HomeMy WebLinkAbout2011-03-16 PACKET 04.T.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM #
DATE 3/16/2011
PREPARED BY Administration Ryan Schroeder
ORIGINATING DEPARTMENT DEPARTMENT HEAD
COUNCIL ACTION REQUEST
Consider ratification of EDA land purchase of 8811/8819 West Point Douglas Road (formerly
Cottage Grove Auto) in the Langdon neighborhood.
STAFF RECOMMENDATION
Ratify the EDA land purchase.
SUPPORTING DOCUMENTS
® MEMO /LETTER: Memo from Ryan Schroeder.
❑ RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
® OTHER: Attachments.
ADMINISTRATORS COMMENTS
* 2/di
City Administrator Date
COUNCIL ACTION TAKEN: /APPROVED ❑ DENIED ❑ OTHER
Documentl
City of
Cotta Grove
Minnesota
To: Honorable Mayor and City Council Members
From: Ryan R. Schroeder, City Administrator
Date: March 10, 2011
Subject: Ratification of EDA Land Purchase Authorization
For the past several years staff has had the directive to bring property located within the
Langdon neighborhood to the EDA for a purchase consideration. Through time we have been
following that directive and a small amount of land within the neighborhood has been acquired.
One approximate 8 acre ag parcel (including adjacent right of way) was acquired through
negotiated sale 8 or 9 years ago. Another 0.8 acre parcel on Islay was acquired through tax
forfeiture a year or two ago. At their meeting of March 8, 2011 the EDA authorized the
acquisition of the 3.03 acre (2.3 acres net) property at the corner of West Point Douglas Road
and Islay Avenue. We are requesting that Council ratify that EDA authorization.
This property is bank owned and is the former Cottage Grove Auto property across Islay from
Public Works. It has a taxable market value of $505,700 and contains a residential structure
along with a 1750 square foot steel structure formerly used by the Auto use. The EDA
approved purchase is in the amount of $345,000.
The purchase agreement, enclosed, has contingencies including approval by the City Council
and environmental clearances. We have contracted with Braun Intertec to provide a limited
phase two environmental report in order to evaluate the extent of any environmental
contamination. Closing is scheduled for March 30, 2011.
The EDA does not currently have an identified use for either structure and is viewing this
purchase as land banking for future redevelopment opportunities long term. There is a tenant
within the residential structure on a month to month lease. The commercial use is vacant. We
would intend to allow the current tenancy to continue so long as the structure does not have
insurmountable code issues that appear. It is anticipated however that the residential structure
is close to or at its useful life. We have not evaluated the ability of the commercial structure to
provide for intermediate term commercial or public use, again as this is perceived as a land
purchase. The purchase price across the unencumbered property is at $3.44 /square foot.
The prior owners had attempted to market the property at about $7.50 /square foot.
Options: Ratify or reject the acquisition of 8811/8819 West Point Douglas Road. The
advantage of ratification is if one perceives redevelopment opportunity within the Langdon
neighborhood over the next decade the current purchase price with holding costs is most likely
an efficient cost of controlling the property. The downside is other opportunities for use of the
same investment. The EDA believes the potential upside outweighs the potential downside.
Council Action: By motion ratify the EDA action.
