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MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
CITY COUNCIL AGENDA REPORT
November 6,2006
5B
Kelly Meyer, Asst. to the City Manager
Consider Approval of a Resolution Authorizing the Mayor and City
Manager to Execute a Quit Claim Deed Releasing the City's Interest in the
former T J Towing Property (Village Commerce Building).
Introduction
The City originally purchased the former T J Towing parcel from Tom Kortsch
in 2001. In May 2005, the City requested proposals from bidders interested in
purchasing this site in order to construct a commercial building. The intent in
seeking proposals for this development was to continue the redevelopment
efforts consistent with the direction provided in the City's 2030 Vision and
Strategic Plan.
On May 5, 2006, the City Council awarded the project to Village Commerce
Building, LLC, whose proposal conformed with the requirements of the RFP,
planned for a 2-story building, and offered a purchase price of $204,000 for the
parcel.
In June 2006, the City Council authorized City participation in two documents.
The first was an Agreement Regarding the Purchase of City-Owned Property,
and the second document was a development agreement. The developer
subsequently was required to enter into a second development agreement for
the actual site improvements associated with obtaining a building permit for the
project.
In September 2006, the City Council authorized the Mayor and City Manager
to enter into a purchase agreement and close on the sale of the property. The
project began construction immediately thereafter.
Current Circumstances
The terms of the contract documents for the sale of the property (Agreement
for the Purchase of City-Owned Properly, Development Agreement, Purchase
Agreement) included that the deed conveying title have a rescission clause
that would allow the City to recover the property in the event the Developer
failed to construct the building, or abandoned the project prior to significant
completion. With the rescission clause, the City would have the opportunity to
rescind the sale and ownership of the land would revert back to the City.
The trigger in the Development Agreement for releasing the City's interest is
for the developer to complete significant foundation work on the building with a
minimum of a $100,000 investment. The construction project began this fall.
Currently, the project is well underway, having completed soil correction, site
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utilities, parking lot soil subcut, and footings and foundation to grade.
Completion of this work has surpassed the $100,000 investment requirement,
and the developer is requesting that the City release its interest.
Conclusion
The staff believes the conditions in the contract documents for the release of
the City's interest has been met.
ISSUES:
There are no significant issues. This item is housekeeping in nature, and is
driven by the City's obligations in the Development Agreement and other
contract documents for the sale of the property.
FINANCIAL
IMPACT:
There is no financial impact of this action. Under the terms of the agreements,
the extension payments held by the City on this project are not released until
the certificate of occupancy is issued.
ALTERNATIVES:
1. Motion and Second to Adopt Resolution 06-xxx as part of the Consent
Agenda Authorizing the Mayor and City Manager to Execute a Quit Claim
Releasing the City's Interest in the Conveyance Document for the Property
at 16675 Franklin Trail.
2. Remove this item from the Consent Agenda for further discussion.
RECOMMENDED
MOTION:
Alternative 1.
RevieNe(Y: All
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Frank Boyles, cry9f
16200 Eagle Creek Avenue S.E.
Prior Lake, MN 55372-1714
RESOLUTION 06-XXX
A RESOLUTION AUTHORIZING THE MAYOR AND CITY MANAGER
TO EXECUTE A QUIT CLAIM DEED RELEASING THE CITY'S INTEREST
IN THE FORMER T J TOWING PROPERTY FOR VILLAGE COMMERCE BUILDING, LLC.
Motion By:
Second By:
WHEREAS, the 2030 Vision and Strategic Plan provides that continued redevelopment of the
Downtown Prior Lake area is important to the citizens of Prior Lake; and
WHEREAS, Village Commerce Building, LLC has purchased the former T J Towing parcel from the
City subject to a rescission provision, in order to construct a 2-story retail/office
building, and
WHEREAS, the contract documents for this transaction provide that the City will release its interest
in the property once an investment of $100,000 has been made in the building project;
and
WHEREAS, Village Commerce Building, LLC has completed the site utilities, the footings and
foundation work to grade, the parking lot soil subcut, and the soil corrections under the
building pad, and is requesting that the City execute a quit claim deed releasing its
interest in the property, and
WHEREAS, the City Council has determined that with respect to this issue, the contract obligations
of Village Commerce Building, LLC pertaining to the release of the rescission clause
have been met.
