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IP #836
For the full report on City Council agenda packets and/or � lanning Commissio .?.genda packets-. PROJECT NO. 836 Bass Lake R Apartments Acquisition Res. 07 -130 9/10/07 Resolution authorizing addendum to purchase agreement for the Bass Lake Road Apartments (improvement project nos. 795 and 836) Item 8.4 9/24/07 Discuss Bass Lake Road Apartments environmental survey results, purchase agreement addendum, relocation efforts and property management issues (improvement project 836). Obtain 60 -day extension by 9/28 or submit notice to rescind purchase agreement. Res. 07 -163 10/22/07 Resolution calling for a closed meeting of the New Hope City Council authorized by Minn. Stat. §13D.05 to develop new purchase offer for real property known as Bass Lake Road Apartments (improvement project no. 836) Res. 07 -180 11/26/07 Resolution calling for a closed meeting of the New Hope City Council authorized by Minn. Stat §13D.05 to develop new purchase offer for real property known as Bass Lake Road Apartments (improvement project no. 836) Res. 07 -190 12/10/07 Resolution calling for a closed meeting of the New Hope City Council authorized by Minn. Stat §13D.05 to respond to owner's offer for sale of real property known as Bass Lake Road Apartments (improvement project no. 836) Item 8.3 1/28/08 Discussion regarding purchase agreement for the Bass Lake Road Apartment complex (improvement project 836) Res. 08 -40 3/10/08 Resolution approving owner's offer for sale of real property known as Bass Lake Road Apartments and directing mayor and city manager to sign purchase agreement (improvement project no. 836) Res.08 -59 4/14/08 Resolution approving plans and specifications and authorizing advertisement for bids for the demolition of the Bass Lake Apartment buildings at 8400 and 8420 Bass Lake Road and 8401, 8411, and 8421 58 Avenue North (improvement project no. 836) Res. 08 -75 4/28/08 Resolutions associated with the acquisition and financing mechanisms available to the Council /EDA for the acquisition of the Bass Lake Road Apartment complex (improvement project no. 836) Res. 08 -76 4/28/08 Resolutions associated with the acquisition and financing mechanisms available to the Council /EDA for the acquisition of the Bass Lake Road Apartment complex (improvement project no. 836) EDA Res.08 -04 4/28/08 Resolution accepting assignment of the Bass Lake Road Apartment complex purchase agreement from the city of New Hope EDA Res. 08 -05 4/28/08 Resolution determining that five parcels of land are occupied by structurally substandard buildings EDA Res.08 -06 4/28/08 Resolution declaring the official intent of the New Hope Economic Development Authority to reimburse certain expenditures from the proceeds of bonds to be issued by the Economic Development Authority EDA Res. 08 -07 4/28/08 Resolution approving interfund loans associated with the proposed acquisition and redevelopment of the Bass Lake Road Apartments redevelopment project EDA Res. 08 -08 5/27/08 Resolution awarding demolition contract for the Bass Lake Road Apartment complex (improvement project no. 836) Saunter & Sons $98,100 and $8,000 per building burn deduct Item 6.8 9/22/08 Motion authorizing final payment of $90,100 to Sauter & Sons, Inc. for the demolition of the Bass Lake Roads Apartment complex ( improvement project 836) Yak v LESLIE A. ANDERSON TUCKER J. HUMMEL GORDON L. JENSEN' MELANIE P. PERSELLIN''' STEPHEN Al. RINGQUIST' STEVEN A.SONDRALL 'Real Property Law Specialist Certified By The Minnesota State Bar Association = Licensed in Illinois /Colorado 'Qualified Neutral Mediator under Rule 114 JENSEN ANDERSON SONDRALL, P.A. Attorneys At Law July 16, 2008 Valerie Leone New Hope City Clerk 4401 Xylon Avenue North New Hope, MN 55428 Re: Bass Lake Road Apartments Our rile No. 99.11334 Dear Val: 8525 EDINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNESOTA 55443 -1968 TELEPHONE (763) 424 -8811 • TELEFAY (763) 493 -5193 e -mail law a?jasattorneys.com Writer's Direct Dial!& (, 763) 201 -0211 e -mail saswjasattorneys.com Please find enclosed for the City records the original Warranty Deed and recording information for the Bass Lake Road Apartments. As you know, we purchased this apartment complex in May of this year. Contact me if you have any questions or comments regarding this document. Very truly yours, Steven A. Sondrall, City Attorney, City of New Hope Enclosure cc: Kirk McDonald Curtis Jacobsen PAAttomey \1 Client Files \2 City of New Hope \99- 11334(Bass Lake Road Apartments ),07 -16-08 Leone Ltr.doc Doc No 9150864 06/23/2008 04:27 PM Certified filed and or regarded on above date: Office of the bounty Recorder Hennepin County, Minnesota Michael H. Cunniff, County Recorder TranslD 415346 Deputy 58 Fees $5.00 ConsFee $35.50 DOC $10.50 SUR $51.00 Total @ ��_ _ NOf RCS. OR TAXES ,AXPAYER SERVICES TRANSFER ]ENTERED JUN 2 3 2008 HENNE IN -C � DEPUTY WARRANTY DEED Corporation to Corporation STATE DEED TAX DUE HEREON: Date: May 6 , 2008. FOR VALUABLE CONSIDERATION, Mar -Jil Corporation, a Minnesota Corporation, Grantor, hereby conveys and warrants to the Economic Development Authority, in and for the City of New Hope, a Minnesota municipal corporation, Grantee, real property in Hennepin County, Minnesota, described as follows: Lots 1, 2, 3, 4, and 5, Block 1, Gervais and Hunter Replat, Hennepin County, Minnesota. together with all hereditaments and appurtenances belonging thereto, subject to the following exceptions: Real estate taxes and special assessments due and payable in 2008 and thereafter, drainage and utility easements over the real property as shown on the recorded plat, access easement as shown on the recorded plat, storm sewer easement as contained in Document Number 1092096. Check box if applicable: X The seller certifies that the seller does not know of any wells on the described real property. A well disclosure certificate accompanies this document. I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. p ©� Mar -Jil Corporati n, a Minnesota Corporation Marsfiall Lebow, President STATE OF MINNESOTA ss. COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this L VIday of 2008, by Marshall Lebow the President of Mar -Jil Corporation, a Minnesota Corporation, Gr oz on behalf of said corporation. i f '"' � py$ � 1 � LELAND J. FRANKMAN Notary Pubiio•Minnesota y area J- 31, 2010 Notary Public Check here if part or all of the land is Registered (Torrens): X Tax Statements for the real property described in this instrument should be sent to: ?Q� V Jensen Anderson Sondrall, P.A. 8525 Edinbrook Crossing, Suite 201 Economic Development Authority in and for the Brooklyn Park, MN 55443 City of New Hope v (763) 424 -8811 4401 Xylon Avenue North City of New hope, MN 55428 =I ZOAG Originating Department Community Development Approved for Agenda Curtis Jacobsen, Director of CD I By: Kirk McDonald, Agenda Section EDA Item No. Resolution awarding demolition contract for the Bass Lake Road Apartment complex (Improvement project Requested Action Staff requests the EDA consider the demolition bids received on May 22, 2008, for the demolition of the Bass Lake Road Apartment Complex and award to the lowest responsible bidder. Policy /Past Practice The EDA has historically considered bids and awarded to the lowest responsible bidder in the best interest of the EDA and the city of New Hope. Background On April 14 the City Council approved the specifications for Demolition of the Bass Lake Road Apartment Complex with a 10:00 am, Thursday, May 22, 2008 bid opening. Bids were received and tabulated to determine low bidder. Name of Bidder Base Bid Burn Deduct Sauter & Sons 98,100.00 8,000.00 Kevitt Excavating LLC 116,980.00 -0- K.A. Kamish Excavating 121,725.00 5,600.00 Griffin Petroleum Services 136,850.00 9,800.00 Doboszenski & Sons 168,444.56 5,000.00 Frattalone Companies 184,320.00 16,600.00 Veit & Company 197,280.00 10,460.00 Sterling Systems Inc. 235,950.00 15,000.00 Staff is in the process of reviewing the Motion by To: of the two low bidders and will have a recommendation 