The approval hereby given to the Purchase Documents includes approval of such
additional details therein as may be necessary and appropriate and such modifications thereof, deletions
therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to
the EDA and by the officers authorized herein to execute said documents prior to their execution; and
said officers are hereby authorized to approve said changes on behalf of the EDA subject to the
following conditions: (a) such modifications do not materially adversely affect the interests of the EDA;
and (b) such modifications do not contravene or violate any policy of the EDA or applicable provision
of law. The execution of any instrument by the appropriate officers of the EDA herein authorized shall
be conclusive evidence of the approval of such document in accordance with the terms hereof. In the
event of absence or disability of the officers, any of the documents authorized by this Resolution to be
executed may be executed without further act or authorization of the Board by any duly designated
acting official, or by such other officer or officers of the Board as, in the opinion of the City Attorney,
may act in their behalf. This Resolution shall not constitute an offer and the purchase agreement shall
not be effective until the date of execution thereof.
4. Upon execution and delivery of the Purchase Documents, the officers and employees
of the EDA are hereby authorized and directed to take or cause to be taken such actions as may be
necessary on behalf of the EDA to implement the Purchase Documents.
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Approved by the Board of Commissioners of The Economic Development Authority of the
th
City of Elk River this 15 day of August, 2022.
President
ATTEST:
Executive Director
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EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
Lot 1, Block 1, Northstar Business Park, Sherburne County, Minnesota
PID No.: 75-757-0105
A-1
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REAL ESTATE PURCHASE AGREEMENT
(Elk River, MN)
THIS REAL ESTATE PURCHASE AGREEMENT (this “Agreement”) is made as of this
day of , 2022 (the “Effective Date”), by and between THE ECONOMIC
DEVELOPMENT AUTHORITY FOR THE CITY OF ELK RIVER, MINNESOTA, a Minnesota
body corporate and politic (“Seller”) and ONYX STRATEGIC PARTNERS LLC, a Minnesota
limited liability company or its assigns (“Purchaser”).
RECITALS
A. Seller is the fee owner of the real property located in Sherburne County, Minnesota,
and consisting of the land containing approximately 12.13 acres legally described in Exhibit A
attached hereto (the “Real Property”).
B. Seller agrees to sell to the Purchaser and the Purchaser agrees to purchase from the
Seller the Real Property according to the terms and conditions herein set forth.
In consideration of the mutual covenants and undertakings contained herein the parties
agree as follows:
1. Sale and Purchase of Property. Seller agrees to sell the Real Property to Purchaser
and Purchaser agrees to purchase the Real Property from Seller on the terms and conditions
contained in this Agreement.
2. Purchase Price. Purchaser agrees to pay to Seller as the purchase price (the
“Purchase Price”) for the Real Property Nine Hundred Thousand and No/Hundredths Dollars
($900,000.00). The Purchase Price shall be payable as follows:
a. Within five (5) business days after the execution and delivery of this
Agreement, Purchaser shall deposit with the Title Company (as herein defined) Ten
Thousand and No/100ths Dollars ($10,000.00) (together with any interest earned thereon
and additions thereto, the “Earnest Money”). Title Company shall hold the Earnest Money
in escrow and shall disburse the Earnest Money according to the terms of this Agreement.
The Earnest Money shall be disbursed to Seller at Closing as defined herein or to the party
entitled thereto as otherwise provided in this Agreement.
b. The balance of the Purchase Price shall be payable at Closing by wire of
immediately available funds through the Title Company to a bank account designated by
Seller.
3. Title. Within twenty (20) business days after the execution and delivery of this
Agreement, Seller, at Seller’s expense, shall obtain a commitment for an owner’s title insurance
policy issued by TitleSmart, Inc. (“Title Company”), naming Purchaser as the proposed owner-
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insured of the Real Property in the amount of the Purchase Price (the “Commitment”), together
with copies of all documents attached to the Commitment. The Commitment shall commit to
insure title in Purchaser, free and clear of all mechanics’ lien claims; questions of survey;
unrecorded interests; rights of parties in possession and other exceptions; and shall set forth any
requirements for deleting any exceptions to title contained therein.
