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HomeMy WebLinkAbout2013-04-03 PACKET 04.L.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # DATE 4/3/13 • � PREPARED BY Economic Development Danette Parr ORIGINATING DEPARTMENT DEPARTMENT HEAD **�**:�*********************�*****�**��*�****:�**� COUNCIL ACTION REQUEST: Seek approval for the City to enter into an agreement that would preserve the City's option for future ownership of the Cottage View Drive-In marquee sign. � :_ •►l►l_1�� •► Staff recommends the City enter into the agreement to assure the longterm preservation of the Cottage View marquee sign. BUDGET IMPLICATION: None at this time BUDGETED AMOUNT ADVISORY COMMISSION ACTION DATE ❑ PLANNING ❑ PUBLIC SAFETY ❑ PUBLIC WORKS ❑ PARKS AND RECREATION ❑ HUMAN SERVICES/RIGHTS ❑ ECONOMIC DEV. AUTHORITY ❑ SUPPORTING DOCUMENTS � MEMO/LETTER: Memo from Sign-A-Rama ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: � OTHER: Conveyance Agreement ADMINISTRATORS COMMENTS REVIEWED ❑ ❑ ❑ ❑ ❑ ❑ ❑ ity Hammisuator DENIED ❑ ❑ ❑ ❑ ❑ ❑ ❑ I� Date **********************************�**�********** TBD ACTUAL AMOUNT APPROVED ❑ ❑ ❑ ❑ ❑ ❑ ❑ C:\Documents and Settings\nbelscamperlLocal Settings\Temporary Internet Files\Content.0utlook\7M17XZQ6\Cottage View CC Cover Memo.doc Cottage / Grove � Pride and PcOSPerity Meet TO: Mayor and Members of the City Council Ryan Schroeder, City Administrator FROM: Danette Parr, Economic Development Director DATE: March 27, 2013 RE: Cottage View Drive-In Sign Background/Discussion The purpose of this agenda item is to seek approval for the City to enter into an agreement that would preserve the City's option for future ownership of the Cottage View Drive-In marquee sign. As the Council is aware, the various elements of the Cottage View Drive-In (i.e.: screen, sign, projector, buildings, etc) need to be removed from its current location to make way for future road and site improvements.Gerry Herringer, owner of Cottage View, indicated early on that the City would be allowed to take ownership of the marquee sign if there was an interest on the part of the City. Due to the significance of the marquee sign to the City of Cottage Grove, many Councilmembers have expressed an interest in preserving the sign for historical purposes. In the hope of having a thorough understanding of the marquee signs current condition, staff had the sign looked at by a sign company (memo attached) and engineer related to the integrity of the sign. It was noted that the sign has structural elements such as rivets and supporting brackets that have rusted away and have compromised the sign. It was recommended that the sign be restored as soon as possible to assure the best long-term preservation of the sign. If the sign were rebuilt today, it would cost an estimated $35,000 to have it identically recreated. We've been told that it would cost well over $35,000 to have a sign company restore it from its cu�rrent condition. Even with an allocation of funds for the restoration of the sign, it doesn't appear that an appropriate location exists for the relocation of the sign within Cottage Grove at this current time. In acknowledgement of this fact, the following additional optionsshould be considered: Stora e The sign could be stored on City property (likely would be stored outside) until the funds and an ultimate site could be located. However, if the sign were to be stored, particularly in the outdoor elements, it would likely only cause the sign to degrade further. The sign company believes that the "brittle" nature of some aspects of the sign may make it difficult to lay the sign down for storage without further harming the integrity of the sign. Due to the need for a crane and large truck, we were given a cost estimate of approximately $6,000 to have the sign removed and relocated to a nearby storage location (Public Works Facility). StafF did contact the Washington County Historical Society to determine if they had access to an interior location that would allow the sign to be stored out of the elements. Unfortunately, they don't appear to have a surplus of space to assist with storing the sign at this time. Honorable Mayor, City Council, and Ryan Schroeder Cottage View Sign March 27, 2013 Page 2 of 2 Relocation & Refurbishinq: We were made aware that the owner of the Little Log House Pioneer Village in Hastings (Steve Bauer/Kimmes-Bauer Well Drilling Inc) had an interest in seeing the Cottage View marquee sign preserved. Staff met with Mr. Bauer and visited the Little Log House Pioneer Village to see the historical restoration work that has taken place at the Pioneer Village. The restoration and preservation work has been extensive and most recently included the Porky's Drive-In from Saint Paul. Mr. Bauer was enthusiastic about working with the City to assure that the sign is preserved. In order to help facilitate this, Mr. Bauer has agreed to relocate the sign to the Pioneer Village and refurbish it to its original condition (with working neon) within 90-120 days at his own cost. Further, as outlined in the attached agreement, Mr. Bauer would allow the