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HomeMy WebLinkAbout05(I) - Approval of a Release and Termination of Payment Agreement and Approval of Release and Termination of Development Agreements Report ITEM: 5I CITY COUNCIL AGENDA REPORT MEETING DATE: September 22, 2026 PREPARED BY: Casey McCabe, Community Development Director PRESENTED BY: Casey McCabe AGENDA ITEM: Approval of a Release and Termination of Payment Agreement and Approval of Release and Termination of Development Agreements RECOMMENDED ACTION: Motion and Second authorizing the Mayor and City Manager to execute a Release and Termination of Payment Agreement and five Release and Termination of Development Agreements. BACKGROUND: The City of Prior Lake and Le Management Properties, LLC entered into a Payment Agreement on March 21, 2011, which was recorded in the Office of the Scott County Recorded on June 8, 2011 as Document No. A881800. The Payment Agreement was related to deferred City Sewer Availability Charges (SAC) units that were due related to the banquet facility expansion at the Fong’s Restaurant & Bar property. This repayment agreement required the property owner to pay the Metropolitan Council SAC charges at building permit issuance and the City SAC fees for sewer, water, and water tower were divided equally and certified to the 2012, 2013 and 2014 property taxes at 8% interest. City of Prior Lake Finance staff have confirmed the SAC repayment agreement was paid in full as of 2014; however, no formal satisfaction or release was recorded at Scott County. In 1992, the City of Prior Lake established Development District No. 2 within which the City created Economic Development Districts to authorize the use of tax increment financing for the development of certain areas of the City. Development District No. 2 originally encompassed an area in the southeast corner of the city on both sides of CH21; generally the Waterfront Passage Business Park and Welcome Avenue Industrial Park areas. In 1994, the City expanded the Development District No. 2 boundaries to include properties in the downtown area, between Main Ave. and Hwy 13, South of CH21, including the Fong’s Restaurant & Bar property at 4770 Pleasant Street currently owned by Le Management. As part of the establishment of the tax increment districts, the City entered into various TIF development agreements for the construction of certain improvements within the Waterfront Passage Business Park. Five separate TIF development agreements were recorded for TIF projects in Waterfront Passage that included the 4770 Pleasant Street property (Fong’s Restaurant & Bar) in the legal description of Development District No. 2 within the agreement. All five of the TIF districts in question have been decertified for at least twenty years; however, the TIF development agreements have not formally been released or terminated. It has not been the practice of the City to formally release and terminate TIF development agreements as the action to decertify the TIF District should be viewed as confirmation that all obligations of the City and Developer under the terms of the Development Agreement have been met. City of Prior Lake | 4646 Dakota Street SE | Prior Lake MN 55372 Item 5I Page | 2 Current Circumstances Le Management Properties, LLC is in the process of selling their property at 4770 Pleasant Street SE. The company completing the title commitment has identified several encumbrances they wish to have released/satisfied prior to the planned property closing in early October 2026; including the Payment Agreement and the five TIF Development Agreements referenced above. The attorney for Le Management has prepared the attached Release and Termination of Payment Agreement which has been reviewed by the City Attorney. The Release and Termination of Payment Agreement acknowledges the obligations of Le Management under the Payment Agreement have been fully performed and satisfied and terminates the Payment Agreement. The legal description of Development District No. 2, which includes the LE Management property, appears in five TIF development agreements for projects in the Waterfront Business Park. This is a concern for the title company as a potential encumbrance on the property. The attached Release and Termination of Development Agreements confirm all work to be performed under the TIF Development Agreements is fully performed and complete; confirms the City decertified the TIF Districts; states decertification of the TIF District is confirmation that all obligations of the City and Developer under the terms of the Development Agreements have been met; and formally approves the release and termination of the Development Agreements. Conclusion Staff recommends approval of a motion authorizing the Mayor and City Manager to execute the Release and Termination of Payment Agreement and the five Release and Termination of Development Agreements. FINANCIAL IMPACT: No financial impact. ALTERNATIVES: 1. Motion and Second, as part of the consent agenda, authorizing the Mayor and City Manager to execute the Release and Termination of Payment Agreement and the Release and Termination of Development Agreements. 