IP #736MW
REQUEST FOR ACTION
Originating Department
Approved for Agenda
Agenda Section
Community Development
1 -27 -03
EDA
Item No.
By: Kirk McDonald, Director of CD
& Ken Doresky, CD Specialist
B
4
RESOLUTION APPROVING OFFICE LEASE FOR TENANTS AT 7801 BASS LAKE ROAD (IMPROVEMENT
PROJECT NO. 719)
ACTION REQUESTED
Staff is requesting EDA consideration of a resolution prepared by the City Attorney approving long -term tenant
leases (12 months with automatic 12 month renewal and a 90 day termination clause after the first year) for
tenants currently located in the City -owned office building located at 7801 Bass Lake Road. On December 9,
2002, the Council approved a resolution awarding a management contract to Quest Real Estate, the low quote
firm, in the lump sum amount of $300 per month to manage the office building and directed staff to further
inquire with the tenants about signing long -term leases. The City closed on the property on December 16. On
November 12, the Council discussed property management and rental options for the building and requested
that staff solicit quotes from professional management firms and determine the status of leases and interest in
remaining in the building for a period of twelve (12) to eighteen (18) months. On October 28, the Council
approved a resolution authorizing acquisition of the property by direct purchase or eminent domain and
directed staff to return to the Council with property management and rental options for discussion at a later
date.
POLICY /PAST PRACTICE
City goal #2 is to pursue the maintenance and redevelopment of commercial and residential properties within
the City. The Council has been addressing this goal through the City's many redevelopment activities,
including acquiring properties from willing sellers in designated redevelopment areas. Over the past few years,
the City has purchased a total of fourteen properties located in Planning District 6 (east Winnetka area) as
referenced in the City's Comprehensive Plan.
The City has, at times, assumed operating responsibilities for various properties in between relocating tenants
and site clearing activities. Most recently, staff assumed operating responsibilities during this interim period for
the residential four -plex apartment buildings previously located at 7601 -41 62 Avenue North. The City
purchased these buildings in 1998 for redevelopment purposes, relocated the tenants, cleared the sites and
landbanked the properties.
BACKGROUND
On December 9, the Council approved a resolution awarding a management contract to Quest Real Estate,
the low quote firm, in the lump sum amount of $300 per month to manage the office building and directed staff
MOTION BY SECOND BY _.
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TO: Gt ° ° °- rt - y . ,, . •, r '� � -� Wit..
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t
Request for Action Page 2 1 -27 -03
to further inquire with the tenants about signing long term leases of twelve (12) to eighteen (18) months.
Evergreen Land Services, the City's relocation consultant then surveyed all the tenants. On January 16, staff,
the City Manager, City Attorney and relocation consultant met to further discuss the leases. Based on that
meeting and information gathered, staff recommends that the City offer one year leases with an automatic one
year renewal and a ninety day termination clause during the second year. Please see the following
information:
Evergreen Land Services Long -Term Lease Information:
As requested by the Council, Evergreen Land Services, the City's relocation consultant met with the tenants to
determine their relocation eligibility and any desire to remain in the building. Please see the following long -term
lease interest summary:
Unit
Business
Last Name
Monthly Rent
Yearly Rent
Long Term Lease
101
MN Repping
L. Evans /M. Martin
$560
$6720
Yes
110
Best Publications
Nick Taylor
$435
$5220
Yes, but concerns
111
Empty
N/A
NIA
N/A
N/A
120
JAK Investments
John Ko i
$360
$4,320
Yes, but concerns
121
Re -Bound Freight
Ed Viehman
$445
$5,340
Yes, but concerns
200
Golden Openings
Kim Baeth
$480
$5,760
Yes
201
Empty
N/A
N/A
N/A
N/A
210
Dresser Rand
Jim Peterson
$222.50
$2,670
No lease, sublets 210
210
On -Track Finance
Dale Sprout
$222.50
$2,670
Yes 18 -24 months, 12 no
211
Buetz Auto
Mark Beutz
$250
$3,000
Yes
220 __ Plymouth
Agency
Sandy Sculthorp
$545
$6,540
Yes
231 1
Empty
N/A
N/A
N/A
N/A
Totall
1
1
$3,520
$42,240
Estimated Cash Flow
Gross Rent
$3,520
Operating Expenses Estimate
$1,895
Management Fee
$300
Cash Flow per month
$1,325
Evergreen Land Services provided the following information regarding tenant leases:
Lori Evans /Margaret Martin — Minnesota Rapping, Suite 101
• Plans on staying the full 12 -18 months.
• Would be willing to sign a lease. Want to stay until the very end.
Nick Taylor — Best Publications, Suite 110
• Plans on staying the full 12 -18 months.
• Would be willing to sign a lease. Before the building was bought by the city of New Hope, he was on a
month -to -month lease. He likes that for the flexibility reasons. Would lose some of that by signing a 12-
month lease. Is a bit concerned about that.
John Koppi — JAK Investments, Suite 120
• Plans on staying the full 12 -18 months, but is concerned about the rent. Does not want it to increase,
would like it to go down.
• Would be willing to sign a lease. Is interested in the terms of the lease and why the month to month is
not an option anymore. Would like to stay as long as possible of course.
Request for Action Page 3 1 -27 -03
Ed Viehman — Re -Bound Freight Brokers, Suite 121 (tenant manager)
• Plans on staying the full 12 -18 months.
• Would be willing to sign a lease. Big question he has is WHY now does he need to have a lease?
Kim Baeth — Golden Openings, Suite 200
• Plans on staying the full 12 -18 months.
• Would sign a lease with the City.
Mark Beutz — Beutz Auto, Suite 211
• Plans on staying the full 12 -18 months.
• Would be willing to sign a lease.
Dale Sprout — On Trac Financial, Suite 210
• Plans on staying the full 12 -18 months.
• Would be willing to sign an 18 -month lease, but a 12 -month lease, probably not. He would like to stay
there as long as possible. Two years would be a better lease. He is sub - letting to Jim Peterson and
would continue to do so.
Jim Peterson — Dresser Rand, Suite 210
• Plans on staying the full 12 -18 months.
• Does not have a lease with the building, is sub - letting from Dale Sprout.
Sandy Sculthorp- Plymouth Agency, Suite 220
• Plans on staying the full 12 -18 months.
• Would be willing to sign a lease
The City Attorney prepared the attached resolution and lease. The City Attorney submitted the following
comments regarding the information. "The lease is for a two -year term, however, it can be terminated after 15
months on 90 days written notice. Please refer to paragraph 2 of the lease concerning this term. Paragraph 4
deals with the base rent. The rent will remain the same during the 24 month period of the lease. Finally,
paragraph 16 deals with tenants holding over after the 24 month period. At that time, the lease will
automatically revert to a month -to -month lease, and the rent will increase by 150% of the base rent. The other
rental terms are basically boiler plate rental terms."
On October 28, 2002, the Council approved a resolution to purchase the subject property for $370,000. The
property is a multi- tenant office building, currently occupied by nine tenants. Two office spaces are vacant. At
the October 28 meeting, the Council requested that staff research options to maintain the building's current
use as offices and potentially lease the open units until redevelopment activities begin. The concept being that
the City could generate income from the property and delay relocation of the existing businesses before the
site is required for redevelopment.
Relocation expenses would be required as a component of this acquisition project. Evergreen Land Services,
the City's relocation consultant, has provided the City with a preliminary relocation estimate of $20,000 per
tenant. It has been determined that ten (10) tenants are currently located in the building, therefore assuming
all the tenants accept the $20,000 in lieu of payment as opposed to actual expenses, relocation expenses are
estimated to be $200,000. Relocation activities are currently underway.
On July 22, 2002, the Council authorized staff to negotiate the potential purchase of this multi- tenant office
building based on its appraised value of $330,000 as determined by the Shenehon Company.
Based on a meeting with the property owner on April 15, 2002, the City Manager authorized staff to obtain an
appraisal of 7801 Bass Lake Road for potential acquisition purposes. The property is located in the East
Request for Action Page 4 1 -27 -03
Winnetka Livable Communities area and in Planning District 6. This property is included in the east Winnetka
area redevelopment concept plans developed by the Livable Communities Task Force,
In 1998, the Council passed a resolution approving the City of New Hope Comprehensive Plan Update. In
1999, the Metropolitan Council approved the Comprehensive Plan Update. In the Plan, the City was broken
down into several planning districts. Planning District 6 is the district where the Winnetka, Bass Lake Road
and Sumter properties that the City has been pursuing over the past few years are located. Planning District 6
is bordered by Winnetka Avenue North to the west, C.P. Rail system to the south and the City of Crystal to the
east and north.
The Comprehensive Plan targeted several areas in the City for redevelopment. Recommendations for
Planning District 6 include the acquisition and redevelopment of sites located along the south side of Bass
Lake Road, in the Bass Lake Road extension area and along the east side of Winnetka Avenue North
between 5340 Winnetka Avenue and Bass Lake Road.
On May 24, 2002, the Council hired the engineering firm Short Elliott Hendrickson, Inc. to determine whether
qualification tests for tax increment eligibility (site coverage, building conditions) can be met in the east
Winnetka area. This study is being undertaken to facilitate redevelopment efforts in the area. SEH has
determined the subject building to be substandard in the DRAFT report. At a future meeting, staff will request
that the Council consider a resolution determining the building to be substandard and included in a Tax
Increment Financing District. The resolution would allow the City to clear the site and still include the property
in a future Tax Increment Financing District.
The property is located at 7801 Bass Lake Road and built in 1969. The property is zoned CB and is used as a
multi- tenant office building. The property measures a total of 14,810 sq. ft. or .34 acres. Gross building area of
the facility is an estimated 6,000 sq. ft., with a net rentable area of approximately 4,313 sq. ft.
Once the building is vacant, the City would request quotes for demolition and site restoration.
Staff recommends approval of the attached resolution.
FUNDING
The subject property is located in an area where TIF funds
property acquisition. The property produces a positive cash flow
management costs.
ATTACHMENTS
• Resolution
• City Attorney Correspondence (1/20/03)
• Location Map
can be expended. TIF funds were used for
. Positive cash flow dollars will be used to pay
• Topographic Map
• Evergreen Land Services Memorandum (1 -7 -03)
• Sample Lease
J E NSE \ 67L SO \LRA L , P.A.
Attorneys At Law
8525 EDINBROOK CROSSING, STE. 201
BROOKLYN PARK, MINNESOTA 55443 -1968
TELEPHONE (763) 424 -8811 ® TELEFAx (763) 493 -5193
e -mail law @ jensen - sondrall.com
DOUGLAS J. DEBNER'
January 20, 2003
GORDON L. JENSEN'
GLEN A. NORTON
VIA FACSIMILE TO: (763) 531 -5136
STEVEN A.SONDRALL
WILLIAM C. STRAIT'
AND BY REGULAR U.S. MAIL
STACY A. WOODS
Ken Doresky
Community Development Specialist
OF COUNSEL
LORENS Q. BRYNESTAD
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
Re: Office Lease /7801 Bass Lake Road
Our File No.: 99.11275
Dear Ken:
This letter will confirm our discussions at the January 16, 2003 meeting on written leases
for the tenants at the 7801 Bass Lake Road office building. Please find enclosed a Lease
which can be used for all tenants at the property. Also enclosed is a proposed Resolution
approving the lease.
As we discussed, the Lease is for a two -year term, however, it can be terminated after 15
months on 90 days' written notice. Please refer to paragraph 2 of the Lease concerning
this term.
Also, paragraph 4 deals with the base rent. You can do the mathematics on each tenant
and incorporate into that paragraph their annual rent and their monthly installment. As
we also discussed, the rent will remain the same during the 24 month period of the
Lease.
In paragraph 3, a description of purpose should be written in each lease. An example
would be the operation of a "dental clinic" or "insurance agency ".
Finally, paragraph 16 deals with Tenants holding over after the 24 month period. At that
time, the Lease will automatically revert to a month -to -month lease, and the rent will
increase by 150% of the base rent. The other rental terms are basically boiler plate
rental terms.
'Real Property Law Specialist
Certified By The
Minnesota State Bar
Association
'Qualified ADR Neutral
'Admitted in Iowa
January 20, 2003
Page 2
Please contact me if you have any questions or comments regarding this Lease.
Very truly yours,
Steven A. Sondrall, City Attorney,
City of New Hope
JENSEN & SONDRALL, P.A.
sasQnjensen- sondrall.coin
After Hours Extension #147
Enclosures
cc: Valerie Leone (w /enc.)
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SERVICES
COMPANY
Acquisition and
Relocation Spectali.cs
January 7, 2003
Ken Doresky
Community Development Specialist
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
Tel: (651) 882 -0200
Fax: (651) 882 -6564
Re: 7801 Bass Lake Road tenants signing a 12 -18 month lease with the City of New Hope.
Dear Mr. Doresky:
Attached is a breakdown of the tenants that are currently in the 7801 Bass Lake Road building.
I had a chance to speak with each one of them regarding the possibility of signing a 12 -18
month lease with the City of New Hope. They all said they would be willing to sign a lease
depending on the terms of the lease. Some questions did come up as to why they needed to
sign a lease or why it was not going to month -to- month, as they have had in the past. I
addressed those questions to the best of my knowledge. Just stating that the City would be
drawing up the lease and I was not aware of the terms. I stated that all questions regarding the
lease should be addressed to the City, as they are the building owner and manager now.
If you need any more information, please give me a call at (651) 882 -0200.
Sincerely,
4131 Old Sibley Memorial Highway
Suite 201
Eagan, MN 55122
Kari Klassen
Relocation Specialist
Relocation status of tenants at 7801 Bass Lake Road — New Hope, MN
Mark Beutz — Beutz Auto, Suite 211
• Plans on staying the full 12 -18 months.
