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8.4 SR 06-03-2024The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity Request for Action To City Council Item Number 8.4 Meeting Date June 3, 2024 Prepared By Brent O'Neil, Economic Development Director Item Description Resolution 24-31: Sale of Property in Nature's Edge Business Park to PLM Properties, LLC Reviewed by Brent O'Neil Cal Portner Tina Allard Action Requested Adopt, by motion, Resolution 24-31 authorizing the execution of a purchase agreement for the sale of city- owned land to PLM Properties, LLC, an affiliate of Heritage Millwork. Background/Discussion To support the Heritage Millwork project, this item authorizes the sale of 14.06 acres of city-owned property to PLM Properties, LLC, which would own and construct the facility for lease to Heritage Millwork. The property is a portion of the property the city recently acquired in the Nature's Edge Business Park development. The proposed value has been negotiated at $1,378,020.60, or $2.25 per square foot, which is in line with the estimated fair market value and pricing established by the city. The purchase agreement authorizes a due diligence period of 45 days and closing to occur by September 30, 2024. It is anticipated the buyer will close on the property as soon as feasible and commence the project immediately thereafter. The buyer has requested the property be transacted for $1 with the city receiving compensation for the full value of the property through receipt of funds through TIF District No. 29. This is contingent on the execution of a Purchase Price Note between PLM Properties, Heritage Millwork, and the city which will be taken to the Council for consideration before the expiration of the due diligence period. This note will contain necessary provisions to ensure the TIF payments are received by the city and guaranteed by the buyer. The sale also includes a reverter clause, which requires the fulfillment of the project or the property reverts to the city. Upon replat and sale of this property, approximately seven acres will remain available and be marketed for development. Financial Impact This agreement authorizes the sale of property for $1, with the city to be compensated for the full remaining value of $1,378,019.60 through TIF District No. 29. Mission/Policy/Goal Support commercial and industrial development. Page 435 of 464 Attachments 1. Res 24- Heritage Millwork Approving Heritage Millwork Purchase Agreement 2. PLM Properties Purchase Agreement 3. Site Plan and Plat 4. Heritage Millwork Inc Page 436 of 464 City of Elk River City Council Resolution 24-____ A Resolution of the City Council of the City of Elk River Approving a Purchase Agreement for the Transfer of Certain City-Owned Property to PLM Properties, LLC BE IT RESOLVED by the City Council (the “Council” of the City of Elk River, Minnesota (the “City”) as follows: Section 1. Recitals. 1.01. The City and PLM Properties, LLC, a Minnesota limited liability company, or an entity related thereto or affiliated therewith (the “Seller”), desire to enter into a Purchase Agreement (the “Purchase Agreement”) pursuant to which the City will transfer certain property in the City legally described in Exhibit A attached hereto (the “Property”) to the Seller. The Seller intends to construct and equip on the Property an approximately 110,000 square foot industrial warehouse facility to be operated by Heritage Millwork, Inc., a Minnesota corporation (the “Tenant”), as part of a relocation of and expansion to the Tenant’s existing business (the “Development”). 1.02. Pursuant to the Purchase Agreement, the Seller will purchase the Property from the City for a total purchase price of $1,378,020.60, in the form of cash in the amount of $1.00 and with a purchase price note in the amount of $1,378,019.60 (the “Purchase Price Note”). The terms and conditions of the Purchase Price Note shall be detailed in a Development Assistance Agreement by and among the City, the Seller and the Tenant, to be approved by the Council at a later date. 1.03. Pursuant to Minnesota Statutes, Section 462.356, subd. 2, the Planning Commission of the City met on May 28, 2024, and reviewed the proposed disposal of the Property and found that the disposal is in conformity to the City’s comprehensive plan (the “Comprehensive Plan”) because the Property is designated for “business park” land use within the Comprehensive Plan and the City’s intends to sell the Property to the Seller who plans to construct an industrial warehouse facility thereon in conformity with the land use designation assigned by the Comprehensive Plan. 1.04. The City finds that disposal of the Property conforms to the Comprehensive Plan and further finds that it will facilitate economic development in the City by allowing the City to convey the Property to a private developer. Page 437 of 464 Section 2. Documents Approved. 1. The Council approves the Purchase Agreement in substantially the form presented to the Council, together with any related documents or certifications necessary in connection therewith, including without limitation the quit claim deed and all documents and certifications referenced in or attached to the Purchase Agreement, and any other documents necessary to transfer the Property to the Seller, all as described in the Purchase Agreement (collectively, the “Documents”) and the Mayor and the City Clerk are hereby authorized and directed to execute the Documents on behalf of the City and to carry out, on behalf of the City, the City’s obligations thereunder when all conditions precedent thereto have been satisfied. 