7.1. SR 06-19-2006
Item Description
Authorization of Purchase Agreement with Tiller Corp. for
Purchase of Woodland Trails Addition
Item Number
7.1.
Prepared by
Bill Maertz, Parks and Recreation
Director
Reviewed by
Lori Johnson, City Administrator
City of Elk River
REQUEST FOR COUNCIL ACTION
Agenda Section Meeting Date
Administration June 19,2006
Introduction
Authorization of purchase agreement with Tiller Corp. for purchase of Woodland Trails addition.
Discussion
In 2004, Council authorized staff to apply for state and federal grants to assist with purchase of 78 acres
of land adjacent to Woodland Trails Park. The land is owned by the Tiller Corp. The city was awarded
$1,200,000 in grants for this acquisition. An appraisal of the property prepared by Patchin, Messner and
Dodd puts a value of $1,950,000 on the property.
The details of the purchase agreement are as follows: $1,755,000 purchase price ($22,500 per acre).
$1,390,000 of the purchase price to be paid in cash at the time of closing. The city shall receive
reimbursement of $1,200,000 by the state after the title has been recorded.
The balance of the purchase price ($365,000) shall be recorded by the city in the form of park dedication
credits. The park dedication credits shall be indexed to the prime rate. Indexing the park dedication
credits to the prime rate was a condition requested by Tiller Corp. as a hedge against park dedication fee
increases. City of Elk River park dedication fees on residential property have increased one hundred
percent since 2001.
There is precedent for using park dedication credits for land purchases. In 1994, the city of Elk River
provided Shiely Company park dedication credit in exchange for the 80 acre Top of the W orId Park.
The city attorney and community development director have reviewed this agreement.
Financial Impact
$190,000 park dedication funds (part of the approved 2006 parks capital budget)
$365,000 park dedication credits indexed to prime rate (restricted to use within the mining district)
Attachments
· Purchase Agreement
· Summary Report of Appraisal
Co \Documents and Settings \ tallard\Local Settings \ Temporary Internet Files \ OLKF\ 7 2 Purchase Agreement Authorization (3).doc
Action Requested
Authorization of purchase agreement with Tiller Corp. for purchase of Woodland Trails addition
Council Action
Motion by _
Second by _
Vote
Follow Up
C: \Documents and Settings \ tallard\Local Settings \ Temporary Internet Files \ OLKF\ 7 2 Purchase Agreement Authorization (3).doc
PURCHASE AGREEMENT
THIS AGREEMENT (Agreement), effective , 2005 ("Effective
Date") is made by and between Tiller Corporation, a Minnesota corporation ("Seller" or "Tiller")
and the City of Elk River, a Minnesota Municipal Corporation, ("Buyer" or "City").
RECITALS
(Rl) Seller owns certain real property located in the City of Elk River, Sherburne County,
Minnesota, consisting of approximately seventy-five (75) acres ofland, legally described
on Exhibit "A" attached hereto, herein "Property".
(R2) Seller desires to sell and Buyer desires to purchase the Property upon the terms and
conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby expressly acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless the context otherwise specifies or requires, for the purposes of this Agreement the
following terms shall have the meanings set forth in this Article:
1.1 Closing Date. The term "Closing Date" shall mean April 14, 2006, or any other
date approved in writing by Buyer and Seller for the closing with respect to the
purchase and sale of the Property.
1.2 Title Commitment. The term "Title Commitment" shall mean a title commitment
with respect to the Property to be issued by the Title Company.
1.3 Title Companv. The term "Title Company" shall mean Old Republic National
Title Insurance Company, 400 Second Avenue South, Minneapolis, Minnesota
55401.
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ARTICLE II
PURCHASE PRICE/ADJUSTMENTS/
PAYMENT/EARNEST MONEY/ PRORATIONS/RESERV ATION
2.1 Purchase Price. Buyer shall pay to Seller, as consideration for the conveyance of
the Property, approximately one million seven hundred fifty-five thousand dollars
and no/lOO ($1,755,000) to be finally calculated at $22,500 per acre of Property
as determined by the survey, the ("Purchase Price"), subject to adjustments,
prorations and allocations, as hereinafter provided.
2.1.1 $1,390,000.00 of the purchase price shall be paid in cash at the time of
closing. The earnest money to be paid by Buyer pursuant to the terms set
forth in Section 2.3 shall be credited toward the payment of the purchase
price at the time of closing.