City to assume ownership of the sign at any point in the next 20 years (or longer if an extension is requested in writing from the City). If the City does request ownership of the sign, the City would be responsible for reimbursing Mr. Bauer $9,000 to assist in covering costs he will have incurred for the refurbishing and relocation of the sign. In addition to the $9,000, the City will responsible for covering any costs of relocating the sign back to Cottage Grove at that given time. The current Cottage View owner, Gerry Herringer, has agreed to convey the Cottage View marquee sign, screen, and projector to Mr. Bauer for preservation purposes, with the condition that the City is allowed to take ownership of the marquee sign in the future, if it wishes to move the sign back to Cottage Grove. Recommendation It appears most cost effective and in the best interest of the Cottage View marquee sign to allow for its relocation and restoration to the Little Log House Pioneer Village in Hastings. For that reason, staff recommends the City enter into the attached agreement. Januaiy 30, 2013 City of Cottage Grove Attn. Danette Parr 12800 Ravine Parkway Cottage Grove, Mn 55016 Danette, Here is my analysis of the outdoor theater sign: 1) The sign has structural elements such as rivets and supporting bracl<ets rusted away, etc., that have compromised the integrity of the sign. This has created a situation where removal (laying down the sign) and storing it would lil<ely hurt the sign further. The rust is the caused for the loss of joints structure and breal<ing away of portions of the sign. It's surprising that wind activity has not further damaged the sign, 2) I believe that it would be more expensive to restore this sign then it would be to replicate an identical sign. 3) If the sign were replaced (identical sign), it would most likely exceed $35,000. 4) Would recommend that if the sign is removed for storage it should be cut in two pieces (upper area from the marquee for letters) and then at the base. 5) A crane would be needed to remove the sign to storage and it would lil<ely cost around $6,000 to have it done (assuming storage in very close proximity). If you have any further questions please feel free to give me a call. Chucl< Stampfle Sign A Rama 2400 Prior Ave. North, Suite 103 Roseville, MN 55113 651-649-0675 www.sarsigns.com fax 651-649-0657 Form of Option A�reement between the City and I�immes-Bauer Well Drillin�, Inc. OPTION AGREEMENT THIS AGREEMENT is made as of April , 2013 by and between Kimmes-Bauer Well Drilling Inc., a corporation under the laws of Minnesota ("Kimmes") and the City of Cottage Grove, a Minnesota municipal corporation (the "City"). Recitals A. Apache Chief Theater Company LLP ("Apache") is the owner and operator of the Cottage View Drive-In (the "Business"), a business which has operated at 9338 East Point Douglas Road in the City of Cottage Grove for 49 years; and B. Apache has entered into an agreement for the sale to Waimart, Inc., of the real property on which the Business is located (the "Walmart Agreement") and Apache intends to dispose of the equipment and fixtures associated with the Business, if the closing contemplated by the Walmart Agreement occurs; and C. Kimmes and Apache have entered into a Conveyance Agreement in which Kimmes is purchasing cei�tain equipment and fixtures from the Business fiom Apache for $1.00 (the "Conveyance Agreement"), with the condition that Kiinines provide the City with an option to purchase the Items from Kimmes at a later date for $1.00. A copy of the executed Conveyance Agreement is attached as Exhibit A. The items include items of historical significance to the Cottage Grove area, including: a marquee sign sn�ucture for the Cottage View Drive-In; outdoor drive-in movie screen, and drive-in movie projector (collectively, the "Items"), which are listed on the attached E�ibit B; and D. Kimmes and the City have agreed to enter into this Option Agreement so that the City may purchase the Items from Kimmes at a later date; and NOW THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: Terms 1. Convevance of Items. Kimmes hereby grants to the City an exclusive right and option to purchase the Items subject to the conditions set forth below (the "Option"). 2. Term of Option. The Option shall terminate after 20 years, with an option for an extension by the City, if requested prior to the teimination of the Option tei7ns. Purchase Price. The total purchase pi7ce for the Items shall be $1.00. B-1 421345v2 SJS CT155-1 4. Exercise of Option. This Option shall be deemed exercised if, within the Option Pet7od or any extension thereof, the City gives written notice to Kimmes of the City's intention to exercise the Option. If the City exercises the Option and Kimmes defaults in any obligations under this Agreement, the City shall have the right to enforce specific perfoi�nance of this Option Agreement. 5. Closin�. The closing shall occur within 60 days of the date of the City's written notice of its intention to exercise the Option, unless otherwise agreed to by the parties (the "Closing Date"). Kimmes shall provide the City with a bill of sale for the Items. 