HomeMy WebLinkAbout5.1 Opus Development Company, LLC
TO: Economic Development Authority
FROM: Christine Costello, Acting Community and Economic Development Director
Matt Wolf, Economic Development Specialist
DATE: June 3, 2019
RE: Rescind Resolution 2019-005 approving the purchase of property from WAG
Farms Inc. and Sale of Property to Opus Development LLC
Background
Renewal by Andersen (Renewal) has been a member of the Cottage Grove Business Park
since 1998. Located at 9900 Jamaica Avenue South their original facility was expanded in
2015 bringing their total employee count in the City of Cottage Grove to over 700 employees
and a facility that is approximately 351,000 square feet.
In March 2018 Renewal met with the City of Cottage Grove to discuss the need for expansion
at their current facility. Renewal has seen tremendous growth and has begun to outgrow their
location for semi-trailer parking for the shipping of their products. At that time Renewal
purchased 9.21 acres to develop a parking lot that would accommodate the parking for 40-50
semi-trailers.
Renewal began the construction of the parking lot on the newly purchased property. However,
their growth required a more long-term solution for not only their semi-trailer parking but the
need for more space for manufacturing and warehousing of supplies for production.
To meet those needs Renewal is working with Opus Development Company LLC to develop a
long-term solution to address these issues. The partnership between the companies would
see Opus Development Company construct a 350,000 square foot industrial facility and
Renewal leasing the building. An additional 113,000 square feet addition to the building would
be available to meet any potential future expansion needs of Renewal.
Discussion
Zoning
Renewal will be selling the 9.21 acre parcel they purchased in 2018 to Opus Development
Company, LLC as part of the construction of a 350,000 square foot facility. Additionally, Opus
Development Company, LLC will be purchasing an additional 18.66 acres of land. The
industrial building will contain warehouse, light manufacturing and office space. Currently both
of these parcels of land are zoned I-2, General Industry and all three of the proposed uses are
allowed by the City’s Zoning (City Code 11-11-1).
Economic Development Authority
June 3, 2019
Page 2 of 4
The building will be fully owned by Opus Development Company, LLC, but Renewal will be
leasing the facility for their use from Opus. The building will contain a transitway along the
ground that will allow for the transfer of goods between the new Opus constructed building and
Renewal’s existing facility.
The project required approval of three zoning variances that were heard at the May 29th
Planning Commission meeting. The first variance was for side yard setback. The proposed
transitway connects the two buildings therefore it will not meet the side yard setback
requirement of 40 feet (City Code 11-11-4). The second variance was for loading dock doors
facing a public street (City Code 11-11-5). Opus Development Company and Renewal have
requested that the loading docks face south due to a safety concerns of vehicles and
employees navigating the parking lot area. Facing the loading dock doors south allows the
sun to melt any ice build-up during the winter months reducing safety concerns. The final
variance is for the City’s landscaping ordinance which requires that 327 trees be planted on
the site (City Code 11-6-5). However, due to tree spacing requirements only 217 trees fit on
site. The Planning Commission recommended approval (vote 6 to 0) of the three variances at
their May 29th meeting. The City Council will hear the variance request at their June 19th
meeting
Figure 2. Elevations of north side of building
Economic Development Authority
June 3, 2019
Page 3 of 4
Figure 3. Site Layout
Sale of Land
The purchase price of the 18.66 acre or 812,830 square feet site is set at $3.00 per square
foot for a total of $2,438,490. The 18.66-acre parcel will be created by subdividing the eastern
section of the current 41.16 acre site that is owned by WAG Farms. This will leave a parcel of
23 acres for future development. The EDA as in the past with other projects (i.e. Airgas,
Gardenworld, etc.) in the Business Park will purchase the land from WAG Farms and then sell
the land to Opus Development Company, LLC.
Economic Development Authority
June 3, 2019
Page 4 of 4
Figure 4. Land to be purchased formerly by Murphy Logistics. Now Opus Development
Rescinding Resolution 2019-005
At the May 14th Economic Development Authority (EDA) meeting the EDA approved
Resolution 2019-005 for the purchase of property from WAG Farms, Inc. et. al. and sale of
property to Shamrock Investments V, LLC for development purposes. Shamrock Investments
V, LLC does business as Murphy Logistics and on Friday, May 24, 2019 they informed the City
of Cottage Grove they would no longer be a partner in the future development project with
Renewal.
Renewal has chosen to move forward with the project and will work with Opus Development as
the purchaser of the property. To continue the project towards development the EDA needs to
rescind Resolution 2019-005, with Shamrock Investments V, LLC. Then the EDA needs to
approve a new resolution for the sale of property to Opus Development Company LLC so that
the project with Renewal can continue to move forward. It is not uncommon for development
partners change as a project begins and in the EDA’s pursuit to be business friendly
Recommendation
By Motion:
A. Approve the Resolution Rescinding Resolution 2019-005 and Approving the Purchase
of Property from WAG Farms Inc. et al and Sale of Property to Opus Development Company,
LLC for Development Purposes subject to minor modifications by the City Attorney.