2.1.2 The balance of the Purchase Price, approximately $365,000.00, shall be
paid by Buyer in the form of park dedication credits ("Park Dedication
Credits") given by City to and for the benefit of Tiller. The City shall hold
the Park Dedication Credits on deposit for the benefit of Tiller. The dollar
value of the Park Dedication Credits shall be adjusted annually,
commencing on May 1, 2007, as follows:
2.1.2.1 The Park Dedication Credits balance shall be increased by an
amount equal to the prime rate of interest as published annually by
the Wall Street Journal's "Money Rate" section on January 1 of
each year commencing May 1 of 2007 for so long as the City
continues to hold the Park Dedication Credits for the benefit of
Tiller ("Adjusted Amount").
2.1.2.2 City shall provide written notice to Tiller, certified by an
authorized official of City, by May 30 of each year an accounting
of the Park Dedication Credits and the Adjusted Amount on
deposit.
2.1.2.3 In conjunction with the development of any property located in
the Gravel Mining Overlay District in the City by Tiller, or Tiller's
assignee, any dedication requirement lawfully imposed by City for
open space for parks, playgrounds, trails, or public open space,
whether arising out of City Ordinance No. 1008.18 or otherwise,
shall be offset by the Park Dedication Credits and Adjusted
Amount held on deposit by City for the benefit of Tiller to the
extent said Park Dedication Credits together with the Adjusted
Amount are needed and available to offset the dedication
requirement.
2.1.2.4 The obligation of City to hold Park Dedication Credits as described
herein on deposit for the benefit of Tiller shall survive the closing
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ofthe transaction which is the subject of this Agreement, and shall
be memorialized by a Park Dedication Credits Agreement to be
executed by City and delivered to Tiller at closing as set forth in
Section 8.2 ofthis Agreement.
2.2 Deed Restriction. Buyer agrees that the Property will be subject to the restriction
contained in the Restriction Agreement attached hereto as Exhibit "C", which
Deed Restrictions shall be recorded in the Office of the County Recorder on or
about the Date of Closing.
2.3 Prorations and Allocations. Seller and Buyer shall make prorations and
allocations of the following expenses, with respect to the Property:
2.3.1 Real Estate Taxes and Special Assessments.
2.3.1.1 Real Estate Taxes. General real estate taxes (i) payable in the
years prior to the year of closing will be paid by Seller, (ii) payable
in the year of closing shall be prorated by Seller and Buyer as of
the Closing Date, based upon a calendar year; and (iii) payable in
the year following the year of closing shall be paid by Buyer.
2.3.1.2 Special Assessments. Seller shall pay any special assessments
levied or pending against the Subject Property as ofthe Effective
Date, or that become levied or pending after the Effective Date of
this Agreement, including, but not limited to, area wide
transportation charges and area charges for sanitary sewer, storm
sewer and trunk water charge, if any.
2.3.2 Title Insurance. Buyer shall pay the title insurance commitment fee and
Buyer will pay all costs of the owner's Title Policy and all supplements
and endorsements thereto.
2.3.3 Closing Fee. Buyer will pay any reasonable and customary closing fee or
charge imposed by any closing agent designated by the Title Company.
2.3.4 Deed Tax. Buyer shall pay all state deed tax regarding the Warranty Deed
to be delivered by Seller pursuant to this Agreement.
2.3.5 Recording Costs. Seller will pay the cost of recording any documents
necessary to clear title and Buyer shall pay the cost of recording the
Warranty Deed.
2.3.6 Attorneys' Fees. In any litigation, arbitration or similar proceeding to
resolve a dispute between Seller and Buyer arising under or relating to this
Agreement, the prevailing party shall be entitled to recover its reasonable
costs, including reasonable attorney's fees, from the other party as
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determined by the court, arbitrator or other decision maker.
2.3.7 Development Costs. Buyer, at its own cost and expense, shall be
responsible for all required approvals of its project by all involved
jurisdictions, permits, studies, engineering, analysis, construction,
recording, and payment of all fees and permits.
2.3.8 Other Costs. All other costs shall be allocated in accordance with the
customs prevailing in similar transactions in the Twin Cities area.
2.4 Earnest Money. Buyer shall, upon execution and delivery of this Agreement,
deposit the sum ofTen Thousand Dollars ($10,000.00) as "Earnest Money" with
the Title Company, to be held, retained or refunded as follows:
2.4.1 Deposit. The Earnest Money shall be deposited in an interest bearing
account, in Buyer's name and for its account with the Title Company.
2.4.2 Default by Buyer. In the event of a default by Buyer, the Earnest Money
and all interest earned on the Earnest Money shall be retained by Seller
free from all claims of Buyer.
2.4.3 Termination by Buyer. If Buyer terminates this Agreement by reason of
Seller's default or, if Buyer terminates this Agreement pursuant to Section
4.1, 4.3.1 or Article IX hereof, then, and only then, the Earnest Money
shall be refunded to Buyer.