• Would be willing to sign a lease.
Jim Peterson — Dresser Rand, Suite 210
• Plans on staying the full 12 -18 months.
• Does not have a lease with the building, is sub - letting from Dale Sprout.
Kim Baeth — Golden Openings, Suite 200
• Plans on staying the full 12 -18 months.
• Would sign a lease with the city
Ed Viehman — Re -Bound Freight Brokers, Suite 121
• Plans on staying the full 12 -18 months.
• Would be willing to sign a lease. Big question he has is WHY now does he need
to have a lease?
John Koppi — JAK Investments, Suite 120
• Plans on staying the full 12 -18 months, but is concerned about the rent. Does
not want it to increase, would like it to go down.
• Would be willing to sign a lease. Is interested in to the terms of the lease and
why the month to month is not an option anymore. Would like to stay as long as
possible of course.
Nick Taylor — Best Publications, Suite 110
• Plans on staying the full 12 -18 months.
• Would be willing to sign a lease. Before the building was bought by the city of
New Hope, he was on a month -to -month lease. He likes that for the flexibility
reasons. Would lose some of that by signing a 12 -month lease. Is a bit concerned
about that.
Dale Sprout — On Trac Financial, Suite 210
• Plans on staying the full 12 -18 months.
• Would be willing to sign an 18 -month lease, but a 12 -month lease, probably not.
He would like to stay there as long as possible. Two years would be a better lease.
He is sub - letting to Jim Peterson and would continue to do so.
Lori Evans /Margaret Martin — Minnesota Rapping, Suite 101
• Plans on staying the full 12 -18 months.
• Would be willing to sign a lease. Want to stay until the very end.
Sandy Sculthorp- Plymouth Agency, Suite 220
• Plans on staying the full 12 -18 months.
• Would be willing to sign a lease
Susan Aseby- Bass Lake Insurance Agency, Suite 220
• Plans to vacate and move into new location by 1/1/03.
• Vacated
Joe Sprout /Russ Hoyt- Frontier Interiors, Suite 201
• Plans to vacate and relocate business and set up a home office.
• Vacated
January 28, 2003
«FirstName» «LastName»
«Company»
«AddressU
«City», «State» « PostalCode»
Subject: 7801 Bass Lake Road — 1/27/03 EDA Action (Tenant Leases)
Dear «FirstName» «LastName»:
As you know, on December 9, 2002, the City Council directed staff to explore the possibility of offering
long -term leases to all tenants in the Nelson Building, 7801 Bass Lake Road.
On January 27, 2003, the New Hope EDA considered offering two -year leases to tenants located in the
subject property. The EDA did not approve long -term leases. The EDA voted to continue the current
verbal month -to -month rental agreements. At this point, the current month -to -month rental agreements
will remain in place. The City still intends to operate the building for one to two years, provided enough
tenants remain in building to generate a positive cash flow.
If you have any questions or comments, do not hesitate to contact me at 763- 531 -5137.
Sincerely,
Ken P. Doresky, AICP
Community Development Specialist
Kirk McDonald
Director of Community Development
Cc: Dan Donahue, City Manager
Steve Sondrall, City Attorney
Steve Ludovissie, Quest Real Estate
Steve Carlson, Evergreen Land Services
Roger Axel, Building Official
Chuck Tatro, General Inspector
4401 Xylon Avenue North e New Hope, Minnesota 55428 -4898 . www. ci.new - hope.mn.us
City Hall: 763 -531 -5100 o Police (non - emergency): 763- 531 -5170 • Public Works: 763 - 592 -6777 e TDD: 763 - 531 -5109
City Hall Fax: 763 - 531 -5136 . Police Fax: 763- 531 -5174 . Public Works Fax: 763- 592 -6776
January 28, 2003
3 or
101il
Evergreen Land Services Co.
Attn.: Steve Carlson, Relocation Manager
4131 Old Sibley Memorial Hwy
Egan, MN 55122
Subject: 7801 Bass Lake Road — 1/27/03 EDA Action (Tenant Leases)
Dear Mr. Carlson:
On January 27, 2003, the New Hope EDA considered offering
owned multi-tenant office building located at 7801 Bass Lake
approve long-term leases. The EDA voted to continue the
agreements. City staff will notify all tenants of this action.
Thank you for your assistance with this project.
long-term leases to tenants in the City-
Road, New Hope. The EDA did not
current verbal month-to-month rental
If you have any questions or comments, do not hesitate to contact me at 763-531-5137.
Sincerely,
Ken P. Doresky, AICP
Community Development Specialist
Kirk McDonald
Director of Community Development
Cc: Dan Donahue, City Manager
Steve Sondrall, City Attorney
Steve Ludovissie, Quest Real Estate
Roger Axel, Building Official
Chuck Tatro, General Inspector
Valerie Leone, City Clerk (Improvement Project No. 736)
4401 Xylon Avenue North + New Hope, Minnesota 55428-4898 + www. ci.new-hope.mn.us
City Hall: 763-531-5100 * Police (non-emergency): 763-531-5170 • Public Works: 763-592-6777 • TDD: 763-531-5109
City Hall Fax: 763-531-5136 ® Police Fax: 763-531-5174 * Public Works Fax: 763-592-6776
January 28, 2003
Quest Real Estate, Inc.
Attn.: Steve Ludovissie, Director of Property Management
10700 Old County Road 15, #150
Plymouth, MN 55441
Subject: 7801 Bass Lake Road — 1/27/03 EDA Action (Tenant Leases)
Dear Mr. Ludovissie:
On January 27, 2003, the New Hope EDA considered offering
owned multi- tenant office building located at 7801 Bass Lak e
approve long -term leases. The EDA voted to continue the
agreements. City staff will notify all tenants of this action.
Thank you for your assistance with this project.
long -term leases to tenants in the City -
Road, New Hope. The EDA did not
current verbal month -to -month rental
If you have any questions or comments, do not hesitate to contact me at 763 -531 -5137.
Sincerely,
Ken P. Doresky, AICP
Community Development Specialist
Kirk McDonald
Director of Community Development
Cc: Dan Donahue, City Manager
Steve Sondrall, City Attorney
Steve Carlson, Evergreen Land Services
Roger Axel, Building Official
Chuck Tatro, General Inspector
CITY OF NEW HOPE
4401 Xylon Avenue North + New Hope, Minnesota 55428 -4898 + www. ci.new - hope.mn.us
City Hall: 763 -531 -5100 + Police (non - emergency): 763- 531 -5170 + Public Works: 763- 592 -6777 + TDD: 763- 531 -5109
City Hall Fax: 763- 531 -5136 + Police Fax: 763- 531 -5174 + Public Works Fax: 763- 592 -6776
HOLD HARMLESS AND LICENSE AGREEMENT FOR
NELSON BUILDING /7801 BASS LAKE ROAD
THIS LICENSE AGREEMENT, is made and entered into this 31" day of January,
2003, by and between the City of New Hope, hereinafter referred to as "City ", and NEAR,
hereinafter referred to as "NEAR ".
RECITALS
WHEREAS, the City is the fee owner of an office building known as the Nelson Building
located at 7801 Bass Lake Road in the City of New Hope, and
WHEREAS, NEAR has requested permission to use without charge or payment of rent a vacant
office located in the Nelson Building for storage purposes, and
WHEREAS, The City is willing to provide NEAR with this gratuitous accommodation pursuant
to the terms and conditions of the herein HOLD HARMLESS AND LICENSE
AGREEMENT, and
WHEREAS, NEAR acknowledges and agrees this Agreement does not create for the benefit of
NEAR any leasehold interest in the Nelson Building, and
WHEREAS, NEAR specifically acknowledges and agrees upon its vacation of the Licensed
Premises it shall not be entitled to any claim for moving or relocation expenses under the
Federal Uniform Relocation or Assistance Act, Minn. Stat. Chap. 117 or any other law,
statute, regulation or ordinance.
NOW THEREFORE, in consideration of the mutual covenants hereafter set forth, the parties do
hereby agree as follows:
1. DESCRIPTION OF THE PREMISES.
City does hereby license and permit NEAR to use and NEAR does hereby take from City the
following office located within the Nelson Office Building at 7801 Bass Lake Road, New Hope,
Minnesota:
Office No. #111; (the "Leased Premises ").
2. TERM.
This License shall be for a month to month term, commencing on the 31 day of January, 2003.
This License shall automatically terminate without any further notice or demand to NEAR on the
31 day of December, 2004. City may also terminate this License for any reason at the option of
the City prior to December 31, 2004 as follows: by City providing NEAR a 30 day written notice
1
indicating City's intent to terminate the License. The License will terminate 30 days following
the last day of the month in which the notice was given.
3. USE OF PREMISES.
It is agreed that the Licensed Premises shall be used by NEAR for: storage purposes only and
for no other purpose, subject to all local, state and federal laws and regulations regarding use of
the premises.
4. LICENSE FEE.
NEAR's use of the property shall be gratuitous, however NEAR shall pay for all utility services
provided to the office, including but not limited to heat, electricity, telephone, water, cable t.v
and internet access and garbage hauling used by NEAR during the term of this LICENSE
AGREEMENT.
5. INSURANCE.
NEAR shall maintain in full force and effect during the lease term, a policy of public liability
insurance under which City and NEAR are named insureds; that the minimum limits of liability
of such insurance shall be $1,000,000.00 combined single limit for bodily injury and property
damage. NEAR agrees to deliver an ACCORD 25 certificate of insurance evidencing such
coverage, to City. Such policy shall contain a provision requiring thirty (30) days' written notice
to City before cancellation of the policy can be effected.
6. INDEMNIFICATION /HOLD HARMLESS.
NEAR shall defend, indemnify and hold harmless the City, its officials, officers, agents and
employees from any liability, claims, causes of action, judgments, damages, losses, costs or
expenses, including reasonable attorneys' fees, resulting directly or indirectly from any act or
omission of NEAR and/or anyone indirectly or directly employed by NEAR and /or anyone for
whose acts and/or omissions for which NEAR may be liable in the performance of this
LICENSE AGREEMENT. This indemnification and hold harmless shall include acts and/or
omissions of any official, agent or employee of the City under the direct or indirect control of
NEAR. NEAR further waives against City any claim based upon liability which may arise
against the City so far as said claim is related to loss or damage to the premises or contents
which is covered by insurance.
7. MAINTENANCE.
NEAR agrees to keep the Licensed Premises in a clean, orderly and sanitary condition and will
neither do nor permit to be done therein anything which is in violation of insurance policies, that
is contrary to law or that interferes with the use and enjoyment of the other tenants of the Nelson
Building.
8. ASSIGNMENT.
2
NEAR shall not assign, mortgage or encumber this License, and shall not permit any part of the
licensed premises to be used by any other individual or entity.
In the event NEAR shall vacate or abandon the Licensed Premises or shall default in any of its
covenants herein, and such default shall not be cured within ten (10) days after written notice
from City, City is hereby authorized, at its option, to exercise one or more the following rights
and remedies: (i) to re -enter the Licensed Premises to eject NEAR and take full possession of
the Licensed Premises; (ii) to terminate this License at its option; (iii) to remove from the
Licensed Premises all personal property of NEAR and to store the same to the account and at the
expense of NEAR and to sell such property or any part thereof, and out of the proceeds to pay all
expenses of so removing, storing and selling the same. In the event the City determines in its sole
discretion the personal property is without value the City may destroy said property.
In the event City shall determine that an action or proceeding at law or otherwise is necessary to
enforce the terms and conditions of this LICENSE AGREEMENT, NEAR agrees to pay to
City the necessary costs and reasonable attorney's fees and disbursements to enforce this
agreement.
10. ALTERATIONS.
NEAR shall not make any alterations to the Licensed Premises.
11. ENTRY.
City, its agents and its employees shall have the right to enter the premises at all reasonable times
to inspect them, to make repairs and to maintain the building of which the Licensed Premises are
a part. City shall also have the right of entry as provided in Paragraph 8.
12. NOTICES.
All legal notices, consents, demands and requests which may be or are required to be given by
either party of the other, shall be in writing and delivered in person or sent by mail, addressed to
NEAR at the street address set forth in Paragraph 1 and to the LANDLORD in care of.
Quest Real Estate, Inc.
10700 Old County Road 15, Suite 150
Plymouth, MN 55441
or to such other address as City may direct in writing in the future.
The date which said mail is mailed by City shall be conclusively deemed to be the date on which
a notice, consent, demand or request is given or made. The above address of a party may be
changed at any time or from time to time by notice given by said party to the other party in the
manner herein above provided.
13. CLAIMS.
NEAR will make no claim against City for any loss of or damage to property caused by theft,
burglary, water, gas, electricity or other means regardless of its cause.
14. IMPAIRMENT OF USE.
If the premises shall become untenantable or unfit for occupancy, in whole or in part, by the total
or partial destruction of the building by fire or other casualty, this Agreement shall cease and
terminate and NEAR shall have no claim against City of any nature.
15. OTHER PROVISIONS.
The invalidity or unenforceability of any provision of this LICENSE AGREEMENT shall not
affect or impair the validity of any other provision.
This LICENSE AGREEMENT shall be governed by, construed and enforced in accordance
with the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed the
day and year first -above written.
CITY OF NEW 140.
By: C. , . z '6'
�F Daniel J. Donahue
Its: Executive Director
P:\ Attorney \SAS\Documents \CNH99.11275 - 002 -NEAR license agreement.doc
NEAR
Y: r
lu
Its: G 4 od
M
North- suburban Emergency Assistance Response (NEAR)
Attn: Jan Monroe
732358 th Avenue North, Room 118
Crystal, MN 55428
Subject: Hold Harmless and License Agreement
Dear Ms. Monroe:
Enclosed please find an original, "Hold Harmless and License Agreement for the Nelson Building /7801
Bass Lake Road" for your files. The Agreement has been signed by the City Manager.
