HomeMy WebLinkAbout5B - Economic Development Authority Meeting
STAFF AGENDA REPORT
AGENDA NUMBER:
PREPARED BY:
SUBJECT:
DATE:
5B
KAY KUHLMANN, ASSISTANT CITY MANAGER
CONSIDER APPROVAL OF PURCHASE AGREEMENT
BElWEEN CITY OF PRIOR LAKE AND A & H
ENTERPRISES, INe.
SEPTEMBER 7, 1993
INTRODUCTION:
The City of Prior Lake has acted as a developer in creating and
marketing the Waterfront Passage Business Park. The City has
been negotiating with a business to locate in the park and has
prepared a Purchase Agreement for Council consideration.
BACKGROUND:
The City of Prior Lake in conjunction with the Planning
Commission, Economic Development Committee, and staff
entered into a study to locate a business park in Prior Lake. The
location was determined in 1992, and purchased in 1993. With the
award of the construction contract tonight, infrastructure
improvements will be made over the next ten (10) months with the
bulk of the improvements being completed within the next three
(3) months (everything except paving).
The City has aggressively marketed the Business Office Park by
distributing brochures and maps through activities such as the
Scott County Economic Development Coalition. Consultant, Roger
Guenette and staff are in various stages of negotiations with
several parties. One party, A & H Enterprises, Inc. has conunitted
to building in the Waterfront Passage Park at tenns negotiated.
DISCUSSION:
The Purchase Agreement attached is between the City and A & H
Enterprises, Inc. Cecil Anderson and Gary Horkey are the
principal partners in this limited liability corporation. Both
gentlemen reside near Prior Lake and have been pursuing location
in Prior Lake for at least 6 months.
The Purchase Agreement provides the shell or structure for the
agreement proposed for consideration by both parties. The
Purchase Agreement requires the developer to provide $3,500.00
cash to partially cover initial costs associated with the sale. The
developer also must sign a Developers Agreement that will cover
the remainder of the negotiated development details.
4629 Dakota St. S.E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447.4245
AN EQUAL OPPORTUNITY EMPLO'reR
The deal has been structured to provide the business a short tenn
financial incentive with reduced land cost. The City will receive
the increment for nine (9) years. Cash flow from the increment
will exceed what is necessary to amortize debt financing with this
parcel. Details of the financing will be presented on September 7
by Roger Guenette.
The Development Agreement will be forwarded to the EDA at the
September 20 meeting along with the Tax Increment Financing
Plan.
ALTERNATIVES:
The City Council has the following alternatives:
1. Approve the Purchase Agreement and direct staff to schedule
the Development Agreement between the EDA and A & H
Enterprises, Inc. for September 20.
2. Modify the Purchase Agreement as per Council's direction.
3. Deny the Purchase Agreement for a specific reason.
AG5B.WRT
RUj-:::0-1'3'3J 14:45 FRI_IM
U~IMr"EN-NEL-=,UN. M>=\...S.
TIJ
:;"':-f?42'4:.,
f'. ,,1..:.
,.........
REAL ESTATE PURCHASE AGREEMENT
THIS AGREEMENT, made as of this day of ,
1993, by and between A & H Enterprises, a Minnesota limited
liability corporation ("Purchaser"), and Economic Development
Author 1 ty, an agency of the City of Prior Lake, a Minnesota
municipal corporation (collectively "Seller-).
In consideration of the mutual covenants and u:ldertakings
contained herein the parties agree as follows:
1. Sal~ and Purchase of Property. Seller agrees to sell,
and Purchaser agrees to purchase, certain real property situated in
the City of Prior Lake, County of Scott, State of Minnesota,
consisting of certain land legally described as follows, to-wit:
See Exhibit A attached hereto and incorporated herein.
together with all the appurtenant rights, privileges, a:-..d easements
belonging thereto (collectively the "Real Property").
2. Purch~sQ Price: Allocation. Purchaser agrees to pay to
Seller, as the purchase price for the Real Property (the ~Purcha5e
Price"), the sum of Three Thousand Five Hundred ($3,500.00)
Dollars. The Purchase Price shall be payable in cash or certified
funds at closing.
3. Title. Seller agrees to promptly obtain and shall
deliver to Purchaser a commitment for an owner's title insurance
policy (ALTA Form B-1970) issued by naming
Purchaser as the proposed owner-insured of the Real Property in the
amount of the Purchase Price (the "Commitment"). The Commitment
shall have a current date as its effective date and shall commit to
insure marketable title in Purchaser, free and clear of all
unrecorded interests, rights of parties in possess;.on or other
exceptions. The Commitment shall set forth all levied real estate
taxes and special assessments. Said commitment shall have attached
copies of all instruments of record which create any easements or
restrictions which are referred to in Schedule B of the title
commitment. Purchaser ..,il1 be allowed after receipt of the
Commitment, an examination thereof and to make any objections to
the marketability of the title to the Real Property, said
objections to be made by written notice or to be deemed waived.