2. Remove this item from the consent agenda for additional discussion. ATTACHMENTS: 1. Release and Termination of Payment Agreement 2-5. Release and Termination of Development Agreements RELEASE AND TERMINATION OF PAYMENT AGREEMENT This satisfaction and termination (“Agreement”) is made as of September , 2026, by and between the City of Prior Lake, a municipal corporation under Minnesota law (“City”) and Le Management Properties LLC, a Minnesota limited liability company (“Le Management”). RECITALS A. On March 21, 2011, the City and Le Management entered into a Payment Agreement (“Payment Agreement”), recorded June 8, 2011, as document A881800, incidental to the expansion of the commercial restaurant property located at 4770 Pleasant Street SE, Prior Lake, Scott County, Minnesota, Tax Parcel 251470030, and legally described as follows (“Property”): st Lot 3, Block 1, Langhorst 1 Addition, Scott County, Minnesota. B. Since all obligations of Le Management under the Payment Agreement have been fully performed, the parties desire to affirm the satisfaction and termination of the Payment Agreement. AGREEMENT 1. RECITALS. The foregoing recitals are incorporated in, and made a part of, this Agreement. 2. SATISFACTION. All obligations of Le Management under the Payment Agreement have been fully performed and satisfied. 3. TERMINATION. The Payment Agreement is hereby terminated in all respects and shall have no further legal force or effect. 4. PERSONS BOUND. This Agreement shall bind and inure to the benefit of the parties hereto and their respective representatives, successors and assigns. 090826v2 5. MISCELLANEOUS. This Agreement is made in the State of Minnesota and shall be governed by Minnesota law. This is the entire agreement between the parties and may not be modified or amended except by a written document signed by the party against whom enforcement is sought. This Agreement may be signed in more than one counterpart, in which case, each counterpart shall constitute an original of this Agreement. Paragraph headings are for convenience only and are not intended to expand or restrict the scope or substance of the provisions of this Agreement. Wherever used herein, the singular shall include the plural, the plural shall include the singular, and pronouns shall be read as masculine, feminine, or neuter as the context requires. CITY LE MANAGEMENT City of Prior Lake Le Management Properties LLC By By Its Mayor Its Manager And Date Signed , 2026 Its City Manager Date Signed , 2026 STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing agreement was acknowledged before me this day of September, 2026, by and , the Mayor and City Manager, respectively, of the City of Prior Lake, a Minnesota corporation under Minnesota law, on its behalf. Notary Public 2 STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing agreement was acknowledged before me this day of September, 2026, by , the Manager of Le Management Properties LLC, a Minnesota limited liability company, on its behalf. Notary Public This instrument was drafted by: Huemoeller, Cheskis & Ostlund PLC 16670 Franklin Trail SE, Suite 210 Prior Lake, MN 55372 3 RELEASE AND TERMINATION OF DEVELOPMENT AGREEMENT WHEREAS, the City of Prior Lake, a Minnesota municipal corporation (the “City”) and H & S, LLC, a Minnesota limited liability company (the “Developer”) entered into that certain Development Agreement dated September 21, 1998 and recorded as Document No. 433064 in the Office of the County Recorder Scott County, Minnesota on December 16, 1998 (the “Development Agreement”) related to Economic Development Tax Increment Financing District 2-1 (the “TIF District”); and WHEREAS, the City confirmed that all work to be performed under the Development Agreement is fully performed and complete; and WHEREAS, the City decertified the TIF District on May 3, 2004 via Resolution 04-86; and WHEREAS, decertification of the TIF District is confirmation that all obligations of the City and Developer under the terms of the Development Agreement have been met; and WHEREAS, on September 22, 2026, the Prior Lake City Council formally approved the release and termination of the Development Agreement to confirm all obligations of the developer and city have been met. NOW THEREFORE, the Development Agreement is hereby terminated. (Signature Page Follows) Page 1 of 2 CITY OF PRIOR LAKE ______________________________ Kirt Briggs, Mayor ______________________________ Jason Wedel, City Manager STATE OF MINNESOTA ) ( ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this ____ day of _______________, 2026 by Kirt Briggs, Mayor, and by Jason Wedel, City Manager, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. _____________________________________ NOTARY PUBLIC DRAFTED BY: City of Prior Lake 4646 Dakota Street SE Prior Lake, MN 55372 Page 2 of 2 RELEASE AND TERMINATION OF DEVELOPMENT AGREEMENT WHEREAS, the City of Prior Lake, a Minnesota municipal corporation (the “City”) and Metro Leasing/Partnership, a Minnesota partnership (the “Developer”) entered into that certain Development Agreement dated October 3, 1994 and recorded as Document No. 359276 in the Office of the County Recorder Scott County, Minnesota on October 4, 1995 (the “Development Agreement”) related to Economic Development Tax Increment Financing District 2-3 (the “TIF District”); and WHEREAS, the City confirmed that all work to be performed under the Development Agreement is fully performed and complete; and WHEREAS, the City decertified the TIF District on December 18, 2006 via Resolution 06-214; and WHEREAS, decertification of the TIF District is confirmation that all obligations of the City and Developer under the terms of the Development Agreement have been met; and WHEREAS, on September 22, 2026, the Prior Lake City Council formally approved the release and termination of the Development Agreement to confirm all obligations of the developer and city have been met. NOW THEREFORE, the Development Agreement is hereby terminated. (Signature Page Follows) Page 1 of 2 CITY OF PRIOR LAKE ______________________________ Kirt Briggs, Mayor ______________________________ Jason Wedel, City Manager STATE OF MINNESOTA ) ( ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this ____ day of _______________, 2026 by Kirt Briggs, Mayor, and by Jason Wedel, City Manager, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. _____________________________________ NOTARY PUBLIC DRAFTED BY: City of Prior Lake 4646 Dakota Street SE Prior Lake, MN 55372 Page 2 of 2 RELEASE AND TERMINATION OF DEVELOPMENT AGREEMENT WHEREAS, the City of Prior Lake, a Minnesota municipal corporation (the “City”) and Guy J. and Mary K. Selinske, joint owners and operators of American Glass and Mirror, Inc. a Minnesota corporation (the “Developer”) entered into that certain Development Agreement dated October 3, 1994 and recorded as Document No. 359277 in the Office of the County Recorder Scott County, Minnesota on October 4, 1994 (the “Development Agreement”) related to Economic Development Tax Increment Financing District 2-3 (the “TIF District”); and WHEREAS, the City confirmed that all work to be performed under the Development Agreement is fully performed and complete; and WHEREAS, the City decertified the TIF District on December 18, 2006 via Resolution 06-214; and WHEREAS, decertification of the TIF District is confirmation that all obligations of the City and Developer under the terms of the Development Agreement have been met; and WHEREAS, on September 22, 2026, the Prior Lake City Council formally approved the release and termination of the Development Agreement to confirm all obligations of the developer and city have been met. NOW THEREFORE, the Development Agreement is hereby terminated. (Signature Page Follows) Page 1 of 2 CITY OF PRIOR LAKE ______________________________ Kirt Briggs, Mayor ______________________________ Jason Wedel, City Manager STATE OF MINNESOTA ) ( ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this ____ day of _______________, 2026 by Kirt Briggs, Mayor, and by Jason Wedel, City Manager, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. _____________________________________ NOTARY PUBLIC DRAFTED BY: City of Prior Lake 4646 Dakota Street SE Prior Lake, MN 55372 Page 2 of 2 RELEASE AND TERMINATION OF DEVELOPMENT AGREEMENT WHEREAS, the City of Prior Lake, a Minnesota municipal corporation (the “City”) and Stan Anderson, an individual, his personal representatives, successors and assigns (the “Developer”) entered into that certain Development Agreement dated July 2, 1996 and recorded as Document No. 374892 in the Office of the County Recorder Scott County, Minnesota on July 8, 1996 (the “Development Agreement”) related to Economic Development Tax Increment Financing District 2-7 (the “TIF District”); and WHEREAS, the City confirmed that all work to be performed under the Development Agreement is fully performed and complete; and WHEREAS, the City decertified the TIF District on March 20, 2006 via Resolution 06-045; and WHEREAS, decertification of the TIF District is confirmation that all obligations of the City and Developer under the terms of the Development Agreement have been met; and WHEREAS, on September 22, 2026, the Prior Lake City Council formally approved the release and termination of the Development Agreement to confirm all obligations of the developer and city have been met. NOW THEREFORE, the Development Agreement is hereby terminated. (Signature Page Follows) Page 1 of 2 CITY OF PRIOR LAKE ______________________________ Kirt Briggs, Mayor ______________________________ Jason Wedel, City Manager STATE OF MINNESOTA ) ( ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this ____ day of _______________, 2026 by Kirt Briggs, Mayor, and by Jason Wedel, City Manager, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. _____________________________________ NOTARY PUBLIC DRAFTED BY: City of Prior Lake 4646 Dakota Street SE Prior Lake, MN 55372 Page 2 of 2 RELEASE AND TERMINATION OF DEVELOPMENT AGREEMENT WHEREAS, the City of Prior Lake, a Minnesota municipal corporation (the “City”) and The Ponds of Prior Lake, LLC, a Minnesota limited liability corporation (the “Developer”) entered into that certain Development Agreement dated June 16, 1997 and recorded as Document No. 397308 in the Office of the County Recorder Scott County, Minnesota on August 13, 1997 (the “Development Agreement”) related to Economic Development Tax Increment Financing District 2-8 (the “TIF District”); and WHEREAS, the City confirmed that all work to be performed under the Development Agreement is fully performed and complete; and WHEREAS, the City decertified the TIF District on March 20, 2006 via Resolution 06-046; and WHEREAS, decertification of the TIF District is confirmation that all obligations of the City and Developer under the terms of the Development Agreement have been met; and WHEREAS, on September 22, 2026, the Prior Lake City Council formally approved the release and termination of the Development Agreement to confirm all obligations of the developer and city have been met. NOW THEREFORE, the Development Agreement is hereby terminated. (Signature Page Follows) Page 1 of 2 CITY OF PRIOR LAKE ______________________________ Kirt Briggs, Mayor ______________________________ Jason Wedel, City Manager STATE OF MINNESOTA ) ( ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this ____ day of _______________, 2026 by Kirt Briggs, Mayor, and by Jason Wedel, City Manager, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. _____________________________________ NOTARY PUBLIC DRAFTED BY: City of Prior Lake 4646 Dakota Street SE Prior Lake, MN 55372 Page 2 of 2