The City is in receipt of NEAR's insurance certificate. The certificate has been forwarded to the City
Attorney for review. Staff will contact you if additional information is required.
If you have any questions or comments, do not hesitate to contact me at 763 -531 -5137.
Sincerely,
R AJ
Ken P. Doresky, AICP
Community Development Specialist
Kirk McDonald
Director of Community Development
Cc: Dan Donahue, City Manager
Steve Sondrall, City Attorney
Valerie Leone, City Clerk (Improvement Project No. 736)
4401 Xylon Avenue North + New Hope, Minnesota 55428 -4898 + www. ci.new- hope.mn.us
City Hall: 763 - 531 -5100 + Police (non - emergency): 763- 531 -5170 + Public Works: 763 - 592 -6777 + TDD: 763 - 531 -5109
City Hall Fax: 763- 531 -5136 + Police Fax: 763 - 531 -5174 + Public Works Fax: 763- 592 -6776
c
Attorneys At .Law
8525 EDINBROOK CROSSING, STE. 201
BROOKLYN PARK, MINNESOTA 55443 -1968
TELEPHONE (763) 424 -8811 • TELEFAY (763) 493 -5193
e -mail lawejensen- sondrall.com
DOUGLAS J. DEBNER'
GORDON L. JENSEN'
GLEN A. NORTON
STEVEN A.SONDRALL
WILLIAM C. STRAIT'
STACY A. WOODS
OF COUNSEL
LORENS Q. BRYNESTAD
'Real Property Law Specialist
Certified By The
Minnesota State Bar
Association
'Qualified ADR Neutral
'Admitted in Iowa
March 4, 2003
City of New Hope
Attn Valerie Leone
4401 Xylon Avenue North
New Hope, MN 55428 -4898
Re: 7801 Bass Lake Road
Dear Ms. Leone:
I am enclosing the original Owner's Title Policy in connection with the property recently
purchased by the City from Mr. and Mrs. Showalter. If you have any questions with
regard to this Policy, please contact us.
Thank you.
Sincerely,
Janet L. Burke
Paralegal
JENSEN & SONDRALL, P.A.
jlb@jensen-sondrall.com
After Hours Extension #126
Enclosure
P: \Attorney \JLB \Letters\CNH 99 11275 -002- Client Ltr.doc
Owner's Policy
* F American Land Title Association Owner's Policy 10 -17 -92
Policy Number A22025 -SV- 00022020
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE
CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, OLD REPUBLIC
NATIONAL TITLE INSURANCE COMPANY, a Minnesota corporation, herein called the Company, insures, as
of Date of Policy shown in Schedule A, against loss or damage, not exceeding the Amount of Insurance stated in
Schedule A, sustained or incurred by the insured by reason of
1. Title to the estate or interest described in Schedule A being vested other than as stated therein;
2. Any defect in or lien or encumbrance on the title;
3. Unmarketability of the title;
4. Lack of a right of access to and from the land.
The Company will also pay the costs, attorneys' fees and expenses incurred in defense of the title, as insured, but
only to the extent provided in the Conditions and Stipulations.
IN WITNESS WHEREOF, the said OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY has caused
its corporate name and seal to be hereunto affixed by its duly authorized officers as of the date shown in Schedule A,
the policy to be valid when countersigned by an authorized officer or agent of the Company.
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or
damage, costs, attorneys' fees or expenses that arise by reason of
1. (a) Any law, ordinance or governmental regulation (including but not limited to building and zoning laws,
ordinances, or regulations) restricting, regulating, prohibiting or relating to (i) the occupancy, use, or
enjoyment of the land; (ii) the character, dimensions or location of any improvement now or hereafter
erected on the land; (iii) a separation in ownership or a change in the dimensions or area of the land or any
parcel of which the land is or was a part; or (iv) environmental protection, or the effect of any violation of
these laws, ordinances or governmental regulations, except to the extent that a notice of the enforcement
thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting
the land has been recorded in the public records at Date of Policy.
(b) Any governmental police power not excluded by a above, except to the extent that a notice of the exercise
thereof or a notice of a defect, lien or encumbrance resulting from a violation or alleged violation affecting
the land has been recorded in the public records at Date of Policy.
2. Rights of eminent domain unless notice of the exercise thereof has been recorded in the public records at Date
of Policy, but not excluding from coverage any taking which has occu.ied prior to Date of Policy v.'rich would
be binding on the rights of a purchaser for value without knowledge.
3. Defects, liens, encumbrances, adverse claims, or other matters:
(a) created, suffered, assumed or agreed to by the insured claimant;
(b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured
claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured
claimant became an insured under this policy;
(c) resulting in no loss or damage to the insured claimant;
(d) attaching or created subsequent to Date of Policy; or
(e) resulting in loss or damage which would not have been sustained if the insured claimant had paid value for
the estate or interest insured by this policy.
4. Any claim, which arises out of the transaction vesting in the Insured the estate or interest insured by this policy,
by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that is based
on:
ORDOCS ORT Form 402 — ALTA Owner's Policy 10 -17 -92 MT01155
(i) the transaction creating the estate or interest insured by this policy being deemed a fraudulent conveyance
or fraudulent transfer; or
(ii) the transaction creating the estate or interest insured by this policy being deemed a preferential transfer
except where the preferential transfer results from the failure:
(a) to timely record the instrument of transfer; or
(b) of such recordation to impart notice to a purchaser for value or a judgment or lien creditor.
CONDITIONS AND STIPULATIONS
1. Definition of Terms..
The following terms when used in this policy mean:
(a) "insured ": the insured named in Schedule A, and, subject to any rights or defenses the Company would
have had against the named insured, those who succeed to the interest of the named insured by operation of
law as distinguished from purchase including, but not limited to, heirs, distributees, devisees, survivors,
personal representatives, next of kin, or corporate or fiduciary successors.
(b) "insured claimant ": an insured claiming loss or damage.
(c) "knowledge ": or "known ": actual knowledge, not constructive knowledge or notice which may be imputed
to an insured by reason of the public records as defined in this policy or any other records which impart
constructive notice of matters affecting the land.
(d) "land ": the land described or referred to in Schedule A, and improvements affixed thereto which by law
constitute real property. The term "land" does not include any property beyond the lines of the area
described or referred to in Schedule A, nor any right, title, interest, estate or easement in abutting streets,
roads, avenues, alleys, lanes, w ays or w aterways, but n othing herein s hall in odify or 1 imit the extent to
which a right of access to and from the land is insured by this policy.
(e) "mortgage ": mortgage, deed of trust, deed, or other security instrument.
(f) "public records ": records established under state statutes at Date of Policy for the purpose of imparting
constructive notice of matters relating to real property to purchasers for value and without knowledge. With
respect to Section l (a)(iv) of the Exclusions from Coverage, "public records" shall also include
environmental protection liens filed in She records of the clerk of the United States district court for the
district in which the land is located.
(g) "unmarketability of the title ": an alleged or apparent matter affecting the title to the land, not excluded or
excepted from coverage, which would entitle a purchaser of the estate or interest described in Schedule A
to be released from the obligation to purchase by virtue of a contractual condition requiring the delivery of
marketable title.
2. Continuation of Insurance After Conveyance of Title.
The coverage of this policy shall continue in force as of Date of Policy in favor of an insured only so long as the
insured retains an estate or interest in the lard, or holds an indebtedness secured by a purchase money mortgage
given by a purchaser from the insured, or only so long as the insured shall have liability by reason of covenants
of warranty made by the insured in any transfer or conveyance of the estate or interest. This policy shall not
continue in force in favor of any purchaser from the insured of either (i) an estate or interest in the land, or (ii)
an indebtedness secured by a purchase money mortgage given to the insured.
3. Notice of Claim to be Given by Insured Claimant.
The insured shall notify the Company promptly in writing (i) in case of any litigation as set forth in Section 4(a)
below, (ii) in case knowledge shall come to an insured hereunder of any claim of title or interest which is
adverse to the title to the estate or interest, as insured, and which might cause loss or damage for which the
Company may be liable by virtue of this policy, or (iii) if title to the estate or interest, as insured, is rejected as
unmarketable. If prompt notice shall not be given to the Company, then as to the insured all liability of the
Company shall terminate wish regard to the matter or matters for which prompt notice is required; provided,
however, that failure to notify the Company shall in no case prejudice the rights of any insured under this policy
unless the Company shall be prejudiced by the failure and then only to the extent of the prejudice.
ORDOCS ORT Form 402 — ALTA Owner's Policy 10 -17 -92 MT01155
4. Defense and Prosecution of Actions; Duty of Insured Claimant to Cooperate.
(a) Upon written request by the insured and subject to the options contained in Section 6 of these Conditions
and Stipulations, the Company, at its own cost and without unreasonable delay, shall provide for the
defense of an insured in litigation in which any third party asserts a claim adverse to the title or interest as
insured, but only as to those stated causes of action alleging a defect, lien or encumbrance or other matter
insured against by this policy. The Company shall have the right to select counsel of its choice (subject to
the right of the insured to object for reasonable cause) to represent the insured as to those stated causes of
action and shall not be liable for and will not pay the fees of any other counsel. The Company will not pay
any fees, costs or expenses incurred by the insured in the defense of those causes of action which allege
matters not insured against by this policy.
(b) The Company shall have the right, at its own cost, to institute and prosecute any action or proceeding or to
do any other act which in its opinion may be necessary or desirable to establish the title to the estate or
interest, as insured, or to prevent or reduce loss or damage to the insured. The Company may take any
appropriate action under the terms of this policy, whether or not it shall be liable hereunder, and shall not
thereby concede liability or waive any provision of this policy. If the Company shall exercise its rights
under this paragraph, it shall do so diligently.
(c) the Company shall have brought an action or interposed a defense as required or permitted by
the provisions of this policy, the Company may pursue any litigation to final determination by a court of
competent jurisdiction and expressly reserves the right, in its sole discretion, to appeal from any adverse
judgment or order.
(d) In all cases where this policy permits or requires the Company to prosecute or provide for the defense of
any a ction o r p roceeding, t he i nsured sh all s ecure t o t he Company the r ight t o so p rosecute o r p rovide
defense in the action or proceeding, and all appeals. therein, and permit the Company to use, at its option,
the name of the insured for this purpose. Whenever requested by the Company, the insured, at the
Company's expense, shall give the Company all reasonable aid (i) in any action or proceeding, securing
evidence, obtaining witnesses, prosecuting or defending the action or proceeding, or effecting settlement,
and (ii) in any other lawful act which in the opinion of the Company may be necessary or desirable to
establish the title to the estate or interest as insured. If the Company is prejudiced by the failure of the
insured to furnish the required cooperation, the Company's obligations to the insured under the policy shall
terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard
to the matter or matters requiring such cooperation.
S. Proof of Loss or Damage.
In addition to and after the notices required under Section 3 of these Conditions and Stipulations have been
provided the Company, a proof of loss or damage signed and sworn to by the insured claimant shall be
furnished to the Company within 90 days after the insured claimant shall ascertain the facts giving rise to the
loss or damage. The proof of loss or damage shall describe the defect in, or lien or encumbrance on the title, or
other matter insured against by this policy which constitutes the basis of loss or damage and shall state, to the
extent possible, the basis of calculating the amount of the loss or damage. If the Company is prejudiced by the
failure of the insured claimant to provide the required proof of loss or damage, the Company's obligations to the
insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue
any litigation, with regard to the matter or matters requiring such proof of loss or damage.
In addition, the insured claimant may reasonably be required to submit to examination under oath by any
authorized representative of the Company and shall produce for examination, inspection and copying, at such
reasonable times and places as may be designated by any authorized representative of the Company, all records,
books, ledgers, checks, correspondence and memoranda, whether bearing a date before or after Date of Policy,
which reasonably pertain to the loss or damage. Further, if requested by any authorized representative of the
Company, the insured claimant shall grant its permission, in writing, for any authorized representative of the
Company to examine, inspect and copy all records, books, ledgers, checks, correspondence and memoranda in
the custody or control of a third party, which reasonably pertain to the loss or damage. All information
designated as confidential by the insured claimant provided to the Company pursuant to this Section shall not be
disclosed to others unless, in the reasonable judgment of the Company, it is necessary in the administration of
the claim. Failure of the insured claimant to submit for examination under oath, produce other reasonably
requested information or grant permission to secure reasonably necessary information from third panics as
required in this paragraph shall terminate any liability of the Company under this policy as to that claim.
ORDOCS ORT Form 402 — ALTA Owner's Policy 10 -17 -92 MT01155
6 Options to Pay or Otherwise Settle Claims; Termination of Liability.
In case of a claim under this policy, the Company shall have the following additional options:
(a) To Pay or Tender Payment of the Amount of Insurance.
To pay or tender payment of the amount of insurance under this policy, together with any costs. attorneys'
fees and expenses incurred by the insured claimant, which were authorized by the Company, up to the time
of payment or tender of payment and which the Company is obligated to pay.
Upon the exercise by the C ompany of this option, all liability and obligations to the insured under this
policy, other than to make the payment required, shall terminate, including any liability or obligation to
defend, prosecute, or continue any litigation, and the policy shall be surrendered to the Company for
cancellation.
(b) To Pay or Otherwise Settle With Parties Other Than the Insured or With the Insured Claimant.
(i) to pay or otherwise settle with other parties for or in the name of an insured claimant any claim insured
against under this policy, together with any costs, attorneys' fees and expenses incurred by the insured
claimant which were authorized by the Company up to the time of payment and which the Company is
obligated to pay; or
(ii) to pay or otherwise settle with the insured claimant the loss or damage provided for under this policy,
together with any costs, attorneys' fees and expenses incurred by the insured claimant which were
authorized by the Company up to the time of payment and which the Company is obligated to pay.