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. The Mayor and City Manager are authorized to execute a Quit Claim deed releasing the City's
interest in the property located at 16675 Franklin Trail, Prior Lake, Minnesota.
PASSED AND ADOPTED THIS 6TH DAY OF NOVEMBER, 2006.
YES
NO
I Hau!;len
I Dornbush
I Erickson
I LeMair
I Millar
Haugen
Dornbush
Erickson
LeMair
Millar
Frank Boyles, City Manager
www.cityofpriorliilke.COITl
Phone 952.447.4230 / Fax 952.447.4245
(Reserved for Recording Data)
QUIT CLAIM DEED
STATE DEED TAX DUE HEREON: $ 1.65
Dated: November 6.2006.
FOR VALUABLE CONSIDERATION, THE CITY OF PRIOR LAKE, a municipal corporation person,
Grantor, hereby conveys and quitclaims to VILLAGE COMMERCE BUILDING, LLC, a Minnesota limited
liability corporation, Grantee, real property in SCOTT County, Minnesota, described as follows:
That part of the West Half of the Southeast Quarter of Section 2, Township 114, Range 22, Scott
County, Minnesota, described as follows: Commencing at the Southeast corner of said West Half
of the Southeast Quarter; thence North 00 degrees 08 minutes 19 seconds East along the West
line of the plat of Prior South, Scott County, Minnesota, as monumented, a distance of 1940.74 feet
to the intersection with a line drawn parallel with and distant 33.00 feet Southerly (as measured at
right angles) of the centerline of County Road No. 39 (Franklin Trail) the point of beginning of the
land to be described; thence South 87 degrees 29 minutes 19 seconds West along said parallel
line a distance of 150.00 feet; thence South 00 degrees 08 minutes 19 seconds West a distance of
256.44 feet; thence South 89 degrees 51 minutes 41 seconds East a distance of 149.84 feet to the
intersection with a line drawn South 00 degrees 08 minutes 19 seconds West from the point of
beginning; thence North 00 degrees 08 minutes 19 seconds East a distance of 263.38 feet to the
point of beginning. For the purposes of this description, the South line of said West Half of the
Southeast Quarter was designated a bearing of North 89 degrees 55 minutes 36 seconds East and
all others are relative thererto, according to the Government Survey thereof.
PID #25-902-043-0 and #25-902-044-0
together with all hereditaments and appurtenances belonging thereto, subject to the following exceptions:
None.
This Quit Claim Deed releases the interest of the City of Prior Lake reserved in that certain Warranty
Deed dated September 20,2006, filed September 25,2006, as Document #T179595 in the office of
the Scott County Recorder.
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Quit Claim Deed
Village Commerce Building, LLC
Page 2 of 2
THE GRANTOR CERTIFIES THAT THE GRANTOR DOES NOT KNOW OF ANY WELLS ON THE DESCRIBED REAL
PROPERTY.
The consideration for this transfer is less than $500.00.
By: Jack Haugen, Mayor
By: Frank Boyles, City Manager
STATE OF MINNESOTA )
)ss.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this day of , 2006, by
Jack G. Haugen and Frank Boyles, respectively the Mayor and City Manager of the City of Prior Lake, a
Minnesota municipal corporation, by and through the authority granted by its City Council.
Notary Public
Tax Statements for the real property
described in this instrument should be sent to:
Village Commerce Building, LLC
Attn: Dan O'Keefe
16675 Franklin Trail
Prior Lake, MN 55372
THIS INSTRUMENT WAS DRAFTED BY:
City of Prior Lake
4646 Dakota Street
Prior Lake, MN 55372
Admin: kgm File No. 100.004
102236