2.4.4 Other Cases. In all other cases, all ofthe Earnest Money and all interest
thereon shall be retained by Seller.
ARTICLE III
ACCESS TO PROPERTY, INDEMNITY,
REPORTS, SURVEY AND GRADING PLAN
3.1 Access to Property/Indemnity. Seller shall allow Buyer and Buyer's
representatives access to the Property for the limited purpose of making such
inspections, tests and verifications as they shall deem reasonably necessary;
however, Buyer (i) shall pay all costs and expenses of such investigations, tests or
verifications; (ii) shall indemnify and hold Seller and the Property harmless from
all losses, liabilities, cost and expenses relating to the activities of Buyer and/or its
representatives, which indemnity shall survive the Closing and/or the termination
of this Agreement; and (iii) shall return the Property to the same condition as it
was prior to said testing. Buyer shall provide Seller with a copy of all reports at
no cost to Seller.
3.2 Survey. Buyer shall be responsible for obtaining a survey prepared by registered
land surveyor complying with Minimum Standard Detail Requirements for
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ALTNACSM Land Title Surveys (Class A Urban)(2005) (the "Survey").
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING/TERMINATION
4.1 Buver's Conditions Precedent. The obligations of Buyer under this Agreement are
subject to the following conditions precedent which, prior to the Closing Date, shall
have either been waived in writing by Buyer or shall have been determined, in
Buyer's sole discretion and at Buyer's sole expense, to have been satisfied:
4.1.1 The representations and warranties contained in this Agreement must be
true now and on the Closing Date as if made on the Closing Date.
4.1.2 Title shall have been found acceptable, or been made acceptable, in
accordance with the requirements and terms of this Agreement and the
Title Company shall agree at the closing to issue the Owner's Policy
contemplated in the Commitment as of the date of recording the warranty
deed.
4.1.3 Seller shall perform all of the obligations required to be performed by
Seller under this Agreement as and when required by this Agreement.
4.1.4 Buyer shall have determined on or before the Closing Date, that it, in its
sole discretion, is satisfied with the results of and matters disclosed by soil
tests, engineering inspections, hazardous waste and environmental reviews
of the Property. All such tests, inspections and reviews are to be obtained
at Buyer's expense. Buyer shall select each of the companies to conduct
the above tests, inspections and reviews.
If any such condition precedent has not been satisfied within the allowable times
specified above, then this Agreement may be terminated, at Buyer's option, by written
notice from Buyer to Seller. In the absence of a written notice from Buyer to Seller,
the conditions precedent shall be deemed automatically waived by Buyer. Upon such
termination, the earnest money shall be released to Buyer and upon such return,
neither party will have any further rights or obligations regarding this Agreement or
the Property and the parties agree to execute a Termination of Purchase Agreement.
All of the conditions precedent set forth in this paragraph above are specifically stated
and agreed to for the sole and exclusive benefit of the Buyer and the Buyer shall have
the right to unilaterally waive any condition precedent by written notice to Seller.
4.2 Seller's Conditions Precedent The Obligations of Seller under this Agreement are
subject to the following conditions precedent:
4.2.1 The Buyer shall have performed all of the obligations required to be
performed by Buyer under this Agreement as and when required by this
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Agreement.
4.3 Termination. This Agreement shall continue in full force and effect unless terminated
within the following times:
4.3.1 If all of the Conditions Precedent have not been timely satisfied then, this
Agreement may be terminated, at the option of Buyer, by written notice
from Buyer to Seller within ten (10) days prior to the date set out in
Section 4.1 or prior if the failure of a Condition Precedent shall be known.
4.3.2 Unless terminated within the time and in the manner provided above, the
Conditions Precedent shall be conclusively considered to be satisfied or
waived and this Agreement shall continue in full force and effect.
4.4 Effects of Termination. Upon any such termination, except for disposition of the
Earnest Money (which is treated in Section 2.3 hereof), neither party will have any
further rights or obligations regarding this Agreement or the Property excepting only
the indemnification obligations contained in Section 3.1 and Article XI hereof.
4.5 Waiver. All the Conditions Precedent to Closing set forth in this Agreement are
specifically stated and agreed to be for the sole and exclusive benefit of the Buyer
and/or Seller, as applicable, and the Buyer and/or Seller, as applicable, shall have the
right to unilaterally waive any Condition Precedent by written notice to the other, as
applicable, within the times provided above.
ARTICLE V
REPRESENTATIONS AND WARRANTIES, COVENANTS,
AND INDEMNIFICATION
The following representations and warranties are made by the Seller and Buyer.