Upon the exercise by the Company of either of the options provided for in paragraphs (b)(i) or (ii),
Company's obligations to the insured under this policy for the claimed loss or damage, other than the
payments required to be made, shall terminate, including any liability or obligation to defend, prosecute, or
continue any litigation.
7. Determination, Extent of Liability and Coinsurance.
This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the
insured claimant who has suffered loss or damage by reason of matters insured against by this policy and only
to the extent herein described.
(a) The liability of the Company under this policy shall not exceed the least of:
(i) the Amount of Insurance stated in Schedule A; or,
(ii) the difference between the value of the insured estate or interest as insured and the value of the insured
estate or interest subject to the defect, lien or encumbrance insured against by this policy.
(b) In the event the Amount of Insurance stated in Schedule A at the Date of Policy is less than 80 percent of
the value of the insured estate or interest or the full consideration paid for the land, whichever is less, or if
subsequent to the Date of Policy an improvement is erected on the land which increases the value of the
insured estate or interest by at least 20 percent over the Amount of Insurance stated in Schedule A, then this
policy is subject to the following:
(i) where no subsequent improvement has been made, as to any partial loss, the Company shall only pay
the loss pro rata in the proportion that the amount of insurance at Date of Policy bears to the total value
of the insured estate or interest at Date of Policy; or
(ii) where a subsequent improvement has been made, as to any partial loss, the Company shall only pay
the loss pro rata in the proportion that 120 percent of the Amount of Insurance stated in Schedule A
bears to the sum of the Amount of Insurance stated in Schedule A and the amount expended for the
improvement.
The provisions of this paragraph shall not apply to costs. attorneys' fees and expenses for which the
Company is liable under this policy, and shall only apply to that portion of any loss which exceeds, in the
aggregate, 10 percent of the Amount of Insurance stated in Schedule A.
(c) The Company will pay only those costs, attorneys' fees and expenses incurred in accordance with Section 4
of these Conditions and Stipulations.
8. Apportionment.
If the land described in Schedule A consists of two or more parcels which are not used as a single site, and a
loss is established affecting one or more of the parcels but not all, the loss shall be computed and settled on a
pro rata basis as if the amount of insurance under this policy was divided pro rata as to the value on Date of
ORDOCS ORT Form 402 — ALTA Owner's Policy 10 -17 -92 MT01155
Policy of each separate parcel to the whole, exclusive of any improvements made subsequent to Date of Policy,
unless a liability or value has otherwise been agreed upon as to each parcel by the Company and the insured at
the time of the issuance of this policy and shown by an express statement or by an endorsement attached to this
policy.
9. Limitation of Liability.
(a) If the Company establishes the title, or removes the alleged defect, lien or encumbrance, or cures the lack
of a right of access to or from the land, or cures the claim of unmarketability of title, all as insured, in a
reasonably diligent manner by any method, including litigation and the completion of any appeals
therefrom, it shall have fully performed its obligations with respect to that matter and shall not be liable for
any loss or damage caused thereby.
(b) In the event of any litigation, including litigation by the Company or with the Company's consent, the
Company shall have no liability for loss or damage until there has been a final determination by a court of
competent jurisdiction, and disposition of all appeals therefrom, adverse to the title as insured.
(c) The Company shall not be liable for loss or damage to any insured for liability voluntarily assumed by the
insured in settling any claim or suit without the prior written consent of the Company.
10. Reduction oflnsurance; Reduction or Termination of Liability.
All payments under this policy, except payments made for costs, attorneys' fees and expenses, shall reduce the
amount of the insurance pro tanto.
11. Liability Noncumulative.
It is expressly understood that the amount of insurance under this policy shall be reduced by any amount the
Company may pay under any policy insuring a mortgage to which exception is taken in Schedule B or to which
the insured has agreed, assumed, or taken subject, or which is hereafter executed by an insured and which is a
charge or lien on the estate or interest described or referred to in Schedule A, and the amount so paid shall be
deemed a payment under this policy to the insured owner.
12. Payment of Loss.
(a) No payment shall be made without producing this policy for endorsement of the payment unless the policy
has been lost or destroyed, in which case proof of loss or destruction shall be furnished to the satisfaction of
the Company.
(b) When liability and the extent of loss or damage has been definitely fixed in accordance with these
Conditions and Stipulations, the loss or damage shall be payable within 30 days thereafter.
13. Subrogation Upon Payment or Settlement.
(a) The Company's Right of Subrogation.
Whenever the Company shall have settled and paid a claim under this policy, all right of subrogation shall
vest in the Company unaffected by any act of the insured claimant.
The Company shall be subrogated to and be entitled to all rights and remedies which the insured claimant
would have had against any person or property in respect to the claim had this policy not been issued. If
requested by the Company, the insured claimant shall transfer to the Company all rights and remedies
against any person or property necessary in order to perfect this right of subrogation. The insured claimant
shall permit the Company to sue, compromise or settle in the name of the insured claimant and to use the
name of the insured claimant in any transaction or litigation involving these rights or remedies.
If a payment on account of a claim does not fully cover the loss of the insured claimant, the Company shall
be subrogated to these rights and remedies in the proportion which the Company's payment bears to the
whole amount of the loss.
If loss should result from any act of the insured claimant, as stated above, that act shall not void this policy,
but the Company, in that event, shall be required to pay only that part of any losses insured against by this
policy which shall exceed the amount, if any, lost to the Company by reason of the impairment by the
insured claimant of the Company's right of subrogation.
(b) The Company's Rights Against Non - insured Obli ag ors.
The Company's right of subrogation against non- insured obligors shall exist and shall include, without
limitation, the rights of the insured to indemnities, guaranties, other policies of insurance or bonds,
ORDOCS ORT Form 402— ALTA Owner's Policy 10 -17 -92 MT01155
notwithstanding any terms or conditions contained in those instruments which provide for subrogation
rights by reason of this policy.
14. Arbitration.
Unless prohibited by applicable law, either the Company or the insured may demand arbitration pursuant to the
Title Insurance Arbitration Rules of the American Arbitration Association. Arbitrable matters may include, but
are not limited to, any controversy or claim between the Company and the insured arising out of or relating to
this policy, any service of the Company in connection with its issuance or the breach of a policy provision or
other obligation. All arbitrable matters when the Amount of Insurance is $1,000,000 or less shall be arbitrated at
the option of either the Company or the insured. All arbitrable matters when the Amount of Insurance is in
excess of $1,000,000 shall be arbitrated only when agreed to by both the Company and the insured. Arbitration
pursuant to this policy and under the Rules in effect on the date the demand for arbitration is made or, at the
option of the insured, the Rules in effect at Date of Policy shall be binding upon the parties. The award may
include attorneys' fees only if the laws of the state in which the land is located permit a court to award attorneys'
fees to a prevailing party. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court
having jurisdiction thereof.
The law of the situs of the land shall apply to an arbitration under the Title Insurance Arbitration Rules. A copy
of the Rules may be obtained from the Company upon request.
15. Liability Limited to this Policy; Policy Entire Contract.
(a) This policy together with all endorsements, if any, attached hereto by the Company is the entire policy and
contract between the insured and the Company. In interpreting any provision of this policy, this policy shall
be construed as a whole.
(b) Any claim of loss or damage, whether or not based on negligence, and which arises out of the status of the
title to the estate or interest covered hereby or by any action asserting such claim, shall be restricted to this
policy.
(c) No amendment of or endorsement to this policy can be made except by a writing endorsed hereon or
attached hereto signed by either the President, a Vice President, the Secretary, an Assistant Secretary, or
validating officer or authorized signatory of the Company.
16 Severability.
In the event any provision of the policy is held invalid or unenforceable under applicable law, the policy shall
be deemed not to include that provision and all other provisions shall remain in full force and effect.
17. Notices, Where Sent.
All notices required to be given the Company and any statement in writing required to be furnished the
Company shall include the number of this policy and shall be addressed to its Home Office: 400 Second
Avenue South, Minneapolis, Minnesota 55401, (612) 371 -1111.
Issued through the office of
Old lZepublic National Title Insurance Company
400 Second Avenue South
Minneapolis, MN 55401
OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY
A Stock Company
400 Second Avenue South, Minneapolis, Minnesota 55401
(612)371 -1111
Authorized Signatory
BY President
s.
m m:
Attest ^�' tN; D ` Secretary
ORDOCS ORT Form 402— ALTA Owner's Policy 10 -17 -92 MT01155
FILE NO: HEN OR999841 -C
ST. 22
CNTY. 053
PROP. 3
IRAN. 010
Re -Issue Liability: $.00
ORT FORM 402 - ALTA Owner's Policy 10 -17 -92
POLICY NUMBER: A22025 -SV- 00022020
FILE NO.: OR999841 -C
POLICY AMOUNT: $370,000.00 PREMIUM: $1,095.00
SCHEDULE A
1. POLICY DATE December 23, 2002 AT 5:00 PM
2. THE INSURED HEREUNDER, IN WHOM TITLE TO THE FEE SIMPLE ESTATE IS
VESTED, AT DATE HEREOF, IS:
City of New Hope
3. THE LAND REFERRED TO IN THIS POLICY IS DESCRIBED AS FOLLOWS:
That part of Lot 38, Auditor's Subdivision Number 226, Hennepin County, Minnesota,
described as follows: Commencing at the Northeast corner of said Lot 38; thence South along
the East line of said Lot a distance of 210.8 feet; thence West parallel with the North line of
said Lot 38 a distance of 70 feet; thence North parallel to the East line of said lot to the North
line thereof, thence East to the point of beginning. EXCEPT that part of Lot 38, Auditor's
Subdivision Number 226, Hennepin County Minnesota described as follows: beginning at a
point on the Nest line of said Lot 38, distant 1100 feet North from the Southwest corner
thereof; thence East parallel with the South line of said Lot 38 to the East line of said lot;
thence South along the East line thereof a distance of 100 feet; thence West parallel with the
South line of said lot to the West line thereof; thence North along the West line thereof to the
point of beginning, Hennepin County, Minnesota, according to the recorded plat thereof, and
situate in Hennepin County, Minnesota.
Abstract Property
ORDOCS ORT STANDARD OWNERS FINAL POLICY NIT01138
OSOFP PAGE 1 � '� '� �
* (� *OLD REPUBLIC
F National Title Insurance Company
FILE NO: HEN OR999841 -C
SCHEDULE B
THIS POLICY DOES NOT INSURE AGAINST LOSS OR DAMAGE BY REASON OF THE
FOLLOWING:
1. FACTS WHICH WOULD BE DISCLOSED BY A COMPREHENSIVE SURVEY OF THE
PREMISES HEREIN DESCRIBED.
2. MECHANICS', CONTRACTORS' OR MATERIALMEN'S LIENS AND LIEN CIAIMS, IF
ANY, WHERE NO NOTICE THEREOF APPEARS ON RECORD.
3. RIGHTS AND CLAIMS OF PARTIES IN POSSESSION.
4. Taxes not yet due and payable and special assessments, if any.
5. Taxes for the year 2002 and prior years are paid.
ORDOCS ORT STANDARD OWNERS FINAL POLICY MT01138
OSOFP PAGE 2 *�` * '
(* OLD REPUBLIC
* 'F National Title Insurance Company
.�c 'F
COUNCIL
O A%
REQUEST FOR ACTION
2�� H oR
Originating Department
Approved for Agenda
Agenda Section
Community Development
12 -9 -02
Development & Plannin
Item No.
By: Kirk McDonald, Director of CD
& Ke n Doresk , CD Specialist
By:
8 I
RESOLUTION APPROVING THE LOW QOTE FROM QUEST REAL ESTATE, INC. FOR PROPERTY
MANAGEMENT OF THE MULTI - TENANT OFFICE BUILDING LOCATED AT 7801 BASS LAKE ROAD
(IMPROVEMENT PROJECT NO. 719)
ACTION REQUESTED
Staff is requesting Council consideration of a resolution approving the low -quote from Quest Real Estate in the
lump sum amount of $300 per month to manage the multi- tenant office building at 7801 Bass Lake Road. Staff
anticipates a closing of the property to occur on December 16, with the City taking ownership at that time. On
November 12, the Council discussed property management and rental options for the building and requested
that staff solicit quotes from professional management firms and determine the status of leases and interest in
remaining in the building for a period of twelve (12) to eighteen (18) months. On October 28, the Council
approved a resolution authorizing acquisition of the property by direct purchase or eminent domain and
directed staff to return to the Council with property management and rental options for discussion prior to
property closing.
POLICY /PAST PRACTICE
City goal #2 is to pursue the maintenance and redevelopment of commercial and residential properties within
the City. The City Council has been addressing this goal through the City's many redevelopment activities,
including acquiring properties from willing sellers in designated redevelopment areas. Over the past few years,
the City has purchased a total of fourteen properties located in Planning District 6 (east Winnetka area) as
referenced in the City's Comprehensive Plan.
The City has, at times, assumed operating responsibilities for various properties in between relocating tenants
and site clearing activities. Most recently, staff assumed operating responsibilities during this interim period for
the residential four -plex apartment buildings previously located at 7601 -41 62 Avenue North. The City
purchased these buildings in 1998 for redevelopment purposes, relocated the tenants, cleared the sites and
landbanked the properties.
BACKGROUND
On November 12, the Council discussed property management and rental options for the building and directed
staff to solicit quotes from professional management firms. Since that time, staff developed a Request for
Quote and solicited quotes from five property management firms, the City Attorney developed a contract for
MOTION BY '' ' r
SECOND BY L.E:, � J
TO:
Request for Action Page 2 12 -9 -02
services and Evergreen Land Services, the City's relocation consultant met with a number of the tenants to
discuss relocation eligibility and to inquire if tenants wish to stay in the building for 12 -18 months.