Attachments
1. Resolution Rescinding Resolution 2019-005 and Approving Purchase and Sale
2. Purchase Agreement EDA-Opus Development Company, LLC
COTTAGE GROVE
ECONOMIC DEVELOPMENT AUTHORITY
WASHINGTON COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2019-008
A RESOLUTION RESCINDING RESOLUTION NO. 2019-005
AND APPROVING THE PURCHASE OF PROPERTY FROM
WAG FARMS, INC., ET AL AND SALE OF PROPERTY TO
OPUS DEVELOPMENT COMPANY, L.L.C. FOR DEVELOPMENT PURPOSES
Whereas, the Cottage Grove Economic Development Authority (“EDA”) hereby rescinds
Resolution No. 2019-005; and
Whereas, the EDA desires to purchase and sell approximately 18.66 acres of property from
WAG Farms, Inc. et. al. for the purpose of development for certain real property legally described
as:
That part of Outlot A, GLENGROVE INDUSTRIAL PARK 7TH ADDITION, according
to the recorded plat thereof Washington County, Minnesota that lies southerly and easterly
of the following described line:
Commencing at the southeast corner of Outlot B, said GLENGROVE INDUSTRIAL
PARK 7TH ADDITION, thence South 00 degrees 07 minutes 51 seconds East, assumed
bearing, along the east line of said Outlot A, a distance of 240.01 feet to the point of
beginning of the line to be described; thence North 89 degrees 59 minutes 21 seconds West
a distance of 650.78 feet; thence South 00 degrees 00 minutes 39 seconds West a distance
of 685.57 feet to the south line of said Outlot A and said line terminating thereat.
(“Property”); and
Whereas, Opus Development Company, L.L.C. (“Developer”) desires to purchase the
Property for a new project involving industrial development and uses incidental thereto; and
Whereas, on June 18, 2019, the EDA held a public public hearing on the purchase of the
Property and the sale of the Property and the EDA considered all of the information presented at
the public hearing.
NOW THEREFORE BE IT RESOLVED by the Board of Commissioners of the Cottage
Grove Economic Development Authority as follows:
1. The purchase of Property from the WAG Farms, Inc., et. al. and sale of the Property to the
Developer is in the public interest of the City and its people, furthers its general plan of
economic development and furthers the aims and purposes of Minn. Stat. Sections 469.090
to 469.108; and the appropriate officials are authorized to take such action so as to effectuate
such purchase and sale.
2. The plans and specifications for the development of the Property are hereby approved.
th
Passed this 18 day of June, 2019.
Myron Bailey, President
Attest:
Jennifer Levitt, Executive Director
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this “Agreement”) is entered into as of June __,
2019 (the “Effective Date”), by and between the Cottage Grove Economic Development Authority,
a public body corporate and politic under the laws of Minnesota (“EDA” or “Seller”), and Opus
Development Company, L.L.C., a Delaware limited liability company (“Opus” or “Buyer”).
RECITALS
Recital No. 1. Glendenning Farms, L.P., WAG Farms, Inc. and Joan Glendenning
Kennedy Family Limited Partnership (collectively “Owner”) are the owners of 18.66 acres of
unimproved real property, which real property represents a portion of Outlot A, Glengrove
th
Industrial Park 7 Addition, located in Cottage Grove, Washington County, Minnesota, legally
described and depicted on Exhibit A (the “Property”).
Recital No. 2. EDA is the contract purchaser of the Property and shall purchase the
Property from Owner and convey the Property to Opus on the terms and conditions of this
Agreement.
NOW, THEREFORE, Opus and EDA agree as follows:
1. Sale.
1.1. Sale. Subject to the terms and provisions of this Agreement, EDA shall sell
the Property to Opus, and Opus shall purchase the Property from EDA.
1.2. Purchase Price. The purchase price to be paid by Opus to EDA for the
Property shall be Three Dollars and 00/100 ($3.00) multiplied by 812,877 square feet as
finally determined by the Survey (as defined below) (the “Purchase Price”). The Purchase
Price of Two Million, Four Hundred Thirty-Eight Thousand, Six Hundred Thirty-One and
00/100s Dollars ($2,438,631.00) shall be payable as follows: (a) Twenty-Five Thousand
and No/100 Dollars ($25,000.00), as earnest money, to be paid within three (3) business
days following the Effective Date to DCA Title, 7373 147th Street West, Apple Valley,
MN 55124 (“Title”), to be held in escrow by Title (“Earnest Money”); and (b) the balance
of the Purchase Price on the Closing Date (as defined in Section 6) subject to those
adjustments, prorations and credits described in this Agreement, in certified funds or by
wire transfer pursuant to instructions from EDA.
2. Available Surveys, Tests, and Reports. Within ten (10) days following the
Effective Date, EDA shall cause to be delivered to Opus (a) copies of any surveys, soil tests,
environmental reports, and any other studies and/or site analyses previously conducted on the
Property and in the possession of EDA, and (b) copies of existing title work for the Property and
in the possession of EDA (the “Due Diligence Materials”). EDA makes no representations or
warranties regarding the accuracy of the Due Diligence Materials. If Buyer so requests, Seller
shall request the preparers of any such surveys, soil tests, environmental reports, and any other
studies and/or site analyses to re-issue or re-certify the same for the direct benefit of Buyer, at
Buyer’s expense except as otherwise provided in this Agreement, so that Buyer may rely on such
site analyses or surveys as if prepared for Buyer in the first instance, but Seller makes no
representation as to whether any such reissuance or recertification will be available.