2. City staff and officials are authorized to take all actions necessary to perform the City’s obligations under the Documents as a whole, including without limitation execution of any documents or certifications to which the City is a party referenced in or attached to the Purchase Agreement, and any other documents necessary to transfer the Property from the Seller. 3. The approval hereby given to the 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 City 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 City subject to the following conditions: (a) such modifications do not materially adversely affect the interests of the City; and (b) such modifications do not contravene or violate any policy of the City or applicable provision of law. The execution of any instrument by the appropriate officers of the City 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 Council by any duly designated acting official, or by such other officer or officers of the Council 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 Documents, the officers and employees of the City are hereby authorized and directed to take or cause to be taken such actions as may be necessary on behalf of the City to implement the Documents. Passed and adopted this 3rd day of June, 2024, by the City Council of the City of Elk River, Minnesota. John J. Dietz, Mayor ATTEST: Tina Allard, City Clerk Page 438 of 464 EXHIBIT A Legal Description of the Property That portion of the property located in the City of Elk River, Sherburne County, Minnesota currently legally described as Outlot B Natures Edge Business Center Fourth Addition which will be replatted as: Lot 1, Block 1 Nature’s Edge Business Center Fifth Addition. Page 439 of 464 EL185\77\951318.v3 1 PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (the “Agreement”) is made and entered into this ___ day of _____, 2024 (the “Effective Date”) by and between the CITY OF ELK RIVER, MINNESOTA, a municipal corporation and political subdivision of the State of Minnesota (the “Seller” or the “City”), and PLM PROPERTIES, LLC, a Minnesota limited liability company (“Buyer” and, together with Seller, the “Parties” or individually each a “Party”). Recitals WHEREAS, the Seller is the fee title owner of that certain real property located in the City legally described in Exhibit B attached hereto, which consists of 21.02 acres (the “Seller Parcel”); WHEREAS, the Buyer wishes to purchase 14.06 acres of the Seller Parcel from Seller (the “Property”) subject to the terms and conditions of this Agreement to construct and equip thereon an approximately 110,000 square foot industrial warehouse facility to be operated by Heritage Millwork, Inc., a Minnesota corporation (the “Tenant”), as part of a relocation of and expansion to the Tenant’s existing business (the “Development”); WHEREAS, the Seller believes that the development of the Property is vital and that it is in the best interests of the Seller, and is in accordance with the public purpose and provisions of the applicable state and local laws and requirements under which the Development will be undertaken. Further, the Seller believes the Development will result in the preservation and enhancement of the City’s tax base and provide increased employment opportunities in the City; and WHEREAS, the Seller is willing to sell the Property to the Buyer under the terms and conditions provided herein. Terms of the Agreement NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the Parties agree as follows: 1. Recitals. The recitals as set forth above are hereby incorporated into this Agreement. 2. Purchase Price. The total purchase price for the Property shall be $1,378,020.60 (the “Purchase Price”). At Closing (as defined below) the Buyer shall pay the Purchase Price to the Seller in cash in the amount of $1.00 and with a purchase price note in the amount of $1,378,019.60 (the “Purchase Price Note”) in substantially the form attached as Exhibit A to the Development Assistance Agreement (as hereinafter defined). Page 440 of 464 EL185\77\951318.v3 2 3. Closing. Subject to the terms of this Agreement, the closing of the purchase and sale of the Property contemplated by this Agreement (the “Closing”) shall occur at the office of a title company to be selected by the Buyer (the “Title Company”), on September 30, 2024, or sooner as determined by the Parties (the “Closing Date”). 