5.1. Representations and Warranties by Seller. Seller represents and warrants to
Buyer as of the Effective Date, the Closing Date and all dates in between, as
follows:
5.1.1. Seller is a Minnesota Corporation duly organized, validly existing and in
good standing under the laws of the State of Minnesota. Seller has the full
right and authority to enter into this Agreement and consummate the
transactions contemplated herein, all of which have been duly authorized
pursuant to all requisite action. The natural persons signing this
Agreement on behalf of Seller are authorized to do so.
5.1.2. To the best of Seller's knowledge, there are no parties other than the City,
it's Park Department and it authorized park users, in possession of any
part of the Property, and there are no rights of possession which have been
granted to any third party whatsoever except than to the City, its Park
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Department and it authorized park users.
5.1.3. To the best of Seller's knowledge, the Property is in compliance, in all
material respects, with all applicable statutes, ordinances, codes, and all
rules and regulations of all governmental and quasi-governmental
authorities with jurisdiction over the Property. Seller has received no
written notice of any violation of any ofthe foregoing.
5.1.4. To the best of Seller's knowledge the Property and its existing and all
prior uses comply and have at all times complied with, and Seller is not in
violation of, has not violated, in connection with its ownership, use,
maintenance or operation of the Property and the conduct of the business
related thereto, any applicable federal, state, county or local statutes, laws,
regulations, rules, ordinances, codes, standards, orders, licenses or permits
of any governmental authorities relating to environmental matters (being
hereinafter collectively referred to as the "Environmental Laws"),
including by way of illustration and not by way of limitation, (A) the
Clean Air Act, the federal Water Pollution Control Act of 1972, the
Resource Conservation and Recovery Act of 1976, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the
Toxic Substances Control Act, the Minnesota Environmental Response
and Liability Act (including any amendments or extensions thereof and
any rules, regulations, standards or guidelines issued pursuant to any of
said Environmental Laws), and (B) all other applicable environmental
standards or requirements. Without limiting the generality of the
foregoing to the best of Seller's knowledge: (i) neither Seller, its agents,
employees and independent contractors nor any tenant, has operated the
Property for the purpose of disposing of petroleum products or any
"hazardous material," as defined in said Environment Laws, other toxic
dangerous or hazardous chemicals, materials, substances, pollutants and
wastes, or any chemical, material or substance exposure to which is
prohibited, limited or regulated by any federal, state, county, regional or
local authority (all the foregoing being hereinafter collectively referred to
as "Hazardous Materials"); (ii) there are no existing or pending remedial
actions or other work, repairs, construction or capital expenditures with
respect to the Property in connection with the Environmental Laws, nor
has Seller received any notice of any of the same; (iii) no Hazardous
Materials have been or will be released into the environment, or have been
or will be deposited, spilled, discharged, placed or disposed of at, on, or
adjacent to the Property, nor has the Property been used at any time by any
person as a landfill or a disposal site for Hazardous Materials or for
garbage, waste or refuse of any kind; (iv) there are no electrical
transformers or other equipment containing dielectric fluid containing
polychlorinated biphenyls in excess of 50 parts per million located in, on
or under the Property, nor is there any friable asbestos contained in, on ore
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under the Property; (v) there are no locations off the Property where
Hazardous Materials generated by or on the Property have been treated,
stored, deposited or disposed of; (vi) the sale of the Property by Seller to
Buyer does not require notice to or the prior approval, consent or
permission of any federal, state or local governmental agency, body, board
or official; and (vii) no notices of any violation of any of the matters
referred to in the foregoing subparagraphs relating to the Property or its
use have been received by Seller and there are no writs, injunctions,
decrees, orders or judgments outstanding, no lawsuits, claims, proceedings
or investigations pending or threatened, relating to the ownership, use,
maintenance or operation of the Property, nor is there any basis for any
such lawsuit, claim, proceeding or investigation being instituted or filed.
Buyer acknowledges that Seller or related entities, agents or designees and
previous land owners may have been in the mining business and that the
Property may have been used by Seller or related entities, agents or
designees for mining activities.
5.1.5. To the best of Seller's knowledge, there are no others wells on the
Property other than one (1) monitoring well. Buyer agrees to allow the
Seller's continued use and access to said well at no cost to Seller. The
Parties agree to execute a separate agreement to this effect concurrently
with the execution of this Purchase Agreement.
5.1.6. There is no demand, proceeding, claim, suit, litigation, or other action
pending or, to Seller's knowledge, threatened against Seller in connection
with or related to the Property.