If the title to the Real Property as evide~ced by the
Commitment, together ..,ith any appropriate endorsements is not good
and marketable of record in Seller and is not made so by the
Closing Date, Purchaser may either:
a. Terminate this Agreement by giving written notice to
Seller in which event this Agreement shall become null and
void and neither party shall have any further right or
obligation hereunderj or
RuG-J0--1'3'3J 14:46 Ff.;/CIM UJMME"<-NEL'3C1N. MPLS.
TC
'9-:-: ;~~'.j::
P.~3
"
b. Elect to accept the title in its unmarketable
condition by giving written notice to Seller, in which event
Purchaser shall hold back adequate fund from the portion of
the Purchase Price payable at the closing to cure the defects
and apply said holdback funds for the cost of curing such
defects, including reasonable attorneys, fees, and pay the
unexpended balance to Seller. (If the amount of said holdback
cannot be mutually agreed to by Seller and Purchaser, the
issuer of the Commitment shall determine the amount of said
holdback) .
4. Covenants and Warranties of Seller. Seller covenants and
~arrants to purchaser as follows:
4.1 Qwnership of Real Property and Personalty. Seller
is or will be at the Closing the owner of good, marketable,
and insurable fee title to the Real Property free and clear of
all title defects, claims lease s, options, right 5 of first
refusal, easements, restrictive covenants, encroachments,
restrictions or limitations on the Real Property except for
those easements and permitted encumbrances listed on Schedule
B of the Commitment for Title Insurance.
4.2 Certain Lo~n Documents. There are no notes, bonds,
mortgages, deeds of trust, colla~eral security documents and
other related documents executed and/or delivered by Seller
and/or other parties in connection with any and all secured
financings (the -Loans") encumbering, or otherwise affecting,
all or any portion of the Real Property except as set forth on
Exhibit B. All Loans shall be paid and satisfied by Seller at
or prior to the Closing Date (as hereinafter defined).
4.3 ~ondernnation. Seller has not received any notice
of, nor does Seller have any kno....ledge of, any pending,
threatened or contemplated condemnation proceeding affecting
the Real Property, or any part thereof, or of any sale or
other disposition of the Real Property or any portion thereof
in lieu of condemnation.
4.4 CaBualt~. No portion of the Real Property has
suffered any material damage by fire or other casualty which
has not heretofore been completely repaired and restored to
its original condition. No portion of the Real Property is
located in a special flood hazard area as designated by
Federal governmental authorities.
4.5 In~ection of Premises. Purchaser, its agents and
designees, shall have the right, at any time or times after
the date hereof, to enter upon the Real Property, at any
reasonable time or times, for any purpose connected with the
sale of the Real Property. From and after the date hereof
Purchaser shall continue to be entitled to free and complete
- 2 -
HUI.i-:.0-1':3Sl3 14:4-:' F~'I:IM lI:'t"MEN-~E,-SC'N. MPLS.
T'-'
, '-
'34474245
f:.'.~4
.......
access to information pertaining to the Real Property,
including any and all subdivision plats and/or proposals, and
Seller shall cooperate ~ith Purchaser in the exam~nation of
such information and in the transition of 0~nersh1p of the
Real Property.
4.6 Mechanics' and Other Liens. Seller does not owe
money to any architect, contractor, subcontractor or
materialman for labor or materials performed, rendered or
supplied to or in connection ~ith the Real Property. There is
no ~ork being done at or materials being supplied to the Real
Property at the date hereof.
5. G~psinq. Subject to the conditions contained herein, the
closing shall take place on October 31, 1993, or such other date as
is mutually agreed upon, or such other date as this transaction
actually closes as determined in accordance with the provisions of
this Agreement (the "Closing Date"). The closing shall take place
at the offices of Seller. At the closing, Seller shall deliver to
Purchaser:
5.1 A ""arranty Deed, properly executed on behalf of
Seller in recordable form with all applicable transfer taxes
paid and stamps, if any, affixed thereto, conveying the Real
Property to Purchaser and warranting title thereto subject to
no exceptions other than those matters expressly agreed to by
Purchaser pursuant to Paragraph No.3 hereof.
5.2 All certificates, instruments and other documents
necessary to permit the recording of the Warranty Deed.
