121211 EDACITY OF NEW HOPE
EDA MEETING
City Hall, 4401 Xylon Avenue North
December 12, 2011
EDA Meeting will commence upon
adjournment of the City Council Meeting
President Kathi Hemken
Commissioner John Elder
Commissioner Andy Hoffe
Commissioner Eric Lammle
Commissioner Daniel Stauner
1.
2.
3.
4.
Call to order
Roll call
Approval of regular meeting minutes of October 24, 2011
Resolution approving purchase agreement and authorizing submittal to Gator New
Hope LLC for the Kmart property, 4300 Xylon Avenue North (project no. 893)
5. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
EDA Minutes October 24, 2011
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development
Authority to order at 7:51 p.m.
ROLL CALL Present: Kathi Hemken, President
John Elder, Commissioner
Andy Hoffe, Commissioner
Absent: Eric Lammle, Commissioner
Daniel Stauner, Commissioner
Staff Present: Kirk McDonald, City Manager
Mark Hanson, City Engineer
Curtis Jacobsen, Director of Community Development
Guy Johnson, Director of Public Works
Valerie Leone, City Clerk
Chris Long, Project Manager
Susan Rader, Director of Parks and Recreation
Steve Sondrall, City Attorney
APPROVE MINUTES Motion was made by Commissioner Hoffe, seconded by Commissioner Elder,
to approve the Regular Meeting Minutes of May 9, 2011. Voting in favor:
Hemken, Elder, Hoffe; voting against: None; Absent: Lammle, Stauner;
Abstained: None. Motion carried
REVENUE BONDS President Hemken introduced for discussion Item 4, A Resolution relating to
Item 4 taxable lease revenue bonds, series 2011A (city of New Hope annual
appropriation lease obligations) (qualified energy conservation bonds — direct
payment to issuer); authorizing the sale thereof, fixing the form and details,
providing for the execution and delivery thereof and security therefor.
EDA RESOLUTION
Commissioner Elder introduced the following resolution and moved its
2011 -02
adoption: "RESOLUTION RELATING TO TAXABLE LEASE REVENUE
Item 4
BONDS, SERIES 2011A (CITY OF NEW HOPE ANNUAL
APPROPRIATION LEASE OBLIGATIONS) (QUALIFIED ENERGY
CONSERVATION BONDS — DIRECT PAYMENT TO ISSUER);
AUTHORIZING THE SALE THEREOF, FIXING THE FORM AND
DETAILS, PROVIDING FOR THE EXECUTION AND DELIVERY
THEREOF AND SECURITY THEREFOR ". The motion for the adoption of
the foregoing resolution was seconded by Commissioner Hoffe, and upon
vote being taken thereon, the following voted in favor thereof: Hemken,
Elder, Hoffe; and the following voted against the same: None; Abstained:
None; Absent: Lammle, Stauner; whereupon the resolution was declared duly
passed and adopted, signed by the president which was attested to by the
EDA Meeting
Page 1
October 24, 2011
executive director.
ADJOURNMENT Motion was made by Commissioner Elder, seconded by Commissioner Hoffe,
to adjourn the meeting. Voting in favor: Hemken, Elder, Hoffe; voting
against: None; Absent: Lammle, Stauner; Abstained: None. Motion carried
The New Hope EDA adjourned at 7:52 p.m.
Respectfully submitted,
4•�isJ�F -v i L+�'
Valerie Leone, City Clerk
EDA Meeting
Page 2 October 24, 2011
FDA
Request for Action
Originating Department
Approved for Agenda
Agenda Section
Community Development
December 12, 2011
EDA
Item No.
By: Curtis Jacobsen, Director of CD
By: Kirk McDonald, City Manager
4
Resolution approving purchase agreement and authorizing submittal to Gator New Hope, LLC for the Kmart
E roperty, 4300 X lon Avenue North ( ro'ect no. 893)
Requested Action
The EDA is requested to approve a resolution approving the attached Purchase Agreement with Gator New
Hope, LLC for the purchase of 4300 Xylon Avenue North (K- Mart).
Policy /Past Practice
It is a past practice for staff to present purchase agreements to the EDA or City Council for approval as
appropriate.
Background
The city has been considering the acquisition of the K -Mart property for some time. The last Council
discussion of this property took place at the November 21 work session. The Council directed staff to work
with the city attorney to draft a purchase agreement with appropriate conditions to protect the city's interests
and bring that agreement back to this meeting for approval. The city attorney's office has submitted the
attached draft of the purchase agreement and a letter to assist the EDA in their review of the agreement. A
copy of the purchase agreement in draft format has been forwarded to the Gator for review and comment. If
comments are received prior to the meeting they will be provided to the EDA at that time. Language intended
to bring K -Mart to the table prior to closing has been reiterated a number of times on pages 6 and 7. There
also is an indemnification clause intended to protect the EDA from claims for relocation benefits.