3. Opus’ Investigations. For a period up to the Closing Date, EDA shall allow Opus
and Opus’ agents access to the Property without charge and at all times for the purpose of Opus’
investigation and testing of the Property, including surveying and testing of soil and groundwater
(“Opus’ Investigations”); provided, however, Opus shall not perform any invasive testing unless
(a) EDA gives its prior written approval of Opus’ consultant that will perform the testing, which
approval shall not be unreasonably withheld, conditioned or delayed, and (b) Opus gives EDA
reasonable prior notice of such testing. EDA shall have the right to accompany Opus during any
of Opus’ Investigations of the Property. Opus shall provide to EDA copies of all third-party, non-
confidential written test results and reports conducted as part of Opus’ Investigations. Except as
otherwise provided herein, Opus agrees to pay all of the costs and expenses associated with Opus’
Investigations, to cause to be released any lien on the Property arising as a result of Opus’
Investigations and to repair and restore, at Opus’ expense, any damage to the Property caused by
Opus’ Investigations. Opus shall indemnify and hold EDA and the Property harmless from all
costs and liabilities, including, but not limited to, reasonable attorneys’ fees, arising from Opus’
Investigations. The indemnification obligations provided herein shall survive the termination or
cancellation of this Agreement. Notwithstanding the foregoing, within thirty (30) days following
the Effective Date, EDA shall, at EDA’s expense, provide Opus with the AUAR (alternative urban
area review) of the Property. If Opus deems it reasonably necessary based upon its review of the
AUAR, Opus shall have an additional thirty (30) days to obtain and approve a Phase II
Environmental Site Assessment (the “Phase II”), at its own expense. If this Agreement is
terminated based upon any environmental condition as herein provided, and EDA requests, Opus
shall give EDA copies of any and all AUAR, Phase I and Phase II reports obtained by Opus.
4. Insurance; Risk of Loss. EDA assumes all risk of destruction, loss or damage to
the Property prior to the Closing Date. If, prior to the Closing Date, all or any portion of the
Property or access thereto is condemned, taken by eminent domain, or damaged by cause of any
nature, EDA shall immediately give Opus written notice of such condemnation, taking or damage.
After receipt of written notice of such condemnation, taking or damage (from EDA or otherwise),
Opus shall have the option (to be exercised in writing within thirty (30) days of receipt of such
written notice from EDA) either (a) to require EDA to (i) convey the Property at Closing (as
defined in Section 6) to Opus in its damaged condition, upon and subject to all of the other terms
and conditions of this Agreement without reduction of the Purchase Price, (ii) assign to Opus at
Closing all of EDA’s right, title and interest in and to any claims EDA may have to insurance
proceeds, condemnation awards and/or any causes of action with respect to such condemnation or
taking of or damage to the Property or access thereto, and (iii) pay to Opus at Closing by certified
or official bank check all payments made prior to the Closing Date under such insurance policies
or by such condemning authorities, or (b) to terminate this Agreement by giving written notice of
such termination to EDA, whereupon this Agreement shall be terminated, the Earnest Money shall
be refunded to Opus and thereafter neither party shall have any further obligations or liabilities to
the other, except for such obligations as survive termination of this Agreement. If the right to
2
terminate this Agreement is not exercised in writing within such thirty (30) day period, such right
shall be deemed to have been waived. EDA shall not designate counsel, appear in, or otherwise
act with respect to the condemnation proceedings without Opus’ prior written consent, which
consent shall not be unreasonably withheld.
5. Contingencies.
5.1. Opus’ Contingencies.
A. Unless waived by Opus in writing, Opus’ obligation to proceed to
Closing shall be subject to (a) performance by EDA of its obligations hereunder,
(b) the continued accuracy of EDA’s representations and warranties provided in
Section 9.1, and (c) Opus’ satisfaction, in Opus’ sole discretion, as to the
contingencies described in this Section 5.1 within the time periods set forth below:
(1) On or before the Closing Date, Opus shall have determined,
in its sole discretion, that it is satisfied with (a) the results of and matters
disclosed by Opus’ Investigations, surveys, soil tests, engineering
inspections, hazardous substance and environmental reviews of the
Property and (b) all other inspections and due diligence regarding the
Property, including any Due Diligence Materials.
(2) On or before the Closing Date, Opus shall have determined
the acceptability and zoning of the Property for its proposed use as a
warehouse and parking lot and other uses related thereto (collectively, the
“Proposed Use”). All costs and expenses related to applying for and
obtaining any governmental permits and approvals for the Property for the
Proposed Use shall be the responsibility of the Opus, with the exception of
the re-plat of the Property which shall be at EDA’s sole cost and expense.
(3) On or before the Closing Date, Opus shall have received
from Title an irrevocable commitment to issue a title insurance policy for
the Property in a form and substance satisfactory to Opus in Opus’ sole
discretion, not disclosing any encumbrance not acceptable to Opus in Opus’
sole discretion (the “Approved Commitment”).
(4) On or before the Closing Date, EDA shall have obtained
releases of the Property from any and all mortgages or other monetary liens
affecting any of the Property.
(5) On or before the Closing Date, Opus shall have determined
that it is satisfied with the books and records in EDA’s possession, if any,
including site plans, surveys, engineering or environmental reports
associated with the Property.
3
(6) On or before the Closing Date, Opus shall have secured
financing that is satisfactory to Opus in Opus’ sole discretion for the
purpose of acquiring and constructing the Proposed Use.