8811 and 8819 West Point Douglas Road
Washington County Property Records as of 1 -27 -2011
PID
21.027.21.41.0034
21.027.21.14.0003
21.027.21.14.0004
Parcel Size
1.43 acres
1.2 acres
0.40 acres
= 3.03 gross
acres
Existing Land Use
Commericial - Used
car lot
Commercial
parking lot and
residential
Commerical
parking lot
Zoning Classification
Retail Business (B -2)
Retail Business (B -2)
Retail Business (B -2)
Wash. Co. Mrkt. Value - 2010
$376,400
$96,300
$33,000
=
$505,700
Wash. Co. Mrkt. Value - 2009
$421,600
$102,600
$35,200
=
$559,400
Wash. Co. Mrkt. Value - 2008
$421,600
$102,600
$35,200
=
$559,400
Wash. Co. Mrkt. Value - 2007
$421,600
$15,200
$13,200
=
$450,000
Wash. Co. Mrkt. Value - 2006
$345,8001
$15,200
$13,200
=
$374,200
Wash. Co. Mrkt. Value - 2006
$295,500
$15,000
$13,000
=
$323,500
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PURCHASE AGR MM1iNT
This purchase agreement (the "Agreement") is made and entered into as of this 1 st day of
March 2611, by and between the Cottage Grove Economic Development Authority, a public body
corporate and politic under the laws of Minnesota (the "Buyer "), and Boundary Waters Bank, a
Minnesota banking corporation (the "8ellez ").
SALE AND "AS TS" CLAUSE.
A. The Seller hereby sells and agrees to convey to the Buyer and the Buyer agrees to
purchase certain real estate located at 8811 Point Douglas Road and 8819 Point
Douglas Road in the City of Cottage Grove, County of Washington and State of
Minnesota and legally described on the attached Exhibit A (the "Property ").
B. Buyer understands and acknowledges that Seller has not made and does not make
any representations or warranties whatsoever, oral or written, express or implied, to
Buyer with respect to the condition, state of repair or operability of the Property,
including but not limited to environmental protection, pollution or land use laws,
rules, regulations, orders or requirements, including the existence in, on, or under the
Property of any hazardous materials or substances, soil or subsoil conditions,
groundwater, any improvements thereon and the structural portions, roofs and
foundations thereof, any personal property, mechanical, plumbing, electrical, sewer,
sanitary disposal, wells, septic, heating, ventilating and air conditioning systems and
other building set-vice equipment therein, with respect to the suitability or fitness for
the Buyer's intended use or purpose or with respect to the appreciation or income
potential of the Property, the zoning of the Property, the platting of the Property, the
availability or adequacy of utilities to the Property, access to the Property,
requirements in connection with any development of the Property or any other
matter. whatsocver. Buyer further hereby acknowledges and agrees that Buyer has
investigated or will investigate all matters of concern with respect to the Property
and that Buyer is not relying and hereby expressly waives any reliance on any
representation or warrant) oral or written, express or implied, of Seller with respect
to such matters unless expressly stated by Seller herein. Buyer agrees to purchase
the Property and all improvements thereon and mechanical systems therein delivered
to Buyer, AS IS, WHERE IS, WITH ALL FAULTS. Notwithstanding any
provision of this Agreement to the contrary, Buyer hereby releases Seller from any
liability, claims, damages, expenses of any kind or nature, or any other claim
resulting from the presence, removal or other remediation of hazardous materials or
substances in, on, under or about the Property or which has migrated fiom adjacent
lairds onto the Property or from the Property to adjacent land. The provisions of this
Section 1B shall survive the closing and the Closing bate of this Agreement.
38220S NKF Cr165 -43
21 PURCHASE PRICE.
The total purchase price ("Purchase Price ") of the Property shall be Three hundred and forty
five thousand Dollars ($345,000), Buyer shall pay the Purchase Price to Seller as follows:
A. No earnest money is due or payable.
B. At closing, Buyer shall pay Seller the Purchase Price, by cash or by wire transfer of
U.S. funds to be received in Minneapolis, Minnesota on the Closing Date (as
hereinafter defined).
3. CONTINGENCIES This Agreement is subject to the following contingencies:
A, The representations and warranties of Seller contained in this Agreement must be
true now and on the Closing Date as if made on the Closing Date.
B. Title shall have been found acceptable or been made acceptable in accordance with
the requirements of and terms of paragraph 8 below.
C. Subject to an environmental investigation by or on behalf of the Buyer discloses the
existence of petroleum product or other pollutant, contaminant or other hazardous
substance on the property, either (i) a closure letter from the Minnesota Pollution
Control Agency (MPCA) or other appropriate regulatory authority that remediation
has been completed to the satisfaction of the MPCA or other authority; or (ii)
agreement for remediationlindemnifrcation and security from a third party olher than
Seller as the Buyer may require.