'q Second by WA I: \RFA \PLANNING \PLANNING \Q & R -Award demo bid BLR Apts 5- 27- 08.doc Request for Action May 27, 2008 Page 2 for the EDA at the May 27 meeting. Funding Funds for the demolition will come from EDA funds. Attachment(s) • Resolution • Bid sheets EDA Resolution No. 2008- 08 Resolution awarding the demolition contract for the Bass Lake Road Apartment Complex (Improvement project no. 836) WHEREAS, the City Council approved the bid specifications for the demolition of the Bass Lake Road Apartment Complex on April 14, 2008; and WHEREAS, the bid specifications called for a bid opening on Thursday, May 22, 2008, at 10:00 am; and WHEREAS, the bids were received, opened and read aloud at that time; and WHEREAS, the apparent low bidder was Sauter & Sons from Ramsey, Minnesota with a bid of $98,100.00 for their fixed cost total quote and a deduct of $8,000.00 per building proposed to be burned by the fire department. NOW, THEREFORE BE IT RESOLVED by the City Council of the city of New Hope to award the demolition contract to Sauter & Sons for the demolition of the Bass Lake Road Apartment Complex in the amount of $98,100.00 with a deduct of $8,000.00 for each building the fire department burns. Adopted by the City Council of the city of New Hope, Hennepin County, Minnesota this 27th day of May 2008. r f Mayor ATTEST: -t City Clerk NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY DEMOLITION CONTRACT for BASS LAKE ROAD APARTMENT COMPLEX (Improvement Project No. 836) For valuable consideration as set forth below, this Contract dated the / / day of June, 2008, is made and signed by the New Hope Economic Development Authority, a Minnesota municipal corporation (hereinafter EDA) and Sauter & Sons, Inc_, a Minnesota Corporation (hereinafter Contractor). 1. CONTRACT DOCUMENTS The Contractor hereby promises and agrees to perform and comply with all the provisions of this Contract and the plans and specifications for the demolition and removal of foundation and other site features on the Bass Lake Road Apartment Complex, EDA owned properties commonly known as follows (collectively hereinafter the Property): • 8400 Bass Lake Road • 8420 Bass Lake Road ® 84015 8th Avenue North 0 8411 58th Avenue North • 84215 8th Avenue North • one small outbuilding centrally located on property all in the City of New Hope, as further detailed and set forth in the City of New Hope Demolition Specifications attached hereto as Exhibit A (hereinafter Plan) and incorporated by this reference. This Contract and the Plan shall compromise the total agreement of the parties hereto. No oral order, objection or claim by any party to the other shall affect or modify any of the terms or obligations contained in this Contract. 9 . The work to be performed by Contractor under this Contract (hereinafter the Work) shall include the entire completed demolition, removals and fill, or the various separately identifiable parts thereof, required to be furnished under this Contract. As part of the Work, the Contractor also agrees to remove all excess material and debris from the Property by the demolition and removal Completion Date. The contractor shall provide post demolition project documentation to the EDA. 3. CONTRACT PRICE - 1 - The EDA agrees to pay Contractor ninety -eight thousand one hundred dollars ($98,100.00), minus eight thousand dollars ($8,000.00) for each building burned by the West Metro Fire and Rescue as part of their training activities, payable upon the FDA's acceptance of Contractor's performance under this Contract. 4. COMPLETION DATE Contractor shall complete all demolition, removal and site restoration Work under this Contract for all property within forty -five (45) days after it receives a written Notice to Proceed from the EDA for the Property. Due to the difficulty in ascertaining and establishing the actual damages which the EDA would sustain, liquidated damages are specified as follows for failure of the Contractor to complete its performance under this Contract by the Completion Date for all properties: for every calendar day that the Contract shall remain uncompleted beyond the Completion Date for the property, the Contractor shall pay the EDA one hundred dollars and no cents ($100.00) per day per property as liquidated damages. Before beginning actual work under this Contract, the Contractor shall submit to the EDA and obtain the FDA's approval of a certificate of insurance on Standard Form C.I.C.C. -701 or ACORD 25 forms, showing the following insurance coverage and listing the EDA/City as a loss payee under the policies: a. General Contractor Liability: $500,000.00 b. Automobile Liability for all automobiles: $500,000.00 c. Workman's Compensation: Statutory Amounts d. Umbrella Excess Liability $1,000,000.00 This certificate must provide for the above coverages to be in effect from the date of the contract until thirty (30) days after the Completion Date, and must provide that the insurance coverage will not be canceled by the insurance company without thirty (30) days written notice to the EDA of intent to cancel. 2001wf i The Contractor shall provide a performance bond and a material and labor payment bond, each bond in an amount equal to the contract price, as security for the complete performance and payment of all the Contractor's obligations under this Contract, and issued by a surety licensed to do business in Minnesota. The performance bond and material and labor payment bond shall be in a form acceptable to the New Hope City Attorney. The Contractor shall pay all labor and -2- material suppliers when payment is due and before any claims are filed for the same against any payment bond required by this Contract. 7. LAWS, REGULATIONS AND SAFETY The Contractor shall give all notices and comply with all Federal, State and local laws, ordinances, rules and regulations applicable to performance under this Contract. The Contractor shall provide adequate signs and/or barricades and will take all necessary precautions for the protection of the Work and the safety of the public. 8, INDEMNIFICATION To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the EDA/City, its agents and employees from and against all claims, damages, losses and expenses, including but not limited to attorney's fees, arising out of or resulting from the performance of Work provided that any such claim, damage, loss or expense (1) is attributable to bodily injury, sickness, disease or death, or injury or destruction of tangible property (other than the Work itself) including the loss of use resulting therefrom, and (2) is caused in whole or in part by any negligent act or omission of the Contractor, any Subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by a party indemnified hereunder. 9. ASSIGNMENT The Contractor shall not assign or transfer, whether by an assignment or novation or otherwise, any of its rights, duties, benefits, obligations, liabilities or responsibilities under this Contract without prior written consent of the EDA. 10. NOTICE The address and telephone number of the Contractor for purpose of giving notices and any other purposes under this Contract shall be: Thomas Sauter, Sauter & Sons, Inc, 6651 141st Avenue NW, Ramsey, Minnesota 55303. Telephone Number: (763) 421 -7919. The address of the City for purpose of giving notices and any other purposes under this Contract shall be: Kirk McDonald, City Manager, City of New Hope, 4401 Xylon Avenue North, New Hope, MN 55428; Telephone Number: (763) 531 -5112. -3- IN WITNESS WHEREOF, the parties to this Contract have hereunto set their hands and seals as of the day and year first above written. NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) The foregoing was acknowledged before me this -1 L- day of June, 2008, by Martin Opem, Sr., and Kirk McDonald, the President and Executive Director, respectively, of the New Hope Economic Development Authority, a Minnesota municipal corporation, on behalf of said municipal corporation. VALERIE LEONE NOTARY PUBLIC - MINNESOTA { Q My Commission Expires Jan. 31, 2010 �a 0 Notary Public SAUTER & SONS, I By: Its President STATE OF MINNESOTA ) ss. COUNTY OF The foregoing was acknowledged before me this day of June, 2008, by Thomas Sauter, the President of Sauter & Sons, Inc., a Minnesota Corporation, on behalf of said corporation. 