5.1.7. Seller is not a "foreign person" as that term is defined under Internal
Revenue Code S 1445(F)(3) and the sale of the Property is not subject to
any withholding requirements imposed by the Internal Revenue Code,
including, without limitation, S 1445(F)(3)
5.1.8. No action in condemnation is now pending or, to Seller's knowledge,
contemplated against the Property.
5.1.9. All labor and/or materials which have been furnished to the Property by or
on behalf of Seller have been fully paid for or will be fully paid for prior
to the Closing Date so that no lien for such labor or materials rendered can
be asserted against the Property.
5.1.10. There is no "individual sewage treatment system" within the meaning of
Minn. Stat. S 115.55 on or serving the Property. No sewage is generated
at the Property.
5.1.11. Seller shall give Buyer prompt written notice of any matter coming to the
attention of Seller which, to Seller's knowledge, would affect or change
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any of the foregoing representations and warranties. In the event any of
the foregoing representations is not in any material respect true as of the
Closing Date, Buyer may, without waiving any other right of remedy it
may have, terminate this Agreement by notice to Seller.
5.1.12. As used in this Agreement, "to the best of Seller's knowledge," "to
Seller's knowledge," and any other statements regarding the knowledge or
awareness of Seller shall mean the actual knowledge of any current
elected officer ofthe Seller, without investigation or inquiry.
5.1.13. The representations and warranties set forth in this paragraph shall be
continuing and shall be true and correct on and as of the Closing Date with
the same force and effect as if made at that time and said representations
and warranties shall survive the Closing for a period of one (1) year. Any
claim or cause of action by Buyer must be filed before the expiration of
said one (1) year period or shall be barred. Seller agrees to indemnify and
hold Buyer harmless from and against and to reimburse Buyer with
respect to any and all claims, demands, causes of action, loss, damage,
liabilities, and costs (including attorney's fees and court costs) asserted
against or incurred by Buyer caused by the breach of any representation,
warranty or covenant as set forth in this paragraph, except that any claim
or cause of action must be filed within one (1) year after the Closing Date
or shall be waived and barred. Seller's obligations and liabilities under
this paragraph shall be limited to Buyer's actual, direct damages caused by
Seller's breach, and in no event shall Seller be liable for lost profits or
other consequential damages.
5.2. Representations and Warranties by Buyer. Buyer represents and warrants to
Seller as of the Effective Date, the Closing Date and all dates in between, as
follows:
5.2.1. Buyer is duly incorporated and qualified to transact business in the State of
Minnesota; Buyer has the requisite corporate power and authority to enter
into and perform this Agreement.
5.2.2. Buyer acknowledges that Buyer has had and/or will have the opportunity to
inspect, inquire about, investigate and examine the Property and matters
regarding the Property and that Buyer has or will obtain and/or perform, at
Buyer's sole cost and expense, all such inspections, assessments, inquiries,
investigations, examinations, studies, tests and reports that Buyer deems
appropriate or otherwise desires (collectively referred to herein as "Due
Diligence"). Seller and Buyer agree that Buyer will accept possession of
the Property in it's AS-IS condition, WITH ALL FAULTS. Except for the
warranties and representations explicitly set forth in this Agreement, such
sale shall be without any other representation or warranty of any kind,
express or implied, and Seller, for Seller, Seller's agents, attorneys,
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representatives, heirs and assigns (hereinafter collectively referred to as
"Seller and Seller's Agents") does hereby disclaim and renounce any other
representation or warranty. Buyer specifically acknowledges that-Buyer is
not relying on any representations or warranties of any kind whatsoever,
express or implied, from Seller or Seller's Agents as to any matter
concerning the Property, except as explicitly set forth in this Agreement,
and that Buyer, as to other matters, is relying entirely on Buyer's own Due
Diligence, without any representations or warranties of any kind by Seller
or Seller's Agents.
ARTICLE VI
TITLE EXAMINATION
Examination oftitle to Property will be conducted as follows:
6.1 Title Commitment. Buyer shall obtain a commitment ("Title Commitment") from
the Title Company for an ALTA Form of Owner's Policy of Title Insurance in the
amount of the Purchase Price, wherein the Title Commitment will commit the
Title Company to insure title to the Property at the Closing.
6.2 Title Examination.
6.2.1 Obiections. Buyer shall have fifteen (15) days, after it has received (i) the
Title Commitment and the Survey, and (ii) all documents shown as
exceptions therein, to make written objections to title ofthe Property
("Objections") and the failure by Buyer to make any such Objections
within such time period will constitute a waiver of all Objections.
