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HomeMy WebLinkAboutVIII-13 Authorize Signature for Purchase Agreement - 910 1st Street E.City Council Memorandum To: Mayor Fasbender & City Council Members From:Ryan Stempski –Public Works Director Date:April 7, 2025 Item:Approve Resolution and Authorize Signature for Purchase Agreement at 910 1st Street Council Action Requested: The Council is requested to approve the attached resolution and authorize signature of the purchase agreement for acquisition of 910 1st Street. Background Information: The property owner of 910 1st Street was looking to build and sell a home on this vacant lot. During the review of the site plan, it was identified that the lot is a localized low point for the region and collects storm water runoff. A flared end section (inlet)is located at the low point and discharges via storm sewer to the Mississippi River. During a flood, the inlet is plugged by Public Works to avoid the river backflowing into the low area.This presents seasonal challenges for the property, which required additional engineering analysis to confirm no negative impacts. The property owner did not want to continue to work through and fund the required analysis, therefore an alternative solution to building was proposed. This alternative was for the City to purchase the lot for future storm water improvements. It was determined by staff to be an opportunity to enhance ponding, water quality, and/or to add infrastructure to improve plugging of the inlet in the future. Financial Impact: An appraisal was conducted for the lot, which determined the value to be $55,000. This is the purchase price listed in the purchase agreement (see attached). This amount would be paid out of the Storm Water Enterprise Fund, and the lot would be utilized for future storm water improvements to the region. Attachments: Resolution Approving Purchase of 910 1st Street Purchase Agreement for 910 1st Street VIII-13 RESOLUTION NO. _______ CITY OF HASTINGS DAKOTA COUNTY, MINNESOTA A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HASTINGS APPROVING THE PURCHASE AGREEMENT WITH DEAN JOHNSON HOMES, INC. Council member ______ introduced the following Resolution and moved its adoption: WHEREAS, Dean Johnson Homes, Inc., a Minnesota corporation (“Seller”) and the City of Hastings, a Minnesota municipal corporation (“City”) mutually desire to enter into a Purchase Agreement, attached hereto and incorporated herein by reference,for real property, located in the City of Hastings, Minnesota, depicted and legally described as follows: Lot 3, Block 111, Town of Hastings, Dakota County, Minnesota. PID: 19.32151.11.032 Abstract (the “Property”), and WHEREAS,the Purchase Agreement describes and articulates the purchase of the Property from Seller and Seller agrees to accept the terms of the sale. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HASTINGS AS FOLLOWS: The City Council hereby approves the purchase of the Property from Seller; and the appropriate officials are authorized to take such action as to effectuate such purchase. Council member_________________ moved a second to this resolution and upon being put to a vote it was adopted by the Council Members present. Adopted by the Hastings City Council on_______________, 202____, by the following vote: Ayes: Nays: Absent: Mary Fasbender, Mayor ATTEST: Kelly Murtaugh, City Clerk VIII-13 Authentislgn ID:55FF12CE-7900-F011-90CE-00224822F75A PURCHASE AGREEMENT 03/14/25THISPURCHASEAGREEMENT(the “Agreement”)is made as of this day of ,2025 (the “Effective Date”)between Dean Johnson Homes,Inc.,a Minnesota corporation (“Seller”),and the City of Hastings,a Minnesota municipal corporation (“City”). WHEREAS,Seller is the fee owner of certain real property with a Property Identification Number of 19.32151.11.032,located in the City of Hastings,County of Dakota,State of Minnesota,legally described as: Lot 3,Block 111,Town of Hastings,Dakota County,Minnesota. PID:19.32151.11.032 Abstract (the “Property”),and WHEREAS,the City has agreed to buy from Seller,and Seller has agreed to sell to the City,the Property pursuant to the terms and conditions of this Agreement. NOW THEREFORE,in consideration of the covenants set forth herein and other good and valuable consideration,the receipt and sufficiency of which the parties hereby acknowledge Seller and the City hereby agree as follows: 1.Sale of Property.Subject to compliance with the terms of this Agreement,Seller agrees to sell to the City,and the City agrees to buy from Seller,the following property (collectively, “Property”): The Property together with (i)all improvements located on the Property (“Improvements”),and (ii)all easements and rights benefiting or appurtenant to the Property,including Seller’s rights in any vacated or existing public rights of way abutting the property (“Appurtenances”)(the Property,Improvements and Appurtenances are collectively the “Real Property”),subject only to Permitted Encumbrances (as defined below). 