1 A I * My STEVEN R. TO RNEY NOTARY PUBLIC _ MINNESOTA ary Public Commission Expires Jan, 31 2010 -4- PROJECT NARRATIVE (Improvement Project No. 836) This city of New Hope project consists of the following items: • Utility disconnections • Demolition of all buildings on site and removal from the site of all demolition debris • Removal of all sidewalks serving the apartment buildings from the site • Removal of all bituminous surfacing from the site • Fill and compaction of basements (fill importation as necessary, gravel parking lot base may be used for basement fill) • Site grading for appropriate drainage per plan • Importation of topsoil for all disturbed areas (all disturbed areas shall received 4" of topsoil) • Hydroseeding of the site Inherent in the completion of this project is the protection of turf slopes and healthy trees. The selected contractor will also be responsible for maintaining the cleanliness of Bass Lake Road throughout the length of the project. Bass Lake Road shall be the only access to the site for the demolition process. It is anticipated that one building will be burnt by the West Metro Fire Department in a department training exercise. All bidders are required to provide a deduct specifically related to the reduced amount of debris to be hauled from the site. The selected contractor will not be required to install silt fencing. Silt fencing will be done under separate contract. SPECIFICATIONS (Improvement Project No. 836) DEMOLITION REMOVALS GRADING AND SEEDING PART 1 1.1 GENERAL A. Removal and Disposal of the Following Items: 1. Clearing and grubbing trees as identified. 2. Grubbing stumps as identified. 3. Building demolition (apartment superstructures and out building). 4. Concrete removal including foundation walls, slabs, footings, pavement accessory to buildings and gravel beneath any pavement. 5. Concrete block, landscaping block and brick removal. 6. Play equipment, doghouses and all other man-made structures on the property. 7. Disconnect and removal of water and sewer services. 1.2 REFERENCES A. Minnesota Department of Transportation, "Standard Specifications for Construction," 1988 Edition and the Supplemental Specification dated May 2, 1994 (MnDOT) Spec. as well as any other supplemental materials or revised specifications as they may be amended from time to time. 1. Section 2104 - Removing Miscellaneous Structures. 1.3 DEFINITIONS A. Remove - To take away, eliminate or remove from the project site by any method selected by the Contractor and to dispose of material. Page 1 of 7 DEMOLITION, REMOVALS, GRADING AND SEEDING 1.4 REGULATORY REQUIREMENTS A. MnDOT 2104.3C is modified as follows: 1. All materials designated for removal shall be disposed of outside the project area at sites to be selected by the Contractor. 1.5 SCHEDULING A. Prior to starting work, submit for review and approval by the Building Official, a schedule showing the commencement, order and completion dates of the various parts of this work. B. Disconnect services prior to superstructure removal. C. Fill holes or depressions resulting from removal. 1.6 SITE CONDITIONS A. Contractors shall make necessary site visits prior to bidding to determine the level of work required to their satisfaction. B. Protect existing streets, curb and gutter, sidewalks, fences, trees, utilities and other features that are to remain from damage from work of this section. C. In the event of damage, the Contractor shall immediately notify the city Building Official. Upon notification, the Contractor shall make all necessary repairs which may include, but is not limited to, replacing materials. Repairs and replacements will be subject to the approval of the Building Official at no additional expense to the Owner. 1.7 EXECUTION A. The Contractor shall be responsible for disposal of all items removed. Said disposal shall be in accordance with all applicable laws, regulations, statutes, etc. B. Demolition shall be performed without damage to adjacent retained work. Where such work is damaged, the Contractor at its expense shall patch, repair or otherwise restore it to its original condition or better. Page 2 of 7 DEMOLITION, REMOVALS, GRADING AND SEEDING C. All demolition debris shall be removed from the area of work as often as necessary, but not less than at least once at the end of each work day. Debris shall be placed in approved containers to prevent the spread of dust and dirt. D. Execute the work in a careful and orderly manner, with the least possible disturbance to the public and occupants of neighboring buildings. 1.8 PROTECTION A. Take all necessary precautions to adequately protect personnel and public and private property in the areas of work. B. All street signs, traffic control signs, guy wires, mail boxes, posts, wood fence, etc. which may interfere with the construction, shall be removed, stored safely and replaced. C. Do not close or obstruct walkways or roadways. Do not store or place materials in passageways, or other means of egress. Conduct operations with minimum traffic interference. D. Take reasonable precautions to limit damage to the existing turf. E. Holes or depressions created by removals shall not be left open for more than one day. Any hole within ten (10) feet of sidewalks shall be filled, suitably marked or covered immediately. F. Install erosion control around the entire project. 1.9 DEMOLITION AND REMOVALS A. Concrete and Bituminous Surfacing, Block and Brick: 1. Remove in accordance with MnDot Spec. 2014.3B, except as modified below. 2. Sawcut bituminous surfacing to full depth at the limits of partial removal, prior to that removal, unless otherwise approved by the Building Official. B. Building Removal and Man-Made Item Removal: 1. Remove in accordance with MnDot Spec. 2103, except as modified below. Page 3 of 7 DEMOLITION, REMOVALS, GRADING AND SEEDING 2. Basement fill shall be compacted 98% standard density. Submit one (1) compaction test for each fill area where fill depth exceeds 1.5 feet. C. Utility Disconnects and Removal 1. Prior to removal of superstructures, disconnect water and sewer service at the property line. a. Shut off at curb stop. b. Cut and crimp water service within 12 to 18 inches of the curb stop. C. Remove the top section of the curb stop. d. Remove sewer service and grout the street side service in the same vicinity as the water curb stop. e. Submit tied location of curb stop and sewer service to Public Works. f. Do not back -fill trench until Public Works has inspected the disconnected services. 2. Remove water and sewer services in their entirety between the disconnect point and the superstructures. a. Compact and trench to 98% standard density. D. Clearing and Grubbing: 1. Review trees and stumps to be removed with the City Forester prior to removal. Trees scheduled for removal will be marked. 2. Remove tree and entire stump. 3. Backfill and compact hole to 98% standard density. 4. Place 4 inches (m ininim ) of topsoil and seed in accordance with Section 02930. F. Miscellaneous Materials: Page 4 of 7 DEMOLITION, REMOVALS, GRADING AND SEEDING All materials identified on the plan for material shall be removed under the requirements of this section. 1.10 MEASUREMENT AND PAYMENT A. All items to be removed are shown on the plans. All work and materials required to remove these items shall be paid under the lump sum bid item "Site Improvements." SITE GRADING PART 2 2.1 SITE CONDITIONS A. Contractors shall make necessary site visits prior to bidding to determine the level of work required to their satisfaction. B. Protect existing roads, fences, trees, utilities and other features from damage from work of this section. A. In the event of damage, immediately make all repairs and replacements necessary subject to the approval of the Building Official at no additional costs to the Owner. 