11-04-2024 Special EDA Packet
Economic Development Authority
Special Meeting
Agenda
Monday, November 4, 2024
6:10 PM or immediately following
the closed EDA meeting
Elk River City Hall
▪ Special meeting in Council Chambers
1. CALL MEETING TO ORDER
1.1 Special EDA Meeting Notice for November 4, 2024
2. PLEDGE OF ALLEGIANCE
3. GENERAL BUSINESS
3.1 Resolution Amending Purchase Agreement of the Fox Haven Site to Java Companies
4. MOTION TO ADJOURN
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The 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
Economic Development Authority
Item Number
3.1
Meeting Date
November 4, 2024
Prepared By
Brent O'Neil, Economic Development Director
Item Description
Resolution Amending Purchase Agreement of the
Fox Haven Site to Java Companies
Reviewed by
Cal Portner
Action Requested
Approve, by motion, a resolution amending terms of the purchase agreement at 13566 and 13530 185th
Street NW to Java Companies.
Background/Discussion
Java Companies expects to close on its purchase of the Fox Haven property in early November. The EDA is
being asked to address two items to facilitate the property transfer and project on the site.
First, Java is requesting to take possession through an affiliated company—Java Elk River Retail, LLC. This
request requires consent by the EDA and is in line with industry practice for property owners to separate
tracts of property under individual holding companies.
Second, the agreement contains a reversion clause in which the buyer is obligated to develop the property as
agreed upon, or the property title may revert to the EDA. The present terms state that "construction of the
footings and foundation for a...5,800 square foot gas station/convenience store must commence on the
property within one year" of closing. Kwik Trip has indicated the project is most likely to commence in early
Spring 2026 with an opening later that year. Java has requested a modification to this provision such that site
work, including clearing vegetation within one year, would satisfy the commencement requirement, and that
more flexibility be given by making 4,500 square feet the minimum facility size requirement. Additionally, to
ensure the project still moves forward as the EDA desires, the proposed modification to the reverter will also
require the project, as stated above, to be completed within two years of closing.
Financial Impact
For consideration of this modification and to offset EDA costs associated with this amendment, Java will
compensate the EDA $10,000 to be added to the purchase price.
Mission/Policy/Goal
Support commercial development.
Attachments
1. First Amendment to Purchase Agreement
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2. EDA Res 24-08 Approving the First Amendment of the Purchase Agreement
3. Assignment of Purchase Agreement
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EL185\76\986160.v1
FIRST AMENDMENT TO PURCHASE AGREEMENT
This First Amendment to Purchase Agreement (this “First Amendment”) is made this ____
day of November, 2024 by and between the Economic Development Authority in and for the City of
Elk River, a public body corporate and politic (the “EDA”) and Java Companies LLC, a Minnesota
limited liability company and its permitted assigns (the “Buyer”).
WHEREAS, the EDA and the Buyer entered into that certain Purchase Agreement dated
April 15, 2024 (the “Agreement”) providing for the conveyance by the EDA to the Buyer of certain
property located at 13530 and 13566 185th Avenue NW in the City of Elk River, Sherburne County,
Minnesota and legally described as follows:
Lot 1, Block 1 and Lot 2, Block 1, Fox Haven Commercial, according to the recorded plat
thereof, County of Sherburne, State of Minnesota.
Parcel ID 75-00597-0110 and 75-005970105
(the “Property”); and
WHEREAS, due to unanticipated delays, the EDA and the Buyer desire to change the
covenant in the deed to redefine the minimum improvements that must be completed by the Buyer on
the Property during a one year and a two year timeframe; and
WHEREAS, in exchange for the change in timeline for the minimum improvements, the
Buyer is willing to provide an additional $10,000 in compensation for the Property; and
WHEREAS, the Buyer requested the minimum structure size be set at 4,500 square feet; and
WHEREAS, the Buyer also desires to assign the Agreement to its subsidiary, Java Elk River
Retail, LLC; and
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
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EL185\76\986160.v1
1. Amendment to Paragraph 15 of the Agreement. Paragraph 15 of the Agreement is
amended to read as follows:
15. ASSIGNMENT. The Buyer may not assign the Buyer’s rights under this
Purchase Agreement without prior consent of the EDA, which shall not
unreasonably be withheld. Notwithstanding the foregoing, the Buyer hereby
assigns this Purchase Agreement and the Buyer’s rights to Java Elk River Retail
LLC, a Minnesota limited liability company (“Assignee”). Assignee hereby
accepts the foregoing assignment and agrees to assume and perform all of the
Buyer’s obligations under the Purchase Agreement which arise on or after the
effective date of the Purchase Agreement. Assignee shall be the Buyer under the
Purchase Agreement for all purposes on and after the Effective Date. The EDA
hereby consents to such assignment of the Purchase Agreement from the Buyer to
Assignee and to such assumption by Assignee, all as provided in this First
Amendment and in the Purchase Agreement. The EDA releases and discharges
Java Companies LLC from all obligations under the Purchase Agreement arising
or accruing on or after the Effective Date.