Recommendation
Staff recommends the EDA approve the resolution.
Attachments
• Commercial Building Purchase Agreement
• Ci Attorney letter
Motion by Second by
To:
Q & R - Purchase Agreement with Gator Investments for K -Mart 12 -12 -11
New Hope EDA
Resolution No. 11-
Resolution approving purchase agreement and authorizing
submittal to Gator New Hope, LLC, for the
K -Mart property, 4300 Xylon Avenue North
WHEREAS, the city has been in negotiations for some time with Gator New Hope, LLC,
for the possible acquisition of 4300 Xylon Avenue North in New Hope;
and
WHEREAS, this parcel of property is considered a key to the redevelopment of the
City Center area of the city; and
WHEREAS, Gator New hope, LLC, also has entered into a purchase agreement to purchase
d .406Xylon Avenue North in New Hope but has agreed to sell this parcel
to the city with no mark up from their acquisition costs.
NOW, THEREFORE, BE IT RESOLVED by the EDA of the city of New Hope, Hennepin
County, Minnesota, that:
1. The EDA approves of the purchase agreement and its submittal to Gator New
Hope, LLC.
2. The EDA authorizes staff to implement minor changes to the purchase agreement as
may be necessary.
Adopted by the EDA of the city of New Hope, Hennepin County, Minnesota, this 12th day of
December, 2011.
President
Attest:
Executive Director
COMMERCIAL BUILDING
PURCHASE AGREEMENT
This Agreement is made effective the day of December, 2011, by and between
Economic Development Authority in and for the City of New Hope, a public body corporate and
political and political subdivision of the State of Minnesota, (hereinafter referred to as "Purchaser ")
and Gator New Hope, LLC, a Minnesota limited liability company (hereinafter referred to as
"Seller ").
1. Sale and Purchase of Properly Subject to the terms, conditions, representations and
warranties set forth herein, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase
from Seller:
a. All that certain real property located in the City of New Hope, County of Hennepin,
State of Minnesota, having a property address of 4300 Xylon Avenue North, New
Hope, Minnesota, 55428. The real property is depicted and identified by the "Tax
Records" attached as Exhibit A (the "Real Property").
b. All and singular rights and appurtenances pertaining to the Real Property, including, but
not limited to all right, title and interest of Seller in and to adjacent streets, rights of
way, easements, utility agreements, parking and other shared use agreements, and all
hereditaments and appurtenances pertaining thereto.
C. The building and all other improvements and fixtures (excluding trade fixtures of the
existing tenant) located on the Real Property including the component structural,
heating, plumbing, electrical, air - conditioning, and roofing elements incorporated into
the improvements.
d. All assignable warranties and guaranties given to, assigned to, or benefiting Seller
and /or the Real Property and its improvements regarding the construction, design, use,
operation, management or maintenance.
e. Unless otherwise stated or otherwise evident to the contrary, the assets listed in this
paragraph 1 above are collectively referred to as the "Property ".
L Specifically excluded from the sale /purchase pursuant to this Agreement are:
i. Trade fixtures of the existing tenant(s)
ii. Rights and obligations of Seller under the existing lease agreements to present
occupants.
2. purchase Price; Earnest Money and Payment of Purchase Price.
a. The purchase price of the Property (the "Purchase Price ") shall be Four Million Five
Hundred Thousand and 00/100 Dollars ($4,500,000.00) to be paid as follows.
i. Ten Thousand and 00/100 Dollars ($10,000.00) Earnest Money paid by check
on the date hereof, the receipt of which is hereby acknowledged, which check
upon acceptance of this Agreement by Seller shall be deposited with "Title ", as
hereinafter defined and held and accounted for in accordance with the terms of
this Agreement.
ii. The remaining balance of the Purchase Price (subject to adjustments as provided
in this Agreement) shall be paid in certified funds or by wire transfer on the
Closing Date,
3. Representations, Warranties and Covenants of Seller Seller represents, warrants and
covenants as follows:
a. This Agreement is valid and binding upon Seller in accordance with its terms. The
Seller and the individual executing this Agreement on behalf of the Seller have the
authority and power to enter into this Agreement and to consummate the transaction
contemplated hereby.
b. The Seller is the fee owner of the Property described in paragraph 1 of this Agreement.
