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HomeMy WebLinkAbout20071105 - VI-07October 26, 2007 v~_7 TO: The Honorable Mayor & Council FROM: John Grossman, HRA Director RE: Resolution authorizing Termination Agreement with Sherman Associates, Inc. The attached termination agreement between The City, HRA, Sherman Associates and Waterfront Lofts LLC specifies that all development agreements between these parties are terminated entirely and that all claims or matters arising out of the agreements have been satisfied and no party shall have any claim against any other party with respect to the development agreements. All agreements (from February 2004 through August 2005) related to riverfront development and all the public properties referenced in the agreements are included in the termination. The development agreements with Sherman specified responsibility for certain costs. The HRA was responsible for providing clear title to the property. The developer was responsible for legal and consulting costs relating to the condo project. The developer was responsible for demolition costs but the HRA would reimburse them if Block 1 was not sold to the developer. The HRA and Sherman Associates have agreed on the costs for which each is to be reimbursed to settle the responsibilities under the agreements. The HRA will reimburse Sherman for $90,308.00 in costs paid by Sherman for demolition and grading on Block 1, clearing the title and preparing a plat for Block i, and for financial analysis related to the townhouse proposal. Sherman will reimburse the HRA for $28,498.98 in costs paid by the HRA for legal and professional consulting costs related to the condo project. This is in addition to the $70,500 Sherman has deposited with the HRA in 2004 and 2005 for the payment of legal and consulting costs. Mr. Brueggemann confirmed that Sherman Associates agrees to the costs settlement and will sign the Termination Agreement. The HRA has approved the termination agreement, contingent on the City Council also approving the agreement. Recommendation: Approve the attached Resolution authorizing the Mayor and City Clerk to execute the Termination Agreement. THE CITY OF HASTINGS, DAKOTA COUNTY, MINNESOTA RESOLUTION NO. -20.07 APPROVING A TERMINATION AGREEMENT RELATING TO DEVELOPMENT AGREEMENTS WITH SHERMANASSOCIATES, INC. AND WATERFORD LOFTS LLC Council Member _ moved its adoption: troduced the following Resolution and BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HASTINGS AS FOLLOWS: Section 1. Background. O 1. The City of Hastings (the "City"), The Housing and Redevelopment Authority in and for the City of Hastings (the "Authority"}, Sherman Associates, Inc., ("Sherman"}, and Waterford Lofts LLC (the "Redeveloper") have entered into a number of agreements (the "Development Agreements") related to the redevelopment of certain real property located in the City's downtown. 1.02. Due to market and other conditions the redevelopment activities contemplated by the Development Agreements did not occur. 1.03. The City, the Authority, Sherman and the Redeveloper have settled their financial claims arising under the Development Agreements and have agreed to terminate the Development Agreements. 1.04. There has been prepared and presented to the City a Termination Agreement terminating the Development Agreements. Section 2. Approval of Termination Agreement. The Termination Agreement is hereby approved and the Mayor and City Clerk are hereby authorized to execute the same on behalf of the City. Section 3. Effective Date. This resolution is effective upon the date of its approval. Council Member and upon being put to a vote: Ayes: Nays: Absent: made a second to the foregoing Resolution The Resolution was adopted by the City Council of Hastings, Minnesota this day of , 2007. Paul J. Hicks, Mayor ATTEST: Melanie Mesko Lee, City Clerk (seal) TERMINATION AGREEMENT THIS TERMINATION AGREEMENT, is made on or as of the day of November, 2007, by and among the Housing and Redevelopment Authority In and For the City of Hastings, a public body corporate and politic (hereinafter referred to as the "Authority"), having its principal office at 101 Fourth Street East, Hastings, Minnesota 55033, the City of Hastings, a home rule charter city under the laws of the state of Minnesota (hereinafter referred to as the "City"), having its principal office at 101 Fourth Street East, Hastings, Minnesota 55033, Sherman Associates, Inc., a Minnesota corporation {hereinafter referred to as "Sherman") having its principal office at 233 Park Avenue South, Minneapolis, Minnesota 55415, and Waterfront Lofts LLC, a Minnesota limited liability company (hereinafter referred to as the "Redeveloper"), having its principal office at 233 Park Avenue South, Minneapolis, Minnesota 55415. WITNESSETH: WHEREAS, the Authority, the City, the Redeveloper and Sherman have entered into several agreements described later in this Termination Agreement (which agreements are collectively referred to herein as the "Development Agreements") relating to the potential redevelopment by Sherman andlor the Redeveloper of certain real property located in the City (which real property is legally described on Exhibit A to this Agreement and referred herein as the "Property"); and WHEREAS, due to market and other conditions the redevelopment