HomeMy WebLinkAbout5.1 Sale of Land to Imagine, LLC for the purposes of developing a Pizza Ranch
TO: Economic Development Authority
FROM: Matt Wolf, Economic Development Specialist
DATE: June 2, 2019
RE: Sale of Land to Imagine, LLC for Development of a Pizza Ranch
Background
Since 2014, the City of Cottage Grove Economic Development Authority has worked to market
their 1.67-acre parcel of land to the north of Muddy Cow and west of Oakwood Park. In 2014,
an RFP for a hotel was sent out to 31 hotel developers to gauge their interest in development
of the site. The City received interest from one hotel developer at that time, but the developer
chose not to further pursue a hotel development on the site. The EDA has also received
interest from two other hotel developers since that time, but those developers as well chose
not to pursue a hotel development on the site due to concerns with meeting parking needs on
the site for a hotel and on making the project financially viable.
In the meantime, the EDA has continued to market the site at such events as ICSC RECon
Convention in Las Vegas and the MNCAR Expo for hotel and/or commercial development.
Figure1. - Proposed site of future Pizza Ranch
Economic Development Authority
July 2, 2019
Page 2 of 2
Discussion
On May 31st, the EDA received a Letter of Intent (LOI) from Pizza Ranch for the proposed
purchase of the 1.67-acre site owned by the EDA. The purchase price for the property is
$650,000 and Pizza Ranch has offered to purchase the site for $600,000. The reduction in the
purchase price is because the Pizza Ranch Corporation requires additional environmental
testing be completed and due to the grading of the proposed site. Pizza Ranch will still be
required to pay all building and development fees. The buyer will be required within five
business days after execution of the purchase agreement to deposit in escrow $10,000
earnest money that will be applied to the purchase price at closing. The EDA approved the
Letter of Intent at a special meeting of the EDA on June 18, 2019 and was approved by the
City Council at their June 19, 2019 meeting.
Currently Pizza Ranch is proposing an 8,000 square foot building that will contain a fun zone
for kids. The restaurant would also have 110-115 parking spaces, 3-4 birthday party rooms,
and a pick-up window for orders made online. The proposed site plan for Pizza Ranch is
subject to change based on final design of the building to fit the site. Staff will continue to work
with Pizza Ranch on the site and zoning requirements to ensure it meets ordinance
requirements. Tentatively the owner has indicated they will be submitting their application with
site plan for the August Planning Commission meeting on Monday, August 26.
Recommendation
By Motion:
Approve the resolution approving the sale of property to Imagine, LLC for development
purposes.
Attachments
Resolution
Purchase Agreement
COTTAGE GROVE
ECONOMIC DEVELOPMENT AUTHORITY
WASHINGTON COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2019-011
A RESOLUTION APPROVING THE SALE OF PROPERTY TO
IMAGINE, LLC FOR DEVELOPMENT PURPOSES
Whereas, the EDA desires to sell property to Imagine, LLC for the purpose of development
for certain real property in Washington County, Minnesota, legally described as follows:
That part of Lot 2, Block 3, GATEWAY NORTH FIRST ADDITION, Washington
County, Minnesota, which lies northerly of the following described line: Commencing at
the southeast corner of said Lot 2; thence North 26 degrees 14 minutes 31 seconds West,
assumed bearing, along the easterly line of said Lot 2, a distance of 290.00 feet to an angle
point in said easterly line: thence North 10 degrees 04 minutes 21 seconds West along said
easterly line, 100.61 feet, to the point of beginning; thence South 89 degrees 58 minutes
43 seconds West, 250.48 feet to the westerly line of said Lot 2, and there terminating,
Washington County, Minnesota.
Abstract Property
PID: 08.027.21.34.0019
(“Property”); and
Whereas, on July 9, 2019, the EDA held a public public hearing on 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:
The sale of the Property to Imagine, LLC 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 sale.
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Passed this 9 day of July, 2019.
Myron Bailey, President
Attest:
Jennifer Levitt, Executive Director
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this “Agreement”) is entered into as of
__________________, 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”),
and Imagine, LLC, a Minnesota limited liability company (“Imagine”).
RECITALS
A. EDA is the fee owner of real property located in the City of Cottage Grove, Minnesota, legally
described on Exhibit A, attached hereto and incorporated herein by reference (the “Property”).
B. Imagine desires to purchase the Property from EDA, and EDA desires to sell the same to
Imagine, all on the terms and conditions of this Agreement.