Purchaser will be allowed ten (10) business days after receipt of the Commitment, the
documents attached thereto, any existing land survey provided by Seller, and the New Survey (as
defined in Paragraph 4 hereof), if any, for examination and to make any objections to title to the
Real Property (the “Objections”). The Objections are to be made by written notice or shall be
deemed waived. Purchaser need not object to mortgages or other liens. If not sooner satisfied,
Seller shall satisfy or release any mortgages on other liens against the Real Property at the Closing.
If any Objections are so made, Seller shall have thirty (30) days after notice of the Objections to
cure the Objections and make the title to the Real Property good and marketable of record in Seller.
Seller shall obtain and deliver to Purchaser appropriate endorsements to the Commitment and, if
applicable, an update to the New Survey evidencing that any Objections have been cured. Seller
will make a diligent, good faith effort to cure the Objections. If the title to the Real Property, as
evidenced by the Commitment and the New Survey together with any updated Commitment and
the New Survey, is not made good and marketable of record in Seller by such date or is not good
and marketable of record in Seller on the Closing Date, Purchaser, without waiving any right or
remedy Purchaser may have as a result of a breach by Seller of any covenant or warranty
hereunder, may either:
a. Terminate this Agreement by giving written notice to Seller and receive an
immediate refund of the Earnest Money; or
b. Elect to accept the title in its unmarketable condition by giving written
notice to Seller.
4. Survey. Purchaser, at its expense, may obtain an ALTA/NSPS land survey of the
Real Property (the “New Survey”). The New Survey shall include such Table A items to the 2016
Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys as Purchaser may
desire.
5. Documents to be Delivered by Seller. Within five (5) business days after the
Effective Date, Seller shall deliver to Purchaser true and complete copies of the following to the
extent that the same are in Seller’s possession or control (collectively, “Seller’s Documents”):
a. Seller’s most recent land survey of the Real Property, if any, and any soil
reports, engineering reports, inspections, plans, and any other information pertaining to the
Real Property.
b. Copies of any environmental audits and reports or notices concerning the
Real Property and all other documents relating to the discharge and/or remediation of
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Hazardous Substances (as defined in Paragraph 8 hereof) in, on, about or from the Real
Property.
c. Copies of any conditional use permit, variance, and any other permits or
authorizations issued by any governmental body having jurisdiction in connection with any
state of facts or activity presently existing or being carried on with respect to the Real
Property.
d. Copies of all leases or other occupancy agreements (“Existing Leases”) that
are in effect with respect to the Real Property.
6. Inspection. Purchaser, its agents, employees, and designees, are hereby granted the
right, at all reasonable times acceptable to Seller and Purchaser, to enter upon and survey, inspect,
analyze, and test the Real Property for all reasonable purposes, including, without limitation, the
presence of hazardous substances. Purchaser shall be permitted to conduct soil borings on the Real
Property and all other customary testing on the Real Property. Purchaser shall pay for the cost of
all surveys, investigations, analyses, and tests which are ordered by Purchaser. Purchaser shall be
responsible, at Purchaser’s sole expense, to repair any damage resulting from Purchaser’s
performance of such tests or inspections. Purchaser hereby agrees to indemnify, defend, and hold
Seller harmless from any claims, damage, costs, and liability, including, without limitation,
reasonable attorneys’ fees, resulting from the entering upon the Real Property or the performing
of any of the analyses, tests or inspections referred to in this Paragraph. Nothing contained herein
shall be deemed to require Purchaser to hold Seller harmless from any liability for discovered
conditions. Purchaser’s indemnity obligations under this Paragraph shall survive the closing or
termination of this Agreement.