2.Earnest Money.Upon execution of this Agreement,the City shall deposit One Thousand and No/100 Dollars ($1,000.00)(“Earnest Money”)to be deposited with Title and applied to the Purchase Price at Closing or otherwise disbursed to the City or Seller as required in this Agreement.The Earnest Money shall be disbursed as follows: (a)If Seller terminates this Agreement pursuant to Section 21 hereof because of the City’s default,or the City terminates this Agreement after any applicable VIII-13 Authentisign ID:55FF12CE-7900-F011-90CE-00224822F75A contingency date for any reason other than a default by Seller,the Earnest Money shall be retained by Seller upon such termination. (b)If the City proceeds to Closing,the Earnest Money shall be applied toward payment of the Purchase Price. (c)If the City or Seller terminates this Agreement prior to any applicable contingency date or otherwise fails to close because of Seller’s default or inability to convey title to the Property as required hereunder,or because of an unresolved title objection or because of a taking of the Property,the Earnest Money shall be returned to the City. 3.Purchase Price.The “Purchase Price”for the Property shall be the sum of Fifty-Five Thousand Dollars and OO/lOOs ($55,000.00). 4.City’s Contingencies.The City’s obligations under this Agreement are contingent upon each of the following occurring on or before the Closing Date (the “Contingency Date”): (a)Title.The condition of title shall have been found acceptable to the City,or been made acceptable,in accordance with the requirements and terms of Section 5 below. (b)Testing,Investigation.The City shall have determined that it is satisfied with the results of all matters disclosed by soil tests,soil borings,engineering inspections,structural and mechanical inspections,surveys,and any and all other reviews,tests or studies of the Property,including tests and inspections relating to asbestos and the adequacy of utilities available to the Property,all such tests,inspections and reviews to be obtained at the City’s sole cost and expense.Seller shall allow the City,and the City’s agents,access to the Property without charge and at all reasonable times for the purpose of the City’s investigation and testing the same.In performing such investigation and testing,the City shall attempt to minimize any interference with the Property’s operation.The City shall pay all costs and expenses of such investigation.The City shall further repair and restore any damage to the Property caused by the City’s testing and return the Property to substantially the same condition as existed prior to such entry.The City agrees to indemnify and defend Seller from and to hold Seller harmless against any and all claims,causes of action or expenses,including attorneys’fees,relating to or arising from the City’s presence on the Property prior to the Closing Date and to provide Seller with evidence that the City maintains reasonably adequate liability insurance,including contractual liability endorsement or provisions insuring the City’s potential liability’s under this Section 4. (c)Well-Sealing.All wells on the Property have been properly sealed by a Well contractor licensed by the Minnesota Department of Health (“MDH”)and the 2 VIII-13 Authentisign ID:55FF12CE-7900-F011-90CE-00224822F75A City has been provided proof that a Well and Boring Sealing Record has been submitted to MDH. (d)Environmental Investigation.The City shall have determined that it is satisfied with the results of all matters disclosed by hazardous waste and environmental reviews of the Property.Within fifteen (15)days after the date hereof Seller shall provide copies of all environmental inspection reports in Seller’s possession.Seller shall allow the City,and the City’s agents,access to the Property without charge and at all reasonable times for the purpose of the City’s investigation and testing the same.All such tests,inspections and reviews will be obtained at the City’s sole cost and expense.In performing such investigation and testing,the City shall attempt to minimize any interference with the operation of the Property.The City shall pay all costs and expenses of such investigation and testing.The City shall further repair and restore any damage to the Property caused by or occurring during the City’s testing and return the Property to substantially the same condition as existed prior to such entry. (e)Document Review.Within fifteen (15)days after the Effective Date,Seller shall make available to the City for copying true and correct copies of all documents reasonably accessible in Seller’s possession relating to the Property including test reports,plans,contracts,permits,any engineering reports,any as-built survey of the Property,and certificates of occupancy for the Property for the City’s review and analysis,and the City shall have determined that it is satisfied with its review and analysis of the