NOW THEREFORE, for mutual consideration, the EDA and the Imagine agree as follows:
1. Sale.
1.1. Sale. Subject to the terms and provisions of this Agreement, EDA shall sell the
Property to Imagine, and Imagine shall purchase the Property from EDA.
1.2. Purchase Price. The purchase price to be paid by Imagine to EDA for the Property
shall be Six Hundred Thousand Dollars and 00/100s ($600,000.00) (the “Purchase
Price”). The Purchase Price shall be payable as follows: (a) Ten Thousand and
No/100 Dollars ($10,000.00), as earnest money, to be paid within five (5) 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 of the Effective Date, EDA
shall cause to be delivered to Imagine to the extent same are in the possession and control
of EDA: (a) copies of any surveys, soil tests and environmental reports previously
conducted on the Property; (b) copies of leases associated with the Property, (c) copies of
existing title work for the Property (the “Due Diligence Materials”). EDA makes no
representations or warranties regarding the accuracy or completeness of the Due Diligence
Materials. Imagine acknowledges that the sale of the Property is “AS-IS”, “WHERE IS,”
and “WITH ALL FAULTS”, and that it is the obligation of Imagine to conduct and
complete its due diligence and investigations relating to the Property.
3. Imagine’s Investigations. For a period up to the Closing Date, EDA shall allow Imagine
and Imagine’s agents access to the Property without charge and at all times for the purpose
of Imagine’s investigation and testing of the Property, including surveying and testing of
soil and groundwater (“Imagine’s Investigations”); provided, however, Imagine shall not
perform any invasive testing unless (a) EDA gives its prior written approval of Imagine’s
consultant that will perform the testing, which approval shall not be unreasonably withheld,
conditioned or delayed, and (b) Imagine gives EDA reasonable prior notice of such testing.
Imagine shall pay all costs and expenses of the Imagine’s Investigations and shall
indemnify and hold EDA and the Property harmless from all costs and liabilities, including
but not limited to mechanics’ liens, relating to activities on the Property related to
Imagine’s Investigations; however, Imagine shall not be responsible for liens, liability,
loss, expense or costs arising out of the discovery or presence of Hazardous Substances (as
such term is defined in Section 9.1(H)) on the Property or otherwise arising out of EDA’s
noncompliance with any Environmental Law (as such term is defined in Section 9.1(H)) or
other law or regulation. EDA shall have the right to accompany Imagine during any of
Imagine’s Investigations of the Property. Imagine shall provide to EDA copies of all third-
party, non-confidential written test results and reports conducted as part of Imagine’s
Investigations. Imagine shall pay all of the costs and expenses associated with Imagine’s
Investigations, to cause to be released any lien on the Property arising as a result of
Imagine’s Investigations and to repair and restore, at Imagine’s expense, any damage to
the Property caused by Imagine’s Investigations. The indemnification obligations set forth
herein shall survive termination or cancellation of this Agreement.
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 Imagine written notice of such condemnation,
taking or damage. After receipt of written notice of such condemnation, taking or damage
(from EDA or otherwise), Imagine 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 Imagine 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 Imagine 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 Imagine 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 Imagine 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 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 Imagine’s prior written consent, which consent
shall not be unreasonably withheld.
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5. Contingencies.
5.1. Imagine’s Contingencies.
A. Unless waived by Imagine in writing, Imagine’s 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) Imagine’s satisfaction, in
Imagine’s 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, Imagine shall have determined, in its
sole discretion, that it is satisfied with (a) the results of and matters
disclosed by Imagine’s 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, Imagine shall have determined the
acceptability and zoning of the Property for its proposed use as a
restaurant 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 Imagine.
(3) On or before the Closing Date, Imagine shall have received from
Title an irrevocable commitment to issue a title insurance policy for
the Property in a form and substance satisfactory to Imagine in
Imagine’s sole discretion, not disclosing any encumbrance not
acceptable to Imagine in Imagine’s 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, Imagine 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.
(6) On or before the Closing Date, Imagine shall have secured financing
that is satisfactory to Imagine in Imagine’s sole discretion for the
purpose of acquiring and constructing the Proposed Use.
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(7) On or before the Closing Date, Imagine may obtain an ALTA survey
for the Property certified to Imagine and Title.
(8) On or before the Closing Date, Imagine shall have reviewed and
approved the ALTA survey Imagine obtained of the Property.
(9) On or before the Closing Date, Imagine shall have obtained approval
of the transaction by the Board of Governors of Imagine.
(10) On or before the Closing Date, Imagine shall have approved the
forms of all closing documents.