4. Due Diligence Investigation. The Buyer, at its sole cost and expense, shall have a due diligence period commencing on the Effective Date and ending 45 days thereafter (“Due Diligence Period”) to make all such investigations as the Buyer, in its sole and absolute discretion, deems reasonable and necessary in determining the suitability of the Property for the Buyer’s needs including: a. To examine and inspect the Property, to review the Due Diligence Documents (as hereinafter defined), to conduct feasibility studies with regard to the ownership and operation of the Property, including, but not limited to, environmental reviews, soil condition testing, surveying, engineering studies, appraisals and any other physical inspections of the Property as determined by the Buyer and at Buyer’s expense, and to investigate all physical aspects of the Property, and to review all other due diligence matters related to the Property. Buyer may enter upon the Property to inspect the same, and may conduct tests and examinations with regard thereto, provided that Buyer’s activities do not unreasonably interfere with the ongoing operation of the Property. Buyer shall promptly restore the Property to substantially the same condition in which it existed immediately prior to any physical tests conducted by or on behalf of Buyer. Seller shall cooperate with Buyer in obtaining reliance letters related to any existing environmental conditions affecting the Property. Buyer agrees to indemnify and defend Seller against any liens, claims, losses, or damage directly attributable by Buyer’s exercise of its right to enter and inspect the Property. Buyer agrees to provide Seller with a copy of any report prepared as a result of such inspection, examination, or testing, upon request by Seller. b. To investigate all zoning, code and governmental regulations or requirements in place at the Property, and to obtain all land use and rezoning approvals and permits determined necessary by the Buyer for Buyer’s intended Development and use of the Property. c. To secure funding for the purchase and development of the Property on terms acceptable to Buyer, in Buyer’s sole discretion. The Parties contemplate that such funding may include, without limitation, one or more of the following: i. Assistance from the Seller in the form of the Purchase Price Note to forgo receipt of the full fair market value of the Property and energy rebates, if approved by the Seller, in accordance with all applicable laws and other legal or policy requirements, in accordance with the terms of the Development Assistance Agreement defined below (the “City Financial Assistance”); ii. Assistance from the Economic Development Authority of the City of Elk River (the “EDA”) in the form of a loan from the EDA’s Microloan Program (the “Loan”), if approved by the EDA, in accordance with all applicable laws and other legal or policy requirements, for costs related the Development, in accordance with the terms of the Loan Agreement defined below (the “EDA Financial Assistance” and, together with the City Financial Assistance, the “Financial Assistance”); and Page 441 of 464 EL185\77\951318.v3 3 iii. Commercial loans and for the purchase and/or development of the Property. d. Buyer shall have until the last day of the Due Diligence Period to provide written notice to Seller of Buyer’s intention to terminate this Purchase Agreement for any reason. If Buyer terminates this Agreement within the Due Diligence Period, the transactions contemplated herein shall be considered terminated. 5. [Reserved.] 6. Title Review and Objections. Within 10 days following the Effective Date, Buyer shall obtain and provide a copy to Seller of a commitment for an ALTA owner’s title insurance policy, which shall be periodically updated in accordance with the Financial Assistance Documents (as defined herein), and any survey desired by Buyer (the “Survey”). Within 20 days after receipt of the title commitment and the Survey, Buyer shall notify Seller in writing of any objections to title and Survey, or the objections shall be deemed waived. If any objections are so made, the Seller may be allowed until the Closing Date to cure such objections and make the title to the Property good and marketable of record in Seller. Notwithstanding the foregoing, Seller shall have no obligation to cure any title objections. If a timely objection has been made by Buyer pursuant to this Section and such objection remains uncured by the Seller on the Closing Date, Buyer, as its sole and exclusive remedy, may either: (A) terminate this Agreement by giving written notice to the Seller; or (B) elect to accept the title in its unmarketable condition and without reduction of the Purchase Price by giving written notice to the Seller. 7. Conveyance Subject to Right of Re-entry. The Seller’s conveyance of the Property to the Buyer pursuant to this Agreement shall be made in the form of a quit claim deed (the “Deed”), in substantially the form set forth in Exhibit A. The Deed shall include a right of re-entry for breach of a condition subsequent in favor of the Seller (the “Right of Re-entry”). The condition subsequent is that the Buyer shall have completed construction of the foundation of the Development by ___________, 2024. If Buyer breaches such condition subsequent, the Buyer shall re-convey the Property back to the Seller, subject to matters then of record. If the Buyer fails to re-convey the Property to the Seller, the Seller may elect to exercise its right of reentry by commencing an action in Sherburne County District Court to establish the breach of the condition subsequent. If the Seller establishes a breach of the condition subsequent, title to and the right to possession of the Property and title to all improvements located thereon reverts to the Seller, and the Buyer is not entitled to any compensation from the Seller for the Property or the value of any improvements the Buyer has made to the Property. The Buyer must record any certificate of completion or certificate of release of the Right of Re-entry in the proper County land records at its expense. 