C. Seller has not received written notice from any state or local authority having
jurisdiction over the Property, and otherwise has no actual knowledge of any existing
violations of any law, regulation, ordinance or code affecting the Property,
d. To Seller's knowledge, no toxic or hazardous substances or wastes, pollutants or
contaminants (including without limitation, urea formaldehyde, the group of organic
compounds known as polychlorinated biphenyls, petroleum products including
gasoline, fuel oil, crude oil, and various constituents of such products, and any
hazardous substance as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ( "CERCLA "), 42 U.S.C. §9601 -9657, as
amended) have been generated, treated, stored, released or disposed of, or otherwise
placed, deposited in or located on the Real Property or in the ground water thereunder,
nor has any activity been undertaken on the Real Property that would cause or
contribute to:
The Real Property to become a treatment, storage or disposal facility within the
meaning of, or otherwise bring the Property within the ambit of, the Resource
Conservation and Recovery Act of 1976 ( "RCRA "), 42 U.S.0 §6901 et sew , any
similar state law or local ordinance.
ii. A release or threatened release of toxic or hazardous wastes or substances,
pollutants or contaminants, from the Real Property within the meaning of, or
otherwise bring the Real Property within the ambit of, CERCLA, or any similar
state law or local ordinance.
FA
iii. The discharge of pollutants or effluents into any water source or system, the
dredging or filling of any waters or the discharge into the air of any emissions,
that would require a permit under the Federal Water Pollution Control Act, 33
U.S.C. §1251 et sec., or the Clean Air Act, 42 U.S.C. §7401 et sec., or any
similar state law or local ordinance in, under or on the Property that may support
a claim or cause of action under RCRA, CERCLA or any other federal, state or
local environmental statutes, regulations, ordinances, or other environmental
regulatory requirements.
e. Seller is not a party to any unrecorded contract or agreement affecting the Property that
will be binding upon Purchaser or upon the Property subsequent to Closing without the
Purchaser's written consent.
f. There are no existing claims, actions, suits or other proceedings pending, or to the
knowledge of Seller, threatened by any governmental department or agency, or any
other corporation, partnership, entity or person whomsoever, which in any manner or to
any extent may detrimentally effect the Property or Purchaser's right, title and interest in
and to any part or all of the Property.
g. That from the effective date of this Purchase Agreement through the Closing Date,
Seller shall not, directly or indirectly, do or fail to do any act which might reasonably be
expected to result in the creation of any lien, charge or encumbrance of any nature
whatsoever, on the Property or otherwise effect the marketability of title or Seller's
ability to convey such title and deliver possession of the Property.
It. Seller authorizes (at Purchaser's sole cost and expense), Purchaser and Purchaser's
employees, agents and representatives, to conduct such investigations and examinations
of the Property as it deems necessary or advisable, and Seller will cooperate fully in
such investigation. Such investigation may include, but is not limited to, survey,
architectural, structural, electrical, mechanical, soil and drainage, environmental and
other investigations. All investigations conducted on the Property shall be performed
only upon prior notice to Seller and with reasonable regard for the rights of current
tenants of the Property.
i. Seller is not a "foreign person ", "foreign partnership ", "foreign trust" or "foreign estate"
as those terms are defined in Section 1445 of the Internal Revenue Code.
j. Seller has not entered into any other contracts for the sale of the Property, nor are there
any rights of first refusal or options to purchase the Property or any other rights of
others that might prevent or delay performance of this Agreement.
k. Until the Closing Date Seller shall maintain the Property in the same manner in which
the Property is currently maintained.
1. Seller has no knowledge of any material defect s
supporting members or exterior walls, or in the
conditioning, drainage, sewer, water or plumbing
part of the Property.
in the roof, foundation, structural
mechanical, electrical, heating, air
systems of the building constituting
3
nn. There are no wells and /or septic systems abandoned or in operation located upon the
Property of which Seller has knowledge.
4. Representations, Warranties and Covenants of Purchaser
a. Purchaser acknowledges that under the terms and conditions of this Agreement, the
Purchaser is granted the full opportunity to inspect the Property and surrounding area
and records applicable to its operation and condition. Purchaser acknowledges that it
will be relying upon its own inspection and judgment and, except as provided in this
Agreement, will not be relying upon any representation of Seller, accepting the Property
in its "as is condition and with all faults" and without any warranty of any kind or
obligation to repair or replace, except as expressly provided in this Agreement.
b. The execution and delivery of this Agreement by Purchaser, and compliance by
Purchaser with the terms and provisions of this Agreement, will not conflict with or
result in a breach of any judgment, order, decree or ruling to which Purchaser is a party,
any injunction of any Court or governmental authority to which Purchaser is subject, or
any agreement, contract or commitment which is material to the financial condition of
Purchaser; or require the affirmative consent or approval of any third party.
C. Subject to formal approval by Resolution duly adopted by the Economic Development
Authority of the City of New Hope, this Agreement is valid and binding upon Purchaser
in accordance with its terms and the individual executing this Agreement on behalf of
the Purchaser has, subject to such Resolution, the authority and power to enter into this
Agreement and to consummate the transaction contemplated hereby.