2.2 SITE GRADING A. Cut, fill and grade site in areas shown on the plans. All graded areas must be left in a mowable condition. B. Slope grades to insure both temporary and permanent drainage. C. Finished slopes cannot exceed 3 to 1. 2.3 COMMON EXCAVATION A. Clean excavated materials can be used as backfill in depressions created by the grubbing of stumps or foundation removal. All excess material shall be hauled off site. A minimum of 4 inches of topsoil shall be placed over all disturbed areas. Page 5 of 7 DEMOLITION, REMOVALS, GRADING AND SEEDING 2.4 MEASUREMENT AND PAYMENT A. All site grading indicated on the plans will be measured and paid as part of the lump sum bid for "Site Improvements." This item represents compensation for all work required to salvage topsoil, complete grading and re- spread topsoil. HYDROSEEDING PART 3.1 DESCRIPTION A. This work consists of hydroseeding and hydromulching that takes place as shown on the Bass Lake Road Apartment demolition site. 3.2 MATERIALS A. Topsoil: select Topsoil Borrow conforming to MN/DOT Section 3877.2A. B. Seed Mixtures: MNDOT 60B. C. Hydromulch: 70% pure wood fiber and 30% recycled paper. D. Fertilizer, Lime or Other Soil Amendments: 1. Fertilizer - Liquor Form 5- 10.5 -4 2. Finn E Tack to blend with slurry. 3.3 CONSTRUCTION REQUIREMENTS: A. Sequencing and Scheduling: 1. Place and grade all topsoil borrow and salvaged topsoil. 2. Loosen topsoil. B. Plant Installation and Seeding. 1. Hydroseed all disturbed locations on site. 2. Remove foreign materials, undesirable plants and their roots. Do not bury foreign material on site. Remove contaminated subsoil. Page 6 of 7 DEMOLITION, REMOVALS, GRADING AND SEEDING 3. Loosen the topsoild to a depth of 3 to 5 inches (Average 4 inches). 4. Handrake areas requiring smooth transitions such as areas adjacent to sidewalks. 5. Installation Methods: a. Mechanically apply. b. Broadcast in tightly confined spaces and along sidewalk edges. C. Brillion seeded or rolled to ensure 100% seed to soil contact. 6. Apply Liquid Fertilizer: Mechanically agitate mulch to ensure even distribution of fertilizer. Apply fertilizer at a rate of 3 gallons per acre mixed with mulch slurry. 7. Apply Finn E Tack at a rate of 3 -4 pounds per acre. 8. Apply hydromulch at a minimum rate of 1800 pounds per acre. 9. Seed Blend MNDOT 60B. 10. Allow all areas to dry 100% before first watering. Water shall be applied in a rainfall type application. No water should be applied if rain is forecasted within the next 12 -hour period. 11. All seeded areas shall be warranted for no erosion up to a 1 inch rain per rainfall. 3.4 MEASUREMENT AND PAYMENT A. Bid Items for "Hydroseeding" have been provided on the Bid Form. Measurement will be based upon square yards (SY) seeded complete in place as specified, including preparation of seed bed, seed, fertilizer, Finn E Tack, and mulch and all correlated activity. The actual quantity installed multiplied by the appropriate unit price will be considered payment in full for all work and costs of this item. Page 7 of 7 DEMOLITION, REMOVALS, GRADING AND SEEDING �titig;e�rsyt Iz A-W g42Axs9LL to I ned 'YS F AI { IIII�III� �dPll o ��FFyy y� R t; a �¢� a 5� K+• yy � tl� v apbo ®b Y a Y r6/w.r+a" +4i1- ...M�i b4V Y f rxv � C.KCAti11.'�M4ik, s 'k t I f] zt If -c J3ANMG' ALAS 4 15G8 IN3MO M NO)MA 'real VIOS3NNIA `3dOH M3N H p i , A ° H I � . f Z \ I fa v x I T I I = wi * k lmq U ( A �1 ACC! CERTIF ICATE LIABILITY 1 DATE (MM /DD/YYYY) 6/30/2008 PRODUCER (651)227 -8405 FAX: (651)227 -0507 T. C. Field & Company p y 530 North Robert Street St. Paul MN 55101 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. INSURERS AFFORDING COVERAGE NAIC # INSURED Sauter & Sons Inc 6 651 141st Avenue NW Ramsey MN 55303 -5641 INSURERA:West Bend Mutual Grou INSURER B: INSURER C: INSURER D: INSURER E: OVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ADD'L TYPE OF INSURANCE POLICY NUMBER DATE MMIDD1YYYY) PDATE EXPIRATION LIMITS A GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY CLAIMS MADE FXI OCCUR BCN0891182 7/12008 7/1/2009 EACH OC CURRENCE $ 1,000,000 PREMISES Ea oocurrrence $ 200,000 MED EXP (Any one person) $ 10,000 PERSONAL &ADV INJURY $ 1,000,000 GENERALAGGREGATE $ 2,000,000 GEML AGGREGATE LIMIT APPLIES PER: POLICY X JECT LOC PRODUCTS - COMP /OP AGG $ 2,000,000 A AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS BCN0891182 7/1/2008 7/1/2009 COMBINED SINGLE LIMIT (Ea accident) $ 1,000,000 X BODILY INJURY (Per person) $ X BODILY INJURY (Per accident) $ PROPERTY DAMAGE (Per accident) $ GARAGE LIABILITY ANY AUTO AUTO ONLY - EA ACCIDENT $ OTHER THAN EAACC AUTO ONLY: AGG $ _.._._.......-- $ A EXCESSIUMBRELLA LIABILITY X OCCUR FI CLAIMS MADE DEDUCTIBLE RETENTION CUN0947590 7/1/2008 7/1/2009 EACH OCCURRENCE $ AGGREGATE $ $ 2,000,000 $ 2,000,000 A WORKERS COMPENSATION AND EMPLOYERS' LIABILITY ANY PROPRIETOR /PARTNER/EXECUTIVE OFFICER /MEMBER EXCLUDED? If yes, describe under SPECIAL PROVISIONS below WCN0891183 7/1/2008 7/1/2009 X WC Y STATU- TOR LIMITS OTH- E_ R_ _ _ E.L. EACH ACCIDENT $ 100,000 E. L. DISEASE - EA EMPLOYEE 100,000 E.L. DISEASE - POLICY LIMIT $ 500 000 OTHER DESCRIPTION OF OPERATIONSILOCATIONSNEHICLES /EXCLUSIONS ADDED BY ENDORSEMENT /SPECIAL PROVISIONS Project: Bass Lake Road Apartment Complex - Improvement Project No. 836. City of New Hope shall be named as Additional Insured in regard to the General Liability Form WB1482 where required by written contract on a primary and non contributory basis. (763)531 -5136 City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE AUTHORIZED REPRESENTATIVE Kichele Miller /MILLER ACORD 25 (2001/08) INS025 (olo8).o8a © ACORD CORPORATION 1988 Page 1 of 2 :e: 6/17/2008 Time: 10:57 AM TO: @ 9,(763) 531-5136 651- 227-05VI 'X c V%le rage: ACORD.. CERTIFICATE OF LIABILITY NSURANCE 6/1 i 7/2008 PRODUCER (651)227-840S FAX: (651) 227 -0507 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE T. C. Field & Company HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 530 North Robert Street ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. St. Paul MN 55101 INSURED Sauter & Sons Inc 6651 141st Avenue NW RERS AFFORDING COVERAGE NAIC # =R A: West Send Mutual Grou Rams MN 55303 - 5641 I INSURER E: ' THE POLICIES OF INSURANCE LISTED BELOINHAVEBEEN ISSUED TOTHE INSURED NAMEDABOVE FORTH EPOLICYPERIOD INDICATED. NOTWITH STAND INGANY REQUIREMENT, TERM OR CONDITION OFANYCONTRACTOR OTHER DOCUMENTWITH RESPECTTOVVHICH THIS CERTIFICATE MAYBE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOVVNMAYHAVE BEE N REDUCEDBYPAIDCLAIMS. INSR LTR ADD'L INS RD TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MMIDD/YY) POLICY EXPIRATION DATE (MM /DDIYY) LIMITS A GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY CLAIMSMADE ❑X OCCUR BCN0891182 7/1/2007 7/1/2008 0 1,000,000 DAMAGE TO RENTED PREMISES (Be occurrence 9 200 000 MEDE4P An nne. .erson s 10, 000 H RSUNAL v. AUV INJURY S 1, 000 , 000 GENERAL AGGREGATE s 2,000,000 f' DUCTS. - OMRI r A C S 2 1 000,000 GEN'L AGGREGA I E LIMI I APPLIES PER POLICY X RE LOC A AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AU 106 HIRED AUTOS NON -OWNED AUTOS BCN0891182 7/1/2007 7/1/2008 COMBINED SINGLE LIMIT (Ea accident) $ 1, 000,000 X BODILY INJURY (Pei I�e�sau) X BODILY INJURY (Per accident) $ PROPERIY UAMAGE (Per accident) - GARAGE LIABILITY ANY AUTO AL ITO ONLY - EA ACCIDENT $ OTHER THAN EA ACC AUTO ONLY ": AGG S s A A EXCESS /UMBRELLA LIABILITY X OCCUR F CLAIMS MADE DEDIICTIBLE X RETENTION $ WORKERS COMPENSATION AND EMPLOYERS' LIABILITY ANY PROPRIETORIPARTNERIE:XECUTIVE OFFICER /MEMBER EXCLUDED? If Ves, describe under 9PFCIAI PROVISIONR below US00891182 WCN0891183 7/1/2007 7/1/2007 7/1/2008 7/1/2008 EACH O CCU RE.E NCIF 2, AGGREGATE S ,_ -, 2 ,000,0 00 s c X TORY T IMTT& O ED $ E.L. EACH A CCIDENT .,,. 100 000 S , , E.L. DIGCAGC - CA CMPLOYCC 9 1 00,020 E.L. DISEASE - POLICY LIMIT S 500,000 OTHER DESCRIPTION OFOPERATIONS ILUL:AlwnsrvtHIcLL�IMA�LUmurva n =c ......._._..