8. Contingencies. a. Buyer’s Contingencies. The Buyer’s obligation to purchase the Property shall be contingent on the following: i. By the end of the Due Diligence Period, the Buyer shall have determined, in its sole and absolute discretion, that it is satisfied with the results and matters disclosed by the Buyer’s investigation of the Property pursuant to Section 4 of this Agreement. ii. By the Closing Date, the Buyer shall have obtained, or caused to be obtained, in a timely manner, all required permits, licenses and approvals which must be obtained for the Development, including without limitation, subdivision of the Seller Parcel by re-platting, and all other zoning and land use approvals, which Page 442 of 464 EL185\77\951318.v3 4 must be obtained for the Development and the Buyer shall have submitted building plans to the City. iii. By the Closing Date, the Buyer shall have obtained approval from the Seller and the EDA, following a duly noticed public hearing and the satisfaction of all other conditions required by Minnesota law, of the Financial Assistance. iv. By the Closing Date, the Buyer shall have obtained all necessary financing for the Development. v. By the Closing Date, the condition of title shall be satisfactory to the Buyer following the Buyer’s examination of title as provided herein. The contingencies set forth above are for the benefit of the Buyer and may be waived by the Buyer in the Buyer’s sole discretion. Notwithstanding any other provision in this Agreement, a waiver of a contingency must be in writing to be effective. At the end of the Due Diligence Period, the Buyer will give written notice to the Seller of the contingencies that have been waived, satisfied, or neither waived nor satisfied. b. Seller’s Contingencies. The Seller’s obligation to convey the Property shall be contingent on the following: i. By the Closing Date, the Buyer shall have obtained, or caused to be obtained, in a timely manner, all required permits, licenses and approvals which must be obtained for the Development, including without limitation subdivision of the Seller Parcel by re-platting, and all other zoning and land use approvals, which must be obtained for the Development; ii. The Buyer shall have obtained approval from the Seller of the sale of the Property pursuant to this Agreement, in accordance with and following the satisfaction of all conditions required by Minnesota law; iii. By the Closing Date, the Buyer shall have obtained approval from the Seller and the EDA, following a duly noticed public hearing and the satisfaction of all other conditions required by Minnesota law, of any Financial Assistance; iv. The Buyer and the Seller shall have negotiated and mutually agreed to, the City of Council of the City shall have approved following the satisfaction of all conditions required by Minnesota law, and the Seller and the Buyer shall have executed, effective not later than the Closing Date, a Development Assistance Agreement (the “Development Assistance Agreement”), providing for, among other things, the (i) construction of the Development by the Buyer in accordance with plans, specifications and a timeline approved by the Seller; (ii) requirements of the Business Subsidy Act, Minnesota Statutes, Section 116J.993 through 116J.995 (the “Business Subsidy Act”); (iii) terms of any City Financial Assistance and the Purchase Price Note in accordance with applicable law; (iv) any applicable legal or policy requirements of the Seller related to the Development or the Purchase Price Note; and (v) any documents ancillary thereto (collectively, the “Development Documents”); Page 443 of 464 EL185\77\951318.v3 5 v. The Buyer and the EDA shall have negotiated and mutually agreed to, the Board of Commissioners of the EDA shall have approved following the satisfaction of all conditions required by Minnesota law, and the EDA and the Buyer shall have executed, effective not later than the Closing Date, a Loan Agreement (the “Loan Agreement”), providing for, among other things, the (i) construction of the Development by the Buyer in accordance with plans, specifications and a timeline approved by the EDA; (ii) requirements of the Business Subsidy Act, Minnesota Statutes, Section 116J.993 through 116J.995 (the “Business Subsidy Act”); (iii) terms of any EDA Financial Assistance and the Loan in accordance with applicable law; (iv) any applicable legal or policy requirements of the EDA related to the Development or the Loan; and (v) any documents ancillary thereto (collectively, the “Loan Documents” and together with the Development Documents, the “Financial Assistance Documents”); vi. Buyer shall have performed all of the obligations required to be performed by the Buyer under this Agreement or the Financial Assistance Documents as of the Closing Date and any further contingencies to Closing set forth in such Financial Assistance Documents shall have been satisfied as provided therein, including without limitation execution and delivery of all Financial Assistance Documents; vii. Buyer shall have delivered