5. Conditions to Purchaser's Obligations In the event the conditions set forth in this paragraph
5 have not been met to the Purchaser's sole satisfaction on or before the date specified, or if no
date is specified, then on or before the Closing Date, this Agreement shall terminate at the
option of the Purchaser and the Earnest Money paid by Purchaser shall be refunded.
a. No later than , Seller shall provide to Purchaser a
commitment from a title insurance company selected by Purchaser ( "Title ") for an
ALTA Owner's Policy of Title Insurance insuring title to the Property in the amount of
the Purchase Price (the "Commitment "). The Commitment will commit to insure title
to Purchaser's interest in the Property subject only to the Permitted Encumbrances and
the so- called "standard exceptions ". The Commitment shall be effective as of a date no
earlier than the effective date of this Agreement and shall include a copy of each
instrument listed as an exception to title or referred to therein. Purchaser shall be
allowed ten (10) business days to make any objections thereto including objection to the
Permitted Encumbrances, as hereafter defined, said objections to be made in writing or
deemed to have been waived. If any objections to title are made, Seller shall be allowed
thirty (30) days in which to make title marketable. Pending correction of title, Closing
shall be postponed, but upon correction of title or waiver of the specified defects by
Purchaser, the Closing shall be held on the later of the Closing Date or ten (10) business
days after the title objections are cured or waived. If title is not made marketable or the
objections thereto are not waived within thirty (30) days after the date on which
Purchaser gives written objection to title as provided above, then Purchaser may at its
option terminate this Agreement, in which event all Earnest Money shall be reimbursed
4
to Purchaser and neither party shall have any further obligations hereunder. The
following shall be deemed Permitted Encumbrances:
i. Reservation of minerals or mineral rights by the State of Minnesota;
ii. Building, zoning and subdivision laws and regulations consistent with the
current utilization of the Property;
W. The lien of real estate taxes and installments of special assessments which are
payable by Purchaser pursuant to the terms and conditions of this Agreement;
iv. Exceptions to title which are not found objectionable after title examination;
V. Exceptions to title which constitute encumbrances, restrictions or easements
which have been disclosed to Purchaser and accepted by Purchaser in writing;
Vi. Exceptions or easements which constitute encumbrances, restrictions or
easements which will be removed at or prior to Closing;
vii. Matters raised in the Commitment to which Purchaser has not made timely
objection.
b. Purchaser obtaining affirmation and approval and authorizing Resolution from the
Economic Development Authority for the City of New Hope authorizing the purchase
on the terms and conditions set forth herein on or before
C. Purchaser conducting and completing such investigations and examinations of the
Property as it deems necessary or advisable in its sole discretion.
d. Purchaser determining to its sole satisfaction or waiving on or before the Closing Date:
i. That the physical condition of the Property and its improvements are acceptable
to Purchaser in its sole discretion.
ii. In furtherance of the Purchaser's right to examination and inspection, the Seller
agrees within twenty (20) days following its execution hereof to make available
to Purchaser for inspection and copying at reasonable times, the following
related to Property:
1. Operating statements for the calendar year 2010 and operating
statements for the year 2011 to date.
2. Copies of all service contracts and other agreements affecting the
Property and /or its improvements.
3. Copies of all lease agreements together with all amendments,
modifications and extension agreements.
4. Copies of any surveys in Seller's possession.
5
5. Copies of all inspection reports in Seller's possession including
environmental, architectural, structural, maintenance and soil.
iii. That the existing lease agreement dated December 8, 1971 executed by and
between New Hope Properties, Inc., a Minnesota corporation and SS Kresge
Company, a Michigan corporation, as amended and modified prior to the date
hereof will be amended in form and substance acceptable to Purchaser no later
than the Closing Date or will be terminated.
iv. That no relocation benefits pursuant to the Minnesota Uniform Relocation Act
will become payable as a result of the sale.
C. That Seller shall have fully kept, performed and observed each and every agreement and
obligation on its part to be kept, performed and observed hereunder and all of Seller's
representations and warranties shall be true and correct in all respects, as remade, on the
Closing Date.
Unless Purchaser has timely raised a contingency specified above on or before the date
specified, the contingencies shall at 5:00 p.m. local time on the day specified be deemed
fulfilled.
6. Conditions to Seller's Obligations. The obligations of the Seller to proceed on the Closing
Date shall be subject (at its discretion) to the satisfaction on or before the Closing Date of the
following conditions.
a. The representations of Purchaser herein contained shall be true in all material respects
on the Closing Date with the same effect as though made as such time.
b. Seller shall have negotiated such amendment, modification and /or termination of the
existing lease agreements as required by Purchaser.
C. Purchaser shall have provided evidence that approval has been given by the Economic
Development Authority of New Hope.