7. “AS IS, WHERE IS.” Purchaser acknowledges that it has inspected or has had the
opportunity to inspect the Real Property and agrees to accept the Real 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 official, employee
or agent of the Seller with respect to the physical condition of the Real Property, including but not
limited to, the existence or absence of petroleum, hazardous substances, pollutants or contaminants
in, on, or under, or affecting the Real Property or with respect to the compliance of the Real
Property or its operation with any laws, ordinances, or regulations of any government or other
body, except as stated above. Purchaser acknowledges and agrees that 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
Real Property for a particular purpose, all of which warranties Seller hereby expressly disclaims,
except as stated above. Purchaser is relying entirely upon information and knowledge obtained
from the Purchaser’s own investigation, experience and knowledge obtained from the Purchaser’s
own investigation, experience, or personal inspection of the Real Property. Purchaser expressly
assumes, at closing, all environmental and other liabilities with respect to the Real Property and
releases and indemnifies Seller from same, whether such liability is imposed by statute or derived
from common law including, but not limited to, liabilities arising under the Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”), the Hazardous and Solid
Waste Amendments Act, the Resource Conservation and Recovery Act (“RCRA”), the federal
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Water Pollution Control Act, the Safe Drinking Water Act, the Toxic Substances Act, the
Superfund Amendments and Reauthorization Act, the Toxic Substances Control Act and the
Hazardous Materials Transportation Act, all as amended, and all other comparable federal, state
or local environmental conservation or protection laws, rules or regulations. The foregoing
assumption and release shall survive Closing. All statements of fact or disclosures, if any, made
in this Agreement or in connection with this Agreement, do not constitute warranties or
representations of any nature. The foregoing provision shall survive Closing and shall not be
deemed merged into any instrument of conveyance delivered at Closing.
8. Additional Covenants and Warranties of Seller. Seller represents and warrants to
and covenants with Purchaser as follows:
a. The representations and warranties of the Seller contained in this
Agreement must be true now and on the Closing Date in all material respects as if made on
the Closing Date. Seller is the fee owner of the Real Property. Seller will cause the Real
Property to be released from any mortgages or other liens at or prior to Closing.
b. At Closing, there will be no leases or other occupancy agreements in effect
with respect to the Real Property.
c. At Closing, no contracts or agreements will be in effect with respect to the
Real Property by which Purchaser shall be bound.
d. To Seller’s actual knowledge, the Real Property is, in all material respects,
in compliance with all applicable laws, codes, ordinances and regulations, including,
without limitation, those relating to zoning and environmental protection (“Applicable
Laws”). To Seller’s actual knowledge, neither Seller nor any other owner or occupant of
the Real Property has received any notice to the effect that the Real Property, or any system
or component serving the Real Property is not in compliance with any Applicable Laws.
To Seller’s actual knowledge, neither Seller nor any other owner or occupant of the Real
Property has received any notice, order or other communication from any governmental
body having jurisdiction requiring any work to be performed with respect to the Real
Property which has not been performed.
e. There is no action, litigation, investigation, condemnation or proceeding of
any kind pending or, to the best of Seller’s knowledge, threatened against Seller or the Real
Property, or any interest therein, which could affect the Real Property, any portion thereof
or title thereto.
f. Seller has received no notices with respect to improvements planned which
may result in special assessments being levied against the Real Property before Closing,
and, to Seller’s best knowledge, there are no such improvements planned which may result
in special assessments being levied against the Real Property before Closing.
To Seller’s best knowledge, there are no wells, either in use, not in use, or sealed located
on the Real Property. If any wells are found to be located on the Real Property, then, prior
to Closing and at Seller’s sole expense, Seller will seal in accordance with all Applicable
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Laws any unsealed wells in accordance with applicable laws and regulations and provide
Purchaser a copy of the sealing report. Prior to sealing, Seller will allow Purchaser’s
environmental consultant to conduct such tests in the well(s) as Purchaser may request.
g. To Seller’s actual knowledge, there are no underground tanks or septic
systems located on the Real Property and there are no above ground or underground tanks
or septic systems located on the Real Property which have been removed. If any
underground tanks are located on the Property, then, prior to Closing and at Seller’s sole
expense, Seller will remove the underground tanks and any related piping or other
underground features in accordance with all Applicable Laws. At the time of any such
removal, Seller will cause the Real Property in the area of each removed tank to be tested
for petroleum releases in a manner reasonably acceptable to Purchaser and its
environmental consultant and will promptly submit any required notices to and file any
subsequent required reports with the applicable federal, state and local governmental
authorities having jurisdiction (“Governmental Authorities”). Seller will promptly provide
to Purchaser copies of the test results and any reports filed with the Governmental
Authorities and other correspondence with the Governmental Authorities concerning the
removed tanks.