to the Seller all of the Buyer’s Documents described in Section 14; viii. The Buyer shall have submitted the construction plans for the Development to the Seller and the EDA, and the Seller and the EDA shall have approved the construction plans pursuant to the Financial Assistance Documents; ix. The Buyer shall have received a building permit for the Development; x. The Seller shall have obtained final plat approval or obtain the necessary subdivision approvals required for the construction of the Development; xi. By the Closing Date, the Buyer shall have obtained and provided to the Seller evidence of all necessary financing for the Development in a form satisfactory to the Seller in its sole discretion; and xii. The Seller shall have determined that the Development to be undertaken by the Buyer on the Property is in conformance with this Agreement and the development objectives set forth in resolutions of the Seller authorizing the Financial Assistance Documents. The contingencies set forth in Section 8(b) are for the benefit of the Seller and may be waived only by the Seller in its sole and absolute discretion. Notwithstanding any other provision in this Agreement, a waiver of a contingency must be in writing to be effective. At the end of the Due Diligence Period, the Seller will give written notice to the Buyer of the contingencies that have been waived, satisfied, or neither waived nor satisfied. Page 444 of 464 EL185\77\951318.v3 6 c. Seller’s and Buyer’s Options. In the event that any of the foregoing contingencies fail to be satisfied on or before the Closing Date or the end of the Due Diligence Period, as applicable: i. The applicable party may terminate this Agreement, and Buyer and Seller shall execute and deliver to each other documentation effecting the termination of this Agreement; or ii. The applicable party may waive such failure and proceed to Closing; provided that the contingencies in Section 8(a) are solely for the benefit of the Buyer and may be waived only by the Buyer as provided in therein) and the contingencies in Section 8(b) are solely for the benefit of the Seller and may be waived only by the Seller as provided therein; or iii. Buyer and the Seller may mutually agree to extend the Closing Date. 9. Real Estate Taxes and Special Assessments. Any general real estate taxes payable in the year in which Closing occurs shall be prorated between the Buyer and the Seller as of the date of Closing. The Seller will pay all outstanding special assessments with respect to the Property. 10. Representations and Warranties of Seller. The Property shall be sold AS-IS. Buyer acknowledges that it has inspected or will have had the opportunity to inspect the Property and agrees to accept the Property “AS IS” with no right of set off or reduction in the Purchase Price. Such sale shall be without representation of warranties, express or implied, either oral or written, made by Seller or any official, employee or agent of Seller with respect to the physical condition of the Property, including but not limited to, the existence or absence of petroleum, hazardous substances, pollutants or contaminants in, on, or under, or affecting the Property or with respect to the compliance of the Property or its operation with any laws, ordinances, or regulations of any government or other body, except as stated above. Buyer 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 Property for a particular purpose, all of which warranties Seller hereby expressly disclaims, except as stated above. Buyer is relying entirely upon information and knowledge obtained from Buyer’s own investigation, experience and knowledge obtained from Buyer’s own investigation, experience, or personal inspection of the Property. Buyer expressly assumes, at closing, all environmental and other liabilities with respect to the 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 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. Notwithstanding the foregoing, Seller represents and warrants to Buyer: a. Unrecorded Agreements. To Seller’s actual knowledge, there are no unrecorded agreements, undertakings or restrictions which affect the Property. Page 445 of 464 EL185\77\951318.v3 7 b. Leases. To the Seller’s actual knowledge, there are no leases or possessory rights of others regarding the Property. c. Due Diligence Documents. The Due Diligence Documents delivered or to be delivered to Buyer hereunder are to Seller’s actual knowledge correct and complete and, to Seller’s actual knowledge, do not contain any false information. d. FIRPTA. Seller is not a “foreign person,” “foreign partnership,” “foreign trust,” or “foreign estate,” as those terms are defined in Internal Revenue Code Section 1445 and the regulations promulgated thereunder. e. No Proceedings. No legal or administrative proceeding is pending or, to Seller’s actual knowledge, threatened (i) which would adversely affect Seller’s right to convey the Property to Buyer as contemplated in this Agreement, or (ii) affecting the Property. There are no condemnation or eminent domain proceedings pending or, to Seller’s knowledge, threatened with respect to the Property. f. Private Sewage Systems; Wells. To the Seller’s actual knowledge there are no wells or private sewage systems located on the Property. g. Use