7. Closine and Possession
a. The consummation of the purchase and sale contemplated hereby (the "Closing ") shall
be held on or before (the "Closing Date "). Closing
shall occur in the office of Jensen Sondrall & Persellin, P.A., 8525 Edinbrook Crossing,
Suite 201, Brooklyn Park, Minnesota.
b. Possession of the Property shall be delivered to the Purchaser on the Closing Date.
C. At the Closing:
L Subject to Purchaser's performance, Seller shall:
1. Deliver to Purchaser a general Warranty Deed, fully executed and
acknowledged in recordable form conveying to Purchaser good,
6
indefeasible and marketable fee title pursuant to the provisions of this
Agreement subject only to the Permitted Encumbrances,
2. Pay all real estate taxes and all special assessments that are the
responsibility of Seller by the terms of this Agreement.
3. Deliver an Affidavit by Seller indicating that on the Closing Date there
are no outstanding, unsatisfied judgments, tax liens or bankruptcies
against or involving Seller or the Property; that there has been no skill,
labor or material furnished to the Real Property for which payment has
not been made or for which mechanic's liens could be filed; and that
there are no other unrecorded interests in the Property, together with
whatever standard owner's affidavit and /or indemnity (ALTA Form)
which may be required to issue an Owner's Policy of Title Insurance with
the standard exceptions waived.
4. Deliver a Non - foreign Affidavit, properly executed containing such
information as is required by IRC Section 1445(B)(2) and its regulations.
5. Provide an appropriate federal income tax reporting form, if any is
required.
6. Execute all other documents reasonably necessary to perform this
Agreement and to transfer the Property to Purchaser.
7. Pay the state deed tax due for conveyance of the Property.
8. Pay the cost of recording all documents necessary to place record title of
the Property in the condition warranted and required of Seller by this
Agreement.
9. Execute and deliver a Well Certificate for wells, if any, located upon the
Real Property.
14. Provide evidence that the lease agreement dated December 8, 1971, as
amended and modified, has been terminated or modified consistent with
the requirements of Purchaser. If so modified, Seller shall execute an
assignment of the amended lease in form and substance acceptable to
Purchaser.
H. Subject to Seller's performance, Purchaser shall:
1. Deliver to Seller by wire transfer the balance of the Purchase Price, less
any adjustments.
2. Accept delivery of possession to the Property and if applicable assume
the revised lease for the Property.
d. Proration of all income and operating expense relating to the Property shall be made as
of the Closing Date, with Seller responsible for the expenses and entitled to the
7
revenues accrued or applicable to the period prior to the Closing Date and Purchaser
shall be responsible for the expense and entitled to the revenues accrued or applicable
after the Closing Date.
e. If on the Closing Date any of the amounts to be apportioned under subparagraph d.
above cannot be calculated with complete precision because the amount or amounts of
one or more items included in such calculation are not then known, such calculation
shall be made on the basis of reasonable estimates of Seller and Purchaser of the
amount or amounts of the item or items in question, subject to adjustments (by
additional payments by Purchaser to Seller or by refunds from Seller to Purchaser)
when the amount or amounts of such item or items become known. Promptly after the
amount of any such item becomes known to either party, such party shall notify the
other thereof and shall include in such notice the amount of any required adjustment. If
such adjustment requires an additional payment by Purchaser to Seller, Purchaser shall
make such payment to Seller simultaneously with its giving of or within twenty (20)
days after its receipt of such notice, as the case may be. If such adjustment requires a
refund by Seller to Purchaser, Seller shall make such refund simultaneously with its
giving of or within twenty (20) days after its receipt of such notice, as the case may be.
8. Real Estate Taxes and Special Assessments The Parties shall pay the real estate taxes
(which term, as used in this Agreement, shall include service charges assessed against real
property on an annual basis pursuant to Minnesota Statutes 429.101) and special assessments as
follows:
a. On or before the Date of Closing, Seller shall pay the real estate taxes, and any penalties
and interest thereon, which shall have become due and payable with respect to the
Property in all years prior to the year of Closing.
b. Purchaser and Seller shall pro rate the real estate which are payable in the year of
closing, on a per -diem basis using a calendar year, to the Date of Closing.
C. Seller shall pay all special assessments levied, pending, approved or deferred against the
Property as of the Date of Closing.
d. Purchaser shall pay all real estate taxes and, except as otherwise paid in accordance
with this paragraph, all special assessments due and payable in the years following the
year of Closing.
9. Indemnification. Seller shall indemnify, defend and hold Purchaser free and harmless from
and against any and all claims, obligations and liability (and attorneys' fees and court costs in
connection therewith) arising out of the Property or any portion thereof or the Lease
Agreements related thereto from any event, occurrence, act, or failure to act prior to Closing.
This indemnity specifically includes and extends to any claim asserted by any party for
relocation benefits pursuant to the Minnesota Uniform Relocation Act.