(7) On or before the Closing Date, Opus shall have reviewed and
approved the ALTA Survey of the Property.
(8) On or before the Closing Date, Opus shall have reviewed and
approved the AUAR of the Property.
(9) On or before the Closing Date, Opus shall have obtained
approval of the transaction by the Board of Governors of Opus.
(10) On or before the Closing Date, Opus shall have approved the
forms of all closing documents.
The foregoing contingencies are for Opus’ sole and exclusive benefit and
one (1) or more may be waived in writing by Opus in its sole discretion. EDA shall
reasonably cooperate with Opus’ efforts to satisfy such contingencies, at no out of
pocket cost to EDA or assumption of any obligation or liability by Opus except as
otherwise provided herein. Opus shall bear all cost and expense of satisfying
Opus’ contingencies. If any of the foregoing contingencies have not been satisfied
on or before the applicable date, then this Agreement may be terminated, at Opus’
option, by written notice from Opus to EDA. Such written notice must be given
on or before the applicable date, or Opus’ right to terminate this Agreement
pursuant to this Section shall be waived. If Opus terminates this Agreement
pursuant to this Section, the Earnest Money shall immediately be refunded to Opus.
Upon termination, neither party shall have any further rights or obligations against
the other regarding this Agreement or the Property, except for such obligations as
survive termination of this Agreement.
B. If Opus elects not to exercise any of the contingencies set out herein,
such election may not be construed as limiting any representations or obligations
of EDA set out in this Agreement, including, without limitation, any indemnity or
representations with respect to environmental matters.
5.2 EDA’s Contingencies. EDA’s obligation to proceed to Closing shall be
subject to the satisfaction, on or prior to the Closing Date, of each of the following
conditions:
A. EDA shall have acquired the Property from Owner, and the EDA
agrees to use its best efforts to effectuate such transaction.
B. Opus shall have performed and satisfied all agreements, covenants
and conditions required pursuant to this Agreement to be performed and satisfied
by or prior to the Closing Date.
4
C. All representations and warranties of Opus contained in this
Agreement shall be accurate as of the Closing Date.
EDA may in its sole discretion waive any of the conditions precedents set
out in this Section.
6. Closing. The closing of the purchase and sale contemplated by this Agreement (the
“Closing”) shall occur on or before July 10, 2019 (the “Closing Date”); provided, however, Opus
shall have the right and option to extend the Closing Date for up to two (2) periods of thirty (30)
days each. Opus shall exercise its right and option to extend the Closing Date, if at all, by giving
EDA notice of such election on or before the Closing Date, as the same may be extended. EDA
agrees to deliver legal and actual possession of the Property to Opus on the Closing Date.
6.1 EDA’s Closing Documents and Deliveries. On the Closing Date, EDA
shall execute and/or deliver, as applicable, to Opus the following:
A. Warranty Deed. A warranty deed conveying title to the Property
to Opus, free and clear of all encumbrances, except the Permitted Encumbrances
(the “Deed”).
B. Recertification of Representations and Warranties. EDA shall
provide Opus with a certificate recertifying that the representations and warranties
set forth in Section 9 of this Agreement are true and correct as of the Closing Date.
C. FIRPTA Affidavit. An affidavit of EDA certifying that EDA is not
a “foreign person”, “foreign partnership”, foreign trust”, “foreign estate” or
“disregarded entity” as those terms are defined in Section 1445 of the Internal
Revenue Code of 1986, as amended.
D. EDA’s Affidavit. A standard owner’s affidavit (ALTA form) from
EDA which may be reasonably required by Title to issue an owner’s policy of title
insurance with respect to the Property with the so-called “standard exceptions”
deleted.
E. Settlement Statement. A settlement statement with respect to this
transaction.
F. Copies of Resolutions. EDA shall provide Opus with copies of the
resolutions for the various EDA and/or City public meetings showing the EDA
and/or various City commissions and/or councils have approved this transaction,
Opus’ CUP, Opus’ site plan, zoning, and such other governmental approvals as may
be required for Opus’ Proposed Use.
G. General Deliveries. All other documents reasonably determined by
Title to be necessary to transfer the Property to Opus and to evidence that EDA (a)
5
has satisfied all monetary indebtedness with respect thereto, (b) has obtained such
termination statements or releases from such secured creditors as may be necessary
to ensure that the Property is subject to no monetary liens, (c) has obtained all
consents from third parties necessary to effect EDA’s performance of the terms of
this Agreement, including, without limitation, the consents of all parties holding an
interest in the Property, (d) has provided such other documents as are reasonably
determined by Title to be necessary to issue policies of title insurance to Opus with
respect to the Property with the so-called “standard exceptions” deleted, and (e) has
duly authorized the transactions contemplated hereby.
6.2. Opus Closing Documents and Deliveries. On the Closing Date, Opus
shall execute and/or deliver, as applicable, to EDA the following:
A. Payment of Purchase Price. The Purchase Price, in accordance
with the terms of Section 1.2.
B. Settlement Statement. A settlement statement with respect to this
transaction.
C. Evidence of Authority. Opus shall provide EDA with copies of the
resolutions showing Opus has met with necessary requirements to acquire the
Property in accordance with this Agreement together with such proceedings,
instruments and documents as may be reasonably required by Title as a condition
precedent to issuing the Title Policy in Opus’ name.