Management Contract
The City Attorney developed a contract for services that includes but is not limited to the following (please
see attached contract):
• Leasing: Manager will not provide leasing services, but will enforce all existing tenant leases and
month -to -month rental agreements.
• Legal Requirements: Compliance with any legal requirements.
• Operation: Manager shall be responsible to maintain the property in good condition and repair to
standards established by owner, at owner's expense.
• Maintenance & Repair: Manager shall see that the physical facilities, personal property and grounds
are at all times well maintained and kept in good order and repair and in a proper state of cleanliness,
at owner's expense. Manager shall have authority to hire, supervise and terminate on behalf of owner,
independent contractors required in the operation of the property. However, all contracts shall require
approval of the owner.
• Emergency Maintenance & Repair: Manager shall report to owner full details of any emergency orally
and by letter remitted by the end of the following business day. The contracting limitation shall be
waived for emergency repairs if owner is not reasonably available to grant approval. Manager shall
obtain and maintain records and enforce any guarantees or warranties that may concern owner's real
or personal property included within the property where such records, guarantees, and warranties are
reasonably available to manager. Owner's approval must be obtained before pursing any legal
remedies to enforce said guarantees or warranties.
• Employees of Manager: Owner reserves the right to approve any employees of manager who will be
assigned maintenance duties on the property.
• Budgets: The fiscal year for the property shall be from January 1 through December 31 of each year.
Manager shall update and revise in a format to be approved by owner the anticipated budget for the
property no later than thirty (30) days from the date this agreement is executed and every year
thereafter, no later than December 1 of each year. Said budgets shall include the estimated operating
monthly income and expenses of the property for the next fiscal year. After approval by owner in
writing, budgets shall be used by manager as a guide for the actual operation of the property. Manager
agrees to obtain the prior written approval for any expenditure or expenditures which would cause any
major budget revisions, except for emergencies. All expenses within approved budget are to be borne
by owner and it shall be the responsibility of owner, provided there is no default by manager, to make
available sufficient funds to manager to meet expenses anticipated in the approved budget.
• Collections: Manager shall use due diligence to collect all sums payable by tenants. All sums so
collected shall be delivered to owner no later than one day after the day of collection.
• Books, Records and Reports: Manager will establish and maintain an accounting and management
reporting system that will account for all transactions relating to the property. Manager shall provide the
following financial and management reports to owner for the preceding accounting month:
1. Detailed report of all monies collected (identified by tenant or other source) which shall include:
A. Rent bills to tenants;
B. Rents collected;
C. Rents delinquent;
D. Rents prepaid beyond current month, and;
E. Security deposits collected.
2. Detailed report of all expenses, capital and operating.
• Termination of Contract: This agreement may be terminated and the obligation of the parities
hereunder shall thereupon cease, upon the occurrence of any of the following circumstances:
1. In the event of a bona fide sale or substantial destruction of the property, either party may
terminate this agreement upon thirty (30) days written notice to the other party.
Request for Action Page 3 12 -9 -02
2. If a petition for bankruptcy, reorganization or rearrangement is filed under state or federal
insolvency statutes by or against manager, or manager shall make an assignment for the benefit of
creditors or take advantage of any insolvency act, owner may terminate this agreement upon ten
(10) days written notice to manager.
3. If a petition for bankruptcy, reorganization or rearrangement is filed under state or federal
insolvency statutes by or against manager, or manager shall make an assignment for the benefit of
creditors or take advantage of any insolvency act, owner may terminate this agreement upon ten
(10) days written notice to manager.
4. If manager shall knowingly and materially fail to comply with any ordinance or law of any federal,
state or municipal authority, owner may terminate this agreement upon ten (10) days written notice
to manager.
5. If either party shall default in the performance of any of its obligations hereunder and such default
shall continue uncorrected for thirty (30) days after written notice from one party to the defaulting
party designating such default, the party not in default may terminate this agreement upon ten (10)
days written notice to the defaulting party.
6. In the event the property fails to produce a positive cash flow, owner, in its sole discretion, may
terminate this agreement upon ten (10) days written notice to manager.
2. Management Quotes
Firm
Quote
Quest Real Estate
$300
Jerry Showalter former owner
$400
Upper Midwest Management Corporation
$500
Staff solicited quotes from five (5) commercial property management firms, three (3) firms submitted quotes.
Staff recommends that the Council award a contract to the low -quote firm, Quest Real Estate, Inc. to manage
the building, unless the Council desires to award the contract to the current owner /manager Jerry Showalter.
As stated in his RFQ cover letter, Mr. Showalter has owned and managed the building for over twenty (20)
years. Furthermore, he stated that there is a special relationship among tenants in the building and he would
like to see that environment maintained.
Quest Real Estate, Inc. would attempt to operate the building as it currently is maintained. Steven A.
Ludovissie, Director of Property Management submitted the quote. According to the qualifications submitted,
Mr. Ludovissie has personally been responsible for the leasing and property management activities of
portfolios with commercial property totally over 900,000 square feet. Staff contacted four (4) of the five (5)
references provided and all were complimentary.
3. Tenant Leases
As requested by the Council, Evergreen Land Services, the City's relocation consultant has been meeting with
tenants to determine their relocation eligibility and any desire to remain in the building. At the time of this
report, Evergreen Land Services indicated that two (2) of the tenants were planning to vacate the building
ASAP and the remaining tenants would like to stay in the building for twelve (12) to eighteen (18) months on a
month -to -month basis. Three (3) of the ten (10) current tenants have leases that expire March 31, 2003. All
other tenants are obligated to month -to -month rental agreements. Due to the inability to sublease (relocation
obligation to new tenants) and the current month -to -month flexibility, staff is recommending that continued
month -to -month rental agreements be offered to each tenant. According to the Property Management
Agreement, the agreement can be terminated at which point that the property fails to produce a positive cash
flow. The City would be required to provide the tenants with a ninety (90) day minimum notice to vacate the
property. Evergreen Land Services will provide a detailed memorandum at the time of the meeting regarding
tenants desiring to vacate the building and tenants wishing to remain.
Please see the following cash flow summary:
Request for Action
Page 4
12 -9 -02
Unit
Rent Per Month
Rent Per Year
Lease Term
Future Plans as of 12/3/02
101
$560
$6720
Month -To -Month
Remain
110
$435
$5220
Expires 3 -31 -03
Remain
111
Empty
N/A
N/A
N/A
120
$360
$4,320
Expires 3 -31 -03
Remain
121
$445
$5,340
Month -To -Month
Remain
200
$210
$2,520
Expires 3 -31 -03
Vacate
201
$445
$5,340
Month -To -Month
Remain
210
$545
$6,540
Month -To -Month
Two tenants — One to remain 1/2 Rent
211
$480
$5,760
Month -To- Month
Remain
221
$250
$3,000
Month -To -Month
Remain
231
Empty
N/A
N/A
N/A
Total
$3,730
$44,760
Estimated Cash Flow
Gross Rent
$3,247.50
Operating Expenses (Avg.)
$1,885.00
Management Fee
$300.00
Cash Flow per month
$1,062.50
Operating Expense Summa 2001)
Item
Per Month
Per Year
Garbage Removal
$112
$1,344
Snow Plowing
$42
$500
*Cleaning
$200
$2,400
Bathroom Towels
$24
$288
* *Misc. Expenses
$144
$1,728
Gas
$236
$2,832
Electricity
$320
$3,840
Water
$45
$540
Insurance
$82
$984
Taxes
$679
$8,148
Total
$1,884
$22,608
• The tenants are responsible for cleaning their own offices.
• All utilities are included in rent.
• *Cleaning service provided by tenant #121. Tenant 121
cleaning and general maintenance of the building.
• * *Miscellaneous expenses include minor repairs (plumbing,
bulbs, etc.)
is the resident manager and takes care off
electrical, doors and locks, tree trimming, light
On October 28, 2002, the Council approved a resolution to purchase the subject property for $370,000. The
property is a multi- tenant office building, currently occupied by nine tenants. Two office spaces are vacant. At
the October 28 meeting, the Council requested that staff research options to maintain the building's current
use as offices and potentially lease the open units until redevelopment activities begin. The concept being that
the City could generate income from the property and delay relocation of the existing businesses before the
site is required for redevelopment.
Relocation expenses would be required as a component of this acquisition project. Evergreen Land Services,
the City's relocation consultant, has provided the City with a preliminary relocation estimate of $20,000 per
tenant. It has been determined that ten (10) tenants are currently located in the building, therefore assuming
Requeuat for Action Page 5 12 -9 -02
all the tenants accept the $20,000 in lieu of payment as opposed to actual expenses, relocation expenses are
estimated to be $200,000. Relocation activities are currently underway.
On July 22, 2002, the Council authorized staff to negotiate the potential purchase of this multi- tenant office
building based on its appraised value of $330,000 as determined by the Shenehon Company.
Based on a meeting with the property owner on April 15, 2002, the City Manager authorized staff to obtain an
appraisal of 7801 Bass Lake Road for potential acquisition purposes. The property is located in the East
Winnetka Livable Communities area and in Planning District 6. This property is included in the east Winnetka
area redevelopment concept plans developed by the Livable Communities Task Force.
In 1998, the Council passed a resolution approving the City of New Hope Comprehensive Plan Update. In
1999, the Metropolitan Council approved the Comprehensive Plan Update. In the Plan, the City was broken
down into several planning districts. Planning District 6 is the district where the Winnetka, Bass Lake Road
and Sumter properties that the City has been pursuing over the past few years are located. Planning District 6
is bordered by Winnetka Avenue North to the west, C.P. Rail system to the south and the City of Crystal to the
east and north.
The Comprehensive Plan targeted several areas in the City for redevelopment. Recommendations for
Planning District 6 include the acquisition and redevelopment of sites located along the south side of Bass
Lake Road, in the Bass Lake Road extension area and along the east side of Winnetka Avenue North
between 5340 Winnetka Avenue and Bass Lake Road.
On May 24, 2002, the Council hired the engineering firm Short Elliott Hendrickson, Inc. to determine whether
qualification tests for tax increment eligibility (site coverage, building conditions) can be met in the east
Winnetka area. This study is being undertaken to facilitate redevelopment efforts in the area. SEH has
determined the subject building to be substandard in the DRAFT report. At a future meeting, staff will request
that the Council consider a resolution determining the building to be substandard and included in a Tax
Increment Financing District. The resolution would allow the City to clear the site and still include the property
in a future Tax Increment Financing District.
The property is located at 7801 Bass Lake Road and built in 1969. The property is zoned CB and is used as a
multi- tenant office building. The property measures a total of 14,810 sq. ft. or .34 acres. Gross building area of
the facility is an estimated 6,000 sq. ft., with a net rentable area of approximately 4,313 sq. ft.
Recommendation Summary:
1. If it is determined that enough tenants plan to remain in the building and a positive cash flow is
generated:
A. Award management contract to Quest Real Estate, Inc. in the low quote amount of $300 per
month, and;
B. Due to the inability to sublease (relocation obligation to new tenants) and the current month -to-
month flexibility, offer continued month -to -month rental agreements to each tenant.
C. Operate the building on a month -to -month basis until a enough tenants vacate the building that a
negative cash flow is generated and at that time begin the minimum ninety (90) day vacation
process.
2. If it is determined that enough tenants are planning to vacate the property that it will generate a
negative cash flow:
A. Accept Jerry Showalter's management proposal of $400 per month and operate the building for the
minimum ninety (90) days.
Once the building is vacant, the City would request quotes for demolition and site restoration.
Reques;t for Action Page 6 12 -9 -02
FUNDING
The subject property is located in an area where TIF funds can be expended. TIF funds would be used for
property acquisition and associated holding costs.
ATTACHMENTS
• Resolution
• Location Map
• Topographic Map
• Quotes and Related Material
• Request for Quote including Sample Contract
• Cash Flow Charts
CITY OF NEW HOPE
RESOLUTION NO. 2002- 174
RESOLUTION APPROVING THE LOW-QUOTE FROM QUEST REAL ESTATE, INC.
FOR PROPERTY MANAGEMENT OF THE MULTI-TENANT OFFICE BUILDING
LOCATED AT 7801 BASS LAKE ROAD
(IMPROVEMENT PROJECT NO. 719)
BE IT RESOLVED by the City Council of the City of New Hope as follows:
1. That quotes for services to manage the multi-tenant office building at 7801 Bass
Lake Road were obtained by City staff.
2. It is hereby found and determined by this Council that the quote from Quest Real
Estate, Inc. for profession management services in the lump sum monthly amount of $300 is
the lowest responsible quote submitted for the project. City staff has recommended the
designated lowest responsible quote to this Council for the award.
3. The Mayor and City Manager are authorized and directed to enter into an
agreement for the performance of said project in the name of the City with the lowest
responsible quote.
Adopted by the New Hope City Council this 9th day of December, 2002.
Mayor
Attest:
City Clerk
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REQUEST FOR QUOTE (RFQ)
PROPERTY MANAGEMENT
MULTI- TENANT OFFICE BUILDING
7801 BASS LAKE ROAD
NEW HOPE, MINNESOTA
City of New Hope
Attn.: Mr. Ken P. Doresky, AICP
Community Development Specialist
4401 Xylon Avenue North
New Hope, MN 55428
Dear Council Members:
RFQ Due 12/2/02, 4:30 PM
The undersigned, having studied the attached description of work, being familiar with all
factors and other conditions affected the work and cost thereof, hereby proposes to
furnish everything necessary to complete the project in accordance with the attached
description of work.