– Project: Bass Lake Road Apartment Complex - Improvement Project No. 836. City of New Hope shall be named as Additional Insured in regard to the General Liability Form WB1482 where required by written contract on a primary and non contributory basis. CERTIFICATE HOLDER CANCELLATION (763) 531 -5136 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE City of NeW Hope EXPIRATION DATE THEREOF, THE ISSUING INSURER VMLL ENDEAVOR TO MAIL 4401 Xylon Avenue North 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT New Hope, MN 55428 FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE _�i Michele Miller /MILLER /�u����yC 4CORD 25 (2001108) n ACORD CORPORATION 1988 NS025 (010ir) n. Pago 1 of 2 THE AMERICAN INSTITUTE OF ARCHITECTS Premium Amount Based on Final Contract Amount Bond No. GRMN27986A AIA Document A312 Any singular reference to Contractor, Surety, Owner or other party shall be considered plural where applicable. CONTRACTOR (Name and Address): SAUTER & SONS, INC. 6651 -141 ST AVENUE NW RAMSEY, MN 55303 SURETY (Name and Principal Place of Business): GRANITE RE, INC. 14001 QUAILBROOK DRIVE OKLAHOMA CITY, OK 73134 OWNER (Name and Address): NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY 4401 XYLON AVENUE NORTH NEW HOPE, MN 55428 CONSTRUCTION CONTRACT Date: 6/11/2008 Amount: $ 98,100.00 Description (Name and Location): IMP. PROD. NO. 836 - DEMO. AND REMOVAL OF FOUNDATION AND OTHER SITE FEATURES ON THE BASS LAKE RD. APARTMENT COMPLEX- PROPERTIES: 8400 & 8420 BASS LAKE RD, 8401, 8411 & 8421 58TH AVE. N., AND ONE SMALL OUTBUILDING CENTRALLY LOCATED ON PROPERTY, NEW HOPE, MN BOND Date (Not earlier than Construction Contract Date): 6/20/2008 Amount: $ 98,100.00 ( NINETY EIGHT THOUSAND ONE HUNDRED AND 00/100) Modifications to this Bond: [X] None See Page 3 CONTRACTOR AS PRINCIPAL SURETY COMPANY: (Corporate Seal) COMPANY: (Corporate Seal) SAUTER & SONS, INC. GRANITE RE, C. Signatur � ' , ,° „�.�e l e , Signature: Name and Title: "' S G L � Name and Title: Je�r BoylesdAttorney -in -Fact (Any additional signatures appear on page 3) FOR INFORMATION ONLY -Name, Address and Telephone OWNER'S REPRESENTATIVE (Architect, AGENT OR BROKER: or Engineer or other party): Pate Bonding, Inc. CITY ENGINEER 1276 South Robert Street West St. Paul, MN 55118 , (651)457 -6842 AIA DOCUMENT A312 PERFORMANCE BOND AND PAYMENT BOND DECEMBER 1984 ED., AIA ® A 312 -1984 1 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON D.C. 20006 THIRD PRINTING - MARCH 1987 1. The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors, and assigns to the Owner for the performance of the Construction Contract, which is incorporated herein by reference. 2. If the Contractor performs the Construction Contract, the Surety and the Contractor shall have no obligation under this Bond, except to participate in conferences as provided in Subparagraph 3.1. 3. If there is no Owner Default, the Surety's obligation under this Bond shall arise after: 3.1 The Owner has notified the Contractor and the Surety at its address described in Paragraph 10 below that the Owner is considering declaring a Contractor Default and has requested and attempted to arrange a conference with the Contractor and the Surety to be held not later than fifteen days after receipt of such notice to discuss methods of performing the Construc- tion Contract. If the Owner, the Contractor and the Surety agree, the Contractor shall be allowed a reason- able time to perform the Construction Contract, but such an agreement shall not waive the Owner's right, if any, subsequently to declare a Contractor Default; and 3.2 The Owner has declared a Contractor Default and formally terminated the Contractors right to complete the contract. Such Contractor Default shall not be de- clared earlier than twenty days after the Contractor and the Surety have received notice as provided in Sub- paragraph 3.1; and 3.3 The Owner has agreed to pay the Balance of the Contract Price to the Surety in accordance with the terms of the Construction Contract or to a contractor selected to perform the Construction Contract in accor- dance with the terms of the contract with the Owner. 4. When the Owner has satisfied the conditions of Para- graph 3, the Surety shall promptly and at the Surety's ex- pense take one of the following actions: 4.1 Arrange for the Contractor, with consent of the Owner, to perform and complete the Construction Contract; or 4.2 Undertake to perform and complete the Construc- tion Contract itself, through its agents or through inde- pendent contractors; or 4.3 Obtain bids or negotiated proposals from qualified contractors acceptable to the Owner for a contract for performance and completion of the Con- struction Contract, arrange for a contract to be pre- pared for execution by the Owner and the contractor selected with the Owner's concurrence, to be secured with performance and payment bonds executed by a qualified surety equivalent to the bonds issued on the Construction Contract, and pay to the Owner the amount of damages as described in Paragraph 6 in ex- cess of the Balance of the Contract Price incurred by the Owner resulting from the Contractor's default; or 4.4 Waive its rights to perform and complete, arrange for completion, or obtain a new contractor and with reasonable promptness under the circumstances: .1 After investigation, determine the amount for which it may be liable to the Owner and, as soon as practicable after the amount is determined, tender payment therefore to the Owner; or .2 Deny liability in whole or in part and notify the Owner citing reasons therefore. 5. If the Surety does not proceed as provided in Paragraph 4 with reasonable promptness, the Surety shall be deemed to be in default on this Bond fifteen days after receipt of an additional written notice from the Owner to the Surety demanding that the Surety perform its obligations under this Bond, and the Owner shall be entitled to enforce any remedy available to the Owner. If the Surety proceeds as provided in Subparagraph 4.4, and the Owner refuses the payment tendered or the Surety has denied liability, in whole or in part, without further notice the Owner shall be entitled to enforce any remedy available to the Owner. 6. After the Owner has terminated the Contractor's right to complete the Construction Contract, and if the Surety elects to act under Subparagraph 4.1, 4.2, or 4.3 above, then the responsibilities of the Surety to the Owner shall not be greater than those of the Contractor under the Construction Contract, and the responsibilities of the Owner to the Surety shall not be greater than those of the Owner under the Construction Contract. To the limit of the amount of this Bond, but subject to commitment by the Owner of the Balance of the Contract Price to mitigation of costs and damages on the Construction Contract, the Sure- ty is obligated without duplication for: 6.1 The responsibilities of the Contractor for correc- tion of defective work and completion of the Construc- tion Contract; 6.2 Additional legal, design professional and delay costs resulting from the Contractor's Default, and re- sulting from the actions or failure to act of the Surety under Paragraph 4; and 6.3 Liquidated damages, or if no liquidated damages are specified in the Construction Contract, actual dam- ages caused by delayed performance or non- perfor- mance of the Contractor. 7. The Surety shall not be liable to the Owner or others for obligations of the Contractor that are unrelated to the Con- struction Contract, and the Balance of the Contract Price shall not be reduced or set off on account of any such unrelated obligations. No right of action shall accrue on this Bond to any person or entity other than the Owner or its heirs, executors, administrators, or successors. 8. The Surety hereby waives notice of any change, includ- ing changes of time, to the Construction Contract or to related subcontracts, purchase orders and other obliga- tions. 