documents. (f)Representations and Warranties.Seller’s representations and warranties contained in this Agreement are accurate in all material respects now and will be on the Closing Date as if made on the Closing. (g)Material Alterations.Seller shall not make any material alterations or improvements to the Property in the period between the Effective Date of this Agreement and the Closing Date. (h)Unpaid Property Taxes.On or before Closing,Seller has paid all unpaid property taxes and penalties. If any contingency set forth in this Section 4 has not been satisfied on or before the Closing Date, then this Agreement may be terminated,at the City’s option,by written notice from the City to Seller.Such notice of termination must be given at any time not later than the Closing Date.Upon such termination,the City shall be entitled to receive the Earnest Money,and neither party will have any further rights or obligations regarding this Agreement or the Property.All the contingencies set forth in this Section 4 are specifically stated and agreed to be for the sole and exclusive benefit of the City and the City shall have the right to unilaterally waive any contingency by written notice to Seller.Seller agrees to cooperate with and assist the City in attempting to satisfy each of the foregoing contingencies. 3 VIII-13 AuthenlisignID:55FF12CE-7900-F011-90CE-00224822F75A 5.Title. (a)Condition of Title.On the Closing Date,Seller shall be required to convey fee title to the Property to the City,subject to no liens,easements, encumbrances,conditions,reservations or restrictions other than the Permitted Encumbrances (as defined below). (b)Title Evidence.The following shall constitute “Title Evidence”:The Seller shall obtain,at the Seller’s expense,within twenty (20)days after the Effective Date of this Agreement a commitment (“Title Commitment”)from the Title Company for an Owner’s Policy of Title Insurance in the amount of the Purchase Price. (c)City’s Objections.Within twenty (20)days after receiving the last of the Title Commitment,the City will make written objections (“Objections”)to the form and/or contents of the Title Evidence.The City’s failure to make Objections within such time period will constitute a waiver of objections, except that the City shall not be deemed by virtue of failure to so object to have waived any proper objection relating to any Consensual Lien on the Property.Any matter shown on such Title Evidence and not objected to by the City (other than such Consensual Liens)shall be a “Permitted Encumbrance”hereunder.As used herein “Consensual Lien”means a mechanic’s lien or similar lien attached to the Property that Seller has voluntarily placed on the Property through his action or inaction. (d)Seller Cure Period.If the City notifies Seller of Objections within the time period set forth above,Seller shall have ten (10)days after receipt of the Objections to notify the City whether it will cure the Objection.If Seller notifies the City that it will cure the applicable Objection,Seller must use its best efforts to do so within thirty (30)days after Seller notifies the City that it will cure the Objection,during which period the Closing will be postponed as necessary.If the Objections are not cured within such thirty (30)day period or if Seller notifies the City that Seller will not cure an applicable Objection, the City’s options will be to do the following:terminate this Agreement by written notice to Seller and the Earnest Money shall be returned to the City or waive the Objections and proceed to close. 6.Closing.The consummation of the purchase and sale transaction contemplated by this Agreement (the “Closing”)shall occur on or before May 30,2025 (the “Closing Date”)at DCA Title,750 Main Street,Suite 280,Mendota Heights,MN 55118,(“Title Company”). Notwithstanding the foregoing,the Closing may be extended as agreed to by the City and Seller. Seller shall deliver possession of the Property to the City on the Closing Date. 4 VIII-13 AuthentisignID:55FF12CE-7900-F011-90CE-00224822F75A 7.Seller’s Closing Obligations.On the Closing Date,Seller shall execute and/or deliver to the City the following items which are referred to as “Seller’s Closing Documents.” Seller’s Closing Documents shall be duly executed and,where appropriate,be in recordable form. (a)Deeds.A warranty deed (the “Warranty Deed”)executed by Seller, conveying the Property to the City,free and clear of all encumbrances,except the Permitted Encumbrances.The Deed shall contain a “no wells”statement, or if there is a well on the Property,a well certificate shall be completed in the form required by law. (b)Title Policy.A Proforma Title Policy or a suitably marked up Commitment for Title Insurance initialed by Title Company,in the form required by this Agreement. (c)Seller’s Affidavit.An Affidavit by Seller indicating that on the Closing Date there are no outstanding,unsatisfied judgments,divorce proceedings,tax liens or bankruptcies against or