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10, Default, Termination and Remedies
a. If title is marketable or is made marketable within the time period and as provided in
this Agreement, and Purchaser has removed or waived its contingencies as specified in
this Agreement but fails to timely perform its obligations to close as specified herein,
Seller may take the following action:
L Cancel this Agreement as provided by statute and retain all payments made
hereunder as liquidated damages; or
ii. Seek specific performance provided action for enforcement is commenced
within six (6) months of the date the cause of action arises.
b. Upon Seller's failure to make title marketable or if Seller is in default under the terms of
this Agreement, Purchaser may elect any one or more of the following options as
permitted by law:
L Proceed to Closing without waiver or merger in the Warranty Deed of any
objections to title or of any rights or remedies Purchaser may have at law or in
equity.
ii. Rescind this Purchase Agreement by written notice in which case the Purchase
Agreement shall be null and void and all Earnest Money paid hereunder shall be
returned to Purchaser,
iii. Seek specific performance within six (6) months after such right of action arises.
C. Upon termination of this Agreement for any reason except Seller's default, the
Purchaser shall assign to Seller all reports, surveys, environmental studies and other
third party investigation reports regarding the Property at no cost to Seller.
11. Brokerage
a. Purchaser has not engaged any third -party to act as Purchaser's real estate agent or
broker in connection with this transaction, and Purchaser is solely responsible for
payment of any commission or fee due to any third party claiming to be an agent or
broker on behalf of Purchaser in connection with this transaction.
b. Seller shall indemnify and hold harmless Purchaser against and in respect of all claims,
losses, liabilities and expenses (including, but not limited to, attorneys' fees and court
costs) which Purchaser may incur on account of any claim which may be asserted
against Purchaser, whether or not meritorious, by any broker or any other person on the
basis of any agreements made or alleged to have been made by or on behalf of Seller.
C. Purchaser shall indemnify and hold harmless Seller against and in respect of all claims,
losses, liabilities and expenses (including, but not limited to, attorneys' fees and court
costs) which Seller may incur on account of any claim which may be asserted against
Seller, whether or not meritorious, by any broker or other person on the basis of any
agreements made or alleged to have been made by or on behalf of Purchaser.
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12. Notice Any notice, request or other communication required or provided to be given under
this Agreement shall be in writing and shall be sufficiently given and shall be deemed given
when delivered personally or when mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed:
To Seller
Gator New Hope, LLC
590 Park Street
#6 Capital Prof Building
St. Paul, MN 55103
With a copy to
To Purchaser
New Hope Economic Development Authority
Attn: Curtis Jacobsen
4401 Xylon Avenue North
New Hope, MN 55428
(763) 531 -5119
With a copy to
Steve Sondrall, City Attorney
Jensen Sondrall & Persellin, P.A.
8525 Edinbrook Crossing, Suite 201
Brooklyn Park, MN 55443
(763) 424 -8811
Fax: (763) 493 -5193
E -mail: sas @jspattorneys.com
or to such other party or other address as a party, by notice given as herein provided,
shall designate, provided that no party may require notice to be sent to more than two
addresses. Any notice given in any other manner (e.g. fax) shall be effective only upon
receipt by the addressee.
13. Insurance.
a. Seller shall, during the term of this Agreement, maintain the fire and hazard insurance
presently carried by Seller on the Property. At the Closing of the purchase and sale
hereunder, Seller shall deliver the Property to Purchaser in the same condition as exits
as of the date hereof, normal wear and tear excepted. In the event the Improvements or
a portion thereof, are destroyed or damaged by fire or other casualty, such damage or
destruction being in excess of $50,000.00 (including any rent loss), prior to the Closing
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hereunder, then, at the option of Purchaser (which option must be exercised within five
days of receipt by Purchaser of notice from Seller of such fire or other casualty):
L This Agreement shall be null and void in which case Earnest Money shall be
returned the to the Purchaser and neither party shall have any further rights,
duties or liabilities hereunder, or
ii. This Agreement shall remain in full force and effect, and Seller, at the time of
Closing hereunder, shall transfer and assign to Purchaser all of Seller's rights,
title and interest in and to the insurance proceeds received or to be received by
reason of such damage or destruction and shall tender at Closing the deductible
portion of any such loss pursuant to the terms of Seller's insurance policy.
14.
b. In the event the Improvements, or a portion thereof, are destroyed or damaged by fire or
other casualty, such damage or destruction being $50,000.00 or less (including any rent
loss), and if:
L The insurance carrier affirms and acknowledges its liability;
H. The insurance proceeds are sufficient (when added to the deductible amount
under such policy) to pay the full cost of repairing such damage or destruction;
iii. Seller tenders at Closing the full amount of the deductible portion of such
insurance loss, then this Agreement shall not be terminated, and at Closing,
Seller shall assign and transfer to Purchaser all such insurance proceeds and
deductible amount.