6.2.2 Cure of ObiectionslNon-Cure Notice. Seller will have one hundred
twenty (120) days after receipt of any Objections to cure the Objections,
during which period the Closing will be postponed as necessary; provided,
however, that if Seller gives Buyer written notice (a "Non-Cure Notice")
within said one hundred twenty (120) day period that Seller cannot or will
not cure specified Objections, then this Agreement shall terminate, unless
within ten (10) days after receiving the Non-Cure Notice Buyer gives
Seller written notice that Buyer is waiving the Objections specified in the
Non-Cure Notice, which items or matters subject to the Objection(s) shall
then also become a Permitted Encumbrance(s). In any event, Seller shall
cure any objection that can be cured solely by the payment of money. If
the Purchase Agreement is terminated because the Seller cannot or will
not cure specified Objections, then the Earnest Money shall be returned to
the Buyer.
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ARTICLE VII
SELLER'S CLOSING DOCUMENTS
On the Closing Date, Seller shall deliver to Buyer the following (collectively, "Seller's
Closing Documents"):
7.1 Deed. A Warranty Deed conveying the Property to Buyer, free and clear of all
encumbrances, except the Permitted Encumbrances, in a form reasonably
acceptable to the Buyer and the Title Company.
7.2 Well Disclosure. Seller will provide Buyer with a well disclosure statement as
required by Minnesota State law or a statement that there is no well.
7.3 Title Documents. An Affidavit of Seller stating that on the Closing Date there are
no outstanding, unsatisfied judgments, tax liens or bankruptcies against or
involving Seller or the Property; that Seller has not caused or allowed any work
on the Property for which payment has not been made; and that there are no other
unrecorded interests in the Property and such other Affidavits and documents as
may be reasonably required by Title Company or Buyer in order to record Seller's
Deed and issue the Title Policy required by this Agreement.
ARTICLE VIII
BUYER'S CLOSING DOCUMENTS
On the Closing Date, Buyer will duly execute and/or deliver to Seller the following
(collectively, "Buyer's Closing Documents"):
8.1 Purchase Price. The full Purchase Price (less Earnest Money and Park Dedication
Credits), by wire transfer of U.S. funds, or by certified check (or other
immediately available funds) to be payable to Seller or to Seller's account or as
Seller may otherwise direct.
8.2 Park Dedication Agreement. The City shall execute and deliver the Park
Dedication Agreement in the form and content of Exhibit "B" attached hereto and
made a part hereof, securing the Buyer's remaining obligations under this
Agreement.
8.3 Other Costs and Expenses. Payment for all other costs and .expenses to be paid by
Buyer pursuant to this Agreement.
8.4 Other Documents. Such other documents as the Title Company or Seller shall
reasonably request to implement the within described transaction.
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ARTICLE IX
CONDEMNATION
If, prior to the Closing Date, eminent domain proceedings are commenced against all or
any part of the Property, Seller shall immediately give notice to Buyer of such fact and at Buyer's
option (to be exercised within thirty (30) days after receipt of Seller's notice), this Agreement
shall terminate, in which event neither party will have further obligations under this Agreement.
If Buyer shall fail to give such notice oftermination within such time, then there shall be no
reduction in the Purchase Price and Seller shall assign to Buyer at the Closing Date all of Seller's
right, title and interest in and to any award made or to be made in the condemnation proceedings
in connection with the Property.
ARTICLE X
BROKER'S COMMISSION
Each party hereto warrants that it has not incurred any real estate brokerage fees, finder's
fees, loan brokerage fees, or any other fees to any third party in connection with this purchase
and sale.
ARTICLE XI
MUTUAL INDEMNIFICATION
Seller and Buyer agree to indemnify each other against, and hold each other harmless
from, all liabilities, claims, losses, damages, costs and expenses (including reasonable attorneys'
fees in defending against claims) arising out of activities or agreements in regard to the Property
whether before or after the Closing Date. Such right to indemnification will not arise to the
extent that the claim for indemnification arises out of the act or neglect of the party seeking
indemnification. This Article shall survive the Closing or the termination of this Agreement.
ARTICLE XII
ASSIGNMENT
Neither party may assign, or sell for profit or otherwise, its rights under this Agreement
with the prior written consent of the other party before or after the Closing Date.
ARTICLE XIII
NOTICES
All notices, demands, consents, requests, or other communications provided for or
permitted to be given pursuant to this Agreement shall be in writing and shall be sent to the
address set forth below for the receiving party by any of the following means: (i) personal
service; (ii) courier; or (iii) ifbeing delivered or sent to an address that is within the same
country from which the notice is being sent, by certified (or equivalent) or registered mail,
postage prepaid, return receipt requested.