9. Any proceeding, legal or equitable, under this Bond may be instituted in any court of competent jurisdiction in the location in which the work or part of the work is located and shall be instituted within two years after Contractor Default or within two years after the Contractor ceased working or within two years after the Surety refuses or fails to perform its obligations under this Bond, whichever oc- curs first. If the provisions of this Paragraph are void or prohibited by law, the minimum period of limitation available AIA DOCUMENT A312 PERFORMANCE BOND AND PAYMENT BOND DECEMBER 1984 ED., AIA @ A 312 -1984 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON D.C. 20006 THIRD PRINTING - MARCH 1987 able to sureties as a defense in the jurisdiction of the suit shall be applicable. 10. Notice to the Surety, the Owner or the Contractor shall be mailed or delivered to the address shown on the sig- nature page. 11. When this Bond has been furnished to comply with a statutory or other legal requirement in the location where the construction was to be performed, any provision in this Bond conflicting with said statutory or legal requirement shall be deemed deleted here from and provisions con- forming to such statutory or other legal requirement shall be deemed incorporated herein. The intent is that this Bond shall be construed as a statutory bond and not as a common law bond. 12 DEFINITIONS 12.1 Balance of the Contract Price: The total amount payable by the Owner to the Contractor under the Construction Contract after all proper adjustments have been made, including allowance to the Con- MODIFICATIONS TO THIS BOND ARE AS FOLLOWS: None tractor of any amounts received or to be received by the Owner in settlement of insurance or other claims for damages to which the Contractor is entitled, re- duced by all valid and proper payments made to or on behalf of the Contractor under the Construction Con- tract. 12.2 Construction Contract: The agreement between the Owner and the Contractor identified on the sig- nature page, including all Contract Documents and changes thereto. 12.3 Contractor Default: Failure of the Contractor, which has neither been remedied nor waived, to per- form or otherwise to comply with the terms of the Construction Contract. 12.4 Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay the Con- tractor as required by the Construction Contract or to perform and complete or comply with the other terms thereof. (Space is provided below for additional signatures of added parties, other than those appearing on the cover page.) CONTRACTOR AS PRINCIPAL Company: (Corporate Seal) SURETY Company: Signature: Name and Title: Address: Signature: Name and Title: Address: (Corporate Seal) AIA DOCUMENT A312 PERFORMANE BOND AND PAYMENT BOND DECEMBER 1984 3D., AIA 0 A312 -1984 3 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON, D.C. 20006 THIRD PRINTING - MARCH 1987 Bond No. ERMN27986A AIA Document A312 Any singular reference to Contractor, Surety, Owner or other party shall be considered plural where applicable. CONTRACTOR (Name and auumos): SAUTER& SONS INC GS51'141ST AVENUE NVV RAMSEY, MN 55303 SURETY (Name and Principa Place of Business): GRANITE RE,|NC. 14UO1QUAILBROOKDRIVE OKLAHOMA CITY, OK73134 OWNER (Name and Aumnxs): NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY 44O1XYLON AVENUE NORTH NEW HOPE, |NN55428 CONSTRUCT CONTRACT Date: 6M1/2008 Amount: $ 98,100.00 Description (Name and Looation): IMP. PR8J. NO. 83$' DEMO. AND REMOVAL OF FOUNDATION AND OTHER SITE FEATURES ON THE BASS LAKE RD. APARTMENT CQ&8PLEX'PR8PERT|ES:84OU&D42O BASS LAKE RD, 8401 AVE. N, AND ONE SMALL OUTBUILDING CENTRALLY LOCATED ON PROPERTY, NEW HOPE, 8AN BOND Date (Not earlier than Construction Contract Date): 612012008 Amount$ 98,1OO1]D (NINETY EIGHT THOUSAND ONE HUNDRED AND OO/1O0 Modifications to this Bond: [ }None [X] See Page S CONTRACTOR AS PRINCIPAL SURETY CO COMPANY: (Corporate Seal) Signature: Signature: �xo�� ' Name and Title: -71ht Name and TiV6./Jenn& Boil Wrney-in-Fact (Any additional signatures appear on page 8) FOR INFORMATION ONLY-Name, Address and Telephone OWNER'S REPRESENTATIVE (Architect, AGENT ()RBROKER: Eng m other party: Pate Bonding Inc. CITY ENGINEER 1u7* South Robert Stree West St. Paul mmmm11u . (651)457'6842 m^ DOCUMENT xn1z PERFORMANCE BOND AND PAYMENT BOND DECEMBER `,o^eo,m^@ THE AMERICAN INSTITUTE OF ARCHITECTS 1735 NEW YORK AVE., N.W., WASHINGTON, D.C. 20006 A3121984 4 THIRD PRINTING ' MARCH `mv 1. The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors, and assigns to the Owner to pay for labor, materials and equipment furnished for use in the perfor- mance of the Construction Contract, which is incorpo- rated herein by reference. 2. With respect to the Owner, this obligation shall be null and void if the Contractor: 2.1 Promptly makes payment, directly, or indirectly, for all sums due Claimants, and 2.2 Defends, indemnifies and holds harmless the Owner from claims, demands, liens or suits by any person or entity whose claim, demand, lien or suit is for the payment for labor, materials, or equipment fur- nished for use in the performance of the Construction Contract, provided the Owner has promptly notified the Contractor and the Surety (at the address described in Paragraph 12) of any claims, demands, liens, or suits and tendered defense of such claims, demands, liens or suits to the Contractor and the Surety, and provided there is no Owner Default. 3. With respect to Claimants, this obligation shall be null and void if the Contractor promptly makes pay- ment, directly or indirectly, for all sums due. 4. The Surety shall have no obligation to Claimants under this Bond until: 4.1 Claimants who are employed by or have a direct contract with the Contractor have given notice to the Surety (at the addres described in Paragraph 12) and sent a copy, or notice thereof, to the Owner, stating that a claim is being made under this Bond and, with substantial accuracy, the amount of the claim. 4.2 Claimants who do not have a direct contract with the Contractor: .1 Have furnished written notice to the Con- tractor and sent a copy, or notice thereof, to the Owner, within 90 days after having last performed labor or last furnished materials or equipment included in the claim stating, with substantial accuracy, the amount of the claim and the name of the party to whom the materials were furnished or supplied or for whom the labor was done or performed; and .2 Have either received a rejection in whole or in part from the Contractor, or not received within 30 days of furnishing the above no- tice any communication from the Contractor by which the Contractor has indicated the claim will be paid directly or indirectly; and .3 Not having been paid within the above 30 days, have sent a written notice to the Surety (at the address described in Paragraph 12) and sent a copy, or notice thereof, to the Owner, stating that a claim is being made under this Bond and enclosing a copy of the previous written notice furnished to the Contractor. 5. If a notice required by Paragraph 4 is given by the Owner to the Contractor or to the Surety, that is sufficient compliance. 6. When the Claimant has satisfied the conditions of Paragraph 4, the Surety shall promptly and at the Surety's expense take the following actions: 6.1 Send an answer to the Claimant, with a copy to the Owner, within 45 days after receipt of the claim, stating the amounts that are undisputed and the basis for challenging any amounts that are disputed. 6.2 Pay or arrange for payment of any undisputed amounts. 7. The Surety's total obligation shall not exceed the amount of this Bond, and the amount of this Bond shall be credited for any payments made in good faith by the Surety. 8. Amounts owed by the Owner to the Contractor under the Construction Contract shall be used for the perfor- mance of the Construction Contract and to satisfy claims, if any, under any Construction Performance Bond. By the Contractor furnishing and the Owner accepting this Bond, they agree that all funds earned by the Contractor in the performance of the Construction Contract are dedicated to satisfy obligations of the Contractor and the Surety under this Bond, subject to the Owner's prior- ity to use the funds for the completion of the work. 9. The Surety shall not be liable to the Owner, Claimants or others for obligations of the Contractor that are unrelat- ed to the Construction Contract. The Owner shall not be liable for payment of any costs or expenses of any Claim- ant under this Bond, and shall have under this Bond no obli- gations to make payments to, give notices on behalf of, or otherwise have obligations to Claimants under this Bond. 10. The Surety hereby waives notice of any change, including changes of time, to the Construction Contract or to related subcontracts, purchase orders and other obligations. 