D. Approval of this Agreement by Buyer's governing body.
The Buyer shall have until the Closing Date to remove the foregoing contingencies. The
contingencies are solely for the benefit of the Buyer and may be waived by the Buyer. If the
contingencies are duly satisfied or waived, then the Buyer and the Seller shall proceed to close the
transaction as contemplated herein. If, however, if one or more of the contingencies is not satisfied,
or is not satisfied on time, and is not waived by the Buyer, this Agreement shall thereupon be void,
at the option of the Buyer. If this Agreement is voided by the Buyer, the Buyer and the Seller shall
execute and deliver to each other a termination of this Agreement.
4. CLOSING,
A. Date and Place.
The closing shalt be held on or before March 30, 2011 (the "Closing, Date ").
Closing shall be. at the offices of Kennedy & Graven, 200 South. Sixth St., Suite 470,
Minneapolis, MN 55402, or such other place as the parties shall agree upon.
:382208 NIKE c ri65 -43
B. Documents to be Delivered at Closing.
At closing, the Buyer shall pay the Purchase Price in the manner hereinbefore
provided, and the Seller shall deliver to the Buyer, the following items, and the
following duly executed documents:
(1) A limited warranty deed conveying marketable title to the Property, subject
only to the .following exceptions:
a. Building and zoning laws, ordinances, state and federal statutes or
other governmental regulations;
b. Real estate taxes and special assessments for which the Buyer is
responsible under this Agreement;
C, Reservation of any minerals or mineral rights in the State of
Minnesota;
d. Disclosure of the existing well; and
(2) Standard form affidavit of seller; and
(3) Well disclosure certificate; and
(4) A sworn statement provided by Seller that it is not a foreign entity and containing
such other information as may be required by Section 1445 of the Internal
Revenue Code and regulations thereunder; and
(5) A "bring- down°' certificate, certifying that the Seller's representations and
warranties in this Agreement are true as of the Closing Date; and
(6) Such other documents as may be reasonably required by Buyer's title
examiner or title insurance company.
C. Closin¢ Costs and Related item
The Seller shall be responsible for the following closing costs and related items: (1)
all recording fees and charges relating to the filing of any instrument required to
make title marketable; (2) any fees incurred for updating the title and standard
searches with, respect to the Seller and the Property; (3) state deed tax, conservation
fee or other federal, state or local documentary or revenue stamps or transfer tax
with respect to the deed to be delivered by the Seller; (4) fees to record a well
certification or septic certification, if required by Washington County; (5) brokerage
fees owing to Seller's listing and/or selling agent only; and (6) its own legal and
accounting fees associated with this transaction. The Buyer shall be responsible for
the following costs and related items: (1) charges for all premiums required for
issuance of the title insurance policy; (2) fees of any soil tests, environmental
382209 NKn3 CT165 -03 3
assessments, inspection reports, appraisals, or other tests or reports ordered by the
Buyer; (3) recording .fees and charges related to the filing of the deed; and (4) its
own legal and accounting fees associated with this transaction. All closing fees
charged by the title company and any escrow fees charged by any escrow agent
engaged by the parties in connection with this Agreement shall be split equally
between the Buyer and the Seller.
5. POSSESSION.
Buyer shall take possession of the Property immediately after closing.
6. TAXIS AND ASSESSMENTS.
The Seller shall pay the real estate taxes due and payable in 2010 and prior years. The Seller
shall also pay, in full, at or before closing, all special assessments levied as of the Closing Date.
The Seller shall pay all deferred real estate taxes, commonly known as "green acres ", if any, due as
a result of this sale.
The Seller and Buyer shall prorate to the Closing bate the real estate taxes due and payable
in the year 2011.
The Buyer shall be responsible for special assessments for improvement projects that have
been ordered but for which special assessments have not been levied as of the Closing Date.