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Buyer:
The City of Elk River
13065 Orono Parkway
Elk River, Minnesota
With Copy To:
Gray Plant Mooty
500 IDS Center
80 South Eight Street
Minneapolis, MN 55402
Attn: Charles D. Wilson
Seller:
Tiller Corporation
7200 Hemlock Lane N., Suite 200
P.O. Box 1480
Maple Grove, MN 55311-6480
Attn: Gary B. Sauer
Tax ID# 41-1408578
With Copy To:
Gries & Lenhardt, PLLP
12725 43rd Street NE
S1. Michael, MN 55376
Attn: John R. Gries
If to Title
Company:
Old Republic National Title Company
400 Second Avenue South
Minneapolis, MN 55401
Attn: Rick Zilka
ARTICLE XIV
MISCELLANEOUS
14.1 Force Maieure. Any prevention, delay, or stoppage because of strikes, lockouts,
other labor disputes, material shortages, embargoes, civil unrest, governmental
regulations, enemy or hostile governmental action, judicial order, public
emergency, weather, fire, earthquake, other Acts of God, and other causes beyond
the reasonable control of the party obligated to perform, will extend the period for
performance of any act required by a party (except for payment obligations
imposed pursuant to this Agreement), including the time required for satisfaction
of any condition, for the period of the delay provided, however (i) the
unavailability of financing shall not qualify for force majeure treatment and (ii) the
affected party shall give reasonable written notice to the other of the occurrence
causing such delay and shall include in such notice, if known, the date by which
the delayed obligation will be performed.
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14.2 Construction. This Agreement shall be governed by and construed under the laws
of the State of Minnesota. All captions in this Agreement are for reference only.
14.3 No Merger. The obligations, covenants, representations, and warranties, and the
remedies for breach thereof, set forth in this Agreement shall survive the closing
and shall not merge with transfer of title but shall remain in effect until fulfilled.
14.4 Confirmation of Termination. If this Agreement terminates, Buyer agrees to
execute and deliver to Seller a quit claim deed for the Property and such execution
and delivery shall be a condition precedent to the return of any Earnest Money, to
the extent any Earnest Money is to be refunded to Buyer.
14.5 Location of Closing. The Closing shall take place at the office of the Title
Company, or at such other place as may be agreed to by the parties.
14.6 Binding Effect. This Agreement binds and benefits the parties and their
successors and assigns.
ARTICLE XV
ENTIRE AGREEMENT; NO MODIFICATIONS
This Agreement, together with the attached Addendum relating to the Title Company and
the attached Exhibits "A", "B" and "c" constitutes the entire agreement of the Seller and Buyer
with respect to the purchase and sale of the Property. This Agreement may not be modified or
amended except in a writing signed by Seller and Buyer.
ARTICLE XVI
DEFAULT
If either party defaults in the performance of any of the party's obligations under this
Agreement and remains in default for ten (10) days after delivery of written notice of default,
then the non-defaulting party may terminate this Agreement by written notice to the other party.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Purchase
Agreement the day and year first above written.
BUYER
CITY OF ELK RIVER
a Minnesota municipal corporation
SELLER
TILLER CORPORATION
a Minnesota corporation
By:
Its:
By:
Its:
By:
Its:
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EXHIBIT" A"
Legal Description
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EXHIBIT "B"
Park Dedication Agreement
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Exhibit C
Deed Restriction
GP:1903720v2
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. . . .
PATCHIN MESSNER & DODD
VALUATION COUNSELORS.
. .
. February 16,2006 .
. .
". City of ~Ik River' . .' .
. Parks and RecreatiQn Department
1104 Lions .Park DriVe . .
~lkRiyer,MN 55330
. . ,'--
, ,'R:E: 'Complete Appraisal, Summary Report. ' .'
-, , : " Ii lIer 'Corporation Propemr," '",
. , ' ,South 'Side of County Road 33' " .'. '. .
. .:"PartsofSe(:; l6,&21{r33N,.R26W' '," ....