involving Seller or the Property;that there has been no skill,labor or material furnished to the Property for which payment has not been made or for which mechanics’liens could be filed;and that there are no unrecorded interests in the Property,together with whatever standard owner’s affidavit and/or indemnity (ALTA form)that may be required by Title Company to issue an Owner’s Policy of Title Insurance with the standard exceptions waived. (d)Other Documents.All other documents reasonably determined to be necessary to transfer the Property to the City free and clear of all encumbrances except for the Permitted Encumbrances or as requested by the Title Company. (e)Lease and Contract Terminations.Evidence of termination of all leases or other occupancy agreements affecting the Property,if any,and evidence of termination of any service and maintenance contracts,equipment leases and other contracts regarding the Property,if any,all in form and substance acceptable to the City,effective as of the Closing Date. 8.City’s Closing Obligations.On the Closing Date,the City will execute and/or deliver to Seller the following,which (in the case of documents)are referred to as the “City’s Closing Documents.”The City’s Closing Documents shall be duly executed and,where appropriate,be in recordable form. (a)Purchase Price.The cash portion of the Purchase Price by wire transfer or other immediately available funds. (b)Other Documents.Such other documents as may be reasonably required by Title Company to record the Seller’s Closing Documents and issue the Title Insurance Policy required by this Agreement. 5 VIII-13 Authentisign ID:55FF12CE-7900-F011-90CE-00224822F75A 9.Costs and Prorations.Seller and the City agree to the following prorations and allocation of costs regarding this Agreement: (a)All real estate taxes due and payable in the year of Closing shall be prorated on a daily basis through the Closing Date.The City shall pay all real estate taxes due and payable in years following Closing.The City shall pay all special assessments levied from and after the Closing Date. (b)The Seller shall pay all title charges for the issuance of the Title Commitment. (c)The City shall pay any Title Policy premium for the owner’s policy of title insurance. (d)The City shall pay all costs of recording the Warranty Deed. (e)The Seller shall pay for the cost of recording any other documents necessary to convey the Property as required by this Agreement. (f)The Seller shall pay the deed tax. (g)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 the City and Buyer on a daily basis as of the Closing Date,with the Seller paying those allocable to the period prior to the Closing Date and the City being responsible for those allocable to the Closing Date and subsequent thereto. (h)All closing fees and costs payable at Closing to the Title Company shall be shared equally between the parties. (i)Each of the parties will pay its own attorneys’fees,except that a party defaulting under this Agreement or any closing document will pay the reasonable attorneys’fees,court costs and any and all other costs incurred by the non-defaulting party to enforce its rights regarding such default. 10.Operation Prior to Closing.During the period from the date of Seller’s acceptance of this Agreement to the Closing Date (“Executory Period”),Seller shall operate and maintain the Property in the ordinary course of business in accordance with prudent,reasonable standards, including maintaining liability insurance in the forms and amounts in place on the Effective Date. Seller shall not execute any contracts,leases or other agreements regarding the Property during the Executory Period that do not terminate on or before the Closing Date,without the written consent of the City,which consent may be withheld by the City in its sole discretion. I I .Representations and Warranties by Seller.Seller represents and warrants to the City as follows: 6 VIII-13 AuthentisignID:55FF12CE-7900-F011-90CE-00224822F75A (a)Authority.Seller has the requisite power and authority to enter into and perform this Agreement and those Seller’s Closing Documents signed by it; the foregoing documents have been duly executed and delivered;the execution,delivery and performance by Seller of such documents do not conflict with or result in a violation of any judgment,order,or decree of any court or arbiter or any other agreements of any nature to which Seller is a party;such documents are valid and binding obligations of Seller,and are enforceable in accordance with their terms. (b)Contracts.Seller has not entered into any contracts for the sale of the Property other than this Agreement.Seller has received no notice of and has no knowledge of any rights of first refusal or first offer,options to purchase any of the Property or any other rights or agreements which may delay or prevent this transaction.All leases for any part of the Property will be terminated and all parties currently in possession