h. Seller has full power and authority to enter into this Agreement and to
perform all its obligations hereunder, and has taken all action required by law, its governing
instruments, or otherwise to authorize the execution, delivery, and performance of this
Agreement and all the deeds, agreements, certificates, and other documents contemplated
herein. This Agreement has been duly executed by and is a valid and binding agreement
of Seller, enforceable in accordance with its terms, except as enforceability may be limited
by equitable principles or by the laws of bankruptcy, insolvency, or other laws affecting
creditors’ rights generally.
i. Seller is a Minnesota body corporate and politic duly organized, validly
existing and in good standing under the laws of the State of Minnesota.
Seller will give Purchaser prompt written notice if it learns of anything which would affect
or change any of the foregoing representations and warranties or any other representations or
warranties of Seller in this Agreement. The notice will include a detailed explanation of the nature
of the matter, and the warranty or warranties affected and/or changed.
Seller will indemnify, defend, and hold Purchaser harmless from any loss, cost, damage,
or expense, including, without limitation, court costs, and reasonable attorneys’ fees, suffered or
incurred by Purchaser arising out of any breach by Seller of any of its representations or warranties
contained in this Paragraph or elsewhere in this Agreement. Without in any way limiting the
foregoing indemnity, if any of the representations or warranties contained in this Paragraph or any
other representation or warranty of Seller in this Agreement is not materially true as of the Closing
Date, Purchaser may, at its option, terminate this Agreement by giving written notice to Seller.
This paragraph shall survive Closing for a period of six months.
9. Closing/Payment of Closing Costs. The closing hereunder (“Closing”) shall take
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place no later than forty-five (45) days after the Contingency Date, or such earlier date on which
Seller and Purchaser may agree. Such date or such other date as this transaction actually closes as
determined in accordance with the provisions of this Agreement is herein called the “Closing
Date”. The Closing shall take place at the office of the Title Company in escrow,
located at ________ , Minnesota, or at such other place that is mutually acceptable to the
parties.
At the Closing, Seller shall execute, where appropriate, and deliver to Purchaser:
a. A quit claim deed (“Deed”) properly executed and acknowledged on behalf
of Seller in recordable form, conveying the Real Property to Purchaser subject to matters
accepted by Purchaser pursuant to Paragraph 3 hereof. The Deed shall contain a covenant
running with the Land that the foundation of a building, the intended use, size and
components of which will be described in more detail in a future agreement between the
Seller and the Buyer (the “Proposed Project”) must be completed within one year from the
date of the deed and the Proposed Project must be substantially completed and a certificate
of occupancy issued for the Proposed Project within two years from the date of the deed or
the Real Property will automatically revert back to Seller.
b. Any certificates, instruments, and other documents necessary to permit the
recording of the Deed.
c. Subject to payment of the premium by Purchaser, a policy of title insurance
in the amount of the Purchase Price issued pursuant to the Commitment, subject to no
exceptions except those other encumbrances which Purchaser has accepted pursuant to
Paragraph 3 hereof and containing the coverage described in Paragraph 3 hereof.
d. A standard seller’s affidavit with respect to judgments, bankruptcies, tax
liens, mechanics liens, parties in possession, unrecorded interests, encroachment or
boundary line questions, and related matters, properly executed on behalf of Seller.
e. An affidavit in form and content satisfactory to Purchaser and Title
Company stating that Seller is not a “foreign person” within the meaning of Section 1445
of the Internal Revenue Code.
f. A certificate to the effect that the representations and warranties of Seller
contained in this Agreement are true, correct, and complete in all material respects as of
the Closing Date (the “Bring-Down Certificate”).
g. An assignment of any assignable guaranties, warranties or permits with
respect to the Real Property that Purchaser desires to have assigned to it.
h. A lease termination agreement for each Existing Lease, duly executed by
Seller and each tenant of the Real Property, if any.
i. A closing statement.
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j. Such other instruments and documents as are reasonably necessary to
complete the transaction contemplated by this Agreement.
