HomeMy WebLinkAboutX-C-04 Property Sale - NW Corner of Spiral Blvd. and Glendale Rd.1
City Council Memorandum
To: Mayor Fasbender and City Council
From: John Hinzman, Community Development Director
Date: June 26, 2023
Item: Resolution: Sale of City Property – Northern State Services LLC – Northwest Corner of
Spiral Blvd and Glendale Rd
City Council Action Requested
Adopt the attached resolution granting the following approvals in conjunction with the sale of a
+/- 5 acre parcel located at the northwest corner of Spiral Blvd and Glendale Rd to Northern
State Services LLC (Richard Ries)
1) Approve Disposition of City Property (as required by City Charter)
2) Approve the Sale and Purchase Agreement with Northern State Services LLC
3) Approve Construction of an on-site sewer system (septic system)
The City Council held a public hearing to consider disposition of the property at the June 5, 2023
meeting. A simple majority is necessary for action.
Background Information
The City owns approximately 20 acres located west of Glendale Road that is bisected by Spiral
Blvd. Approximately 5 acres is located north and west of Spiral Blvd, with the remaining
acreage located south and east of Spiral Blvd.
Northern State Services recently purchased a 19.37-acre parcel directly to the north and seeks to
combine both properties into Ries Addition, a two lot rural subdivision. The purchase agreement
requires the property to be platted to include the right-of-way for the existing Spiral Blvd
roadway.
The property is zoned Agriculture which establishes a 10-acre minimum lot size. The properties
are outside of the present and planned extension of the Metropolitan Urban Service Area
(MUSA) which establishes the boundary for municipal sewer and water service. Northern State
seeks acquisition to meet the minimum lot size of the Agricultural zoning district and to establish
frontage along Spiral Blvd to utilize an existing driveway access.
A purchase price of $60,960 has been offered based for the parcel. The offer is consistent with
the price per s.f. paid for the adjoining property. As part of the land purchase, the applicant
agrees to plat the property which would establish dedicated right-of-way for Spiral Blvd that
does not presently exist and is desired by the City.
X-C-04
2
History
The proposed for sale is part of a larger parcel the city uses for some material storage and was a
former dump site. The subject Property was separated from the parcel with the construction of
Spiral Blvd. This remnant is sloped, unusable, and too small to be developed on its own. The
city currently maintains it but has no use for it.
Upon acquisition of the City parcel the two lots would meet the minimum requirements for a
single-family home. There are no city utilities available currently and the location is out of the
Municipal Services Area. With the future wastewater treatment plant relocation, there may or
may not be services accessible to these properties in the future. City ordinance would require
connection to future city utilities if they become available.
City Charter Provisions
Section 7.04 of the City Charter establishes the following provisions for the sale of real property
held by the City:
No real property of the City shall be disposed of unless the Council shall first pass a
resolution containing specific findings that the public interest requires that the property
be disposed of, and only after public notice and hearing of such proposed disposition.
The proceeds of any sales of such property shall be used, as far as possible, to retire any
outstanding indebtedness incurred by the City in the purchase, construction or
improvement of this property. If there is no such outstanding indebtedness, the Council
may by resolution designate some other public use for the proceeds. Sales of real
property owned by the City shall be conducted in commercially reasonable manners.
Recommendation
Approval of the resolution is recommended.
Financial Impact:
Sale of the property will generate $60,960 in revenue as well as an increase in the community’s
annual tax base. City maintenance expenses for the property will cease.
Advisory Commission Discussion:
N/A
Council Commission Discussion:
N\A
Attachments:
• Resolution
• Map
• Purchase Agreement
X-C-04
3
HASTINGS CITY COUNICL
RESOLUTION NO.
A RESOLUTION APPROVING THE DISPOSAL OF CITY PROPERTY;
APPROVING THE SALE OF PROPERTY TO NORTHERN STATE SERVICES LLC
AND APPROVING THE RELATED PURCHASE AGREEMENT; AND APPROVING
CONSTRUCTION OF ON-SITE SEWER SYSTEM
Council member _ ______________ introduced the following Resolution and
moved its adoption:
WHEREAS, the City of Hastings (“City”) is the fee owner of real property located in
Dakota County, Minnesota, and legally described on Exhibit A (“City Property”); and
WHEREAS, the City desires to dispose of and sell a portion of City Property legally
described on Exhibit B (the “Property”) so that the Property will be platted and include right of
way for Spiral Boulevard; and
WHEREAS, Northern State Services LLC, a Minnesota limited liability company
(“Buyer”), is willing to plat the property and dedicate right of way for Spiral Boulevard, pursuant
to a Purchase Agreement by and between City and Buyer (“Purchase Agreement”); and
WHEREAS, the Purchase Agreement describes and articulates the sale of the Property
and the Buyer agrees to accept these terms of the sale; and
WHEREAS, on June 5, 2023, the City held a public hearing on the disposal and sale of
the Property and City considered all of the information presented at the public hearing; and
WHEREAS, Buyer has requested the ability to construct private on-site sewer systems on
the Property.