will have vacated the Property on or before the Closing Date. (c)Mechanic’s Liens.There has been no labor or materials of any kind furnished to or for the benefit of the Property for which payment in full has not been made. (d)Proceedings.Etc.Seller has received no notice of any proceedings (other than from the City),nor to the best of the Seller’s knowledge,any threatened proceedings against the Property,either administrative or judicial and that there is no litigation or condemnation proceeding pending,nor to the best of Seller’s knowledge threatened,which would affect the Property or the use thereof by the City.Seller knows of no present proceedings which would cause special assessments against the Property. (e)Other Agreements.That no note,mortgage,security agreement,or other agreement affecting the Property requires the consent of any party (or Seller shall provide such consent if necessary at its expense)or requires a change in the terms and conditions of the underlying financing as a result of the sale contemplated by this Agreement,and that there are no defaults existing in any such agreements affecting the Property. (f)Hazardous Materials;Storage Tanks.To the best of Seller’s knowledge there has not been any storage,release or disposal of,any Hazardous Material in,on,about or from the Property.The term “Hazardous Materials” means asbestos,urea formaldehyde,polychlorinated biphenyls,nuclear fuel or materials,radioactive materials,explosives,known carcinogens, petroleum products and by-products,and any pollutant,contaminant, chemical,material or substance defined as hazardous or as a pollutant or a contaminant in,or the release or disposal of which is regulated by,any federal,state,county,municipal,local or other statute,ordinance or 7 VIII-13 AuthentisignID:55FF12CE-7900-F011-90CE-00224822F75A regulation which relates to or deals with human health or the environment, including,without limitation,all regulations promulgated by a regulatory body pursuant to any such statute,ordinance,or regulation,including,but not limited to,the Comprehensive Environmental Response and Liability Act of 1980 (“CERCLA”),42 U.S.C.§9601,as amended. (g)Storage Tanks.To the best of Seller’s knowledge,there are no storage tanks located on the Property. Seller will indemnify the City,its successors and assigns,against,and will hold the City,its successors and assigns harmless from,any expenses or damages,including reasonable attorneys’fees,that the City incurs because of the breach of any of the above representations and warranties,whether such breach is discovered before or after Closing.Each of the representations and warranties herein contained shall survive the closing or the early termination or the merger of this Agreement. Consummation of this Agreement by the City with knowledge of any such breach by Seller will not constitute a waiver or release by the City of any claims due to such breach.Seller’s representations and warranties contained in this Section must be accurate in all material respects now and on the Closing Date as if made on the Closing Date and Seller shall have delivered to the City at Closing an Update Certificate. 12.Representations and Warranties by the City.The City represents and warrants to Seller that the City has the requisite power and authority to enter into this Agreement and the City’s Closing Documents signed by it;such documents have been duly authorized by all necessary action on the part of the City and have been duly executed and delivered;that the execution, delivery and performance by the City of such documents do not conflict with or result in violation of any judgment,order or decree of any court or arbiter to which the City is a party;such documents are valid and binding obligations of the City,and are enforceable in accordance with their terms. The City will indemnify Seller,its successors and assigns,against,and will hold Seller,its successors and assigns,harmless from,any expenses or damages,including reasonable attorneys’ fees,that Seller incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or after Closing.Each of the representations and warranties herein contained shall survive the closing or the early termination or the merger of this Agreement.Consummation of this Agreement by Seller with knowledge of any such breach by the City will not constitute a waiver or release by Seller of any claims due to such breach. 13.Condemnation.If,prior to the Closing Date,eminent domain proceedings are commenced against all or any portion of the Property by an entity other than the City,Seller shall immediately give notice to the City of such fact and this Agreement shall terminate,in which event neither party will have further obligations under this Agreement and the Earnest Money is returned to the City. 1 4.Brokers’Commission.Seller and the City represent and warrant to each other that they have dealt with no brokers,finders or the like in connection with this transaction.Seller hereby discloses that one or more of its principals are licensed real estate brokers in the State of Minnesota. 