2. Amendment to Paragraph 3. Paragraph 3 of the Agreement is amended to read as
follows:
3. PURCHASE PRICE AND MANNER OF PAYMENT. The Buyer shall
pay the EDA Three Hundred and Seventy Thousand and no/100ths Dollars
($370,000.00) for the Property (the “Purchase Price”). Upon approval and execution
of this Agreement by the Buyer and the EDA, the Buyer shall deposit $20,000.00 in
initial earnest money (the “Earnest Money”) to be held in escrow by Servion
Commercial Title (the “Title Company”). The Earnest Money shall be credited
against the Purchase Price at Closing.
3. Amendment to Paragraph 6.1.1. Paragraph 6.1.1. of the Agreement is amended to
read as follows:
6.1.1. Deed. A quit claim deed (the “Deed”) conveying the Property to the Buyer.
The Deed shall contain a covenant running with the Property that the Buyer
must commence and complete site preparation of the Property which includes
the substantial clearing of all vegetation on the Property, or the Property will
be subject to a reversionary interest in favor of the EDA pursuant to Minnesota
Statutes Section 469.105, subdivision 5 and 6. The Deed must also include a
covenant running with the Property that the construction of a 4,500 square foot
gas station/convenience store on the Property must be completed within two
years from the date of the Deed, or the Property will be subject to a
reversionary interest in favor of the EDA pursuant to Minnesota Statutes
Section 469.105, subdivisions 5 and 6. The Buyer may also construct a fast
food restaurant on the Property subject to the consent of the EDA, which
approval shall not be unreasonably withheld, and receiving any necessary land
use approvals. The Deed shall contain provisions for the EDA to execute and
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EL185\76\986160.v1
record a Certificate of Completion evidencing that the required improvements
have been completed.
4. Miscellaneous. Except as amended by this Amendment, the Agreement shall remain
in full force and effect.
(Remainder of this page intentionally left blank.)
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IN WITNESS WHEREOF, the parties have executed this First Amendment to Purchase Agreement
as of the date written above.
ECONOMIC
DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF ELK
RIVER
By: ________________________________
Its: President
By: ______________________________
Brent O’Neil
Its: Executive Director
JAVA COMPANIES LLC
By: _________________________________
Its: __________________________________
ASSIGNEE:
JAVA ELK RIVER RETAIL LLC
By: _______________________________
Its: ________________________________
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EL185\76\983990.v3
ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION NO. 24-08
RESOLUTION APPROVING THE FIRST AMENDMENT OF THE PURCHASE
AGREEMENT FOR THE PURCHASE OF CERTAIN PROPERTY LOCATED AT 13530
& 13566 185TH AVENUE NW BY JAVA COMPANIES LLC AND JAVA ELK RIVER
RETAIL LLC
WHEREAS, the Economic Development Authority in and for the City of Elk River (the
“EDA”) entered into a purchase agreement with Java Companies LLC, a Minnesota limited liability
company (“Java Companies”) dated April 15, 2024 (the “Purchase Agreement”); and
WHEREAS, Java Companies desires to assign its rights under the Purchase Agreement to
Java Elk River Retail LLC, a Minnesota limited liability company (“Assignee”); and
WHEREAS, Assignee has agreed to accept the assignment from Java Companies of Java
Companies’ rights and has agreed to assume Java Companies’ obligations under the Purchase
Agreement; and
WHEREAS, the EDA, Java Companies, and Assignee have agreed to amend paragraph
6.1.1 of the Purchase Agreement to allow the buyer to extend the full completion of the building on
the property from one year to two years with the site preparation being completed within one year,
setting the minimum building size to 4,500 square feet, and to increase the purchase price in
paragraph 3 of the Purchase Agreement from $360,000 to $370,000; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (“Board”) of the
Economic Development Authority in and for the City of Elk River as follows:
1.01. The Board hereby approves the First Amendment of Purchase Agreement between
Java Companies and Assignee in substantially the form presented to the Board; and
1.02. The President and the Executive Director are authorized and directed to execute the
First Amendment to the Purchase Agreement on behalf of the EDA.