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Hastings as
follows:
1. That pursuant to the City’s Charter Section 7.04, the disposal and sale of the Property
to Buyer is in the public interest of the City and its people to avoid economic waste and
secure platted right of way; and, there being no outstanding indebtedness incurred by
the City in the purchase, construction or improvement of this Property the Council
designates the proceeds be placed into the General Fund.
2. That said conveyance has no relationship to the City’s Comprehensive Plan and
therefore the Council has dispensed with the requirements of Minn. Stat. § 462.356,
Subd. 2 that may require the Hastings Planning Commission to perform a
Comprehensive Plan compliance review of said conveyance that may constitute a
disposal of real property pursuant to § 462.356, Subd. 2.
X-C-04
4
3. Pursuant to City Code Section 50.05 subd. D.3 approval is given to Buyer to construct
a private on-site septic system on the Property.
4. The appropriate officials are hereby authorized to take such action so as to effectuate
such sale.
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 this 26th day of June 2023, with the following vote:
Ayes:
Nays:
Absent:
______________________________
Mary Fasbender, Mayor
ATTEST:
_____________________________
Kelly Murtaugh, City Clerk
I HEREBY CERTIFY that the above is a true and correct copy of resolution presented to and
adopted by the City of Hastings, County of Dakota, Minnesota, on the 26th day of June 2023, as
disclosed by the records of the City of Hastings on file and of record in the office.
Kelly Murtaugh, City Clerk (SEAL)
X-C-04
A-1
EXHIBIT A
LEGAL DESCRIPTION OF CITY’S PROPERTY
That part of the Southwest Quarter of the Southeast Quarter of Section 35, Township 115, Range
17, Dakota County, Minnesota lying west of Glendale Road and subject to highway easement
Parcel 1 on County Right-of-Way Map 108.
Abstract Property
PID: 19-03500-84-010
X-C-04
EXHIBIT B
LEGAL DESCRIPTION OF THE PROPERTY
That part of the Southwest Quarter of the Southeast Quarter of Section 35, Township 115,
Range 17, described as BEGINNING at the northwest corner of said Southwest Quarter of
the Southeast Quarter; thence South 0 degrees 15 minutes 13 seconds East along the west
line of said Southwest Quarter of the Southeast Quarter 578.64 feet; thence northeasterly
535.96 feet along a curve that is concave to the northwest having a radius of 707.00 feet,
central angle of 35 degrees 01 minute 17 seconds, chord distance of 425.45 feet, and the
chord of said curve bears North 52 degrees 26 minutes 53 seconds East; thence North 34
degrees 56 minutes 16 seconds East, tangent to the last described curve, 104.02 feet; thence
northeasterly 253.80 feet along a curve concave to the southeast, having a radius of 260.00
feet, central angle of 55 degrees 55 minutes 45 seconds, chord distance of 243.84 feet, and
the chord of said curve bears North 62 degrees 54 minutes 08 seconds East; thence South
89 degrees 58 minutes 45 seconds East, not tangent to the last described curve; 50.00 feet
to the centerline of Dakota County Road 91, as now traveled; thence North 0 degrees 01
minute 15 seconds East along said centerline of County Road 91 a distance of 125.04 feet
to the north line of said Southwest Quarter of the Southeast Quarter; thence South 89
degrees 49 minutes 32 seconds West along said north line of the Southwest Quarter 666.55
feet to the point of beginning. Subject to highway easement.
X-C-04
A-3
City Property for disposition/ sale
+/- 5 acres including Spiral Blvd
X-C-04
A-4
Richard Reis Property
City Property for disposition/ sale
X-C-04
1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this “Agreement”) is entered into as of
, 2023 (the “Effective Date”), by and between the City of Hastings, a Minnesota municipal
corporation (“City”), and Northern State Services LLC, a Minnesota limited liability company
(“Buyer”).
RECITALS
Recital No. 1. City is the owner of certain real property located in Hastings, Dakota
County, Minnesota, with Parcel Identification No. 19-03500-84-010, depicted on Exhibit A
(“City’s Property”), attached hereto and incorporated herein by reference.