Contemporaneously with the delivery of the foregoing items, Purchaser will deliver the Purchase
Price to Seller in accordance with Paragraph 2 hereof and a closing statement executed on behalf
of Purchaser. Purchaser shall also deliver to Seller such documents as are reasonably necessary to
complete the transaction contemplated by this Agreement.
Seller shall pay any deed tax payable on the Deed. Seller and Purchaser each shall pay
one-half of the fee charged by the Title Company for handling the Closing. Purchaser will pay the
premium for any policy of title insurance it elects to purchase and the cost of any endorsements.
Seller shall pay the cost of recording all documents necessary to vest marketable title in Seller and
cure Title Objections, if any. Purchaser shall pay the cost of recording all other documents,
including, but not limited to, the Deed. Except as provided in Paragraph 25 hereof, each party
shall pay its own legal fees.
10. Real Estate Taxes and Special Assessments. Real estate taxes due and payable in
the tax year prior to the year of Closing and all prior years, including any real estate taxes otherwise
payable during any such year which may have been deferred, shall be paid by Seller. Real estate
taxes due and payable in the tax year of Closing, including any real estate taxes otherwise payable
during such tax year which may have been deferred, shall be prorated as of the Closing Date based
upon the parties’ respective period of ownership of the Real Property in such year of Closing. If
the real estate taxes due and payable in the tax year of Closing are unavailable on the Closing Date,
the proration will be based on the real estate taxes due and payable in the immediately prior year
and shall be readjusted between the parties when final bills are issued.
On or prior to the Closing Date, Seller shall pay all special assessments levied or pending
against the Real Property as of the Closing Date; or, at Purchaser’s option, Purchaser shall receive
a credit at Closing for the amount thereof against the Purchase Price. If the actual amount of any
pending or other assessments is not known at the Closing Date, the Title Company shall withhold
in escrow from Seller’s proceeds at closing an amount equal to 125 percent of the estimated amount
thereof. When the amount of said assessments becomes fixed and payable, the Title Company
shall apply said withheld escrow in payment of the assessments, returning any surplus to Seller. If
the amount withheld in escrow is insufficient to pay the assessments, Purchase shall notify Seller,
and Seller shall immediately pay, and shall be liable for the immediate payment of, any such
deficiency. Purchaser shall be responsible for the payment of any special assessments levied or
pending against the Real Property after the Closing Date. The provisions of this Paragraph shall
survive Closing.
11. Possession; Utilities. Seller shall deliver possession of the Real Property to
Purchaser on the Closing Date. All utilities and other expenses shall be prorated and adjusted as
of the Closing Date, with Purchaser responsible for the utilities and expenses beginning on the
Closing Date. To the extent practical, Seller shall pay prior to the Closing Date any utility bills
that pertain to the period before the Closing Date and deliver appropriate receipts evidencing such
payment at Closing.
12. Revesting Title in Seller Subsequent to Conveyance to Purchaser. In the event that
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the Purchaser fails to complete the construction of the foundation of the building on the Land
within one year from the date of the Deed or Purchaser fails to construct the building and receive a
certificate of occupancy for it within two years from the date of the Deed, subject to Unavoidable
Delays, and such failure is not cured within sixty (60) days after written notice from Seller to
Purchaser, the title to and possession of the Real Property shall revert back to the Seller. An
Unavoidable Delay for purposes of this Agreement means delays, outside the control of the party
claiming their occurrence, which are the direct result of strikes, lockouts or other labor troubles,
prolonged adverse weather or acts of God, fire or other casualty to the Project, litigation
commenced by third parties which, by injunction or other similar judicial action, directly results
in delays, war, invasion, rebellion, revolution, insurrection, riots or civil war, or unavailability or
shortage of supply of construction materials or construction labor, other than by reason of non-
payment of costs of the same.
13. Risk of Loss; Pending Condemnation. Risk of loss to the Real Property prior to
Closing shall remain in Seller.