of Property. To Seller’s actual knowledge, no methamphetamine production has occurred on the Property. h. Unpaid Labor and Materials. To Seller’s actual knowledge, Seller is not indebted for labor or material that might give rise to the filing of notice of mechanic’s lien against any portion of the Property. i. Approval of Sale. Prior to Closing, Seller will take all applicable action to seek approval of the sale of the Property to the Buyer pursuant to the terms of this Agreement and following the satisfaction of all other conditions required by Minnesota law. j. Current Conditions. Seller shall maintain the Property in its present condition, ordinary wear and tear excepted. To the actual knowledge of the undersigned City Clerk of the Seller, there are no conditions that are protected by federal or state law (such as American Indian burial grounds, other human burial grounds, historical structures or materials, or archeological sites). k. Governmental Violations. Seller has not received any written notice from a governmental authority that a person or the Property has violated a law, ordinance or regulation affecting the Property or that the authority may commence eminent domain, condemnation, special taxing district, or rezoning proceedings affecting the Property. l. Authority. 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. Page 446 of 464 EL185\77\951318.v3 8 m. Entity. Seller is a municipal corporation and political subdivision of the State of Minnesota. n. The obligations of Buyer under this Agreement are contingent upon the representations and warranties of Seller contained in this Agreement being true as of the Effective Date and on the Closing Date as if made on the Closing Date. Each of the foregoing representations and warranties shall be deemed remade as of the Closing Date and, as so remade, shall survive the Closing. 11. Due Diligence Documents. Within 30 days after the Effective Date, Seller shall deliver to Buyer copies of the documents set forth on Exhibit C attached hereto and incorporated herein that are in Seller’s possession (the “Due Diligence Documents”). 12. Closing Costs. a. The Buyer shall pay all costs of the preparation of a title commitment, including the search and examination fees and any abstracting fees, if required by the Title Company. The Seller shall pay all recording fees and charges related to the filing of any instrument required to make title marketable. The Buyer shall also pay the cost of obtaining any title evidence desired by Buyer, including a title commitment, the fees for standard searches with respect to the Seller and the Property, all premiums required for issuance of a title insurance policy and any endorsements, any survey costs, all Closing fees charged by the Title Company, and any escrow fees charged by any escrow agent engaged by the parties in connection with this Agreement. b. Buyer shall also pay the following costs: (1) all costs for obtaining government approvals that may be required in order to close on the Property or as required for the Buyer’s intended use of the Property; (2) the cost of preparation of any necessary platting or other subdivision documents, (3) the filing fee to record the Deed, (4) any state deed tax, conservation fee or other federal, state or local documentary or revenue stamps or transfer tax with respect to the Deed to be delivered by the Seller; (5) Buyer’s attorney’s fees; (6) the Seller’s reasonable legal, accounting fees and other out of pocket costs incurred in connection with this Agreement and the Financial Assistance Documents as further provided in the Financial Assistance Documents; and (7) all other costs as outlined in the Financial Assistance Documents entered into between the Parties. 13. Seller’s Closing Documents. At Closing, Seller shall execute and deliver to Buyer the following documents (collectively, the “Seller’s Closing Documents”): a. A Quit Claim Deed conveying the Property to Buyer. b. A closing/settlement statement prepared by the Title Company to be executed by Seller, Buyer, and the Title Company at the Closing that accurately describes the economic terms of the transaction described this Agreement. c. A non-foreign affidavit, properly executed, containing such information as is required by Code Section 1445(b)(2) and the regulations promulgated thereunder. Page 447 of 464 EL185\77\951318.v3 9 d. Any executed documents that may be required in the State of Minnesota in order for the deed to be recorded on the Closing Date. e. An affidavit of title with respect to the Property in a form satisfactory to the Title Company so as to enable the Title Company to remove standard title insurance exceptions that can be removed with such affidavit. f. A Well Disclosure Certificate. g. Such other documents as may be required to complete the transaction as set forth in this Agreement. 