The foregoing contingencies are for Imagine’s sole and exclusive benefit
and one (1) or more may be waived in writing by Imagine in its sole
discretion. EDA shall reasonably cooperate with Imagine’s efforts to satisfy
such contingencies, at no out of pocket cost to EDA or assumption of any
obligation or liability by Imagine except as otherwise provided herein.
Imagine shall bear all cost and expense of satisfying Imagine’s
contingencies. If any of the foregoing contingencies have not been satisfied
on or before the applicable date, then this Agreement may be terminated, at
Imagine’s option, by written notice from Imagine to EDA. Such written
notice must be given on or before the applicable date, or Imagine’s right to
terminate this Agreement pursuant to this Section shall be waived. If
Imagine terminates this Agreement pursuant to this Section, the Earnest
Money shall immediately be refunded to Imagine. 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 Imagine 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 obtain and record an Easement Vacation and Termination,
terminating the Reciprocal Parking Easement Agreement dated July 1, 2004
by and between the City of Cottage Grove, a Minnesota municipal
corporation and RT Minneapolis Franchise, LLC, a Delaware limited
liability company recorded as document number 3473952 on October 22,
2004.
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B. Imagine 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.
C. All representations and warranties of Imagine 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. If any of the foregoing contingencies have not been satisfied on or
before the dates set forth herein, then this Agreement may be terminated, at EDA’s
sole option, by written notice from EDA to Imagine. Upon termination, neither
party shall have any further rights or obligations against the other regarding this
Agreement or the Property, except for such obligations that survive termination of
this Agreement.
6. Closing. The closing of the purchase and sale contemplated by this Agreement (the
“Closing”) shall occur on or before September 30, 2019 (the “Closing Date”), unless
otherwise agreed to by the parties; provided, however, Imagine shall have the right and
option to extend the Closing Date for up to two (2) periods of thirty (30) days each.
Imagine 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 Imagine 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 Imagine the following:
A. Warranty Deed. A warranty deed conveying title to the Property to
Imagine, free and clear of all encumbrances, except the Permitted
Encumbrances (the “Deed”).
B. 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.
C. 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.
D. Settlement Statement. A settlement statement with respect to this
transaction.
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E. “Bring-Down” Certificate. A Bring-Down Certificate certifying that all of
the warranties made by EDA in this Agreement remain true as of the date
of closing.
F. Copies of Resolutions. EDA shall provide Imagine 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, Imagine’s CUP, Imagine’s site plan, zoning, and such other
governmental approvals as may be required for Imagine’s Proposed Use.
G. General Deliveries. All other documents reasonably determined by Title to
be necessary to transfer the Property to Imagine and to evidence that EDA
(a) 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
Imagine with respect to the Property with the so-called “standard
exceptions” deleted, and (e) has duly authorized the transactions
contemplated hereby.
6.2. Imagine Closing Documents and Deliveries. On the Closing Date, Imagine 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. Imagine shall provide EDA with copies of the
resolutions showing Imagine 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 Imagine’s name.
D. “Bring-Down” Certificate. A Bring-Down Certificate certifying that all of
the warranties made by Imagine in this Agreement remain true as of the date
of closing.
E. General Deliveries. All other documents reasonably determined by Title
to be necessary to evidence that Imagine has duly authorized the
transactions contemplated hereby and evidence the authority of Imagine to
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enter into and perform this Agreement and the documents and instruments
required to be executed and delivered by Imagine pursuant to this
Agreement, or may be required of Imagine under applicable law, including
any purchaser’s affidavits or revenue or tax certificates or statements.
7. Prorations. EDA and Imagine agree to the following prorations and allocation of costs
regarding this Agreement:
7.1 Title Evidence and Closing Fee. EDA shall pay all costs of the title search and
preparation of the commitment with respect to the Property. Imagine shall pay all
premiums for any title insurance policy it desires with respect to the Property.
Imagine 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.
7.3 Recording Costs. EDA will pay the cost of recording all documents necessary to
place record title to the Property in EDA. Imagine will pay all recording costs with
respect to the recording of the Deed and for the recording of any mortgage required
by Imagine, 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 Imagine 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 Imagine 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.
Imagine 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 Imagine’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 Imagine on a daily basis as of the Closing Date, with EDA
paying those allocable to the period prior to the Closing Date and Imagine being
responsible for those allocable to the Closing Date and subsequent thereto.
7.6 Environmental Review. Imagine shall pay all costs and expenses related to
Imagine’s Investigations.
7.7 Attorneys’ Fees. EDA and Imagine shall each pay its own attorneys’ fees incurred
in connection with this transaction, except as otherwise specifically set forth in this
Agreement.