Recital No. 2. Buyer desires to purchase a portion of City’s Property, legally described
on Exhibit B (“Property”), attached hereto and incorporated herein by reference, from City.
Recital No. 3. City will sell the Property to Buyer on the terms and conditions of this
Agreement.
Recital No. 4. City believes that the sale of the Property pursuant to and in general
fulfillment of this Agreement is in the vital and best interests of the City, will promote the health,
safety, morals, and welfare of its residents, and will be in accord with the public purposes and
provisions of the applicable State and local laws and requirements.
NOW, THEREFORE, in consideration of the covenants and the mutual obligations
contain herein, the parties hereby covenant and agree with each other as follows:
1. Sale.
1.1. Sale. Subject to the terms and provisions of this Agreement, City shall sell
the Property to Buyer, and Buyer shall purchase the Property from City.
1.2. Purchase Price. The purchase price to be paid by Buyer to City for the
Property shall be Sixty Thousand Nine Hundred Sixty and no/100 Dollars ($60,960.00)
(the “Purchase Price”) payable as follows: (a) Ten Thousand and no/100 Dollars
($10,000.00), as earnest money, to be paid to DCA Title, 750 Main Street, Suite 280,
Mendota Heights, MN 55118 (“Title”) within 3 business days of execution this
Agreement; and (b) the balance on the Closing Date subject to those adjustments,
prorations and credits described in this Agreement, in cash or certified funds or by wire
transfer pursuant to instructions from City or Title. The Closing will occur at Title, unless
otherwise agreed to by the parties.
2. Available Surveys, Tests, and Reports. Within five (5) days of the Effective
Date, City shall cause to be delivered to Buyer (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 City, and (b) copies of existing title work for the Property and in the possession of
X-C-04
2
City (the “Due Diligence Materials”). City makes no representations or warranties regarding the
accuracy of the Due Diligence Materials. If Buyer so requests, City 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 City makes no representation as to whether any such
reissuance or recertification will be available.
3. Buyer’s Investigations. Up to the Closing Date, City shall allow Buyer and
Buyer’s agents access to the Property without charge and at all times for the purpose of Buyer’s
investigation and testing of the Property, including surveying and testing of soil and groundwater
(“Buyer’s Investigations”); provided, however, Buyer shall not perform any invasive testing unless
(a) City gives its prior written approval of Buyer’s consultant that will perform the testing, which
approval shall not be unreasonably withheld, conditioned or delayed, and (b) Buyer gives City
reasonable prior notice of such testing. City shall have the right to accompany Buyer during any
of Buyer’s Investigations of the Property. Buyer shall provide to City copies of all third-party,
non-confidential written test results and reports conducted as part of Buyer’ Investigations. Except
as otherwise provided herein, Buyer agrees to pay all of the costs and expenses associated with
Buyer’s Investigations, to cause to be released any lien on the Property arising as a result of
Buyer’s Investigations and to repair and restore, at Buyer’ expense, any damage to the Property
caused by Buyer’s Investigations. Buyer shall indemnify and hold City and the Property harmless
from all costs and liabilities, including, but not limited to, reasonable attorneys’ fees, arising from
Buyer’ Investigations. The indemnification obligations provided herein shall survive the
termination or cancellation of this Agreement. If this Agreement is terminated based upon any
environmental condition as herein provided, and City requests, Buyer shall give City copies of any
and all environmental reports obtained by Buyer, if any.
4. Insurance; Risk of Loss. City 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, City shall immediately give Buyer written notice of such condemnation, taking or damage.
After receipt of written notice of such condemnation, taking or damage (from City or otherwise),
Buyer shall have the option (to be exercised in writing within thirty (30) days of receipt of such
written notice from City) either (a) to require City to (i) convey the Property at Closing (as defined
in Section 6) to Buyer 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 Buyer at
Closing all of City’s right, title and interest in and to any claims City 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 Buyer 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 City, whereupon this Agreement shall be terminated, the Earnest Money shall
be refunded to Buyer 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. City shall not designate counsel, appear in, or otherwise act
X-C-04
3
with respect to the condemnation proceedings without Buyer’ prior written consent, which consent
shall not be unreasonably withheld.
5. Contingencies.
5.1. Buyer’s Contingencies.
A. Unless waived by Buyer in writing, Buyer’s obligation to proceed
to Closing shall be subject to (a) performance by City of its obligations hereunder,
(b) the continued accuracy of City’s representations and warranties provided in
Section 9.1, and (c) Buyer’s satisfaction, in Buyer’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, Buyer shall have determined,
in its sole discretion, that it is satisfied with (a) the results of and matters
disclosed by Buyer’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. If Buyer has not
terminated this Agreement on or before the Closing Date, the contingency
set forth in this paragraph shall be deemed waived.