D. General Deliveries. All other documents reasonably determined by
Title to be necessary to evidence that Opus has duly authorized the transactions
contemplated hereby and evidence the authority of Opus to enter into and perform
this Agreement and the documents and instruments required to be executed and
delivered by Opus pursuant to this Agreement, or may be required of Opus under
applicable law, including any purchaser’s affidavits or revenue or tax certificates
or statements.
7. Prorations. EDA and Opus agree to the following prorations and allocation of
costs regarding this Agreement:
7.1 Title Evidence, Survey and Closing Fee. EDA shall pay all costs of the
Commitment with respect to the Property. EDA shall pay all costs of obtaining the Survey
and re-platting of the Property. Opus shall pay all premiums for any title insurance policy
it desires with respect to the Property. Opus and EDA shall each pay one half (1/2) of any
reasonable closing fee or charge imposed by Title.
7.2 Transfer Taxes. EDA shall pay all state deed tax regarding the Deed.
6
7.3 Recording Costs. Opus will pay all recording costs with respect to the
recording of the Deed and for the recording of any mortgage required by Opus, if any, and
any mortgage registration tax, if any.
7.4 Real Estate Taxes and Special Assessments. General real estate taxes
applicable to any of the Property due and payable in the year of Closing shall be prorated
between EDA and Opus on a daily basis as of 12:00 a.m. CT on the Closing Date based
upon a calendar fiscal year, with EDA paying those allocable to the period prior to the
Closing Date and Opus being responsible for those allocable to the Closing Date and
subsequent thereto. EDA shall pay in full all special assessments (and charges in the nature
of or in lieu of such assessments) levied, pending, postponed or deferred with respect to
any of the Property as of the Closing Date. Opus shall be responsible for any special
assessments that are levied or become pending against the Property after the Closing Date,
including, without limitation, those related to Opus’s development of the Property.
7.5 Utilities. All utility expenses, including water, fuel, gas, electricity, sewer
and other services furnished to or provided for the Property, if any, shall be prorated
between EDA and Opus on a daily basis as of the Closing Date, with EDA paying those
allocable to the period prior to the Closing Date and Opus being responsible for those
allocable to the Closing Date and subsequent thereto.
7.6 AUAR. EDA shall pay all costs and expenses related to the AUAR of the
Property.
7.7 Attorneys’ Fees. EDA and Opus shall each pay its own attorneys’ fees
incurred in connection with this transaction, except as otherwise specifically set forth in
this Agreement.
7.8 Survival. The obligations set forth in this Section 7 survive the Closing.
8. Title Examination. (i) Within seven (7) days following the Effective Date, EDA
shall, at EDA’s expense, provide a commitment dated within sixty (60) days of the Effective Date
for an owner’s title insurance policy (ALTA Form 2006) issued by Title for the Property, and
copies of all encumbrances described in the commitment (the “Commitment”); and (ii) within
fifteen (15) days following the Effective Date, EDA shall provide, at EDA’s expense, an ALTA-
certified survey bearing the legal description of the Property, and showing the area, dimensions
and location of the Property and the matters shown in the Commitment (the “Survey” and, together
with the Commitment, the “Title Evidence”).
8.1 Opus’ Objections. Within twenty (20) days after Opus’ receipt of the last
of the Title Evidence, Opus may make written objections (“Objections”) to the form or
content of the Title Evidence. The Objections may include, without limitation, any
easements, restrictions or other matters which may interfere with the Proposed Use of the
Property or matters which may be revealed by the Survey. Any matters reflected on the
Title Evidence which are not objected to by Opus within such time period or waived by
Opus in accordance with Section 8.2(B) shall be deemed to be permitted encumbrances
7
(“Permitted Encumbrances”). Notwithstanding the foregoing, the following items shall
be deemed Permitted Encumbrances: (a) Covenants, conditions, restrictions (without
effective forfeiture provisions) and declarations of record which do not interfere with the
Proposed Use, if any; (b) Reservation of minerals or mineral rights by the State of
Minnesota, if any; (c) Utility and drainage easements which do not interfere with the
Proposed Use; and (d) Applicable laws, ordinances, and regulations. Opus shall have the
renewed right to object to the Title Evidence as the same may be revised or endorsed from
time to time.
8.2 EDA’s Cure. EDA shall be allowed twenty (20) days after the receipt of
Opus’ Objections to cure the same but shall have no obligation to do so. If such cure is not
completed within said period, or if EDA elects not to cure such Objections, Opus shall have
the option to do any of the following:
A. Terminate this Agreement with respect to all of the Property.
B. Waive one or more of its objections and proceed to Closing.
If Opus so terminates this Agreement, neither EDA nor Opus shall be liable to the other
for any further obligations under this Agreement (except for such obligations as survive
termination of this Agreement) and the Earnest Money shall be refunded to Opus.
9. Warranties and Representations.
9.1 By EDA. EDA warrants and represents the following to Opus, and
acknowledges that Opus has relied on such representations and warranties in agreeing to
enter into this Agreement:
A. This Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligation of EDA enforceable in
accordance with its terms. EDA has been duly formed under the laws of the State
of Minnesota and is in good standing under the laws of the jurisdiction in which the
Property is located, is duly qualified to transact business in the jurisdiction in which
the Property is located, and has the requisite power and authority to enter into and
perform this Agreement and the documents and instruments required to be executed
and delivered by EDA pursuant hereto. This Agreement and the documents and
instruments required to be executed and delivered by EDA pursuant hereto have
each been duly authorized by all necessary action on the part of EDA and such
execution, delivery and performance does and will not conflict with or result in a
violation of EDA’s organizational agreement or any judgment or order.