5.3 A standard Seller's Affidavit ~ith respect to
judgments, bankruptcies, tax liens, mechanics liens, parties
in possession, unrecorded interests, encroachment or boundary
line questions, and related matters, properly executed on
behalf of Seller.
5.4 The Commitment for Title Insurance.
5.5 An affidavit of
satisfactory to Purchaser
"foreign person" within the
Internal Revenue Code.
Seller in form and content
stating that Seller is not a
meaning of Section 1445 of the
5.6
necessary
Purchaser
ownerShip
Such other instruments and documents as are
to vest title to the Real Property absolutely in
and to enable Purchaser to enjoy the benefits of
thereof.
upon delivery of the foregoing items, Purchaser shall deliver
to Seller the Furchase Price payable at the closing.
- 3 -
;::',_,;- ::;'21-1 ':j',,~; 14: 47 FR!~IM
LOMMEN-NELSON. MPL5.
T()
9.j"::?4~45
~. "'~~
.-.....
6. ~axeB. Real estate taXQS due and payable in the year of
clOSlng and all prior years shall be paid by Seller. Real estate
taxes due and payable in the year tollowing c 106 ing sha 11 be
prorated as of the Closing Date based upon the parties' respective
period of ownership and possession of the Real Property in the
calendar year of closinq. On or prior to the Closing Date, Seller
shall pay all special assessments, whether or not then due, then
levied against the Real Property or pending for improvements with
respect to which, as of the Closing Date, the letting of contracts
has been duly authorized by appropriate governmental action. If
the actual amount of any pending or other assessments is not known
at the Closing Date, the title insurance company for the Commitment
shall withhold in escrow from Seller's proceeds at closing an
amount equal to 150% of the estimated amount thereof. When the
amount of said assessments becomes fixed and payable, said title
insurance company shall apply said escrow in payment of the
assessments, returning any surplus to Sellerj provided that if the
amount withheld in escrow is insufficient to pay the assessments,
Seller shall immediately pay, and shall be liable for the immediate
payment of, any such deficiency.
7. PossesBion. Seller agr~~s to deliver possession of the
Real Property to Purchaser on the Closing Date.
8. Continqencies. Notwithstanding anything to the contrary
contained in this Agreement, the consummation of this Agreement and
the closing provided in paragraph 5 hereof is hereby expressly
conditioned upon the following:
8.1 Purchaser and Seller negotiating and executing a
written Developer'S Agreement satisfactory to both parties.
8.2 Seller obtaining the approval of this Agreement by
the City Council of Prior Lake.
If the contingencies set forth in this paragraph 8 are not
satisfied, either party shall have the right to terminate this
Agreement by giving written notice of termination to the other on
or before the Closing Date. In the event that any such .....ritten
notice of termination is given, this Agreement shall be null and
void and neither party shall have any further rights, obligations,
or liability hereunder.
9. Hotices. All documents to be delivered and all
correspondence and notices to be given in connection .,ith this
Agreement shall be in writing and given by personal delivery or
sent by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to Purchaser:
A & H Enterprises
- 4 -
f.:iUG-3\21-1'3'3:3 14:.n FRUM U:IMMEN-NELSI]N. MF'LS.
11J
''344':.j~t4S
F' . 12''::.,
.-,
With a copy to:
If to Seller:
Economic Development Authority
Attn: Kay Kuhlmann
City of Prior Lake
4629 Dakota Street S.E.
Prior Lake, MN 55372
With a copy to:
Glenn R. KQssel, Esq.
Lommen, Nelson, Cole & Stageberg, P.A.
1800 IDS Center
Minneapolis, MN 55402
Each such mailed notice or communication shall be deemed to have
been given to or served upon, the party to ~hom it is addressed on
the date the same is deposited in the United States mail, postage
prepaid, properly addressed in the manner above provided. Either
party hereto may change such party's address for the service of
notice hereunder by .....ritten notice of said change to the other
party hereto, in the manner above specified ten (10) days prior to
the effective date of said change.
10. A~si..gnm~nt. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto, their
respective successors and assigns.
11. CQmm1s~ions. Seller warrants and represents that it has
dealt with no realtor or broker in connection with this transaction
and will indemnify, defend and hold harmless Purchaser agai~st any
claim made by an agent or broker for a commission or fee based on
acts or agreements of Seller. Purchaser warrants and represents
that it has dealt ~ith no realtor or broker in connection with this
transaction and that it will indemn~fy, defend and hold harmless
Seller against any claim made by an agent or broker for a
commission or fee based on acts or agreements of Purchaser.