activities contemplated by the Development Agreements were not feasible consistent with the terms of the Development Agreements and did not occur; and WHEREAS, the parties hereto desire by this Termination Agreement to terminate the Development Agreements in their entirety. NOW, THEREFORE, the Authority, the City, the Redeveloper and Sherman do hereby agree as follows: Section 1. The Development Agreements consist of the following agreements: (a) Purchase and Development Agreement dated August 15, 2005 by and between the City, the Authority and the Redeveloper. (b) Amendment dated June 19, 2006 to Purchase and Development Agreement, between the City, the Authority and the Redeveloper. (c) Subdivision and Development Agreement for Riverfront Addition dated August 15, 2005, between the City, the Authority and the Redeveloper. (d) Access Agreement dated August 15, 2005 between the Authority and the Redeveloper. (e) Demolition Access Agreement dated September 20, 2005 between the Authority and the Redeveloper. (fj First Amendment dated November i0, 2005 to Demolition Access Agreement between the Authority and the Redeveloper. (g) Master Preliminary Development Agreement dated January 3, 2004 between the City, the Authority and Sherman. (h) Amendment dated June 20, 2005 to Master Preliminary Development Agreement between the City, the Authority and Sherman. (i) Right of Entry Agreement dated May 24, 2005 between the Authority and Sherman. (j) Preliminary Development Agreement dated February 26, 2004 between the City, the Authority, and Sherman. Section 2. The Authority, the City, Sherman and the Redeveloper do hereby agree that all of the Development Agreements are hereby terminated in their entirety and that all claims or matters arising out of the Development Agreements have been satisfied and no party hereto shall have any claim against any other parry hereto with respect to the Development Agreements. As of the date hereof the parties have settled their financial claims against each other as described in Exhibit B to this Agreement. Section 3. In the event that it shall become necessary to execute any additional or supplementary instrument to evidence the termination of the Development Agreements the parties agree to execute the same. IN WITNESS WHEREQF, the Authority, the City, the Redeveloper and Sherman have caused this Agreement to be duly executed in their names and on their behalf on or as of the date first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF HASTINGS By Robert J. Hollenbeck, Chair By John Grossman, Executive Director CITY OF HASTINGS, MINNESOTA By Paul J. Hicks, Mayor By Melanie Mesko Lee, City Clerk WATERFRONT LOFTS LLC By George E. Sherman, its President and Chief Manager SHERMAN ASSOCIATES, INC. By George E. Sherman, its President STATE OF N~NNESOTA) COUNTY OF SS. The foregoing instrument was acknowledged before me this _ day of .2007, by Robert J. Hollenbeck and John Grossman, the Chair and the Executive Director of the Housing and Redevelopment Authority In and For the City of Hastings, a public body politic and corporate under the laws of the state of Minnesota, on behalf of the Authority. Notary Public STATE OF INNESOTA) COUNTY OF SS. The foregoing instrument was acknowledged before me this _ day of , 2007, by Paui J. Hicks and Melanie Mesko Lee, the Mayor and the City Clerk of the City of Hastings, Minnesota, a home rule charter city under the laws of the state of Minnesota, on behalf of the City. Notary Public STATE OF I~RNNESOTA) COUNTY OF SS. The foregoing instrument was acknowledged before me this ~ day of , 2007, by George E. Sherman, the President and Chief Manager of Waterfront Lofts LLC, a Minnesota limited liability company, on behalf of the Company. Notary Public STATE OF MINNESOTA) COUNTY OF SS. The foregoing instrument was acknowledged before me this -day of , 2007, by George E. Sherman, the President of Sherman Associates, Inc., a Minnesota corporation, on behalf of the corporation. Notary Public This document was drafted by: BRADLEY & DEIKE, P. A. 40 i 8 West 65~' Street, Suite 100 Edina, MN 55435 Telephone: (952) 926-5337 EXHIBIT A Description of Property The following property located in the City of Hastings, Dakota County, Minnesota: Lots 1- 8, Block 1, plus a .32 acre parcel of vacated First Street north of and contiguous to Lots 1-4, Block 1, Town of Hastings Lots i- 8, Block 2, Town of Hastings Lots 1- 4, Block 3, Town of Hastings Lots 1- 8, Block 16, Town of Hastings Lots 1 & 2 and Lot 3 except the West 29 feet thereof, Block 29, Town of Hastings Lots 1-4, Block 4, Town of Hastings EXIiIBIT B Terms of Financial Settlement A. Costs paid by HRA from Sherman's escrow account $70,500.00 Total of Sherman's deposits in escrow 2004 - 2005 $98,998.98 Consultant & legal fees, demolition, grading costs paid $28,498.98 Balance due to HIZA escrow account by Sherman B. Costs reimbursed from escrow account to Sherman $21,800.00 Block 1 demolition: reimburse per agreement if land not sold. $8,595.00 Townhouse proposal consultants: reimburse per HRA direction $30,395.00 Due to Sherman C. Title and site costs paid directly by Sherman, reimbursed by HRA per agreement $62,413.00 Block 1 title work, ALTA survey and plat $500.00 Grading on Block 1 $62,913.00 Due to Sherman D. Settlement Sherman pays HRA: $28,498.98 HRA pays Sherman: $93,308.00