B. The execution, delivery and performance by EDA of this Agreement
will not (a) violate any provision of any law, statute, rule or regulation or any order,
writ, judgment, injunction, decree, determination or award of any court,
governmental agency or arbitrator presently in effect having applicability to EDA,
or (b) result in a breach of or constitute a default under any indenture, loan or credit
8
agreement or any other agreement, lease or instrument to which EDA is a party or
by which it or any of its properties may be bound.
C. To EDA’s knowledge, except as contemplated herein, no order,
consent, approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or authority,
or any other entity, is required on the part of EDA to authorize, or is required in
connection with, the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, this Agreement.
D. To EDA’s knowledge, there are no actions, suits or proceedings
pending or threatened against or affecting EDA or any of its properties, before any
court or arbitrator, or any governmental department, board, agency or other
instrumentality which in any of the foregoing (a) challenges the legality, validity or
enforceability of this Agreement, or (b) if determined adversely to EDA, would
have a material adverse effect on the ability of EDA to perform its obligations under
this Agreement.
E. EDA has not received written notice, and has no knowledge, of (a)
any pending or contemplated annexation or condemnation proceedings, or purchase
in lieu of the same, affecting or which may affect all or any part of the Property, (b)
any proposed or pending proceeding to change or redefine the zoning classification
of all or any part of the Property, (c) any proposed changes in any road patterns or
grades which would adversely and materially affect access to the roads providing a
means of ingress or egress to or from all or any part of the Property, or (d) any
uncured violation of any legal requirement, restriction, condition, covenant or
agreement affecting all or any part of the Property or the use, operation,
maintenance or management of all or any part of the Property.
F. To EDA’s knowledge, there are no wells or sewage treatment
systems located on any portion of the Property. To EDA’s knowledge, there has
been no methamphetamine production on or about any portion of the Property. To
EDA’s knowledge, the sewage generated by the Property, if any, goes to a facility
permitted by the Minnesota Pollution Control Agency and there is no “individual
sewage treatment system” (as defined in Minnesota Statutes § 115.55, Subd. 1(g))
located on the Property.
G. EDA is not a “foreign person,” “foreign corporation,” “foreign
trust,” “foreign estate” or “disregarded entity” as those terms are defined in Section
1445 of the Internal Revenue Code.
H. To EDA’s knowledge, except as may be disclosed as part of the Due
Diligence Materials, (i) no condition exists on the Property that may support a claim
or cause of action under any Environmental Law (as defined below) and there are
no Hazardous Substances (as defined below) on the Property, (ii) there has been no
release, spill, leak or other contamination or otherwise onto the Property, and (iii)
9
there are no restrictions, clean ups or remediation plans regarding the Property. To
EDA’s knowledge, except as may be disclosed as part of the Due Diligence
Materials, there is no buried waste or debris on any portion of the Property.
“Environmental Law” shall mean (a) the Comprehensive Environmental
Response Compensation and Liability Act of 1980, 42 U.S.C. § 9601-9657, as
amended, or any similar state law or local ordinance, (b) the Resource Conservation
and Recovery Act of 1976, 42 U.S.C. § 6901, et seq., (c) the Federal Water
Pollution Control Act, 33 U.S.C. § 1251 et seq., (d) the Clean Air Act, 42 U.S.C. §
7401, et seq., (e) the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., (f)
the Safe Drinking Water Act, 42 U.S.C. § 300(f) et seq., (g) any law or regulation
governing aboveground or underground storage tanks, (h) any other federal, state,
county, municipal, local or other statute, law, ordinance or regulation, including,
without limitation, the Minnesota Environmental Response and Liability Act,
Minn. Stat. § 115B.01, et seq., (i) all rules or regulations promulgated under any of
the foregoing, and (j) any amendments of the foregoing. “Hazardous Substances”
shall mean polychlorinated biphenyls, petroleum, including crude oil or any
fraction thereof, petroleum products, heating oil, natural gas, natural gas liquids,
liquefied natural gas or synthetic gas usable for fuel, and shall include, without
limitation, substances defined as “hazardous substances,” “toxic substances,”
“hazardous waste,” “pollutants or contaminants” or similar substances under any
Environmental Law.
I. There are no leases or tenancies with respect to the Property that will
not be terminated as of the Closing Date. There are no unrecorded agreements or
other contracts of any nature or type relating to, affecting or serving the Property
beyond an unwritten month-to-month lease with a farmer and the agreements to
acquire the Property from Owner.
J. EDA has the right to acquire the Property from Owner in sufficient
time to perform its obligations under this Agreement in a timely manner.
K. There will be no indebtedness or sums due attributable to the
Property which will remain unpaid after the Closing Date.