If, prior to Closing, proceedings for the condemnation of the Real Property, or any interest
therein, or any portion thereof, are commenced, Purchaser may, at its option, terminate this
Agreement by written notice to Seller given within fifteen (15) days after Seller advises Purchaser
in writing of the occurrence of such an event. If Purchaser terminates this Agreement pursuant to
this Paragraph, the Earnest Money shall be immediately returned to Purchaser and neither party
shall have any further rights, obligations, or liability under this Agreement. If the Closing is
scheduled to occur prior to expiration of the fifteen (15) day period, it shall be extended by written
notice of Purchaser, at Purchaser’s option, to the first business day following expiration of the
fifteen (15) day period. Prior to the Closing, Seller shall not designate counsel, appear in, or
otherwise act with respect to any condemnation proceedings without Purchaser’s prior written
consent. In the event of any such condemnation, destruction or any damages to the Real Property,
or any interest therein, or any portion thereof, Seller agrees to fully inform Purchaser regarding
any insurance coverage with respect thereto and the probable amount of any condemnation award
or insurance proceeds recoverable on account thereof. If this Agreement is not terminated
following the destruction or damage to the Real Property, Seller shall repair and restore the Real
Property to the extent practical prior to the Closing and Purchaser shall receive a credit against the
Purchase Price for any condemnation award paid to Seller.
14. Notices. All notices to be given in connection with this Agreement shall be in
writing and delivered personally, sent by e-mail, by a nationally recognized overnight courier
service or by registered or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Seller: The Economic Development Authority for the City of Elk River,
Minnesota
Attn: Executive Director
13065 Orono Parkway
Elk River, MN 55330
Attention: Brent O’Neil
E-mail: BOneil@ElkRiverMN.gov
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If to Purchaser: Onyx Strategic Partners LLC
nd
330 South 2 Ave, Suite 370
Bloomington, Minnesota 55401
Attention: Daniel Kurkowski
E-mail: daniel@obsidiangroup.com
Notices sent by e-mail shall be deemed to have been given on the date transmitted. Notices sent
by courier shall be deemed to have been given to or served upon the party to whom it is addressed
on the date it is deposited with the courier service for next business day delivery. Notices sent by
mail shall be deemed to have been given to or served upon the party to whom it is addressed on
the date it is deposited in the United States registered or certified mail, return receipt requested,
postage prepaid, properly addressed in the manner above provided. Either party hereto may change
such party's address for the service of notice hereunder by written notice of said change to the other
party hereto, in the manner above specified ten (10) days prior to the effective date of said change.
15. Default. If Seller or Purchaser is in default as hereunder provided, the other party
shall have rights and remedies as follows:
a. Default by Seller. If Seller should fail to consummate the transaction
contemplated by this Agreement for any reason except for Purchaser’s default or the failure
of Purchaser to satisfy any conditions to Seller’s obligations hereunder, and Seller fails to
cure such default within ten (10) business days after written notice by Purchaser, Purchaser
may: (a) enforce the specific performance of this Agreement, which action must be
commenced within six (6) months after the date of failure of Seller to consummate the
transactions contemplated herein; or (b) cancel and terminate this Agreement and each
party shall be relieved of its obligations hereunder. If Purchaser elects to terminate this
Agreement, Purchaser shall be immediately entitled to the return of the Earnest Money. No
delay or omission in the exercise of any right or remedy accruing to Purchaser upon any
breach by Seller under this Agreement shall impair such right or remedy or be construed
as a waiver of any such breach theretofore or thereinafter occurring.
b. Default by Purchaser. If Purchaser should fail to consummate the
transaction contemplated by this Agreement for any reason except for Purchaser’s election
to terminate this Agreement pursuant to a termination right expressly provided herein or
Seller’s default or the failure of Seller to satisfy any conditions to Purchaser’s obligations
hereunder, and shall fail to cure such default by Purchaser within ten (10) business days
after written notice by Seller, Seller’s sole remedy is to terminate this Agreement and each
party shall be relieved of its obligations hereunder. In the event of termination resulting
from Purchaser’s default, Seller shall be entitled to the Earnest Money as liquidated
damages. No delay or omission in the exercise of any right or remedy accruing to Seller
upon any breach by Purchaser under this Agreement shall impair such right or remedy or
be construed as a waiver of any such breach theretofore or thereinafter occurring.
