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HomeMy WebLinkAbout07L Lease Agreement with WAG Farms, Inc. for the Dog Park and Compost Site City Council Action Request Form Meeting Date 9/7/2016 Department Community Development Agenda Category Consent Agenda Title Lease Agreements with WAG Farms, Inc. for the Dog Park and Compost Site Staff Recommendation Accept and issue the proposed Dog Park and Compost Site Lease Agreements and the Option Agreement and Right of Entry with WAG Farms, Inc. with the following conditions: a)Review and acceptance by WAG Farms, Inc. b)Allow the City attorney to make minor changes to all agreements when necessary. Budget Implication N/A Attachments Council Memo Dog Park Lease Agreement Compost Site Lease Agreement Option Agreement and Right of Entry TO: Honorable Mayor and City Council Charlene Stevens, City Administrator FROM: Christine Costello, Economic Development Director DATE: August 24, 2016 RE: WAG Agreements Background/Discussion The City of Cottage Grove has maintained a number of lease agreements with WAG Farms (Glendenning Farms, L.P., a Minnesota limited partnership, and Joan Glendenning Kennedy Family Limited Partnership), the land owners of all undeveloped land in the Cottage Grove Business Park for a number of years. The leases for the dog park, compost site, and the other areas that are undeveloped need to be updated or implemented. Dog Park Lease Agreement The existing agreement is to expire and needs to be renewed so that the dog park can remain and continue to be used as such. The proposed lease agreement proposes the following changes:  Lease extended until December 31, 2026;  The City has the first option to purchase the land if the owner was to sell;  The City shall continue to maintain the site; and  The City can make any improvements to the site to improve overall use of the site and are not required to restore it to its natural state if it was to be sold to another party. Compost Site Lease Agreement The existing lease agreement is also set to expire soon and needs to be renewed so that the compost site can continue to operate. The proposed lease agreement provides for the following:  Lease extended until December 31, 2026;  The City has the first option to purchase the land if the owner was to sell;  The City will continue to sublease the property to Rumpca (Rumpca) Companies, Inc., for the composting of yard waste; and  If lease was terminated with Rumpca they would be responsible for returning the site to its original condition. Option Agreement and Right of Entry Currently this option is not in place with WAG Farms. The City and EDA would like to implement this agreement due to the significant costs that the City and EDA have incurred in making the sites available developable for future development in the Business Park. Currently WAG Farms has a private broker that they use to market the developable sites at the Business Park. Over the years it has been clear that City and EDA staff have done more progressive marketing of the Business Park land and brought the majority of the users into the Business Park, yet the WAG Farms broker has benefited from these transactions. Honorable Mayor, City Council, and Charlene Stevens WAG Agreements August 24, 2016 Page 2 of 2 City staff has maintained a wonderful working relationship with WAG Farms and all parties’ interest is in the development of all the land in the Business Park. This agreement will serve both parties needs and allow the City and EDA to be the only interest in bringing development to the Business Park. The City has installed, at its own cost, public improvements on or near the property to enhance the developability. The City and EDA have also continued to incur costs and expenses related to seeking shovel-ready certification from the Minnesota Department of Employment and Economic Development in order to actively and aggressively market the property. Due to the City, EDA and landowners interests in continuing to promote the sale and development of the property. The City and EDA do use tax increment financing (TIF) to recapture the City’s public improvement costs by reselling the land to a developer. The proposed Option Agreement and Right of Entry will allow that to continue as well as provide:  The EDA exclusive option to purchase all or some of the property in one or more transactions;  Agreement is in place until all land is sold or the EDA wishes to terminate the agreement;  The EDA can enter into a purchase agreement with a buyer at any time and no subsequent costs to the landowner;  Landowner grants City any drainage or utility easements that might be needed for storm water basins;  The landowner is responsible for any real estate broker fees or commissions that may be charged with the purchase of any property;  The landowner allows the EDA and its consultant’s access to the property, with reasonable notice, for site investigation work. On August 9th the EDA recommended acceptance of the and issuance of the proposed Dog Park and Compost Site Lease Agreement and the Option Agreement and Right of Entry with WAG Farms, Inc. with the same conditions listed below in the recommendation. (M/Dennis, S/Celkis; vote 7-0). Recommendation Consideration of a motion to: 1. Recommend acceptance and issuance of the proposed Dog Park and Compost Site Lease Agreement and the Option Agreement and Right of Entry with WAG Farms, Inc. with the following conditions: Review and acceptance by WAG Farms, Inc. a) Allow the City attorney to make minor changes to all agreements when necessary. b)