'-': .'Elk River,Miri'nesot.~,< " . "
Attri: Mr.WiJI iam Maerti
. 'j ...! -
" DearMf:..~~ertz: ,_ ,,','. .':~',,", _',' " , ':"""':'" . _'.' ,......, ' .,' " ,,;
, At 'your request, 'J':havemade a.cdmpiete~ppraisal :oftbe':apqv~r~~'renced':propeiiy~' The" . "','
, purpose ofJheappr~isalis<to,'estimate tt~e:marketvalu,e,9f!he$ubje,ctprppertY:Thef~.mCtioli" ,~'; _
" 'of this appraisaL ista assist the c:l,ieht (~ity otElkRiv.errwithacquiring ajJortior)'qrtf).~'subject ': ',- ','
, property. Theeffeqive date of thisapprCiisaris FebrLJary6,2006,.th,esamedate'l inspeged <.
the property,. .' A 'representative '.' of owner.... (MIke, ,Karon) was . contacted ", bY<,:telephone . .ahd' "
provirJed an opportunity,toaccorT\panyine during th~ ,inspectioD. ,Mr~!<(lronelected"'lJotto',c . ',.
be present during the inspeetioll, but did discuss the subject. property with me during'our '
:,telephoneconver$ation. _ " ~' ,"::., ,':, ',' ',' :'.:_ 1 ','_' ,
'::Th i's':~ppra'isalis'i'ntehd.~d ioc6mpjY.~ith "t~~"'Unif~~m. ..Sta~dard~ .';oi P;of~sst()~ai 'Appi~isal,> ,'-,'
practice (US PAP) , 9f the Appraisal Joundati6h~ This appraisal is also meant fO,comply\:Vith-, .', '
the Uniform App'raisalStandardsforFederal Land Ac'quisitio_rls' (UASFLAh. :'Theappr~is,al,is': "
presented in a. sllmmary'reporting 'format,' as desc~ibed in, u.SPJ\PSta-ndardRule-2;:; 2(b)'.' " '~""
Th~ cI i~nt proposes to a~~lUl~~ ~ 78'~cre'tract ~f .land.fr6n, '{he owne~(TiU~r). .;:his18~~r:" < " "
tract is Pellt ofalarger 34,2.04 acre parcel owned by Ii lJer' Corporation. Thus, tneappraisal"
assignment considers the~proposed acquisition as ~L"partialacquisitionn, of the largerparc;eL '
. " diScussed .inthe :attached'report,J have q:mcluded thatthelarger pattel is.the342:04acre' ,
,parce10\yned qy Iiller~ These ~42~04 acres areqintiguous,are underc;<;>mmonown'ership,.:'
:andshare:a continurtyinuse.., :'. .'. ',> ." . ,'>: "..", ."
Further, I, have determined that the partial acquisition will not cause severance damage to the - .
, remainder parcel., The partial acquisition will in no way interfere with the current sand and '
> gravel mining operation, Likewise,<none'ofthe, improvements associated with the'mining
,operation will beimpadedby the partial acquisition. Therefore, only -the land valu~has
-been appraised. ,As ,a partial acquisition, the land ,value has beenapprais,edin both the
,~efore and 'after conditions. " .' , ,
'Sunset Ponds Office Park. J 3967,WestPreserveBoulevard. Burnsville. MNS5337
. 'Phone: (952)895-1205 . Fax: (9S2)895-152J.
. ii .
- '.'
. . ., .'
. .. .. .
Based .upon the inspection ,of the property,.and after consideration of. the. manyfacfors'
influencinglT1arketYalu~i I have reached the following condusions of market value, as of .'
February 6,'2006: '. . .... '. .
Market Value - Before. Condition: . $.8;550,000.
. ,
. Market Value- AiterConditio~~ ,. $6/600JOOQ~."'
Coridusi9n of Just Compensation.:~$1;950iOOO .
'It. should b~'noted' that this I~tter dbesnotqualifyas.an', apprais;:tIJ'~nd ;that!he reader~jsi .
dir~ctedtothe following-report ~fo.r the~supporting datal' analysi's,.and'conclusionswhkh .
support this value estimate.. the 'appraisal report is c'ontirigent upon the~assumpti'6ns anQ
limitil1g conditi'ons submitted within the report. . '.' . ..' . '. .',' ,
" .' - ,~ .. "~" - .
The"~Contingent and Limiting Co.nd'itions" s~ctiQn of this . report sho:u Id: be. tt)9~oughIY read' . .'
and 'ungerstoqd before relying on any information or,analysis present~d herein., : .' . .' ,
.Jh~nk'youfor.lh~.:6pp6rt:un~i~.'~~ ..b~ '()fa~Si$tarKe; i,~..this.'.'~atte~. . .rf'y6'u".~a~~'-~~y,qu~S~iOns,or . .
r:oll1ml?ntsafter~eading thist()risultatiohrepo~please feel freeto'cootact the firm at your"
coqvEmience:,'. ,". . ...... .' . '. ..... '
'.'
. .
.... ..
~~sp~~tfull)(Subm ittea,
, :, ;, , - ,'. ;' . ,"' :, '. " ~. . . - .:~ ..' ",' -'.'\- .
-,."
PATCHIN MESSNER & DODD