Property Management Lump Sum Quote (Monthly)
7801 Bass Lake Road 300 a --
In submitting this quote proposal it is understood that the City retains the right to reject
any and all quotes and to award the quote in the best interests of the City. It is also
understood that quotes may not be withdrawn for a period of 30 days after the deadline
date on this request for proposal quote form.
Respectfully submitted,
0 of-S - 1 , e-FA2
Firm
Agent
It ?a o 014) Co. ED • 1.S 4 r - J -0
Address
City, State & Zip Code
5 7, rr- egg'.. 4 - LX'4 Jo ✓ Iss 161-
Printed Name of Agent
71, 3- .Sys'-
Telephone No.
Iz oza2
Date
Suite 150
10700 Old County Road 15
Plymouth, MN 55441
December 2, 2002
Mr. Ken P. Doresky
Community Development Specialist
City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
RE: 7801 Bass Lake Road
New Hope, MN
Tel: 763 - 595 -9511
Fax: 763- 595 -9512
Dear Mr. Doresky:
Enclosed are the following documents in response to your Request
For Quote to provide property management services at the above
referenced property:
1) Completed RFQ Proposal Cover Sheet
2) Summary of Services To Be Provided
3) Company Profile and Qualifications
Thank you for allowing us the opportunity to provide the City of New
Hope with a proposal for managing the above referenced property. If
you should have any questions, please call me at 763 - 595 -9511.
Sir4efely
Jevp A h W enA —
. Ludovissie
Director of Property Management
A
Suite 150
10700 Old Countly Road 1.5
Pltzuouth_ 91\ 55141
SUMMARY OF PROPERTY
MANAGEMENT AND LEASING
SERVICES
1) Prepare initial Property Inspection/Assessment Report and
submit to the City of New Hope ( "City ")
2) Prepare 2003 projected Income and Expense Budget and
submit to City
3) Physical Property Maintenance and Operating Services:
a) Contract- Grounds maintenance /snow removal
b) Contract- Exterior building maintenance /roof
c) Contract- Rubbish removal
d) Contract- Janitorial services and supplies
e) Contract- Fire safety /security or (as needed)
f) Contract - Interior building maintenance
g) Weekly site visits or (as needed)
h) Resolve tenant service requests
i) Handle emergency maintenance and repair items
4) Financial Activities
a) Collection of tenant rent and forward to City
b) Review invoices and forward to City for payment
c) Prepare monthly Income and Expense Reports for City
5) Other
a) Enforce tenant lease provisions
6) Exclusions
a) No leasing services required
b) Establishment of bank accounts
c) Payment of any expenses /security deposits
COMMENTS:
Management Agent will negotiate all service contracts, (as needed),
for approval and execution by City as Owner. City will pay all
approved operating expenses, insurance and real estate taxes incurred
by the property directly. The prevailing document governing Agent
responsibilities shall be Exhibit A; "Property Management
Agreement ". The Management Agreement will have a maximum term
of six (6) months and continue on a month -to -month basis thereafter.
Tel: 763 -595 -9511
Fax: 763 - 595 -9512
Quest Real Estate, Inc. and Quest Development, Inc.
In 1986 Leonard G. Anderson and James M. Waters created Quest Development, Inc.,
to pursue a mutual interest in real estate investment and development. Until 1993 Quest
has been pursuing the private investment and development goals of its owners and
other partners. During the mid and late 1980's Quest Development, Inc. developed and
managed, for our account, strip centers and medical office buildings. In 1993 a strategy
to develop and market subdivided land was successfully implemented, and continues
today.
In 1996, in order to better define specific corporate activities, Quest Development, Inc.
became the entity through which all development activity takes place. Quest Real
Estate, Inc. was formed to conduct asset management and property management
functions. Currently we are successfully pursuing this dual focus on subdivided land
development, as well as commercial development and management.
The companies operate with a full time staff of five people, thus following the maxim of
"less is more" and adhering to a strategy of pursuing the optimum deals, rather then
pursuing more deals to cover excessive overhead.
Included in our recent projects is Echo Shores of Mahtomedi, a single family and town
home development venture, developed in cooperation with Pratt Homes and Nedegaard
Construction. This housing development offers homes ranging in price from $350,000 to
$900,000 and is the site for the 1998 "Idea House" featured in the Twin Cities Fall
Parade of Homes and Midwest Living magazine. As a company, we feel this project is
representative of our quality standard. Other recently completed land development
projects include: Ridgecliffe Woods, a single family subdivision and Seneca Woods, a
townhouse subdivision, both in Eagan; and Blaine Ridge, a detached townhouse
subdivision in Inver Grove Heights.
Leonard G. Anderson, CEO
Leonard Anderson started in the insurance business in 1966 with Reserve Life
Insurance Company, and immediately became one of their top personal producers. Mr.
Anderson worked through the ranks and became a State Manager, always placing his
state in the top three spots for the nation. In 1974 he formed his own General Agency,
National Independent Brokers, Inc. and continued to set production records for the
various insurance companies with which this company wrote business. In 1979 Mr.
Anderson founded American Independent Underwriters, Inc. This company is
responsible for marketing insurance products to agents throughout the eastern half of
the United States.
In 1989, after having been heavily involved in the senior market for over 20 years, Mr.
Anderson co- founded the GoldenCare marketing organization. Determined to provide a
superior long -term care product, he and his partner developed and hold exclusive
marketing rights to the GoldenCare line of long -term care insurance products.
Currently operating in 43 states, GoldenCare has grown to over 11,000 contracted
agents, writing 1,500 applications per month, and has more than $50,000,000 of
annualized premium in force.
As a result of his long time interest in real estate investment, Mr. Anderson joined with
Mr. Waters in 1986 to found Quest Development, Inc. He is currently an active investor
and officer in both Quest Development, Inc. and Quest Real Estate, Inc.
James M. Waters, President / COO
Mr. Waters has been actively involved as a professional real estate broker and manager
for over twenty years, during which time Mr. Waters has acquired an extensive
background in real estate. In addition to real estate sales and leasing, his experience
includes the development of retail strip centers, medical office buildings, hotel properties
and subdivided land. He is currently developing the two phase Plymouth City Center
office project in downtown Plymouth, Minnesota. He has been the managing partner of
Quest Development, Inc. since founding it, with Mr. Anderson in 1986.
He has been a member of the Minnesota Shopping Center Association and the
International Council of Shopping Centers. Current memberships and affiliations include
the National Association of Realtors, the Minneapolis Area Association of Realtors, the
Builders Association of the Twin Cities, National Association of Office and Industrial
Parks (NIAOP) and the Building Owners and Managers Association (BOMA).
His responsibilities include corporate financial management, as well as development
and implementation of the company's strategic plan. Additional responsibilities include
asset management, property acquisition and disposition, as well oversight of land
development staff and management staff who are conducting Lease negotiations, tenant
improvement planning, renovation and construction.
Stephen A. Ludovissie, Director of Property Management
Mr. Ludovissie joined Quest Real Estate, Inc. in September of 2001 with over twenty
years of commercial and multi- family residential property management experience. He
holds a B.A. degree from the University of Minnesota, a M.A. degree from Mankato
State University and designation of Certified Property Manager from the Institute of Real
Estate Management.
Mr. Ludovissie was the owner and President of Provesco, Inc. for over thirteen (13)
years. Provesco, Inc. provided property management services on up to fifteen (15)
commercial and multi - family residential properties. In addition, Provesco, Inc. provided
consulting services and served as court appointed receiver for various mortgage
companies and State and Federal agencies. Prior to Provesco, Inc., Mr. Ludovissie held
the position of Vice - President with The Schuett Companies for over three (3) years
during which time the company developed and managed twenty (20) multi - family
residential and commercial properties. During his career, Mr. Ludovissie has personally
been responsible for the leasing and property management activities of portfolios with
commercial property totaling over 900,000 square feet and multi - family residential
property in excess of 2,500 units.
In his current position at Quest Real Estate, Inc., Mr. Ludovissie is responsible for
leasing and property management duties for five (5) office buildings and one (1) retail
center ranging in size from 4,400 square feet to 58,500 square feet. He will also
assume management of a 30,000 square foot office building developed by Quest
Development, Inc. under construction upon its completion in the spring of 2003.
Uj" .16JU 43 Wig LOMd 4 L 14 0 k 4 N
SIGNAL BANK
1270 Yankee Doodle Road
Eagan, MN 55121
5050 France Avenue
Edina, MN 55410-2085
Pfiffner Heating and A/C
Services,, Inc.
6301 Welcome Avenue
Brooklyn Park, MN 55429
Metro Elevator
1721 Mainstreet
Hopkins, MN 55343
WILKERSON & HEGNA, PLLP
3800 West 80 Street, Suite 1100
Bloomington, MN 55431
Nancy Aune, Vice President
Phone: 651-306-1667
Fax: 651-306-1650
Dan Poppe, Managing Director
Phone: 952-836-3032
Fax: 952-836-3045
Mark Pogreba, Owner
Contact: Penny
Phone: 763-533-7516
Brad Hanson, Owner
Contact: Sue Hanson
Phone: 952-932-9868
Gary Wilkerson, Attorney at Law
Phone: 952-897-1707
Fax: 952-897-3534
A A
4.A 6
8001 Building
10600 Building
Apache Medical
Tiffany Building
Zane Professional Building
Walker Street Building
Greeley Square
Lake Street Center
Lake Place Shopping Center
Zaneplace Center
Plymouth City Center
7,000 sf — Medical/Office
4,400 sf — Professional Office
58,500 sf — Medical/Office
35,000 sf — Professional Office
16,000 sf — Medical/Office
12,000 sf — Office
24,000 sf — Retail & Office
27,000 sf — Retail & Office
15,000 sf — Retail
30,000 sf — Retail
21,000 sf — Professional Office
St. Louis Park, MN
Plymouth, MN
St. Anthony, MN
Plymouth, MN
Brooklyn Park, MN
St. Louis Park, MN
Stillwater, MN
Minneapolis, MN
Oakdale, MN
Brooklyn Park, MN
Plymouth, MN
Quest Real Estate, Inc
Management. Development. Investment.
Commercial
Property Specialists
We deliver excellent results to
owners through comprehensive
management, leasing and
consulting services.
We provide timely and
effective office space solutions
to meet the needs of today's
small and midsize businesses.
We are committed to
dependable, high - quality
customer service through
prompt and effective response
to tenant requests.
Commercial .Property Division
Suite 150
10700 Old County Road 15
Plymouth, MN 55441
•` k •
ZANEWAY SHOPPING CENTER AND
ZANE PROFESSIONAL BUILDING, Brooklyn Park, Minnesota
46,000 Square Feet - Retail and Office Space
Managed Only. Sold to the City of Brooklyn Park in 2002.
LAKE PLACE CENTER, Oakdale, Minnesota
15,000 Square Feet - Retail Strip Center
Construction Completed Spring of 1988
8009 HIGHWAY SEVEN, St. Louis Park, Minnesota
7,000 Square Feet - Medical Office Building
Construction Completed August, 1988
GREELEY SQUARE, Stillwater, Minnesota
24,000 Square Feet - Retail and Office Project
Construction Completed Spring of 1990 - Sold
TIFFANY BUILDING, Plymouth, Minnesota
35,000 Square Feet - Office Building
Renovation of an REO Property - Completed June of 1990
STADIUM VILLAGE PROJECT, University of Minnesota
34,000 square feet - Retail Development - Sold
APACHE MEDICAL BUILDING, St. Anthony, Minnesota
58,500 Square Feet — Professional Office Building
Managed Only.
PLYMOUTH CITY CENTER 1, Plymouth, Minnesota
20,765 Square Feet — Multi Tenant Office & Retail Project.
Anchored by Citizens Independent Bank.
Developed and Managed — Completed July 2001.
PLYMOUTH CITY CENTER It, Plymouth, Minnesota
28,625 Square Feet — Multi Tenant Medical Office Project.
Anchored by three Dental Specialty Practices.
Developed and Managed — Completion April 2003.
REQUEST FOR QUOTE (RFQ)
PROPERTY MANAGEMENT
MULTI - TENANT OFFICE BUILDING
7801 BASS LAKE ROAD
NEW HOPE, MINNESOTA
City of New Hope
Attn.: Mr. Ken P. Doresky, AICP
Community Development Specialist
4401 Xylon Avenue North
New Hope, MN 55428
Dear Council Members:
m oll
RFQ Due 12/2/02, 4:30 PM
The undersigned, having studied the attached description of work, being familiar with all
factors and other conditions affected the work and cost thereof, hereby proposes to
furnish everything necessary to complete the project in accordance with the attached
description of work.
Property Management Lump Sum Quote (Monthly)
7801 Bass Lake Road
_,
In submitting this quote proposal it is understood that the City retains the right to reject
any and all quotes and to award the quote in the best interests of the City. It is also
understood that quotes may not be withdrawn for a period of 30 days after the deadline
date on this request for proposal quote form.
Respectfully submitted,
Firm
�C4--Y e J
rnt
1-04D '1 �2Li= a�1 Le,fv
Address
tity, & Zip Code
Printed Nanhe of Agent
Telephone No.
zzz ;'- - o v
Date
November 23, 2002
City of New Hope
Attn.: Mr. Ken P. Doresky, AICP
Community Development Specialist
4401 Xylon Avenue North
New Hope, Mn 55428
Dear Mr. Doresky:
Enclosed is my quote for managing the building at 7801 Bass Lake Road.
I would manage the building as if it were my own, providing the services
that you require in your contract agreement.
I am qualified to manage this building as I have owned and managed it for
over 20 years. I have owned and managed many properties starting in 1977.
I still own and manage other properties.
We have a very special atmosphere in this building with the tenants really
relating well and enjoying each other'-s company. I would like to see that
environment maintained.