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c. Additional Instruments. If either party exercises, in accordance with this
Agreement, an expressly stated right to terminate this Agreement, the other party shall
execute such additional instruments as the party exercising such right may reasonably
request, to further assure due termination of this Agreement, rights and obligations of the
parties under this Agreement, and eliminate any record, legal or beneficial claim of a party
under and pursuant to this Agreement. If a party unreasonably fails to comply with the
requirements of the preceding sentence, that party shall be liable for all resulting costs and
expenses of the other party, including attorneys’ fees and expenses.
16. Complete Agreement. This is the final Agreement between the parties and contains
their entire agreement and supersedes all previous understandings and agreements, oral or written,
relative to the subject matter of this Agreement. This Agreement may be amended only in a writing
dated subsequent to the date of this Agreement and duly executed by all parties.
17. Time of the Essence. Time is of the essence in the performance of this Agreement.
18. Controlling Law. This Agreement has been made and entered into under the laws
of the State of Minnesota and said laws shall control the interpretation hereof.
19. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. Seller acknowledges that
Purchaser may assign this Agreement to a third party at or prior to Closing but only with Seller’s
consent, which shall not unreasonably be withheld. No assignment of this Agreement will relieve
the assigning party of primary liability for the performance of its obligations hereunder.
20. Incorporation of Recitals; Survive Closing. The Recitals are incorporated into and
made a part of this Agreement. All of the covenants, warranties and provisions contained in this
Agreement shall survive and be enforceable after Closing of the transaction contemplated by this
Agreement.
21. Captions. The paragraph headings or captions appearing in this Agreement are for
convenience only, are not a part of this Agreement, and are not to be considered in interpreting
this Agreement.
22. Brokerage Commission. Seller and Purchaser each warrant to the other that, in
connection with this Agreement, they have dealt with no broker, finder, or similar person in
connection with the sale of the Real Property, except Ryan Hardin of the Hardin Companies
(“Seller’s Broker”) and Daniel Kurkowski of Obsidian Group (“Purchaser’s Broker”). Seller’s
Broker or Seller shall pay Purchaser’s Broker a commission of three (3) percent of the Purchase
Price. Seller will indemnify, defend, and hold harmless Purchaser against any claim made by any
agent or broker for a commission or fee based on acts or agreements of Seller. Purchaser will
indemnify, defend, and hold harmless Seller against any claim made by any agent or broker for a
commission or fee based on acts or agreements of Purchaser.
23. Counterparts; Delivery by E-mail. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall constitute one Agreement.
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Delivery of an executed copy of this Agreement by e-mail shall be deemed delivery of the executed
original.
24. Severability of Provisions. If any term or provision of this Agreement is illegal or
invalid for any reason, such illegality or invalidity shall not affect the validity or enforceability of
the remainder of this Agreement.
25. Attorneys’ Fees. If any action at law or in equity, including an action for declaratory
relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall
be entitled to recover reasonable attorneys’ fees and all other costs and expenses of litigation from
the other party, which amounts may be set by the court in the trial of such action or may be enforced
in a separate action brought for that purpose, and which amounts shall be in addition to any other
relief which may be awarded.
26. Purchaser’s Contingency. Purchaser’s obligation to close under this Agreement is
expressly conditioned upon Purchaser having determined within one-hundred fifty (150) days
following the Effective Date of this Agreement that the content, information, terms or provisions
of the documents delivered by Seller pursuant to Paragraph 5 hereof, the physical condition of the
Real Property, including, without limitation, its environmental condition, and the zoning and land
use laws, ordinances and regulations that are applicable to the Real Property, are acceptable to
Purchaser, in its sole discretion.
The foregoing contingency is for Purchaser’s sole benefit. Whether or not it has been
satisfied shall be determined by Purchaser in the exercise of its sole and absolute discretion. If this
contingency is not satisfied, or satisfaction thereof is not waived by Purchaser giving written notice
to Seller of said waiver on or before the Contingency Date, Purchaser, at its option, may terminate
this Agreement by giving written notice to Seller on or before the Contingency Date. If Purchaser
so terminates this Agreement, the Earnest Money shall be promptly refunded to Purchaser and
neither party shall have any further rights, obligations, or liability hereunder, except that
Purchaser’s indemnity obligations under Paragraph 6 hereof shall survive any such termination.