Miscellaneous
a. All the terms of this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective heirs, legal representatives, successors and assigns of
Seller and Purchaser. Purchaser may assign its interest in this Purchase Agreement and
the individually named Purchaser may allocate the percentage interest of the respective
individuals in such manner as they may deem appropriate.
b. This Agreement contains the entire agreement between the parties. Terms hereof
cannot be waived except by the written agreement of the parties.
C. Except as otherwise provided in this Agreement, the representations, warranties and
covenants of the Seller and Purchaser herein contained shall survive the Closing and
shall not be merged into the Closing.
d. The captions used in connection with the sections of this Agreement are for
convenience only and shall not be deemed to construe or to limit the meaning of the
language of this Agreement.
e. This Agreement may be amended only by a written instrument executed by Seller and
Purchaser.
11
f. All references in this Purchase Agreement to "Agreement" shall refer to this Purchase
Agreement, including all exhibits and attachments hereto as the same may be amended
and modified by written agreement of the parties from time to time.
g. This Agreement may be executed in any number of counterparts and/or by facsimile
signature, each of which shall be an original, but such counterparts together shall
constitute one and the same instrument.
h. This Agreement shall be governed by and construed in accordance with the laws of the
State of Minnesota.
i. It is expressly understood and agreed that Purchaser and Seller shall each be entirely
responsible for the payment of any attorneys' fees incurred by each party relating to the
legal services furnished to such party in connection with the transactions contemplated
herein; provided, however, that in the event that either party hereto should employ the
services of an attorney in connection with a breach of this Agreement or the
enforcement of the terms hereof, the defaulting or losing party shall pay, in addition to
any other sums due hereunder, the prevailing party's reasonable attorneys' fees, costs
and expenses.
j. One or more waivers of any covenant, term or condition of this Agreement by either
party shall not be construed as a waiver of a subsequent breach of the same covenant,
term or condition. The consent or approval of either party to or of any act by the other
party of a nature requesting consent or approval shall not be deemed to waive or render
unnecessary consent to or approval of any subsequent similar act. The failure or delay
on the part of either party to enforce or exercise at any time any of the provisions, rights
or remedies in this Agreement shall in no way be construed to be a waiver thereof or of
the right to thereafter enforce each and every provision, right or remedy.
k. If any part of this Agreement or any part or any provision herein shall be adjudicated to
be void or invalid, then the remaining provisions hereof, not specifically so adjudicated
to be invalid, shall be executed without reference to the part of portions so adjudicated,
insofar as such remaining provisions are capable of execution.
1. Purchaser shall have the sole right to disclose to the public its anticipated acquisition of
the Property.
nn. Time is of the essence as respects all terms and conditions of this Agreement.
n. Unless accepted by Seller on or before ' this offer
shall be null and void and the Earnest Money shall be refunded. If accepted on or
before said date, the Agreement shall be deemed in effect.
4
12
.T
PURCHASER:
Economic Development Authority in and for
the City of New Hope, a public body
corporate and political and political
subdivision of the State of Minnesota
go
Its:
P9At1orney \GIj\ I- Client Folders \City of New HopeTA Mdoc
Gator New Hope, LLC, a Minnesota limited
liability company
L'I'm
13
Its:
APPRAISAL REPORT
Kmart
4300 Xylon Five N
New Hope, MN
HENNEPIN COUNTY PROPERTY MAP
Hennepin County Property Mafia r Tax Year-, 2011
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*ssEOCted Parcel Data Prtntedt 9/20/20111158154 PU
'Parcellas 29^218' 21- 11 -Q0i9 Current ParmlData:9 /0/2011
Owner Native: "TOR NEW HOPE LLC
Parcel Address : 4300 RYLON AVE N, NEW HOPE ,.MN 53428
Property Type.- COMMERCIAL-PREF Sala Prlcet $3,935,225.00
Homexteadt NON-HOPAEST,EAD Sale Dater 0912006
Area (spit): 545465 Sale Code: WARRAWTV DEED
Area tacresj:12.52
i
A -T ^8: TORR£NS
Market Total: $3,500,000.00
Tax rotalt $139,373.09
EXHIBIT
S
a
JENSEN SONDRALL & PERSELLIN, P.A.