Yours Truly,
S erry Sh Iter
15409 Tarleton Crest
Maple Grove, Mn 55311
7631420 -2522
," iulj%
REQUEST FOR QUOTE (RFQ)
PROPERTY MANAGEMENT
MULTI- TENANT OFFICE BUILDING
7801 BASS LAKE ROAD
NEW HOPE, MINNESOTA
City of New Hope
Attn.: Mr. Ken P. Doresky, AICP
Community Development Specialist
4401 Xylon Avenue North
New Hope, MN 55428
Dear Council Members:
314031
RFQ Due 12/2/02,4:30 PM
The undersigned, having studied the attached description of work, being familiar with all
factors and other conditions affected the work and cost thereof, hereby proposes to
furnish everything necessary to complete the project in accordance with the attached
description of work.
Property Management Lump Sum Quote (Monthly)
7801 Bass Lake Road
$500.00
In submitting this quote proposal it is understood that the City retains the right to reject
any and all quotes and to award the quote in the best interests of the City. It is also
understood that quotes may not be withdrawn for a period of 30 days after the deadline
date on this request for proposal quote form.
Respectfully submitted,
11PPER MIDWEST MANAGEMENT CORPORATION
Firm
� ,. -0�'�.�, Gregg Larson or Chad Thomas
Agent Printed Name of Agent
4900 Highway 169 N, Suite 100
Address
New Hope, MN 55428
City, State & Zip Code
_763- 535 -4914
Telephone No.
1Z
Date
REQUEST FOR QUOTE (RFQ)
PROPERTY MANAGEMENT
MULTI- TENANT OFFICE BUILDING
7801 BASS LAKE ROAD
NEW HOPE, MINNESOTA
City of New Hope
Attn.: Mr. Ken P. Doresky, AICP
Community Development Specialist
4401 Xylon Avenue North
New Hope, MN 55428
Dear Council Members:
RFQ Due 12/2/02,4:30 PM
The undersigned, having studied the attached description of work, being familiar with all
factors and other conditions affected the work and cost thereof, hereby proposes to
furnish everything necessary to complete the project in accordance with the attached
description of work.
Property Management Lump Sum Quote (Monthly)
7801 Bass Lake Road
In submitting this quote proposal it is understood that the City retains the right to reject
any and all quotes and to award the quote in the best interests of the City. It is also
understood that quotes may not be withdrawn for a period of 30 days after the deadline
date on this request for proposal quote form.
Respectfully submitted,
9"11
Agent
Address
City, State & Zip Code
Printed Name of Agent
Telephone No.
Date
mmil
DESCRIPTION OF WORK
1. PROJECT DESCRIPTION: The City is requesting quotes from professional property
management firms to manage the multi- tenant office building located at 7801 Bass
Lake Road. The City expects to take ownership of the property on December 16,
2002.
Management process (See attached sample contract):
• Management firm to collect rent checks and submit checks to City staff.
o All checks made payable to the City of New Hope EDA.
• Management firm to contract all operating services.
• Snow Plowing.
• Cleaning (common areas — tenants are responsible for offices).
• Bathroom towels.
• Miscellaneous maintenance.
• Garbage removal.
• Utilities (gas, electric & water).
• Management firm to obtain approval from City staff for any maintenance
expenses.
• Invoices for all services to be submitted monthly to City staff for review and
payment.
• Invoice from management firm to be submitted monthly to City staff for review
and payment.
• No leasing services required.
2. RFQ SUBMISSION MATERIALS: All quotes are to be received at City offices by the
submission deadline (mail or fax) and should include the following information:
• Completed RFQ Proposal Cover Sheet, RFQ Deadline 1212/02, 4:30 PM;
• Summary of services, and;
• Qualifications.
3. AWARD DATE: The quote will be awarded on Monday, December 9, 2002. The firm
will be expected to begin management activities on December 16, 2002.
4. CITY CONTACT: Questions may be directed toward Ken Doresky, Community
Development Specialist at 763 - 531 -5137 or Kirk McDonald, Director of Community
Development at 763 - 531 -5119.
5. ATTACHMENTS:
• 7801 Bass Lake Road — Location Map
• Building Summary
• Sample Contract
BUILDING SUMMARY
7801 BASS LAKE ROAD — MULTI- TENANT OFFICE BUILDING
• Building size: 6,000 sq. ft.
• Net rentable area: 4,313 sq. ft. (multi- tenant suites)
Rental Summary (based on 2002 rents):
Unit
Rent Per Month
Rent Per Year
Lease Term
101
$560
$6720
Month -To -Month
110
$435
$5220
Expires 3 -31 -03
111
Em
NIA
N/A
120
$360
$4,320
Expires 3 -31 -03
121
$445
$5,340
Month -To -Month
200
$210
$2,520
Expires 3 -31 -03
201
$445
$5,340
Month -To -Month
210
$545
$6,540
Month -To -Month
211
$480
$5,760
Month -To -Month
221
$250
$3,000
Month -To -Month
231
Em
N/A
N/A
Total
$3,730
$44,760
3
Property Management Firm List:
Jerry Showalter
15409 Tarleton Crest
Maple Grove, MN 55311
Fax: 763-416-6014
A & R Management Company
Attn.: Reza Vojoodi
10825 41' Avenue North
Plymouth, MN 55441
Fax: 763-559-0296
Phone: 763-550-7901
Quest Real Estate
Attn.: Steve Ludovissie
10700 Old Co. Rd 15, Suite 150
Fax: 763-595-9212
Phone: 763-595-9511
Park Midwest Commercial Real Estate
Attn.: Matt Rieger
8085 Wayzata Blvd, Suite 100
Minneapolis, MN 55426
Fax: 763-847-6633
Phone: 763-847-6600
Upper Midwest Management Group
Attn.: Chad Thomas
4900 N. Hwy 169
New Hope, MN 55428
Fax: 763-535-3958
Phone: 763-535-4914
4
9
R
$1
Gross Rent/Positive
Break Even
Point/Negative -
Operating Expenses
and $300 Management
Fee
♦ - *U,7 rAq - W10 4 • a •
$2,500.00
$1
E3 Gross Rent - Current
11 Break Even Point -
Operating Expenses and
$300 Management Fee—
December 13, 2002
«Name»
«Company»
<<Add ress 1 »
«City»
RE: 7801 Bass Lake Road — Ownership and Management Confirmation
Dear «Name» :
On December 16, 2002, the City of New Hope is scheduled to take ownership of the property at
7801 Bass Lake Road. City staff solicited quotes from professional property management firms,
including the former owner, for operation of the building. On December 9, 2002, the New Hope
City Council awarded the management contract to Quest Real Estate, Inc., the low -quote firm.
Quest Real Estate will mail a notification letter to all tenants next week describing the logistical
information. The City is attempting to provide a seamless ownership and management transition.
Also, Evergreen Land Services, the City's relocation consultant, has been contacting and meeting
with all tenants to discuss relocation options. The City Council is hopeful that all tenants will decide
to remain in the building for twelve (12) to eighteen (18) months until the property is required for
redevelopment. Please see the following property contacts:
Ownership
Management Firm
Relocation Consultant
City of New Hoe
Quest Real Estate, Inc.
Evergreen Land Services Co.
Attn: Ken Doresky, Community
Development Specialist
Attn: Steve Ludovissie, Director
of Property Management
Steve Carlson, Relocation
Manager
4401 Xylon Avenue North
10700 Old County Rd. 15, #150
4131 Old Sibley Memorial
Highway, Suite 201
New Hope, MN 55428
Plymouth, MN 55441
Eagan, MN 55122
Telephone: 763 - 531 -5137
Telephone: 763- 595 -9511
Telephone: 651 - 882 -0200
Fax: 763 - 531 -5136
Fax: 763- 595 -9512
Fax: 651 -882 -6564
Do not hesitate to contact me at 763- 531 -5119 with any questions or comments.
Sincerely,
Kirk McDonald
Director of Community Development
Cc: Dan Donahue, City Manager
Steve Sondrall, City Attorney
Ken Doresky, Community Development Specialist
Chuck Tatro, Acting Building Official
Steve Ludovissie, Quest Real Estate
Steve Carlson, Evergreen Land Services
Erin Seeman, Community Development Intern
Valerie Leone, City Clerk (Im rovement Project No. 719)
CITY OFNEwHOPE
4401 Xylon Avenue North o New Hope, Minnesota 55428 -4898 * www. ci.new- hope.mn.us
City Hall: 763- 531 -5100 ® Police (non - emergency): 763- 531 -5170 ® Public Works: 763- 592 -6777 ® TDD: 763- 531 -5109
City Hall Fax: 763- 531 -5136 m Police Fax: 763- 531 -5174 ® Public Works Fax: 763- 592 -6776
Name
Company
Lori Evans and
Minnesota Rapping
Margaret Martin
7801
Nick Taylor
Best Publications
John Koppi
JAK Investments
Ed Viehman
Re -Bound Freight
55428
Brokers
Kim Baeth
Golden Openings
Joe Sprout and
Frontier Home
Russ Hoyt
Interiors
Dale Sprout
On Trac Financial
Jim Peterson
Dresser Rand
Mark Beutz
Beutz Auto
Sandy Sculthorp
Plymouth Agency
Susan Aaseby
Plymouth Agency
Addressl
City
7801
Bass
Lake
Road, #101
New
Hope,
MN
55428
7801
Bass
Lake
Road, #110
New
Hope,
MN
55428
7801
Bass
Lake
Road, #120
New
Hope,
MN
55428
7801
Bass
Lake
Road, #121
New
Hope,
MN
55428
7801
Bass
Lake
Road, #200
New
Hope,
MN
55428
7801
Bass
Lake
Road, #201
New
Hope,
MN
55428
7801
Bass
Lake
Road, #210
New
Hope,
MN
55428
7801
Bass
Lake
Road, #210
New
Hope,
MN
55428
7801
Bass
Lake
Road, #211
New
Hope,
MN
55428
7801
Bass
Lake
Road, #220
New
Hope,
MN
55428
7801
Bass
Lake
Road, #220
New
Hope,
MN
55428
December 10, 2002
Jerry Showalter
15409 Tarleton Crest
Maple Grove, MN 55311
RE: Management Contract Award — 7801 Bass Lake Road
Dear Mr. Showalter:
Thank you for submitting a quote for the above referenced project. Listed below are the quotes
received:
Management Firm
Quote
Quest Real Estate, Inc.
$
300.00
Jerry Showalter former owner
$
400.00
Upper Midwest Management Corp.
$
500.00
On December 9, 2002, the New Hope City Council awarded the contract to Quest Real Estate, Inc.
in the low -quote amount of $300.00 per month. The City will contact you if we require quotes for
future projects. Thank you again for submitting a quote.
Sincerely,
WC <Z
Ken Doresky, AICP
Community Development Specialist
Kirk McDonald
Director of Community Development
Cc: Dan Donahue, City Manager
Steve Sondrall, City Attorney
Doug Sandstad, Building Official
Chuck Tatro, Acting Building Official
Erin Seeman, Community Development Intern
Valerie Leone, City Clerk (improvement Project No. 719)
r •
4401 Xylon Avenue North + New Hope, Minnesota 55428 -4898 + www. ci.new - hope.mn.us
City Hall: 763- 531 -5100 + Police (non - emergency): 763 - 531 -5170 + Public Works: 763- 592 -6777 + TDD: 763- 531 -5109
City Hall Fax: 763 - 531 -5136 + Police Fax: 763 -531 -5174 + Public Works Fax: 763- 592 -6776
Quest Real Estate, Inc.
Attn.: Steve Ludovissie
10700 Old Co. Rd 15, Suite 150
Plymouth, MN 55441
RE: Management Contract Award — 7801 Bass Lake Road
Dear Mr. Ludovissie:
On December 9, 2002, the New Hope City Council awarded a contract for- the property
management of 7801 Bass Lake Road to Quest Real Estate, Inc. in the low quote amount of $300
per month. Enclosed are three copies of the contract. Please date the copies on page 1, provide
notice on page 6 and sign all copies on page 7. Please return all copies of the contracts to the City
for execution by the Mayor and City Manager. The City will then return one copy to you for your
records. The City expects to close on the property on Monday, December 16. Management
activities are expected to begin at that time.
Listed below are the quotes received by the City:
Management Firm
Quote
Quest Real Estate, Inc.
$ 300.00
Jerry Showalter former owner
$ 400.00
Upper Midwest Management Corp.
$ 500.00
Do not hesitate to contact me at 763 - 531 -5137 with any questions or comments.
Sincerely,
Lo �'
Ken Doresky, AICP
Community Development Specialist
Kirk McDonald
Director of Community Development
Enc.: Management Contract (3 copies)
Cc: Dan Donahue, City Manager
Steve Sondrall, City Attorney
Doug Sandstad, Building Official
Chuck Tatro, Acting Building Official
Erin Seeman, Community Development Intern
ITY OF IN EW HOPE
4401 Xylon Avenue North • New Hope, Minnesota 55428 -4898 . www. ci.new - hope.mn.us
City Hall: 763- 531 -5100 • Police (non - emergency): 763 - 531 -5170 • Public Works: 763 - 592 -6777 e TDD: 763- 531 -5109
City Hall Fax: 763- 531 -5136 • Police Fax: 763- 531 -5174 e Public Works Fax: 763- 592 -6776
PROPERTY MANAGEMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the _�_ day of
2002, by and between the City of New Hope, a Minnesota municipal corporation (hereinafter "Owner ")
and QW 9S f X1 44 f.W'Wf - Aw , a M4 CV R e„ d (hereinafter "Manager ").
RECITALS
Owner owns that certain real property presently used as an office building, located in the City of
New Hope, Hennepin County, Minnesota, together with all improvements erected thereon, located at
7801 Bass Lake Road, New Hope, Minnesota (hereinafter "Property).
Manager is an independent contractor in the business of managing and operating commercial real
estate.