As used in this Agreement, the term “to EDA’s knowledge” shall mean and refer
to only the current actual knowledge of the designated representative of EDA and shall not
be construed to refer to the knowledge of any other officer, manager, director, agent,
authorized person, employee or representative of EDA, or any affiliate of EDA, or to
impose upon such designated representative any duty to investigate the matter to which
such actual knowledge or the absence thereof pertains, or to impose upon such designated
representative any individual personal liability. As used herein, the term “designated
representative” shall refer to Jennifer Levitt. EDA represents and warrants that the
foregoing individual is the representative of EDA most knowledgeable regarding the
Property.
10
The representations, warranties and other provisions of this Section 9.1 shall
survive Closing; provided, however, EDA shall have no liability with respect to any breach
of a particular representation or warranty if Opus shall fail to notify EDA in writing of such
breach within two (2) years after the Closing Date, and provided further that EDA shall
have no liability with respect to a breach of the representations and warranties set forth in
this Agreement if Opus has actual knowledge of EDA’s breach thereof prior to Closing
and Opus consummates the acquisition of the Property as provided herein.
Opus acknowledges and agrees that, except as expressly specified in this
Agreement and/or in any documents executed and delivered by the EDA at Closing, EDA
has not made, and EDA hereby specifically disclaims, any representation, warranty or
covenant of any kind, oral or written, expressed or implied, or rising by operation of law,
with respect to the Property, including, but not limited to, any warranties or representations
as to the habitability, merchantability, fitness for a particular purpose, title, zoning, tax
consequences, physical or environmental condition, utilities, valuation, governmental
approvals, the compliance of the Property with governmental laws, or any other matter or
item regarding the physical condition of the Property. Opus agrees that except as expressly
specified in this Agreement and/or in any documents executed and delivered by the EDA
at Closing, Opus shall accept the Property and acknowledges that the sale of the Property
as provided for herein is made by EDA on an “AS IS,” “WHERE IS,” and “WITH ALL
FAULTS” basis. Opus is an experienced purchaser of property such as the Property and
Opus has made or will make its own independent investigation of the Property. The
limitations set forth in this paragraph shall survive the Closing and shall not merge in the
deed.
9.2 By Opus. Opus warrants and represents the following to EDA, and
acknowledges that EDA has relied on such representations and warranties in agreeing to
enter into this Agreement:
A. Opus has all requisite authority to enter into this Agreement and to
perform all of its obligations under this Agreement.
B. The execution, delivery and performance by Opus of this Agreement
will not (a) violate any provision of any law, statute, rule or regulation or any order,
writ, judgment, injunction, decree, determination or award of any court,
governmental agency or arbitrator presently in effect having applicability to Opus,
(b) violate or contravene any provision of the articles of incorporation or bylaws of
Opus, or (c) result in a breach of or constitute a default under any indenture, loan
or credit agreement or any other agreement, lease or instrument to which Opus is a
party or by which it or any of its properties may be bound.
The representations, warranties and other provisions of this Section 9.2 shall survive
Closing; provided, however, Opus shall have no liability with respect to any breach of a particular
representation or warranty if EDA shall fail to notify Opus in writing of such breach within two
(2) years after the Closing Date.
11
10. Additional Obligations of EDA.
10.1 Licenses and Permits. EDA shall transfer to Opus all transferable rights,
if any, in any permits or licenses held by EDA with respect to the Property. EDA shall
execute all applicable transfer forms and applications to facilitate and effect any such
transfer and to cooperate fully with Opus in its efforts to obtain all of the necessary licenses
and permits for the Proposed Use, at no out-of-pocket cost to EDA, or the assumption of
any obligations or liabilities by EDA.
10.2 Condition of the Property at Closing. Prior to Closing, the Property shall
be operated in the ordinary course consistent with previous practice. On the Closing Date,
EDA shall deliver to Opus exclusive vacant possession of the Property, free and clear of
any personal property, surface waste and surface debris of any kind. On or before the
Closing Date, EDA shall remove all trash and personal property from the Property. EDA
agrees that Opus may dispose of any trash or personal property remaining on the Property
as of the Closing Date in Opus’ sole discretion and EDA agrees to pay for all costs and
expenses incurred by Opus with respect to the transport and/or disposal of the personal
property within ten (10) days after receipt of an invoice from Opus.
10.3 Further Assurances. From and after the Closing Date, EDA agrees to
execute, acknowledge and deliver to Opus such other documents or instruments of transfer
or conveyance as may be reasonably required to carry out its obligations pursuant to this
Agreement.
10.4 Non-Assumption of Contracts or Other Obligations. The parties
understand and agree that Opus is only acquiring certain of EDA’s real property assets and
that this Agreement and any related agreements shall not be construed to be in any manner
whatsoever an assumption by Opus of any agreements, indebtedness, obligations or
liabilities of EDA which are owing with respect to the operation of the Property prior to
the Closing Date.
10.5 Mortgages. On or before the Closing Date, EDA shall satisfy all mortgage
and/or lien indebtedness with respect to all or any portion of the Property and shall obtain
recordable releases of the Property from any and all such mortgages or other liens affecting
all or any portion of the Property.