6. Warran . Kimmes warrants that it is the sole owner of the Items and that there are and will be no other persons or entities with security interests or liens on any of the Items. 7. Deliver.v of Possession. Kimmes agrees to deliver the right of possession of the Items to the City on the Closing Date. The City shall be responsible for removing the Items fiom their existing location at its sole cost and expense. The City must remove the Items no later than 30 days from the date of Closing. 8. Restoration of the Cotta�e View Sign. Kimmes is restoring the Cottage View Sign to its original condition and intends to maintain the original integrity of the sign for restoration and preservation purposes. In the event that the City exercises the Option and the restoration work has been completed by Kimmes, the City agrees that it will reimburse Kimmes in the amount of $9000 for Kimmes' costs incui�ed in relocating and rehabilitating the sign. 9. Entire Agreement, Amendments. This Agreement constitutes the entire agreement between the parties and no other agreement prior to this Agreement or contemporaneous herewith shall be effective except as expressly set forth or incoiporated herein. Any purported amendment shall not be effective unless it shall be set forth in writing and executed by both parties or their respective successors or assigns. 10. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, successors, and assigns. 11. Notice. Any notice, demand, request, or other communication which may or shall be given or seived by the pai�ties shall be deemed to have been given or served on the date the same is deposited in the United States Mail, registered or cei�tified, postage prepaid and addressed as follows: a. If to Kimmes: Kimmes-Bauer Well Drilling Inc. 22100 Lillehei Avenue Hastings, MN 55033 Attn: Steve Bauer B-2 421345v2 SJS CT155-1 b. If to the City: Ciiy of Cottage Grove 12800 Ravine Parlcway Cottage Grove, MN 55016 Attn: City Administrator IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the date written above. I:iiui►l I�.� C_til �I�iii/�I 1� �7�i �I �I i►Cl���� C Its: CITY OF COTTAGE GROVE By: Myron Bailey Its: Mayor By: Ryan Scluoeder Its: City Administrator B-3 421345v2 SJS CT155-1 EXHIBIT A Executed Conveyance Agreement [To be executed and added] CONVEYANCE AGREEMENT THIS AGREEMENT is made as of April , 2013 by and between Apache Chief Theatre Company LLP, a limited liability partnership under the laws of Minnesota ("Apache") and Kimmes-Bauer Well Drilling Inc., a coiporation under the laws of Minnesota ("Kimmes"). Recitals A. Apache is the owner and operator of the Cottage View Drive-In (the `Business"), a business which has operated at 9338 East Point Douglas Road in the City of Cottage Grove, Minnesota ("Theater Site") for 49 years; and B. Apache has entered into a Purchase Agreement with Walmart Real Estate Business Trust ("Walmart") ("Walmart Purchase AgreemenY') wherein Apache agreed to convey to Walmai�t cer-tain real property adjacent to the Theater Site and as part of the Walmai�t Purchase Agreement, Apache will enter into a Temporary Grading Easement with Walmart wherein Walmart will grade and fill the Theater Site (the "Grading Agreement"); and C. Apache intends to dispose of equipment and fixtures associated with the Business, provided Closing on the Walmart Purchase Agreement occurs; and D. Kimmes desires to purchase cei�tain equipment and fixtures of the Business from Apache for $1.00. The Items consist of items of historical significance to the Cottage Grove area, and are limited to: a marquee sign stiucture for the Cottage View Drive-In; outdoor drive-in movie screen, and drive-in movie projector and related equipment (collectively, the "Items'), which are listed on the attached E�ibit A; and E. Apache desires to convey the Items to Kimmes for $1.00 provided that Kimines enter into an agreement with the City of Cottage Grove that will allow the City of Cottage Grove to purchase the marquee sign fiom Kimmes for $1.00 at any time in the future; and NOW THEREFORE, in consideration of the One Dollar ($1.00) payment and other good and valuable consideration, the parties hereby agree as follows: Tei7ns 1. Convevance of Items. Apache hereby agrees to convey the Items to Kimtnes for $1.00, provided that Kimmes enter into an agreement with the City of Cottage Grove which is attached as E�ibit B that will provide the City with the option to purchase marquee sign fiom Kimmes at a later date for $1.00. Apache's obligation to convey the Items is contingent upon the closing of the B-A-1 421345v2 SJS CT155-1 transaction contemplated by the Walmart Purchase Agreement. This contingency is for the benefit of Apache and may be waived by Apache. If this contingency is not satisfied on or before April 30, 2013, this Agreement shall be null and void. Apache shall provide Kimmes with written notice that the closing on the transaction contemplated by the Wal-Mart Purchase Agreement has occurred. 