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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 “Title Evidence”).
8.1 Imagine’s Objections. Within twenty (20) days after Imagine’s receipt of the last
of the Title Evidence, Imagine 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. Any matters reflected on the Title Evidence
which are not objected to by Imagine within such time period or waived by Imagine
in accordance with Section 8.2(B) shall be deemed to be permitted encumbrances
(“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. Imagine 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 Imagine’s
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,
Imagine 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 Imagine so terminates this Agreement, neither EDA nor Imagine 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
Imagine.
9. Warranties and Representations.
9.1 By EDA. EDA warrants and represents the following to Imagine, and
acknowledges that Imagine 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
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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 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
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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) 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 unrecorded agreements or other contracts of any nature or type
relating to, affecting or serving the Property.
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J. 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.
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 Imagine 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 Imagine has actual knowledge of EDA’s breach thereof prior to Closing
and Imagine consummates the acquisition of the Property as provided herein.
Imagine 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. Imagine agrees that except as
expressly specified in this Agreement and/or in any documents executed and delivered by
the EDA at Closing, Imagine 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. Imagine is an experienced purchaser of property such as
the Property and Imagine 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 Imagine. Imagine 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. Imagine has all requisite authority to enter into this Agreement and to
perform all of its obligations under this Agreement.
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B. The execution, delivery and performance by Imagine 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 Imagine, (b) violate or contravene any provision of the
articles of incorporation or bylaws of Imagine, 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 Imagine 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, Imagine shall have no liability with respect to any breach of
a particular representation or warranty if EDA shall fail to notify Imagine in writing of
such breach within two (2) years after the Closing Date.
10. Additional Obligations of EDA.
10.1 Licenses and Permits. EDA shall transfer to Imagine 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 Imagine 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 Imagine 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 Imagine may dispose of any trash or
personal property remaining on the Property as of the Closing Date in Imagine’s
sole discretion and EDA agrees to pay for all costs and expenses incurred by
Imagine with respect to the transport and/or disposal of the personal property within
ten (10) days after receipt of an invoice from Imagine.
10.3 Further Assurances. From and after the Closing Date, EDA agrees to execute,
acknowledge and deliver to Imagine 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 Imagine 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 Imagine of any agreements, indebtedness,
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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. Imagine may elect to seek certain approvals in order for Imagine 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 Imagine’s efforts to obtain the Approvals at or prior to
Closing. EDA hereby grants Imagine the right to file and prosecute applications
and petitions for the Approvals and any special use permits and variances desired
by Imagine; 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
cooperate with Imagine in the filing and prosecution of such applications and
petitions, including the filing of the same in EDA’s name, if required.
11. Broker. It is acknowledged that there is not a broker for EDA. Imagine has a broker and
all fees to the broker will be paid by EDA.
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 Imagine: Imagine, LLC
1885 Newberry Avenue North
Stillwater, MN 55082
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13. Default; Remedies. In addition to the rights granted to the parties pursuant to Minn. Stat.
Sec. 559.21, if either EDA or Imagine 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 Imagine, 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 forfeited to EDA as agreed and final
liquidated damages. In the case of any default by EDA, Imagine’s 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 Imagine as agreed and final liquidated
damages. In no event shall Imagine be entitled to record a notice of Lis Pendens against
the Property, unless Imagine 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.
14. Cumulative Rights. No right or remedy conferred or reserved to EDA or Imagine 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.
15. 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.
16. 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.
17. Governing Law. The provisions of this Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
18. 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.
19. Represented by Counsel. Each party has been represented and advised by counsel in the
transaction contemplated hereby.
20. Time of the Essence. Time is of the essence of this Agreement.
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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
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IMAGINE, LLC
By:
Ernest L. Swanson, Sr.
Its
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real property in Washington County, Minnesota, legally described as follows:
That part of Lot 2, Block 3, GATEWAY NORTH FIRST ADDITION, Washington County,
Minnesota, which lies northerly of the following described line: Commencing at the southeast
corner of said Lot 2; thence North 26 degrees 14 minutes 31 seconds West, assumed bearing, along
the easterly line of said Lot 2, a distance of 290.00 feet to an angle point in said easterly line:
thence North 10 degrees 04 minutes 21 seconds West along said easterly line, 100.61 feet, to the
point of beginning; thence South 89 degrees 58 minutes 43 seconds West, 250.48 feet to the
westerly line of said Lot 2, and there terminating, Washington County, Minnesota.
Abstract Property
PID: 08.027.21.34.0019
A-1