11. No suit or action shall be commenced by a Claimant under this Bond other than in a court of competent juris- diction in the location in which the work or part of the work is located or after the expiration of one year from the date (1) on which the Claimant gave the notice required by Subparagraph 4.1 or Clause 4.2.3, or (2) on which the last labor or service was performed by anyone or the last mate- rials or equipment were furnished by anyone under the Con- struction Contract, whichever of (1) or (2) first occurs. If the provisions of this Paragraph are void or prohibited by law, the minimum period of limitation available to sureties as a defense in the jurisdiction of the suit shall be applicable. 12. Notice to the Surety, the Owner or the Contractor shall be mailed or delivered to the address shown on the signature page. Actual receipt of notice by Surety, the Owner or the Contractor, however accomplished, shall be sufficient compliance as of the date received at the address shown on the signature page. 13. When this Bond has been furnished to comply with a statutory or other legal requirement in the location where the construction was to be performed, any provision in this Bond conflicting with said statutory or legal requirement shall be deemed deleted here from and provisions con- forming to such statutory or other legal requirement shall be deemed incorporated herein. The intent is that this AIA DOCUMENT A312 PERFORMANCE BOND AND PAYMENT BOND DECEMBER 1984 ED., AIA® A312 -1984 5 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON, D.C. 20006 THIRD PRINTING - MARCH 1987 Bond shall be construed as a statutory bond and not as a common law bond. 14. Upon request by any person or entity appearing to be a potential beneficiary of this Bond, the Contractor shall promptly furnish a copy of this Bond or shall permit a copy to be made. 15. DEFINITIONS 15.1 Claimant: An individual or entity having a direct contract with the Contractor or with a subcontractor of the Contractor to furnish labor, materials or equip- ment for use in the performance of the Contract. The intent of this Bond shall be to include without limita- tion in the terms "labor, materials or equipment' that part of water, gas, power, light, heat, oil, gasoline, telephone service or rental equipment used in the MODIFICATIONS TO THIS BOND ARE AS FOLLOWS: Construction Contract, architectural and engineering services required for performance of the work of the Contractor and the Contractor's subcontractors, and all other items for which a mechanic's lien may be asserted in the jurisdiction where the labor, materials or equipment were furnished. 15.2 Construction Contract: The agreement between the Owner and the Contractor identified on the sig- nature page, including all Contract Documents and changes thereto. 15.3 Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay the Con- tractor as required by the Construction Contract or to perform and complete or comply with the other terms thereof. Paragraph 6 of the Bond is deleted in its entirety and replaced with the following provision: Within a reasonable time (1) after the claimant has satisfied the conditions of Paragraph 4 and (2) after the Surety has reviewed all supporting documentation it requested to substantiate the amount of the claim, the Surety shall pay or arrange for payment of any undisputed amounts. Failure of the Surety to satisfy the above requirements shall not be deemed a forfeiture or waiver of the Surety's or the Contractor's defenses under this Bond or their right to dispute such claim. However, in such event the Claimant may bring suit against the Surety as provided under this Bond. (Space is provided below for additional signatures of added parties, other than those appearing on the cover page.) CONTRACTOR AS PRINCIPAL Company: (Corporate Seal) Signature: r t_ Name and Title: V/ Address: SURETY Company: Signature: Name and Title: Address: (Corporate Seal) AIA DOCUMENT A312 PERFORMANCE BOND AND PAYMENT BOND DECEMBER 1984 ED. AIA@ A312 -1984 6 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON, D.C. 20006 THIRD PRINTING - MARCH 1987 State of County of ACKN OWLEDGMENT OF , On this day of in the year , before me personally come(s) , to me known and known to me to be the person(s) who (is) (are) described in and executed the foregoing instrument and acknowledge(s) to me that _ he _ executed the same. Notary Public ACKNOWLEDGMENT OF PRINCIPAL (Partnership) State of ) County of ) On this day of in the year , before me personally come(s) a member of the co- partnership of to me known and known to me to be the person who is described in and executed the foregoing instrument and acknowledges to me that he executed the same as for the act and deed of the said co- partnership. Notary Public ACKNOWLEDGMENT OF PRINCIPAL (Corporation) State of lP)t{5�' ) County of l vv 3 )) On this L - 5 rA day of :1 in the year '&)6 before me personally come(s) f t0NN S cut -c~ , to me known, who, being duly sworn, deposes and says that he is the of the Fes, the corporation described in and which executed the foregoing instrument; that he knows the seal of the said corporation; the seal affixed to the said instrument is such corporate seal; that it was so affixed by the order of the Board of Directors of said corporation, and that he signed his name thereto by like order. STEVEN R. TORNEY NOTARY PUBLIC - MINNESOTA. My Commission Expires Jan. 31, 2010 Notary Public State of Minnesota ) County of Dakota ) On this 20th day of June , in the year 2008 before me personally come(s) Jennifer Boyles Attorney(s) -in -Fact of GRANITE RE, INC. with whom I am personally acquainted, and who, being by me duly sworn, says that he is (are) the Attorneys) -in -Fact of GRANITE RE, INC. company described in and which executed the within instrument; thot he know(s) the corporate seal of such company; and that seal affixed to the within instrument is such corporate seal and that it w s affixed by order of theoard of Directors of said company, and that he signed said instrument as Attorneys) -in -Fact of the said comp y by like rder. '., L Notary Public q ` l Q"' o V Ni'raNS4" A 2010 >> t tx 1.�IC Ic�G 1 THE AMERICAN INSTITUTE OF ARCHITECTS Premium Amount Based on Final Contract Amount Bond No. GRMN27986A •'i: AIA Document A312 • . - • Any singular reference to Contractor, Surety, Owner or other party shalt be considered plural where applicable. CONTRACTOR (Name and Address): SAUTER & SONS, INC. 6651 -141 ST AVENUE NW RAMSEY, MN 55303 SURETY (Name and Principal Place of Business): GRANITE RE, INC. 14001 QUAILBROOK DRIVE OKLAHOMA CITY, OK 73134 OWNER (Name and Address): NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY 4401 XYLON AVENUE NORTH NEW HOPE, MN 55428 CONSTRUCTION CONTRACT Date: 6/11/2008 Amount: $ 98,100.00 Description (Name and Location): IMP. PROD. NO. 836 - DEMO. AND REMOVAL OF FOUNDATION AND OTHER SITE FEATURES ON THE BASS LAKE RD. APARTMENT COMPLEX - PROPERTIES: 8400 & 8420 BASS LAKE RD, 8401, 8411 & 8421 58TH AVE. N., AND ONE SMALL OUTBUILDING CENTRALLY LOCATED ON PROPERTY, NEW HOPE, MN BOND Date (Not earlier than Construction Contract Date): 6/20/2008 Amount: $ 98,100.00 ( NINETY EIGHT THOUSAND ONE HUNDRED AND 00/100) Modifications to this Bond: [X] None [j See Page 3 CONTRACTOR AS PRINCIPAL COMPANY: (Corporate Seal) SAUTER & SONS, INC. .wpm Signature: ' - IrA Name and Title: tj r gs _ * v SURETY COMPANY: (Corporate Seal) GRANITE RE NC. Signature: s Name and TitI Je fer Boy s , Attorney -in -Fact (Any additional signatures appear on page 3) FOR INFORMATION ONLY -Name, Address and Telephone AGENT OR BROKER: Pate Bonding, Inc. 1276 South Robert Street West St. Paul, MN 55118 (651)457 -6842 OWNER'S REPRESENTATIVE (Architect, or Engineer or other party): CITY ENGINEER AIA DOCUMENT A312 PERFORMANCE BOND AND PAYMENT BOND DECEMBER 1984 ED., AIA ® A 312 -1984 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON D.C. 20006 THIRD PRINTING • MARCH 1987 I. The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors, and assigns to the Owner for the performance of the Construction Contract, which is incorporated herein by reference. 