7. SELLER'S COVENANIT,S AND WARRANTIES,
A. Specific Warranties.
(1) Title:
The Seiler warrants that it has good marketable title in and to the Property,
and has the right and authority to sell and assign the same provided,
however, the Property is sold in its AS IS, 'WHERE IS condition as set forth
in Section 1B above. The Seller flrrther warrants that all bills 1'6r work done
or materials furnished to or in the improvement of the Property, if requested
or undertaken by Seller, have been paid in full.
(2) U nrecorded Leases:
Seller warrants that there are no unrecorded leases or tenants in possession of
the Property.
382208 NKE CT165 -43 4
(3) hazardous Waste:
Except for a barrel, the contents of which were unknown to Seiler but which
was disposed of by a waste disposal vendor, the Seller warrants that there are
no facts relative to the presence of hazardous substances on the Property
which Seller has not disclosed to Buyer. To the best of Seller's knowledge,
without making further inquiry, there are no hazardous substances as defined
in Minnesota Statutes, Section 1158.02 Subd. 8 and in USCA Section
9601(14) located on the surface of the Property. Except for those documents
marked "Seller documents" and numbered 1 through 16, Seller has no
knowledge that the Property was or is contaminated with hazardous
substances as defined herein, or with other pollutants, and Seller has not
failed to report to governmental authorities or disclose to Buyer the existence
of such contamination or release or threats of release of the same into the
environment or regarding existing well contamination.
The Seller shall, within a reasonable time after approval of this Agreement, furnish an
abstract or commitment for title insurance certified as to date to include Property searches covering
bankruptcies, all State and Federal judgments and liens or other evidence of title satisfactory to
Buyer. The Buyer shall be allowed 20 days after receipt thereof for examination of said title and the
making of any objections thereto, said objections to be made in writing or deemed to be waived, If
any objections are made, the Seller shall be allowed 124 days to make such title marketable and the
Closing Bate shall be adjusted to reflect this period of time. Pending corrections to title, the
payments hereunder required shall be postponed but upon correction of title and within 10 days after
written notice to the Buyer, the parties shall perform the Agreement according to its terms.
If said title is not marketable and is not made so within 120 days .from the date of uniting of
objections thereto as above provided, this Agreement shall be null and void, at the option of the
Buyer, and neither principal shall be liable for damages hereunder to the other principal, If the title
to said Propetty is found marketable or is so made within said time, and the Buyer shall default in
any of the agreements and continue in defauh .for a period of 10 days, then and in that case the
Seller may torniinate this Agreement. This provision shall not deprive either party of the right of
enforcing specific performance of this Agreement provided the Agreement shall not be terminated
as aforesaid, and providing action to enforce such specific performance shall be commenced'Adthin
six months after such right of action shall arise, lNotwithstand ing anything herein to the contrary, in
the event that objection to title is based upon a judgment lien or encumbrance which may be
satisfied by the payment of a sum of money, Seller shall be obligated to remedy such objection by
payment or deposit in escrow of funds sufficient to permit the issuance of a title insurance policy in
favor of the Buyer free of any exception with respect thereto,
9. MISCFLLAISEOUS
382.208 NKE CT165-03
The terms, covenants, indemnities and conditions of this Agreement shall be binding upon
and inure to the benefit of the successors and assigns of the respective parties hereto, and shall
survive the closing and passage of title for no more than twelve months. Time is of the essence of
this Agreement. Buyer may assign this Agreement without first obtaining Seller's Fvritten consent,
provided that, in the case of such an assignment, Buyer shall provide Seller a copy of the fully
executed assignment document; and provided further that the assignee of Buyer's rights to this
Agreement agrees to fully assume Buyer's obligations hereunder. However, Buyer shall not be
released from its liabilities hereunder this Agreement. If the date for performance shall fall on a
Saturday, Sunday or legal holiday, the date for performance shall be extended to the next business
day. This Agreement may be executed in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrarment.