(2) On or before the Closing Date, Buyer shall have determined
the acceptability of the Property for its intended use and incidental uses
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 Buyer.
If Buyer has not terminated this Agreement on or before the Closing Date,
the contingency set forth in this paragraph shall be deemed waived.
(3) On or before the Closing Date, Buyer shall have obtained all
appropriate approvals and permits necessary for the Proposed Use on the
Property, which approvals may include, without limitation, access permits,
signage permits, building permits, required licenses (the “Approvals”). All
costs and expenses related to the preparation of any documentation
necessary to create any plans, specifications or the like shall be the
responsibility of the Buyer.
(4) On or before the Closing Date, Buyer shall have obtained all
Land Use Entitlements. “Land Use Entitlements” means planning
applications, including but not limited to, Plat, Site Plan, and Rezoning
Approvals, obtained by Buyer for the Proposed Use.
(5) On or before the Closing Date, and without limitation of the
terms of Sections 5.1(A)(1), 5.1(A)(2), 5.1(A)(3) and 5.1(A)(4), Buyer shall
be satisfied that they may develop the Property in accordance with a site
X-C-04
4
plan, architectural plan, building plan, grading and drainage plan and other
plans and specifications satisfactory to Buyer in their sole discretion.
(6) On or before the Closing Date, Buyer shall have satisfied
themselves, in Buyer’s sole discretion, that access to and from roads and the
Property is adequate for the Proposed Use, including without limitation,
access to the Property from the adjacent road, median cuts and curb cuts.
(7) On or before the Closing Date, Buyer shall have satisfied
themselves, in Buyer’s sole discretion, that water and gas mains, electric
power lines, sanitary and storm sewers and other utilities are available to
the Property and are adequate for the Proposed Use, such that only service
lines must be extended to service the Property for water, gas, electric,
sanitary and storm sewer and other utilities.
(8) On or before the Closing Date, Buyer shall have received
from Title an irrevocable commitment to issue a title insurance policy for
the Property in a form and substance satisfactory to Buyer in Buyer’s sole
discretion, not disclosing any encumbrance not acceptable to Buyer in
Buyer’s sole discretion (the “Approved Commitment”). If Buyer has not
terminated this Agreement on or before the Closing Date, the contingency
set forth in this paragraph shall be deemed waived.
(9) On or before the Closing Date, Buyer shall have received
from Title an irrevocable commitment to issue a title insurance policy for
the Property in the form of the Approved Commitment, subject only to such
changes in title as are Permitted Encumbrances or as are acceptable to Buyer
in Buyer’s sole discretion.
(10) On or before the Closing Date, City shall have obtained
releases of the Property from any and all mortgages or other monetary liens
affecting any of the Property.
(11) On or before the Closing Date, Buyer shall have determined
that it is satisfied with the books and records in City’s possession, if any,
including site plans, surveys, engineering or environmental reports
associated with the Property.
(12) On or before the Closing Date, Buyer shall have secured
financing that is satisfactory to Buyer in Buyer’s sole discretion for the
purpose of acquiring and constructing the Proposed Use.
(13) On or before the Closing Date, Buyer may obtain a Survey
for the Property certified to Buyer and Title.
(14) On or before the Closing Date, Buyer shall have approved
X-C-04
5
the forms of all closing documents.
(15) City shall have performed and satisfied all agreements,
covenants and conditions required pursuant to this Agreement to be
performed and satisfied by City prior to the Closing Date.
(16) All representations and warranties of City contained in this
Agreement shall be accurate as of the Closing Date.
(17) On or before the Closing Date, City shall have split the
Property from the City’s Property.
(18) On or before the Closing Date, Buyer shall have received
final approval from the City of Hastings to record a plat, which includes the
Property and Buyer’s property located immediately to the north of the
Property, in a form approved by Buyer (the “Plat”). All costs and expenses
related to applying for and obtaining approvals for the Plat shall be waived
by the City.