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EL185\76\983990.v3
Approved by the Board of Commissioners of the Economic Development Authority in and
for City of Elk River this 4TH day of November, 2024.
_________________________________
President
ATTEST:
_____________________________
Executive Director
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MU200-204-739901.v2
ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENT
AND CONSENT TO ASSIGNMENT
THIS ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENT AND
CONSENT TO ASSIGNMENT (this “Assignment”) is made effective as of _______ ___, 2024,
by and between Elk River Economic Development Authority, a Minnesota body corporate and
politic (the “EDA”) and Java Companies LLC, a Minnesota limited liability company and its
permitted assigns (“Assignor”) and Java Elk River Retail LLC, a Minnesota limited liability
(“Assignee”).
RECITALS
A. The EDA and Assignor have entered into that certain Purchase Agreement dated April
15, 2024, (“Purchase Agreement”) pursuant to which Seller agreed to sell to Assignor,
and Assignor agreed to purchase from Seller, the Property, as described in the Purchase
Agreement.
B. Assignor desires to assign its rights under the Purchase Agreement to Assignee.
C. The EDA desires to consent to such assignment and transfer of the Purchase Agreement
upon the terms hereinafter set forth.
NOW, THEREFORE, for valuable consideration in consideration of the foregoing
recitals, the mutual covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Assignment. Assignor hereby assigns to Assignee, all of Assignor’s right, title and
interest in and to the Purchase Agreement.
2. Acceptance of Assignment. Assignee hereby accepts the foregoing assignment and
agrees to assume and perform all the Assignor’s obligations under the Purchase
Agreement which arise on or after the effective date of the Purchase Agreement
(“Effective Date”). The Assignee shall be the Buyer under the Purchase Agreement
for all purposes on and after the Effective Date.
3. Indemnity. Assignor agrees to indemnify and hold harmless Assignee with respect to
any claims or liabilities arising from the Assignee’s acts or omissions prior to the
Effective Date.
4.Seller Consent. Seller hereby consents to such assignment of the Purchase Agreement
from Assignor to Assignee and to such assumption by Assignee, all as provided in this
Assignment and in the Purchase Agreement. Seller releases and discharges Assignor
from all obligations under the Purchase Agreement arising or accruing on or after the
Effective Date.
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MU200-204-739901.v2
5.Authority to Sign. Each party hereto represents and warrants that the person executing
this Assignment on behalf of said party has the authority to execute this Assignment
and to bind the party for which such person so executes this Assignment.
6.Entire Agreement. This Assignment, and any agreement executed in furtherance of
this Assignment, constitute the entire, full and complete agreement concerning the
assignment and assumption of the Purchase Agreement and supersede any and all prior
or contemporaneous negotiations, discussions, understandings or agreements. There
are no other representations, inducements, promises, agreements, arrangements, or
undertakings, oral or written, relating to the assignment other than those set forth in
this Assignment. No obligations or duties that contradict or are inconsistent with the
express terms of this Assignment may be implied into this Assignment.
7.Counterpart Signatures. This Assignment may be executed in one or more
counterparts, any one of which need not contain the signature of more than one party,
and all of which taken together shall constitute one and the same Assignment.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment on the day
and year first written above.
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MU200-204-739901.v2
ASSIGNOR:
JAVA COMPANIES LLC, a Minnesota
limited liability company
By: __________________________________
Mark Krogh
Its: Chief Manager
ASSIGNEE:
JAVA ELK RIVER RETAIL LLC, a
Minnesota limited liability company
By: ____________________________
Its: _______________________________
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MU200-204-739901.v2
ACKNOWLEDGMENT
The undersigned Economic Development Authority for the City of Elk River, Minnesota,
a Minnesota body corporate and politic, acknowledges the foregoing Assignment and Assumption
of Purchase Agreement and Consent to Assignmnet.
SELLER:
ECONOMIC DEVELOPMENT AUTHORITY
FOR THE CITY OF ELK RIVER,
MINNESOTA
By: __________________________________
Dan P. Tveite
Its President
Date: ________________________________
By: __________________________________
Brent O’Neil
Its Executive Director
Date: ________________________________
Notary Public
This document drafted by:
KENNEDY & GRAVEN, CHARTERED
Fifth Street Towers
150 South Fifth Street, Suite 700
Minneapolis, MN 55402
(612) 337-9300
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