Owner desires to employ Manager to manage the day -to -day operations of the Property.
DEFINITIONS
The following terms when used in this Agreement and the Exhibits hereto shall have the
following meanings:
"Property" shall be as described above.
"Gross Rent" shall mean and refer to all income, issues, profits, receipts, payments and rents
(including without limitation base rent, additional rent, payments from tenants for operating
expenses, taxes and installments of special assessments, percentage rents, rent escalations and
rents based on increases in operating expenses) payable to Owner for the use or occupancy of the
Property or any part thereof, including, without limitation, all income, issues, profits, receipts,
payments and rents payable under the Leases or under any other lease or agreement for the use or
occupancy of the Property, whether written or verbal, but shall not include the following:
a. Security deposits:
b. Sales, finance, refinance, condemnation or casualty insurance proceeds for the sale,
financing or condemnation of or casualty to the Property;
c. Moneys collected for capital expenses which are paid for by tenants, but only to the
extent the same are not deducted from Gross Rent pursuant to the definition of Net
Rent, below.
"Authorized Expenses" shall be those expenses included within the Owner Approved Budget, and
such additional expenses as may thereafter be approved by Owner.
"Owner Approved Budget" shall be the budget approved pursuant to Section 3.7.
"Fiscal Year" shall be from January 1 through December 31 of each year.
NOW, THEREFORE, incorporating the Recitals and Definitions as set forth above, and in
consideration of the mutual covenants here in contained, Owner and Manager mutually hereby agree as
follow:
ARTICLE 1.
Owner hereby employs and Manager hereby accepts employment as exclusive Manager for the Property
for a term of six (6) months, commencing on December 16, 2002 and ending on June 15, 2003, except as
described under Article 5. At expiration of said term, this Agreement, if not renewed in writing by the
Owner, shall then be deemed a month -to -month Agreement cancelable by either party on not less than
thirty (30) days advance written notice provided that in any event, the cancellation shall be effective at the
end of the calendar month in which the thirty (30) day notice period ends.
ARTICLE 2.
COMPENSATION OF MANAGER
Owner agrees to pay Manager and Manger agrees to accept a full compensation for the services to be
rendered to Owner hereunder during the term hereof a fee equal to $ 30 D _SP per month.
ARTICLE 3.
RESPONSIBILITIES OF MANAGER
Manager shall operate, manage and maintain the Property as an independent contractor for Owner in
accordance with sound property management practice. Manger shall not enter into any new lease with
any tenant not already occupying office space in the Property as of the date of this Agreement unless
authorized in writing by the Owner. It is acknowledged Owner only desires to rent to the current tenants
and not lease to any new tenants.
The responsibilities of Manager shall be limited to those permitted only by this Property Management
Agreement and such other services as Owner may approve in writing. Manager shall exercise prudence
and diligence in performing its duties. The responsibilities of Manager shall include, but not be limited
to, the following:
3.1. Leasing. Manager shall take all reasonable actions to enforce the tenant leases and month -to-
month rental agreements, including, but not limited to, all actions and proceedings to collect or
cause (i) the collection of all rentals and other charges due Owner from tenants of the Property in
accordance with the terms of their leases or rental agreements; and (ii) the ousting, dispossession
or eviction of tenants or other persons from the Property provided, however, that Manager shall
not commence any lawsuit or other proceedings requiring legal assistance without first obtaining
the written approval of Owner. All such actions or proceedings shall be through legal counsel
approved by Owner. The expenses for such counsel shall be borne by Owner.
3.2. Compliance with Legal Requirements. Manager shall take such action as directed by Owner
and at Owner's expense, as may be necessary, to comply with any and all orders or requirements
affecting the Property by any federal, state, county or municipal authority having jurisdiction
thereover. Manager, however, shall not take any such actions as long as Owner is contesting, or
has affirmed its intention to contest and promptly starts proceedings contesting, any such order or
requirement. Manager shall promptly notify Owner of all such orders and notices or
requirements. Manager shall prepare, execute, and, after obtaining the approval of Owner, file
any such reports and documents as may be required by any local, state, or federal authority
consistent with routine and customary services provided by property management firms.
N
3.3. Operation. Manager shall be responsible to maintain the Property in good condition and repair
to standards established by Owner, at Owner's expense.
In connection with its operation of the Property, Manager shall provide or arrange for the
provision to the tenants of the Property of only those services stipulated in leases in existence as
of the date of this Agreement or entered into thereafter in accordance with Section 3.1 hereof, and
such other services as Owner may approve in writing.
3.4. Maintenance and Repair. Manager shall see that the physical facilities, personal property and
grounds are at all times well maintained and kept in good order and repair and in a proper state of
cleanliness, at Owner's expense.
Manager shall have authority to hire, supervise and terminate on behalf of Owner, independent
contractors required in the operation of the Property. However, all contracts shall require
approval of the Owner.
3.5. Emergency Maintenance and Repair. Manager shall report to Owner full details of any
emergency orally and by letter remitted by the end of the following business day. The
contracting limitation shall be waived for emergency repairs if Owner is not reasonably available
to grant approval.
Manager shall obtain and maintain records and enforce any guarantees or warranties that may
concern Owner's real or personal property included within the Property where such records,
guarantees, and warranties are reasonably available to Manager. Owner's approval must be
obtained before pursing any legal remedies to enforce said guarantees or warranties.
3.6. Employees of Manager. Owner reserves the right to approve any employees of Manager whom
will be assigned maintenance duties on the Property.
3.7. Budgets. The fiscal year for the Property shall be from January 1 through December 31 of each
year. Manager shall update and revise in a format to be approved by Owner the anticipated
budget for the Property no later than thirty (30) days from the date this Agreement is executed
and every year thereafter, no later than December 1 of each year. Said budgets shall include the
estimated operating monthly income and expenses of the Property for the next fiscal year. After
approval by Owner in writing, budgets shall be used by Manager as a guide for the actual
operation of the Property. Manager agrees to obtain the prior written approval for any
expenditure or expenditures which would cause any major budget revisions, except for
emergencies. All expenses within the Owner Approved Budget are to be borne by Owner and it
shall be the responsibility of Owner, provided there is no default by Manager, to make available
sufficient funds to Manager to meet expenses anticipated in the Approved Budget.
3.8. Collections. Manager shall use due diligence to collect all sums payable by tenants. All sums so
collected shall be delivered to Owner no later than one day after the day of collection.
3.9. Books, Records and Reports. Manager will establish and maintain an accounting and
management reporting system that will account for all transactions relating to the Property.
Manager shall provide the following financial and management reports to Owner for the
preceding accounting month:
(1) Detailed report of all monies collected (identified by Tenant or other source) which shall
include:
Rent bills to tenants
Rents collected
Rents delinquent
Rents prepaid beyond current month
Security deposits collected
(2) Detailed report of all expenses, capital and operating.
All original reports, documents and leases are to be retained in Owner's possession or deposited
as directed by Owner. Copies as required will be retained by Manager.
3.10. Use and Maintenance of Premises. Manager agrees not to knowingly permit the use of the
Property for any purpose which might void any policy of insurance relating to the Property or
which might render any loss thereunder uncollectible, or which would be in violation of any
governmental restriction.
3.11. Other. Manager shall be expected to perform such other acts and deeds as are reasonable,
necessary and proper in the discharge of its duties under this Agreement.
ARTICLE 4.
INDEMNIFICATION AND INSURANCE
4.1. Liability Insurance. Owner shall carry comprehensive general liability insurance to include, but
not be limited to, operations liability, contractual liability (specifically insuring the indemnity
provisions contained herein), products and/or completed operation liability, personal injury
liability and such other insurance as may be necessary for the protection of the interest of Owner.
In each such policy of insurance, Owner shall designate Manager as a party insured with Owner.
The carrier and the amount of coverage in each policy shall be decided upon by Owner, but shall
not be in amounts that are not substantially in compliance with generally accepted industry
standards. Manager shall have no other rights under any other policies of insurance.
M
ARTICLE 5.
TERMINATION
5.1. Termination of Contract. Notwithstanding the provisions of Article 1 above to the contrary,
this Agreement may be terminated and the obligation of the parities hereunder shall thereupon
cease, upon the occurrence of any of the following circumstances:
(1) In the event of a bona fide sale or substantial destruction of the Property, either party may
terminate this Agreement upon thirty (30) days written notice to the other Party.
(2) If a petition for bankruptcy, reorganization or rearrangement is filed under state or federal
insolvency statutes by or against Manager, or Manager shall make an assignment for the
benefit of creditors or take advantage of any insolvency act, Owner may terminate this
Agreement upon ten (10) days' written notice to Manager.
(3) If Manager shall knowingly and materially fail to comply with any ordinance or law of
any federal, state or municipal authority, Owner may terminate this Agreement upon ten
(10) days' written notice to Manager. Such cancellation shall not release the indemnities
of Owner set forth in paragraph 4.1.
(4) If either party shall default in the performance of any of its obligations hereunder and
such default shall continue uncorrected for thirty (30) days after written notice from one
party to the defaulting party designating such default, the party not in default may
terminate this Agreement upon ten (10) days' written notice to the defaulting party.
(5) In the event the Property fails to produce a positive cash flow, Owner, in its sole
discretion, may terminate this Agreement upon ten (10) days' written notice to Manager.
5.2. Obligations upon Termination. Upon termination of this Agreement, for whatever reason, each
party shall promptly pay to the other, as soon as the same is determinable after the effective date
of termination, all amounts due such other party under the terms of this Agreement, and upon
such payment, neither party shall have any further claim or right against the other, except as
expressly provide hereinafter.
Upon termination for whatever cause, Manager shall, not later than the effective date of
termination, deliver to Owner the original of all books, permits, plans, records, leases, licenses,
contracts and other documents pertaining to the Property and its operation, all insurance, policies,
bills of sale, or other documents evidencing title or rights of Owner, and any and all other records
or documents, whether or not enumerated herein, which are necessary or desirable for the
ownership and operation of the Property. Manager shall provide final reports as set forth in
Section 3.9 hereof, through the date of termination, except those reports relating to periods prior
to the date of termination that require information only subsequent to the date of termination.
Manager shall assign unexpired service and supply contracts to Owner or parties designated by
Owner. All personal property of Owner, whether on the premises of the Property or elsewhere,
shall be delivered intact to Owner or Owner's representatives. Manager further agrees to do all
other things necessary to cause an orderly transition of the management of the Property without
detriment to the rights of Owner or to the continued management of the Property.
ARTICLE 6.
MISCELLANEOUS PROVISIONS
6.1. Headings. The headings used herein are for purposes of convenience only and should not be
used in construing the provisions hereof.
6.2. Notice. Any notice, demand or communication required or permitted hereunder shall be deemed
effectively given when mailed by registered or certified mail, postage prepaid, return receipt
requested, addressed to the following addresses or to such other addresses as any party may
hereafter designate by written notice:
TO OWNER: City of New Hope
c/o Dan Donahue, City Manager
4401 Xylon Avenue North
New Hope, MN 55428
WITH COPY TO: Steven A. Sondrall
New Hope City Attorney
Jensen & Sondrall, P.A.
8525 Edinbrook Crossing, Suite 201
Brooklyn Park, MN 55443
TO MANAGER: S'r'i ts4 A, GADwi ssl!F_
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6.3. Relationship of the Parties. Manager is an independent contractor hired by Owner pursuant to
the terms hereof. Nothing contained in this Agreement, nor any acts of the parties hereto, shall be
deemed or construed by the parties hereto, or either of them, or any third party, to create a
relationship of principal and agent, or a partnership or a joint venture, between the parties hereto.
6.4. Entire Agreement. This document represents the entire agreement between the parties with
respect to the subject matter hereof, and to the extent inconsistent therewith, supercedes all other
prior agreements, representations and covenants, oral or written. Amendments to this agreement
must be in writing and signed by both parties.
6.5. Successors and Assigns. Subject to the limitations concerning assignment, this Agreement shall
be binding upon and inure to the benefit of the parties, their heirs, legal representatives and
successors and assigns.
6.6. Severability. Every provision of this Agreement is intended to be severable. If any term or
provision hereof is determined to be illegal for any reason whatsoever, such provision shall be
severed from the Agreement and shall not affect the validity of the remainder of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of
the day and year first -above written.
CITY/0 WHOP
F
By: �
W. Peter Enck .,
Its: Mayor
By: �°�"r;C d"
-,
? Daniel L. Donahue
0
Its: City Manager
MANAGER:
By: — A;L
Its: X) aR feria. d F P/4
C
Its:
P:\Attomey\SAS\DocumentslCNH99 .11275- 002 - Management Agt.doc
4401 Xylon Avenue North City Hall: 763 - 531 -5100
New Hope, Minnesota 55428 -4898 Police: 763 -531 -5170
www.ci.new- hope.mn.us Public Works: 763 - 533 -4823
TDD: 763 -531 -5109
December 20, 2002
Quest Real Estate, Inc.
Attn: Steve Ludovissie
10700 Old Co. Road 15, Suite 150
Plymouth, MN 55441
Subject: Management Contract
City Hall Fax: 763 - 531 -5136
Police Fax: 763 - 531 -5174
Public Works Fax: 763 - 533 -7650
Enclosed is a fully executed contract for the property management at 7801 Bass Lake Road. The
New Hope City Council awarded this contract at its meeting of December 9, 2002, in the amount
of $300 per month.
Any questions regarding the contract may be directed to Ken Doresky, Community Development
Specialist, at 763 - 531 -5137.
Sinc rel ,
Valerie Leone, CMC
City Clerk
Enc.
cc: Ken Doresky, Community Development Specialist
Steve Sondrall, City Attorney
Family Styled City ^ fi n For Family Living
' �! 6 r