12. Survive Closinq. All of the covenants, warranties, and
provisions of this Agreement shall survive and be enforceable after
the closing of this transaction.
13. Cp~lete Aqreement. This is a final Agreement between
the parties and contains their entire agreement and supersedes all
previous understandings and agreements, oral or written, relative
to the subject matter of this Agreement.
14. ~ime of the Essence.
performance of this Agreement.
Time is of the essence in the
- 5 -
QIjG-3?-1993 14:4iJ FRIJM
LOMMEN-NELSGN. MPLS.
Tel
''3.j.j-:'424S
P.07
15. Entire Agreement. This Agreement (including the Exhibits
hereto) ~upersede all prior agreements and understandings, orcl or
vritten, betveen the parties hereto vith respect to the subject
matter hereof and cannot be changed or terminated orally, and this
agreement constitutes the entire agreement of the parties as to the
matters set forth herein.
16. Captions. The paragraph hQadings or
in this Agreement are for convenience only, are
Agreement, and are not to be considered in
Agreement.
captions appearing
not a part of this
interpreting this
SELLER
ECONOMIC DEVELOPMENT AUTHORITY
By
BUYER
A & H ENTERPRISES, a Minnesota
limited liability corporation
By
Its
$: \$HDATA\1677ZG\GRK\AHREAl. PUR
- 6 -
AUG-30-1'3'33 14:4:3 FRIJM LOMMEN-NELSON. MPLS.
TO
944~4245
p. 01~1
EXHIBIT A
Real Property Description
That part of the Southwest Quarter of Section 1, Township 114,
Range 22, Scott County, Minnesota described as follows:
A strip of land 228.00 feet in width the southerly line of
which is described as follows:
Commencing at the southeast corner of ~aid South~e6t Quarter;
thence on an assumed bearing of North 89 degrees 49 minutes 16
seconds West along the South line of said Southwest Quarter a
distance of 354.00 feet to the point of beginning of the line
to be described; thence on an assumed bearing of North 89
degrees 49 minutes 16 seconds West along the South line of
saia Southwest Quarter a distance of 310.00 feet and there
terminating.
Containing 1.7 acres
- 7 -
~'L;'...J __ ......-.J_ ~-...-..)
~'.......... ...:.l...;..~._
EXHIBIT B
Permitted Easements, Encumbrances
- 8 -
. ~-' -'
TOTAL P.09
ECONOMIC DEVELOPMENT COMMITTEE
OUTLINE FOR
GROUND BREAKING CEREMONY
BUSINESS OFFICE PARK
AUGUST 9, 1993
Followup to meeting with: Roger Guenette, Mike Sweeney, Dean Sutliff, Kay Kuhlmann
I.
Date: Undetennined, target date end of September
II.
Day of the week: Week day
m.
Time: Starting 3:00 p.m., Ceremony 4:00 p.m.
IV.
Location: Onsight possible activities to follow at the other location. (Possible
alternate site for inclement weather.)
v.
Invitation list:
City Council
Economic Development Committee
Planning Commission
Fonner Economic Development Committee Members
Park Advisory Committee
Prior Lake American
The Wilds Representatives
Representatives of Utilities
Lake Advisory Committee
City Staff
Dakota Community
Local Businesses
Elected Representatives: Kelso, Johnston, etc.
County Commissioners & Staff
School Administration & Board
Interested Developers (In BOP)
Residential Developers
Corporate List (Dean)
Client Ust (Mike)
Scott County Economic Development Committee (Kay)
Corporate List Request from Bill Johnson
VI.
Requested Speakers:
Governor Carlson
Mayor Andren
Elected Officials
Met Council Representative Julius Smith
MNDTED Corrunissioner
VII. Display Invites:
Scott County Economic Development Corrunittee
Other Chambers in Scott County
Real Estate and Developers
All Utilities
VIII. Details
Invitation
Program
Coordinate Police activities
Biffs
Order tent
Order PA System
Order cookies/cake/coffee/cider
Order platform
Design and order flag for Business Office Park
Coordinate golf carts
Prepare parking area
Request P.L. High School Band for entertainment
IX.
Media
Develop contact list
TV
Radio
Newspaper
Consider Ads in Journals
Coordinate with Wavelength Publication
X.
Budget
Tent
PA
Food
Marketing
$ 600.00
$ 50.00
$ 100.00
$2,000.00
XI.
EDCGBC.KK
Marketing Kits
Single Packet Folders with Inserts
Business Office Park Brochure
State Profile
Demographics
DRC
Economic Development Committee Listing
Standards