Attorneys At Law
8525 EDINBROOK CROSSING, STE. 241
BROOKLYN PARK, MINNESOTA 55443 -1968
TELEPHONE (763) 424 -8811 • TELErAX (763) 493 -5193
e -mail 1aw@jspattorneys.com
AMANDA M. FIIRTH Writer's Direct Dial No,: (763) 201 -0210
GORDON L. JEmEN` e -mail g j@jspattorneys.com
ADmmJ. KAurMAN December 8, 2011
MELANIE P. PERSEI.IJ N- -'
sr>;Pxr:N N1.1tLNGQUIST Curtis Jacobsen, Director of Community
STENTIN A. SONDRALI, Development, City of New Hope
4401 Xylon Avenue North
New Hope, MN 55428
Re: Purchase Agreement
4300 Xylon Avenue.North
Dear Mr. Jacobsen:
Enclosed for your consideration and consideration by the City Council/Economic
Development Authority is a proposed Purchase Agreement for acquisition of the " Kmart
Site ". Although most terms of the Agreement are typical for acquisition of a commercial
property, the Lease Agreement between the Seller and Kmart presents issues of concern
which must be addressed in the Purchase Agreement and resolved to the satisfaction of the
City prior to Closing. After preliminary review of the Lease Agreement included in the
appraisal it is apparent that Kmart must be engaged in order to successfully complete the
transaction as the Lease Agreement:
a. Provides for multiple extensions
b. Caps the real estate tax obligation of the Tenant
C. Grants Kmart a right of first refusal
d. Creates a risk of claims for relocation benefits
For assistance in reviewing the proposed Purchase Agreement, I note the following regarding
specific provisions:
1. Sale and Purchase of Property. The description of the property to be acquired is
consistent with a typical agreement for acquisition of a commercial property with the
exception of subparagraph f. Trade fixtures are the property of the Tenant not the
Seller. It also makes clear that the City will not accept and assume responsibility for
the Lease Agreement In its present form.
2. Purchase Price Earnest Money and Payment of Purchase Price The Agreement
anticipates that the City will select a title insurance company and the Earnest Money
Will be held pending closing with the title company. The remaining balance will be
paid in cash at Closing,
'Real Property Law
Specialist Certified By 3. Representations, Warranties and Covenants of Seller The representations and
'lle Minnesota State warranties of the Seller are typical including representations regarding hazardous
Bar Association
licensed in nrnois Colorado materials, ownership, outstanding claims and unrecorded interests. It is also noted
'Qualified Neutral Mediator that the Purchaser is entitled to fully investigate the Property prior to Closing.
under Rule 114
4.
Representations Warranties and Covenants of Purchaser The Purchaser
acknowledges that it will accept the Property "as is" but pAly if its inspection of the
physical condition, environmental and lease modification are acceptable in the City's
sole discretion. Also, the offer to purchase is ineffective unless and until a
Resolution of the City is adopted.
5.
Conditions to Purchaser's Obligations The provisions regarding title and
examination of title are standard. Dates for providing the City with evidence of title
and for the City to pass its Resolution should be determined. The obligation of the
City to proceed (assuming that a Resolution is adopted and authorization in place to
proceed) is subject to investigation and examination of the Property. The Agreement
also requires the Seller to make available financial statements regarding the Property,
service contracts, copies of all leases and amendments and copies of all surveys and
inspection reports it may have. Paragraph 5(d)(iii) and (iv) make it clear that the
present lease and the exposure to potential relocation benefits will not be accepted.
6.
Conditions to Seller's Obligations Although representatives of the Seller have
indicated that there will be no problem negotiating modification of the existing Lease
Agreement the Seller's success in this negotiation has been made a contingency.
7:
Closinli and Possession A date for Closing must be selected. I anticipate that
inspection, title examination and in particular lease negotiations may be time
consuming. The closing date should be no earlier than January 31, 2012. Note that a
closing obligation of the Seller is to provide evidence that the Lease Agreement has
been terminated or modified in a manner which will not subject the City to the terms
of the present Lease or relocation benefits.
8.
Real Estate Taxes and Special Assessments. Paragraph 8 is typical for a
commercial transaction. The Agreement provides that the Seller will pay all special
assessments levied, pending or approved.
9.
Indemnification. The Seller will indemnify the City from any claim which may be
asserted as a result of relocation benefit claims under the Minnesota Uniform
Relocation Act.
10. Default. Termination and Remedies In the event marketable title is not provided
and /or the City is not satisfied with the condition of the Property, the revision or
termination of the Lease or basically any other aspect of the transaction the
Agreement may be cancelled and the Earnest Money will be refundable.
11. Brokerage The City will not be obligated for any real estate commission.
12. Notice This provision is standard.
13. Insurance. Although it is not anticipated that any loss to the. Property will - occur
between execution of the Agreement and Closing, this provision is included to make
certain that no issue arises regarding payment for minor damage at the Property.
14, Miscellaneous. These provisions are standard, however, paragraph 14(n) requires
insertion of a date for Seller acceptance.
The foregoing is a brief summary of specific provisions of the Purchase Agreement and is
submitted to assist in review of the actual document. Also, if helpful, I will be happy to attend
the City Council meeting December 12, 2011 to answer any questions council members may
have.
Thank you.
Sincerely,
Gordon L. Jensen
cc: Steve Sondrall
Kirk McDonald