8 VIII-13 AuthentisignID:55FF12CE-7900-F011-90CE-00224822F75A 15.Survival.All of the terms of this Agreement will survive and be enforceable after the Closing and delivery of the Deeds unless otherwise stated herein. 1 6.Notices.Any notice required or permitted to be given by any party to the other shall be given in writing,and shall be (i)hand delivered to the receiving party (or any officer of such party),or (ii)mailed by United States registered or certified mail,return receipt requested,postage prepaid,(iii)emailed with a confirmation of receipt or (iv)properly deposited with a nationally recognized,reputable overnight courier,properly addressed as follows: If to Seller:Dean Johnson Homes,Inc. 4700 County Road 19 Medina,MN 55357 Attn-Dean Johnson If to the City:City of Hastings 101 4th Street East Hastings,MN 55033 Attn:City Administrator Notices shall be deemed effective on the earlier of the date of receipt or in the case of such deposit in the mail or overnight courier,on the third business day following such deposit.Any party may change its address for the service of notice by giving written notice of such change to the other party,in any manner above specified,at least ten (10)days prior to the effective date of such change. 17.Entire Agreement.This written Agreement constitutes the complete agreement between the parties and supersedes any and all other oral or written agreements,negotiations, understandings and representations between the parties regarding the Property.There are no verbal or written side agreements that change this Agreement. 18.Amendment;Waiver.No amendment of this Agreement,and no waiver of any provision of this Agreement,shall be effective unless set forth in a writing expressing the intent to so amend or waive,and the exact nature of such amendment or waiver,and signed by all parties (in the case of amendment)or the waiving party (in the case of waiver).No waiver of a right in any one instance shall operate as a waiver of any other right,nor as a waiver of such right in a later or separate instance. 19.Binding Effect.This Agreement binds and benefits the parties and their successors and assigns. 20.Controlling Law.This Agreement has been made under the laws of the State of Minnesota,and such laws will control its interpretation and effect. 21.Remedies.If City defaults under this Agreement,Seller shall have the right to terminate this Agreement by giving written notice to City in the manner provided by law.If City 9 VIII-13 Aulhentisign ID:55FF12CE-7900-F011-90CE-00224822F75A fails to cure such default within thirty (30)days of the date of such notice,this Agreement will terminate and Seller shall be entitled to retain the Earnest Money.The termination of this Agreement and the retention of the Earnest Money will be the sole remedies available to Seller for such default by City,and City will not be liable for damages or specific performance.If Seller defaults under this Agreement,City’s sole options are to either bring an action for specific performance or to terminate this Agreement upon written notice to Seller and receive the Earnest Money. 22.As-Is.The City acknowledges that the City is purchasing the Property in reliance solely on Seller’s representations and warranties in Paragraph 1 1 and the City’s inspection of the Property pursuant to Paragraph 4 and on the City’s judgment regarding the sufficiency of such inspections.The City is not relying on any written or oral representations,warranties or statements that Seller or Seller’s agents have made except for the representations and warranties of title to the Property and the representations and warranties of Seller set forth in this Agreement.Subject to the City’s right to terminate this Agreement as set forth herein,the City is purchasing the Property in “as is”condition.The “as is”nature of this transaction was considered by both parties in arriving at the agreed Purchase Price 23.Counterparts.For the convenience of the parties,any number of counterparts hereof may be executed and each such executed counterpart shall be deemed an original,but all such counterparts together shall constitute one and the same Agreement. IN WITNESS WHEREOF,the City and Seller have caused this Agreement to be executed under seal by its duly authorized signatory as of the dates referenced below. CITY OF HASTINGS By: Mary Fasbender Mayor By: Kelly Murtaugh City Clerk 10 VIII-13 Authentisign ID:55FF12CE-7900-F011-90CE-00224822F75A SELLER DEAN JOHNSON HOMES,INC.x—AuthentisiGN'7 B [PeAM 03/14/25 [NAME] Its;Owner 1 1 VIII-13 Authentisign ID:55FF12CE-7900-F011-90CE-00224822F75A EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY Real property located in the County of Dakota,State of Minnesota,legally described as follows: Lot 3,Block 111,Town of Hastings,Dakota County,Minnesota. PID:19.32151.1 1.032 Abstract A-l VIII-13