10.6 Approvals. Opus may elect to seek certain approvals in order for Opus to
develop the Property for the Proposed Use, including rezoning the Property or receipt of
a conditional use permit (the “Approvals”). EDA, at no out-of-pocket cost to EDA, or the
assumption of any obligations or liabilities by EDA, will reasonably cooperate with Opus’
efforts to obtain the Approvals at or prior to Closing. EDA hereby grants Opus the right
to file and prosecute applications and petitions for the Approvals and any special use
permits and variances desired by Opus; provided, however, any special use permits or
variances shall be contingent on the occurrence of the Closing and shall not be binding
upon EDA or the Property unless and until the Closing occurs. EDA, at no out-of-pocket
cost to EDA, or the assumption of any obligations or liabilities by EDA, agrees to
12
cooperate with Opus in the filing and prosecution of such applications and petitions,
including the filing of the same in EDA’s name, if required.
10.7 Property Acquisition / Farm Lease. EDA shall acquire the Property from
Owner in sufficient time to perform EDA's obligations under this Agreement in a timely
manner. On or before the Closing, EDA shall lawfully terminate the lease with the farmer
with respect to the Property such that EDA may convey the Property to Opus free and
clear of such tenancy.
11. Commissions. Each party represents that all negotiations on its behalf relative to
this Agreement and the transactions contemplated by this Agreement have been carried on directly
between the parties, without the intervention of any party as broker, finder or otherwise, and that
there are no claims for brokerage commissions or finders’ fees in connection with the execution
of this Agreement.
12. Notice. Any notice to be given by one party hereto shall be personally delivered
(including messenger delivery) or be sent by registered or certified mail, or by a nationally
recognized overnight courier which issues a receipt, in each case postage prepaid, to the other party
at the addresses in this Section (or to such other address as may be designated by notice given
pursuant to this Section), and shall be deemed given upon personal delivery, three (3) days after
the date postmarked or one (1) business day after delivery to such overnight courier. Attorneys
for each party shall be authorized to give and receive notices for each such party.
If to EDA: Cottage Grove Economic Development Authority
12800 Ravine Parkway South
Cottage Grove MN 55016
Attn: Jennifer Levitt, EDA Executive Director
with a copy to: Korine L. Land
LeVander, Gillen & Miller, P.A.
633 South Concord Street, Suite 400
South St. Paul, MN 55075
If to Opus: Opus Development Company, L.L.C.
10350 Bren Road West
Minnetonka, MN 55343
Attn: Philip T. Cattanach, LEED AP
14. Default; Remedies. In addition to the rights granted to the parties pursuant to
Minn. Stat. Sec. 559.21, if either EDA or Opus fails to perform any of its obligations under this
Agreement in accordance with its terms, and such failing party does not cure such failure within
thirty (30) days after written notice thereof from the other party (provided that no notice or cure
period shall be required for obligations to be performed at Closing), then the other party shall have
the right to terminate this Agreement by giving the failing party written notice of such election. In
the case of any default by Opus, EDA’s sole and exclusive remedies shall be termination of this
Agreement as provided above and, upon any such termination, the Earnest Money shall be
13
forfeited to Seller as agreed and final liquidated damages. In the case of any default by EDA,
Opus’ sole and exclusive remedies shall be (i) specifically enforce this Agreement, or (ii) terminate
this Agreement, in which case the Earnest Money shall be returned to Opus as agreed and final
liquidated damages. In no event shall Opus be entitled to record a notice of Lis Pendens against
the Property, unless Opus is pursuing specific performance of this Agreement. In any action or
proceeding to enforce this Agreement or any term hereof, the prevailing party shall be entitled to
recover its reasonable costs and attorneys’ fees.
15. Cumulative Rights. No right or remedy conferred or reserved to EDA or Opus is
intended to be exclusive of any other right or remedy herein or by law provided, but each shall be
cumulative in and in addition to every other right or remedy existing at law, in equity or by statute,
now or hereafter.
16. Entire Agreement; Modification. This written Agreement constitutes the
complete agreement between the parties with respect to this transaction and supersedes any prior
oral or written agreements between the parties regarding this transaction. There are no verbal
agreements that change this Agreement and no waiver of any of its terms will be effective unless
in writing executed by the parties.
17. Binding Effect; Survival. This Agreement binds and benefits the parties and their
respective successors and assigns. All representations and warranties, and indemnification
obligations of the parties hereto shall survive the Closing.
18. Opus’ Assignment. Opus may assign this Agreement without the prior written
consent of the EDA (but with written notice to EDA). No assignment shall relieve Opus from its
obligations under this Agreement.
19. Governing Law. The provisions of this Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota.
20. Counterparts; Facsimiles. This Agreement may be executed in any number of
counterparts, and all of the signatures to this Agreement taken together shall constitute one and the
same agreement, and any of the parties hereto may execute such agreement by signing any such
counterpart. Facsimile or “PDF” signatures on this Agreement shall be treated as originals until
the actual original signatures are obtained.
21. Represented by Counsel. Each party has been represented and advised by counsel
in the transaction contemplated hereby.
22. Time of the Essence. Time is of the essence of this Agreement.
\[remainder of page intentionally blank\]
14
IN AGREEMENT, the parties hereto have hereunto set their hands as of the Effective
Date.
COTTAGE GROVE ECONOMIC
DEVELOPMENT AUTHORITY
By ________________________________
Myron Bailey
Its President
By ________________________________
Jennifer Levitt
Its Executive Director
15
OPUS DEVELOPMENT COMPANY, L.L.C.
By:
Name:
Title:
16
EXHIBIT A
LEGAL DESCRIPTION AND DEPICTION OF THE PROPERTY
564006.00534.23019648.2
A-1