The foregoing contingencies are for Buyer’s sole and exclusive benefit and
one (1) or more may be waived in writing by Buyer in its sole discretion. City shall
reasonably cooperate with Buyer’s efforts to satisfy such contingencies, at no out
of pocket cost to City or assumption of any obligation or liability by Buyer except
as otherwise provided herein. Buyer shall bear all cost and expense of satisfying
Buyer’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 Buyer’s option, by written notice from Buyer to City. Such written notice must
be given on or before the applicable date, or Buyer’s right to terminate this
Agreement pursuant to this Section shall be waived. If Buyer terminates this
Agreement pursuant to this Section on or before the applicable date, the Earnest
Money shall immediately be refunded to Buyer. 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 Buyer elects not to exercise any of the contingencies set out
herein, such election may not be construed as limiting any representations or
obligations of City set out in this Agreement, including, without limitation, any
indemnity or representations with respect to environmental matters.
5.2. City’s Contingencies. City’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. On or before the Closing Date, City shall approve the sale of the
Property for the Purchase Price at a public hearing.
X-C-04
6
B. On or before the Closing Date, City split the Property from City’s
Property.
C. On or before the Closing Date, Buyer shall have received final
approval of the Plat.
D. Buyer shall have performed and satisfied all agreements, covenants
and conditions required pursuant to this Agreement to be performed and satisfied
by Buyer prior to the Closing Date.
E. All representations and warranties of Buyer contained in this
Agreement shall be accurate as of the Closing Date.
F. There shall be no uncured default by Buyer of any of its obligations
under this Agreement as of the Closing Date, not otherwise waived by City.
If any contingency contained in this Section 5.2 has not been satisfied on or
before the date described herein, and if no date is specified, then the Closing Date,
then this Agreement may be terminated by written notice from City to Buyer. If
termination occurs all documents deposited by Buyer shall be immediately returned
to Buyer, and all documents deposited by City shall be immediately returned to
City and neither party will have any further rights or obligations with respect to this
Agreement or the Property, except for such obligations that survive termination of
this Agreement. If City terminates this Agreement pursuant to this Section, the
Earnest Money shall be retained by City. All the contingencies in this Section 5.2
are specifically for the benefit of City, and City shall have the right to waive any
contingency in this Section 5.2 by written notice to Buyer.
6. Closing. The closing of the purchase and sale contemplated by this Agreement (the
“Closing”) shall occur on or before December 31, 2023, unless otherwise agreed to by the parties
(the “Closing Date”). City agrees to deliver legal and actual possession of the Property to Buyer
on the Closing Date.
6.1. City’s Closing Documents and Deliveries. On the Closing Date, City
shall execute and/or deliver, as applicable, to Buyer the following:
A. Warranty Deed. A general warranty deed conveying title to the
Property to Buyer, free and clear of all encumbrances, except the Permitted
Encumbrances (the “Deed”).
B. Bring Down Certificate. City shall provide Buyer with a certificate
recertifying that the representations and warranties of City contained in this
Agreement are true and correct as of the Closing Date.
X-C-04
7
C. FIRPTA Affidavit. An affidavit of City certifying that City 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. City’s Affidavit. A standard owner’s affidavit (ALTA form) from
City 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. City shall provide Buyer with copies of the
resolutions for the various City and/or City public meetings showing City and/or
various City commissions and/or councils have approved this transaction, Buyer’
CUP, Buyer’ site plan, zoning, and such other governmental approvals as may be
required for Buyer’ Proposed Use.
G. General Deliveries. All other documents reasonably determined by
Title to be necessary to transfer the Property to Buyer and to evidence that City (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 City’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 Buyer with
respect to the Property with the so-called “standard exceptions” deleted, and (e) has
duly authorized the transactions contemplated hereby.
6.2. Buyer Closing Documents and Deliveries. On the Closing Date, Buyer
shall execute and/or deliver, as applicable, to City the following:
A. Payment of Purchase Price. The Purchase Price, in accordance
with the terms of Section 1.2.
B. Bring-Down Certificate. A certificate dated as of the Closing Date,
signed by an authorized officer of Buyer, certifying that the representations and
warranties of Buyer contained in this Agreement are true as of the Closing Date.
C. Settlement Statement. A settlement statement with respect to this
transaction.
D. FIRPTA Affidavit. An affidavit of Buyer certifying that Buyer is
not a “foreign person”, “foreign partnership”, foreign trust”, “foreign estate” nor a
X-C-04
8
“disregarded entity” as those terms are defined in Section 1445 of the Internal
Revenue Code of 1986, as amended.
E. Buyer’s Affidavit. A standard owner’s affidavit (ALTA form)
from Buyer 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.
F. Plat. Mylars of the property to be platted.
G. General Deliveries. All other documents reasonably determined by
Title to be necessary to evidence that Buyer has duly authorized the transactions
contemplated hereby and evidence the authority of Buyer to enter into and perform
this Agreement and the documents and instruments required to be executed and
delivered by Buyer pursuant to this Agreement, or may be required of Buyer under
applicable law, including any purchaser’s affidavits or revenue or tax certificates
or statements.