10. ]ENVIRONMENTAL INSPECTION,
The Buyer and its agents shall have the right to enter upon the Property after the date of
execution of this Purchase Agreement for the purpose of inspecting the Property and conducting
such environmental examination and tests as the Buyer deems necessary. The Buyer agrees to
indemnify the Sellers against any liens, claims, losses, or damage occasioned by the Buyer's
exercise of its right to enter and work upon the Property. The Buyer agrees to provide Sellers with a
copy of any report prepared as a result of such examination and tests.
11. CASITAUI`Y OR C€INDEMNATIOM
In the event of the exercise by any governmental unit having jurisdiction over the Property
of the right to eminent domain or any action or threatened action in nature of or in lieu of eminent
domain or condemnation (hereinafter referred to as condemnation), with respect to all or any part of
the Property prior to the Closing Date, the Buyer may, by written notice to Seller, terminate this
Agreement. In the event the Buyer elects to accept the Properly notwithstanding condemnation,
then any condemnation proceeds received or receivable by Seller shall be paid or assigned to Buyer
at closing.
12. SU RVIVAL OF REPRFSFNTATIONS.
All representations, warranties, and agreements made by the Seller and Buyer in this
Agreement or pursuant hereto shall survive closing for a period of twelve months from the Closing
Date.
13. BINDING It FFECT.
This Agreement shall be binding upon and shall inure to the benefit of the respective parties
and their successors and assigns.
14. IIE AULT BY Ir'I1YER OR SFLLM
382208 NIKE C,f165 -13
In the event the Buyer shall default in the performance of its obligations hereunder, and the
Seller shall have performed or tendered performance of all of its obligations hereunder, and said
default shall continue for a period of 10 days, then, in that event, the Seller shall be entitled to
terminate this Agreement. This provision shall not deprive either party of the right of enforcing the
specific performance of this Agreement provided such Agreement shall not be terminated as
aforesaid, and provided action to enforce such specific performance shall be commenced within six
months after such right of action shall. arise.
15. EN'T'IRE AGREEMENT.
All understandings and agreements heretofore made between the parties hereto are merged
in this Agreement, which alone fully and completely expresses their agreement This Agreement is
entered into after full investigation, neither part relying on any statement or representation not
embodied in this Agreement.
16. WELL DISCLOSURE.
The Seller represents that there are wells located on the Property.
17. BROKER Ct7MMISSIONS.
The Seller agrees to pay any commission due to its listing and/or selling agent only in
connection with the transaction contemplated by this Agreement.
18. NOTICTE.
Any notice, demand, request or other conununication which may or shall be given or served
by the parties shall be deemed to have been given or served on the date the same is deposited in the
United States mail, registered or certified, postage prepaid and addressed as follows:
a. If to Seller: Eddie Riemer
Market Place Cornrnercial Real Estate
b. If to Buyer: Cottage Grove Economic Development Authority
7516 W' St. So.
Cottage Grove, MN 55016
AITN: Ryan Schroeder
With copy to. Kennedy & Graven, Chartered
382208 WE Cr16543
470 U S. Bank Building
200 South Sixth St.
Minneapolis, MN 55402
ATTN: Ronald II. Batty
19, COUNTERPARTS.
Tbis Agreement may be executed in any number of counterparts, each of whdch shall
constitute one and the sane instrument.
IN WIFNESS WHEREOF, the patties have executed this Agreement the date and year
indicated above.
BUYER:
Cottage Grove Economic
Development Authority
By: _ I q
Its Presiden
And by. tf` .
Its Lx c n e Director
SELLER:
Boundary Waters Bank
- - 4
Its: _w V c. Pile's
382208 NKE CTrfi543 8
EXHIBIT A
LEGAL DESCRIPTIO
[to be completed]
Property ID Nos.
21.027.21.14.0003
21.027.21.14.0004
21,027.21.14.0054
382203 NS: �. CT1G5 -49 A..1