14. Documents to be Delivered by the Buyer. The Buyer agrees to deliver to the Seller the following documents (the “Buyer’s Documents”), duly executed as appropriate, at Closing: a. Such affidavits of Buyer, Certificates of Value or other documents as may be reasonably required in order to complete the transaction contemplated by this Agreement. b. Any documentary evidence required to satisfy the contingencies set forth herein. c. The Development Assistance Agreement, the Assessment Agreement (as defined in the Development Assistance Agreement), the Personal Guaranty (as defined in the Development Assistance Agreement), the Corporate Guaranty (as defined in the Development Assistance Agreement), the Mortgage (as defined in the Development Assistance Agreement), and any other documents required pursuant to the terms of the Financial Assistance Documents. d. Such other documents as shall be required to carry out the intent of this Agreement. 15. Casualty or Condemnation. If before the recording of the Deed any of the improvements on the Property are destroyed or substantially damaged by fire or any other casualty or any substantial part of the Property shall be taken by condemnation (including a deed given in lieu thereof), Buyer shall have the option of (i) enforcing this Agreement (and in such event the insurance proceeds or condemnation award shall belong to Buyer) or (ii) canceling the Agreement by written notice given within 30 days after Buyer receives notice of such casualty or condemnation from Seller. If this Agreement is canceled under this Section, this Agreement shall be null and void, and the Parties’ obligations hereunder shall be of no further force and effect. 16. Remedies. If either Party defaults under this Agreement, the non-defaulting party shall have the right to terminate this Agreement by giving written notice to the defaulting party. If the defaulting party fails to cure such default within 14 days of the date of such written notice, this Agreement will terminate. The termination of this Agreement shall be the sole and absolute remedy available to the non- defaulting Party for such default. 17. Commissions. Each party represents that it has not engaged any broker in connection with the transactions contemplated by this Agreement and agrees to indemnify and hold the other harmless from anyone claiming a commission/fee through them. Page 448 of 464 EL185\77\951318.v3 10 18. Notices. Any notices required herein shall be deemed given when sent in the U.S. Mail, either registered or certified, return receipt requested, or by Federal Express or other overnight delivery service requiring a signature upon receipt, to the parties at the following addresses: SELLER: City of Elk River, Minnesota 13065 Orono Parkway Elk River, Minnesota 55330 Attn: City Clerk BUYER PLM Properties, LLC 19830 Polk Street Elk River, MN 55330 Attn: Patrick Menth 19. Survival. All representations, warranties, and indemnities set forth herein shall survive the Closing, except as otherwise provided herein. 20. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 21. Assignment. Buyer shall have the right to assign its interest to this Agreement to an entity in which Buyer has an ownership interest, is a member or is otherwise affiliated with. The consent of the Seller shall be required if Buyer assigns this Agreement to any third party with which Buyer has no connection. 22. Binding Effect. This Agreement is binding upon the Parties and their respective permitted successors and assigns. 23. Construction. This Agreement shall not be construed more strictly against one Party than the other, merely by virtue of the fact that it may have been prepared primarily by counsel for one of the Parties, it being recognized that both Buyer and Seller have contributed substantially and materially to the preparation of this Agreement. 24. Headings. The headings preceding the text of the sections and subsections hereof are inserted solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. 25. Severability. The invalidity or unenforceability of any term or terms of this Agreement shall not invalidate, make unenforceable or otherwise affect any other term of this Agreement, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted, and in such event, the remaining terms of this Agreement shall remain in full force and effect. 26. Computation of Time. In computing any period of time pursuant to this Agreement, the day of the act or event from which the designated period of time begins to run will not be included. The last day of the period so computed will be included, unless it is a Saturday, Sunday or federal holiday, in which event the period runs until the end of the next day which is not a Saturday, Sunday or federal holiday. 27. Time of the Essence. All times, wherever specified herein for the performance by Seller or Buyer of their respective obligations hereunder, are of the essence of this Agreement. Page 449 of 464 EL185\77\951318.v3 11 28. Complete Agreement. This instrument and any exhibits, schedules or addendums attached hereto contain the entire Agreement of the Parties regarding the subject matter hereof, and supersedes all prior negotiations, agreements or understandings, whether oral or in writing. This Agreement may not be changed orally but only by an Agreement in writing signed by the Parties. 29. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute an original but all of which, taken together, shall constitute but one and the same instrument. Page 450 of 464 EL185\77\951318.v3 12 IN WITNESS WHEREOF, said Parties hereby execute this Purchase Agreement effective the date first above written. SELLER: CITY OF ELK RIVER, MINNESOTA By:___________________________________ Its: Mayor By: _____________________________________ Its: City Clerk BUYER: PLM PROPERTIES, LLC By: __________________________________ Its: ___________________________________ Page 451 of 464 EL185\77\951318.v3 A-1 EXHIBIT A FORM OF QUIT CLAIM DEED (Top 3 inches reserved for recording data) QUIT CLAIM DEED DEED TAX DUE: $ DATE: _________ , 2024 ECRV: ________________ FOR VALUABLE CONSIDERATION, City of Elk River, Minnesota (insert name of Grantor) a municipal corporation and political subdivision of the State of Minnesota under the laws of Minnesota , ("Grantor"), hereby conveys and quitclaims to PLM Properties, LLC a Minnesota limited liability company under the laws of Minnesota, ("Grantee"), real property in Sherburne County, Minnesota, legally described as follows: The property located in the City of Elk River, Sherburne County, Minnesota legally described as: LOT 1, BLOCK 1 NATURE’S EDGE BUSINESS CENTER FIFTH ADDITION. Check here if all or part of the described real property is Registered (Torrens) □ together with all hereditaments and appurtenances and subject to the Right of Re-Entry for Breach of Condition Subsequent in favor of Grantor which is described on Exhibit A. Page 452 of 464 EL185\77\951318.v3 A-2 Check applicable box:  The Seller certifies that the Seller does not know of any wells on the described property.  A well disclosure certificate accompanies this document (If electronically filed, insert WDC number: __________________).  I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. CITY OF ELK RIVER, MINNESOTA By: John J. Dietz Its: Mayor By: ___________________________ Tina Allard Its: City Clerk State of Minnesota, County of SHERBURNE This instrument was acknowledged before me on , 2024, by John J. Dietz and Tina Allard, as the Mayor and the City Clerk, respectively, of the City of Elk River, Minnesota, a municipal corporation and political subdivision of the State of Minnesota, on behalf of the municipal corporation. Notary Public THIS INSTRUMENT WAS DRAFTED BY: (insert name and address) Kennedy & Graven, Chartered (GAF) 150 South Fifth Street, Suite 700 Minneapolis, MN 55402 TAX STATEMENTS FOR THE REAL PROPERTY DESCRIBED IN THIS INSTRUMENT SHOULD BE SENT TO: (insert name and address of Grantee to whom tax statements should be sent) PLM Properties, LLC 19830 Polk Street Elk River, MN 55330 Page 453 of 464 EL185\77\951318.v3 A-3 EXHIBIT A TO QUIT CLAIM DEED EXECUTED BY THE CITY OF ELK RIVER, MINNESOTA, GRANTOR, IN FAVOR OF PLM PROPERTIES, LLC, GRANTEE. The CITY OF ELK RIVER, MINNESOTA, Grantor, is conveying the property described in the attached Quit Claim Deed (the “Development Property”) to PLM PROPERTIES, LLC, Grantee, subject to a right of re-entry for breach of conditions subsequent in favor of Grantor. The condition subsequent is that, barring any Unavoidable Delays, the Grantee shall have completed construction of the foundation of an approximately 110,000 square foot industrial warehouse facility, as defined in that certain Development Assistance Agreement between the Grantor and Grantee dated as of __________, 2024 (the “Development Assistance Agreement”), by October 31, 2024. If Grantee breaches the condition subsequent, Grantee shall re-convey the Development Property back to Grantor. If Grantee fails to re-convey the Development Property to the Grantor, Grantor may elect to exercise its right of reentry by commencing an action in Sherburne County District Court to establish the breach of the condition subsequent. If Grantor establishes a breach of the condition subsequent, title to and the right to possession of the Development Property, and title to all improvements located thereon reverts to Grantor, and Grantee is not entitled to any compensation from Grantor for the value of any improvements Grantee has made to the Development Property. The Certificate of Completion issued under the Development Assistance Agreement shall conclusively satisfy and terminate the right of re-entry of the Grantor in this Quit Claim Deed or pursuant to the Development Assistance Agreement. Page 454 of 464 EL185\77\951318.v3 B-1 EXHIBIT B LEGAL DESCRIPTION The property located in the City of Elk River, Sherburne County, Minnesota legally described as: Lot 1, Block 1 Nature’s Edge Business Center Fifth Addition. Page 455 of 464 EL185\77\951318.v3 C-1 EXHIBIT C DUE DILIGENCE DOCUMENTS Copies of the following in Seller’s possession and related to the Property: 1. Copies of all agreements affecting the Property, including any assignable warranties; 2. All studies and reports in the possession of Seller relating to environmental status, soil tests, and any other information regarding the environmental and soil conditions; 3. Copies of all written citations from any governmental entities including those pertaining to any uncured violations of any applicable laws and codes or compliance with the same; 4. All site plans, construction documents, engineer reports, and property assessments performed to date; and 5. Any existing surveys of the Property. Page 456 of 464 Page 457 of 464 Page 458 of 464 1 Heritage Millwork Inc. Land Sale §PLM Properties to own property and construct building §HMI to lease the building from PLM §Purchase price $1,378,020: §$2.25 per square foot §14.06 acres §Purchase price note §Reverter clause Page 459 of 464