7. Prorations. City and Buyer agree to the following prorations and allocation of
costs regarding this Agreement:
7.1. 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 City and Buyer on a daily basis as of 12:00 a.m. CT on the Closing Date based
upon a calendar fiscal year, with City paying those allocable to the period prior to the
Closing Date and Buyer being responsible for those allocable to the Closing Date and
subsequent thereto. City shall pay in full all special assessments (and charges in the nature
of or in lieu of such assessments) certified, levied, pending, postponed or deferred, or
constituting a lien against the Property with respect to any of the Property as of the Closing
Date. Buyer 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 Buyer’s development of the Property.
7.2. Title Evidence, Survey and Closing Fee. City shall pay all costs of the
Commitment with respect to the Property. Buyer will pay all costs of the Survey, if any,
and all premiums for any title insurance policy it desires with respect to the Property.
Buyer and City shall each pay one half (1/2) of any reasonable closing fee or charge
imposed by Title.
7.3. Recording Costs. City shall pay the cost of recording all documents
necessary to cure any Objections, as hereinafter defined. Buyer shall pay all recording costs
with respect to the recording of the Deed, Plat and any related development and planning
documents, and for the recording of any mortgage required by Buyer, if any, and any
mortgage registration tax, if any.
7.4. Transfer Taxes. City shall pay all state deed tax regarding the Deed.
X-C-04
9
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 City and Buyer on a daily basis as of the Closing Date, with City paying those
allocable to the period prior to the Closing Date and Buyer being responsible for those
allocable to the Closing Date and subsequent thereto.
7.6. Attorneys’ Fees. City and Buyer shall each pay its own attorneys’ fees
incurred in connection with this transaction, except as otherwise specifically set forth in
this Agreement.
7.7. Survival. The obligations set forth in this Section 7 survive the Closing.
8. Title Examination. (i) within a reasonable time following the Effective Date, City
shall obtain a commitment 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, if desired, (ii) by the Closing Date, Buyer may at its sole option obtain, at
Buyer’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. Buyer’s Objections. Within ten (10) days after Buyer’s receipt of the last
of the Title Evidence, Buyer 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 Buyer within such time period or waived by
Buyer 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. Buyer 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. City’s Cure. City shall be allowed twenty (20) days after the receipt of
Buyer’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 City elects not to cure such Objections, Buyer 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.
X-C-04
10
If Buyer so terminates this Agreement, neither City nor Buyer 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 Buyer.
9. Warranties and Representations.
9.1. By City. City warrants and represents the following to Buyer, and
acknowledges that Buyer 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 City enforceable in accordance
with its terms. City 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 City pursuant hereto. This Agreement and the documents and
instruments required to be executed and delivered by City pursuant hereto have
each been duly authorized by all necessary action on the part of City and such
execution, delivery and performance does and will not conflict with or result in a
violation of City’s organizational agreement or any judgment or order.
B. The execution, delivery and performance by City 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 City,
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 City is a party or
by which it or any of its properties may be bound.
C. To City’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 City 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 City’s knowledge, there are no actions, suits or proceedings
pending or threatened against or affecting City 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 City, would have
a material adverse effect on the ability of City to perform its obligations under this
Agreement.
X-C-04
11
E. City 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 City’s knowledge, there are no wells, underground or above
ground storage tanks of any size or type, or sewage treatment systems located on
any portion of the Property. To City’s knowledge, there has been no
methamphetamine production on or about any portion of the Property. To City’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. City 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 City’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
City’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
X-C-04
12
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. To City’s knowledge, there are no leases, tenancies unrecorded
agreements or other contracts of any nature or type relating to, affecting or serving
the Property that will not be terminated as of the Closing Date.
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 City’s knowledge” shall mean and refer to
only the current actual knowledge of the designated representative of City and shall not be
construed to refer to the knowledge of any other officer, manager, director, agent,
authorized person, employee or representative of City, or any affiliate of City, 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 John Hinzman. City represents and warrants that the
foregoing individual is the representative of City most knowledgeable regarding the
Property.
The representations, warranties and other provisions of this Section 9.1 shall
survive Closing; provided, however, City shall have no liability with respect to any breach
of a particular representation or warranty if Buyer shall fail to notify City in writing of such
breach within two (2) years after the Closing Date, and provided further that City shall
have no liability with respect to a breach of the representations and warranties set forth in
this Agreement if Buyer has actual knowledge of City’s breach thereof prior to Closing
and Buyer consummates the acquisition of the Property as provided herein.