27. Seller’s Contingencies. Prior to Closing, the following conditions shall be satisfied:
a. The Seller shall have approved the sale of the Property pursuant to this
Agreement following a duly noticed public hearing as required by Minnesota Statutes,
Section 469.105 and approval by the City’s planning commission as required by
Minnesota Statutes, Section 462.356.
b. After submission of an application for financing assistance from the City of
Elk River (the “City”) in the form of tax increment assistance or tax abatement assistance,
the City shall review any such request in accordance with its policies and procedures,
including but not limited to, the review of any financial assistance by the City’s municipal
advisor to help the City determine whether the project would not occur “but for” the
financial assistance to be provided. No financial assistance shall be provided unless and
until the City Council of the City has approved such assistance and all requirements of
Minnesota Statutes, Section 469.174 through 469.1794, as amended, or Minnesota
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Statutes 469.1812 through 469.1815, as amended, have been met. In addition, any
financial assistance provided to the Buyer shall comply with Minnesota Statutes, Section
116J.993 through Section 116J.995, as amended (the “Business Subsidy Act”) and the
Purchaser and the City shall negotiate and enter into an agreement which shall include any
among other things, (1) the construction of Purchaser’s Proposed Project by the Purchaser
in accordance with plans, specifications and a timeline approved by the Seller, (2) the
terms of any financial assistance in the amount determined in accordance with applicable
law, the policies of the City, and in accordance with advice provided by the City’s
municipal advisor; and (3) a business subsidy agreement with job and wage goals as
required by the Business Subsidy Act..
c. The Purchaser has a signed commitment for financing at or before Closing
on transfer of title to the Property for construction of the Purchaser’s Proposed Project.
d. The Seller having received construction plans for the Purchaser’s Proposed
Project that have been approved by the City, all permits being ready to be issued; and all
required City fees in connection therewith having been paid.
e. The Seller has approved the construction plans, the design of the building, and
the proposed standard and quality of building materials and finishes for the Proposed Project.
The foregoing contingency is for Seller’s sole benefit. Whether or not it has been satisfied shall be
determined by Seller in the exercise of its sole and absolute discretion. If the contingencies are not
satisfied, or satisfaction thereof is not waived by Seller giving written notice to Purchaser of said
waiver on or before the Closing Date, Seller, at its option, may terminate this Agreement by giving
written notice to Purchaser on or before the Closing Date. If Seller so terminates this Agreement,
the Earnest Money shall be promptly refunded to Purchaser and neither party shall have any further
rights, obligations, or liability hereunder, except that Seller’s indemnity obligations under
Paragraph 6 hereof shall survive any such termination.
28. No Strict Construction. The parties and their respective counsel have participated
jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provision of this Agreement.
29. Tax Deferred Exchange. Seller or Purchaser, or both of them, may close the
transaction contemplated by this Agreement as part of a tax deferred exchange of properties under
the Section 1031 of the Internal Revenue Code of 1986, as amended, and applicable rules and
regulations. The exchanging party shall bear all costs of the exchange. The other party shall
cooperate with the exchanging party and do all things reasonably required and requested by the
exchanging party (provided that such actions do not increase the other party’s obligations or
liabilities under this Agreement) to effect and facilitate such an exchange. Anything in this
Paragraph to the contrary notwithstanding: (i) no party makes any representation or warranty to
the other as to the effectiveness or tax impact of any proposed exchange; (ii) no party will be
EL185\\71\\796863.v7
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required to take title to any exchange or replacement property; and (iii) in no event shall completion
of any such exchange be a cause or excuse for any delay in the Closing.
\[Signature Page follows\]
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
SELLER:
The Economic Development Authority for the City
of Elk River, Minnesota
By:
Its: President
By:
Its: Executive Director
PURCHASER:
Onyx Strategic Partners LLC
By:
Its
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EXHIBIT A
LEGAL DESCRIPTION OF
LAND
\[The property is legally described as Lot 1, Block 1 Northstar Business Park,
Sherburne County Minnesota with Property ID#:75-757-010, subject to Legal
description to be drafted by surveyor and verified by Title Company prior to
closing\]
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