2. Closin�. The closing on the sale of the Items shall talce place on April 8 2013 unless otherwise mutually agreed by the parties at a place mutually agreeable to the par (the "Closing Date"). Closing may be delayed in order to allow satisfaction of the contingency in paragraph 1 of this Agreement. Apache shall provide Kimmes with a bill of sale for the Items. 3. Wai�rantv. Apache war�ants that to the best of its knowledge it is the sole owner of the Items and that there are no other persons or entities with security interests or liens on any of the Items. 4. Deliverv of Possession. Apache agrees to deliver the right of possession of the Items to Kimmes on the Closing Date. Kimmes shall be responsible for removing the Items fiom their existing location at 9338 East Point Douglas Road, Cottage Grove, Minnesota, at its sole cost and expense. Kimmes must obtain a demolition pernut fiom the City. Kimmes must remove the Items no later than Apri122, 2013, with a phased removal approach of the Items in the following order: 1) the projector, 2) the movie screen, 3) the marquee sign. Failure of Kimmes to remove the Items on or before April 22, 2013 shall be deemed a forfeiture of any and all rights related to the Items and Kimmes agrees to release Apache and Walmart from any claims, damages or causes of action for subsequent disposal of the Items if Kimmes fails to remove the same as required by this Agreement. 5. Entire Agreement, Amendments. This Agreement constitutes the entire agreement between the parties and no other agreement prior to this Agreement or contemporaneous herewith shall be effective except as expressly set foi�th or incorporated herein. Any purported amendment shall not be effective unless it shall be set foi�th in writing and executed by both parties or their respective successors or assigns. 6. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the pai�ties and their respective heirs, executors, administrators, successors, and assigns. 7. Notice. Any notice, demand, request, or other communication which may or shall be given or seived by the pal shall be deemed to have been given or served on the date the same is deposited in the United States Mail, registered or cer postage prepaid and addressed as follows: a. If to Apache: Apache Chief Theater Company LLP 5210 Central Avenue NE Columbia Heights, MN 55421 Attn: Jerry Hei7inger b. If to Kimmes: I�immes-Bauer Well Di711ing Inc. 22100 Lillehei Avenue Hastings, MN 55033 Attn: Steve Bauer B-2 421345v2 SJS CT155-1 8. Indemnification. Kimmes indemnifies and holds Apache and Walmai�t harmless from any and every claim, damages and cause of action that may at any time be made or brought against Apache or Walmart by reason of Kimmes entering upon the Theater Site, or by any injuries to persons or proper or property rights of any persons or public or private rights of any l�ind that may be due or caused by any use, work or operation of Kimmes upon the Theater Site, or by reason of anything done or omitted by Kimmes, its agents, servants, contractors, or persons with whom Kimmes is doing business, except for claims arising fiom Apache's negligence or breach of this Agreement. 9. Insluance. Kimmes or its agent shall provide at its own expense commercial general liability (including coverage against bodily injuiy or death, property damage and contractual liability) in an amount of not less than Two Million and No/100 Dollars ($2,000,000.00) combined single limit and excess liability of Tluee Million and No/100 Dollars ($3,000,000.00) each occur�ence and aggregate naming Apache as an additional insured. Kimmes or its agent will also provide any and all statutoiy required worlcer's compensation and employer's liability insurance. Certificates of such insurance reasonably acceptable to Apache shall be furnished to Apache on or prior to the commencement of the activities on the Theater Site. 10. Severabilitv. In the event any provision or portion of this Agreement is held by any court of competent jurisdiction to be invalid or unenforceable, such holding will not effect the remainder hereof, and the remaining provisions shall continue in full force and effect at the same extent as would have been the case had such invalid or unenforceable provision or portion never been made a part hereof. ll. Countei�parts. This Agreement may be executed in one or more counteipat�ts, each of which shall be deemed an original and all such counteipai�ts shall constitute one and the same inshument. 12. Governin L�aw. This Agreement and the rights and obligations of the pat�ties hereunder are to be governed by and construed and interpreted in accordance with the laws of the State of Minnesota applicable to contracts made and to be performed wholly within Minnesota, without regard to choice or conflict of law rules. IN WITNESS WHEREOF, the parties have executed this Conveyance Agreement as of the date written above. APACHE CHIEF THEATER COMPANY LLP : Its: B-3 421345v2 SJS CT155-1 HIMMES-BAUER WELL DRILLING INC. 591916-v3 421345v2 SJS CT155-1 : Its: : '� D . .1 i : List of Items •"Cottage View Drive-In" marquee sign and sign stiucture • Drive-in movie theater screen • Drive-in movie projector B-B-1 421345v2 SJS CT155-1