Buyer acknowledges and agrees that, except as expressly specified in this
Agreement and/or in any documents executed and delivered by City at Closing, City has
not made, and City 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. Buyer agrees that except as expressly
specified in this Agreement and/or in any documents executed and delivered by City at
Closing, Buyer shall accept the Property and acknowledges that the sale of the Property as
provided for herein is made by City on an “AS IS,” “WHERE IS,” and “WITH ALL
FAULTS” basis. Buyer is an experienced purchaser of property such as the Property and
Buyer 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.
X-C-04
13
9.2. By Buyer. Buyer warrants and represents the following to City, and
acknowledges that City has relied on such representations and warranties in agreeing to
enter into this Agreement:
A. Buyer is a limited liability company, duly organized and in good
standing under the laws of the state of Minnesota and is not in violation of any
provisions of its company documents or its operating agreement.
B. Buyer has all requisite authority to enter into this Agreement and to
perform all of its obligations under this Agreement.
C. The execution, delivery and performance by Buyer 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
Buyer, (b) violate or contravene any provision of the articles of incorporation or
bylaws of Buyer, 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 Buyer is a party or by which it or any of its properties may be bound.
D. Buyer have received no notice or communication from any local,
state or federal official that the activities of the Buyer or City on the Property may
be or will be in violation of any environmental law or regulation. Buyer is aware of
no facts, the existence of which would cause it to be in violation of any local, state,
or federal environmental law, regulation or review procedure or which give any
person a valid claim under any of the foregoing.
E. Buyer shall have satisfied the terms and conditions contained in this
Agreement prior to the Closing Date or posted surety bonds for future fulfillment
of all requirements contained in this Agreement.
The representations, warranties and other provisions of this Section 9.2 shall survive
Closing; provided, however, Buyer shall have no liability with respect to any breach of a particular
representation or warranty if City shall fail to notify Buyer in writing of such breach within two
(2) years after the Closing Date.
10. Additional Obligations of City.
10.1. Licenses and Permits. City shall transfer to Buyer all transferable rights,
if any, in any permits or licenses held by City with respect to the Property.
10.2. Condition of the Property at Closing. On the Closing Date, City shall
deliver to Buyer exclusive vacant possession of the Property.
X-C-04
14
10.3. Further Assurances. From and after the Closing Date, City agrees to
execute, acknowledge and deliver to Buyer 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 Buyer is only acquiring certain of City’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 Buyer of any agreements, indebtedness, obligations or
liabilities of City 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, City 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. Zoning; Other Approvals. Buyer may elect to seek certain Approvals as
defined in Section 5.1(A)(3) and Land Use Entitlements as defined in Section 5.1(A)(4) in
order for Buyer to develop the Property for the Proposed Use. City, at no out-of-pocket
cost to City, or the assumption of any obligations or liabilities by City, will reasonably
cooperate with Buyer’s efforts to obtain the Approvals and Land Use Entitlements at or
prior to Closing. City hereby grants Buyer the right to file and prosecute applications and
petitions for the Approvals, Land Use Entitlements and any special use permits and
variances desired by Buyer; provided, however, any special use permits or variances shall
be contingent on the occurrence of the Closing and shall not be binding upon City or the
Property unless and until the Closing occurs. City, at no out-of-pocket cost to City, or the
assumption of any obligations or liabilities by City, agrees to cooperate with Buyer in the
filing and prosecution of such applications and petitions, including the filing of the same
in City’s name, if required.
10.7. Marketing. At all times prior to the Closing Date, City shall not negotiate
in any manner for the sale or transfer of the Property with any third party.
11. Broker. It is acknowledged that neither party has a broker for the sale of the
Property.
12. Notice. Any notice to be given by one party hereto shall be personally delivered
(including messenger delivery), by email at the address set forth below, 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, one (1) business day after delivery to such
overnight courier, or immediately upon personal delivery or delivery by email. Attorneys for each
party shall be authorized to give and receive notices for each such party.
X-C-04
15
If to City: City of Hastings
Attn: John Hinzman
101 4th Street East
Hastings, MN 55033
with a copy to: Korine L. Land
LeVander, Gillen & Miller, P.A.
1305 Corporate Center Drive, Suite 300
Eagan, MN 55121
If to Buyer: Northern State Services LLC
2568 South Park Place
Hastings, MN 55033
13. Default; Remedies. If either City or Buyer fails to perform any of their respective
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 Buyer, City’s sole and exclusive remedy shall
be termination of this Agreement as provided above and, upon any such termination, the Earnest
Money shall be forfeited to City as the full and final liquidated damages, with the exception of any
liens arising out of Buyer’s Investigations, the obligations and liability for which shall survive the
termination of this Agreement and the release of the Earnest Money to City. In the case of any
default by City, the Earnest Money deposit shall be returned to Buyer and Buyer shall also have
the right to specifically enforce 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. Other Obligations of Buyer.
14.1. Administrative Costs. City has incurred and will continue to incur
administrative costs in reviewing, analyzing, negotiating and studying the Minimum
Improvements and this Agreement. In consideration of the time, effort and expenses to be
incurred in pursuing the undertakings set forth herein, on or before execution of this
Agreement, Buyer agrees to pay a $600 deposit for the costs of certain consulting fees,
including planning, financial, attorneys, engineering, testing and any special meetings. If
the obligations of Buyer under this Agreement result in a complete depletion of the $600
cash deposit, then the balance owed shall be due and payable at Closing. If, after
completion of the tasks contemplated by this Agreement and if, after appropriate payment
to City, there remains on deposit any sum, then such sum shall be paid over to Buyer by
City within 30 days after such completion and payment. If Buyer terminates this
Agreement because of City’s default, Buyer shall be entitled to payment of any remaining
balance. If City terminates this Agreement because of Buyer’s default, the deposit shall be
retained by City.
X-C-04
16
15. Cumulative Rights. No right or remedy conferred or reserved to City or Buyer 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. Assignment. Buyer may assign this Agreement with the prior written consent of
City. No assignment shall relieve Buyer from its obligations under this Agreement.
17. 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.
18. 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.
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. Rules of Interpretation. The words “herein” and “hereof” and words of similar
import, without reference to any particular section or subdivision, refer to this Agreement as a
whole rather than any particular section or subdivision hereof. References herein to any particular
section or subdivision hereof are to the section or subdivision of this Agreement as originally
executed.
21. Titles of Sections. Any titles of the sections, or any subsections, of the Agreement
are inserted for convenience of reference only and shall be disregarded in construing or interpreting
any of its provisions.
22. 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.
23. Represented by Counsel. Each party has been represented and advised by counsel
in the transaction contemplated hereby.
24. Time of the Essence. Time is of the essence of this Agreement.
[remainder of page intentionally blank]
X-C-04
17
IN AGREEMENT, the parties hereto have hereunto set their hands as of the Effective
Date.
CITY:
CITY OF HASTINGS
By ________________________________
Mary Fasbender
Its Mayor
By ________________________________
Kelly Murtaugh
Its City Clerk
X-C-04
18
BUYER:
NORTHERN STATE SERVICES LLC
By:
Printed Name:
Its:
X-C-04
A-1
EXHIBIT A
DEPICTION OF CITY’S PROPERTY
Abstract Property
PID: 19-03500-84-010
X-C-04
B-1
EXHIBIT B
LEGAL DESCRIPTION OF PROPERTY
Real property located in the County of Dakota, State of Minnesota, legally described as
follows:
That part of the Southwest Quarter of the Southeast Quarter of Section 35, Township 115, Range
17, described as BEGINNING at the northwest corner of said Southwest Quarter of the Southeast
Quarter; thence South 0 degrees 15 minutes 13 seconds East along the west line of said Southwest
Quarter of the Southeast Quarter 578.64 feet; thence northeasterly 535.96 feet along a curve that
is concave to the northwest having a radius of 707.00 feet, central angle of 35 degrees 01 minute
17 seconds, chord distance of 425.45 feet, and the chord of said curve bears North 52 degrees 26
minutes 53 seconds East; thence North 34 degrees 56 minutes 16 seconds East, tangent to the last
described curve, 104.02 feet; thence northeasterly 253.80 feet along a curve concave to the
southeast, having a radius of 260.00 feet, central angle of 55 degrees 55 minutes 45 seconds, chord
distance of 243.84 feet, and the chord of said curve bears North 62 degrees 54 minutes 08 seconds
East; thence South 89 degrees 58 minutes 45 seconds East, not tangent to the last described curve;
50.00 feet to the centerline of Dakota County Road 91, as now traveled; thence North 0 degrees
01 minute 15 seconds East along said centerline of County Road 91 a distance of 125.04 feet to
the north line of said Southwest Quarter of the Southeast Quarter; thence South 89 degrees 49
minutes 32 seconds West along said north line of the Southwest Quarter 666.55 feet to the point
of beginning. Subject to highway easement
Abstract Property
[Commitment legal description to govern]
X-C-04