2. If the Contractor performs the Construction Contract, the Surety and the Contractor shall have no obligation under this Bond, except to participate in conferences as provided in Subparagraph 3.1. 3. If there is no Owner Default, the Surety's obligation under this Bond shall arise after: 3.1 The Owner has notified the Contractor and the Surety at its address described in Paragraph 10 below that the Owner is considering declaring a Contractor Default and has requested and attempted to arrange a conference with the Contractor and the Surety to be held not later than fifteen days after receipt of such notice to discuss methods of performing the Construc- tion Contract. If the Owner, the Contractor and the Surety agree, the Contractor shall be allowed a reason- able time to perform the Construction Contract, but such an agreement shall not waive the Owner's right, if any, subsequently to declare a Contractor Default; and 3.2 The Owner has declared a Contractor Default and formally terminated the Contractor's right to complete the contract. Such Contractor Default shall not be de- clared earlier than twenty days after the Contractor and the Surety have received notice as provided in Sub- paragraph 3.1; and 3.3 The Owner has agreed to pay the Balance of the Contract Price to the Surety in accordance with the terms of the Construction Contract or to a contractor selected to perform the Construction Contract in accor- dance with the terms of the contract with the Owner. 4. When the Owner has satisfied the conditions of Para- graph 3, the Surety shall promptly and at the Surety's ex- pense take one of the following actions: 4.1 Arrange for the Contractor, with consent of the Owner, to perform and complete the Construction Contract; or 4.2 Undertake to perform and complete the Construc- tion Contract itself, through its agents or through inde- pendent contractors; or 4.3 Obtain bids or negotiated proposals from qualified contractors acceptable to the Owner for a contract for performance and completion of the Con- struction Contract, arrange for a contract to be pre- pared for execution by the Owner and the contractor selected with the Owner's concurrence, to be secured with performance and payment bonds executed by a qualified surety equivalent to the bonds issued on the Construction Contract, and pay to the Owner the amount of damages as described in Paragraph 6 in ex- cess of the Balance of the Contract Price incurred by the Owner resulting from the Contractor's default; or 4.4 Waive its rights to perform and complete, arrange for completion, or obtain a new contractor and with reasonable promptness under the circumstances: .1 After investigation, determine the amount for which it may be liable to the Owner and, as soon as practicable after the amount is determined, tender payment therefore to the Owner, or .2 Deny liability in whole or in part and notify the Owner citing reasons therefore. 5. If the Surety does not proceed as provided in Paragraph 4 with reasonable promptness, the Surety shall be deemed to be in default on this Bond fifteen days after receipt of an additional written notice from the Owner to the Surety demanding that the Surety perform its obligations under this Bond, and the Owner shall be entitled to enforce any remedy available to the Owner. If the Surety proceeds as provided in Subparagraph 4.4, and the Owner refuses the payment tendered or the Surety has denied liability, in whole or in part, without further notice the Owner shall be entitled to enforce any remedy available to the Owner. 6. After the Owner has terminated the Contractor's right to complete the Construction Contract, and if the Surety elects to act under Subparagraph 4.1, 4.2, or 4.3 above, then the responsibilities of the Surety to the Owner shall not be greater than those of the Contractor under the Construction Contract, and the responsibilities of the Owner to the Surety shall not be greater than those of the Owner under the Construction Contract. To the limit of the amount of this Bond, but subject to commitment by the Owner of the Balance of the Contract Price to mitigation of costs and damages on the Construction Contract, the Sure- ty is obligated without duplication for: 6.1 The responsibilities of the Contractor for correc- tion of defective work and completion of the Construc- tion Contract; 6.2 Additional legal, design professional and delay costs resulting from the Contractor's Default, and re- sulting from the actions or failure to act of the Surety under Paragraph 4; and 6.3 Liquidated damages, or if no liquidated damages are specified in the Construction Contract, actual dam- ages caused by delayed performance or non- perfor- mance of the Contractor. 7. The Surety shall not be liable to the Owner or others for obligations of the Contractor that are unrelated to the Con- struction Contract, and the Balance of the Contract Price shall not be reduced or set off on account of any such unrelated obligations. No right of action shall accrue on this Bond to any person or entity other than the Owner or its heirs, executors, administrators, or successors. 8. The Surety hereby waives notice of any change, includ- ing changes of time, to the Construction Contract or to related subcontracts, purchase orders and other obliga- tions. 9. Any proceeding, legal or equitable, under this Bond may be instituted in any court of competent jurisdiction in the location in which the work or part of the work is located and shall be instituted within two years after Contractor Default or within two years after the Contractor ceased working or within two years after the Surety refuses or fails to perform its obligations under this Bond, whichever oc- curs first. If the provisions of this Paragraph are void or prohibited by law, the minimum period of limitation available AIA DOCUMENT A312 PERFORMANCE BOND AND PAYMENT BOND DECEMBER 1984 ED., AIA ® A 312 -1984 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON D.C. 20006 THIRD PRINTING - MARCH 1987 able to sureties as a defense in the jurisdiction of the suit shall be applicable. 10. Notice to the Surety, the Owner or the Contractor shall be mailed or delivered to the address shown on the sig- nature page. 11. When this Bond has been furnished to comply with a statutory or other legal requirement in the location where the construction was to be performed, any provision in this Bond conflicting with said statutory or legal requirement shall be deemed deleted here from and provisions con- forming to such statutory or other legal requirement shall be deemed incorporated herein. The intent is that this Bond shall be construed as a statutory bond and not as a common law bond. 12.1 Balance of the Contract Price: The total amount payable by the Owner to the Contractor under the Construction Contract after all proper adjustments have been made, including allowance to the Con- MODIFICATIONS TO THIS BOND ARE AS FOLLOWS: None tractor of any amounts received or to be received by the Owner in settlement of insurance or other claims for damages to which the Contractor is entitled, re- duced by all valid and proper payments made to or on behalf of the Contractor under the Construction Con- tract. 12.2 Construction Contract: The agreement between the Owner and the Contractor identified on the sig- nature page, including all Contract Documents and changes thereto. 12.3 Contractor Default: Failure of the Contractor, which has neither been remedied nor waived, to per- form or otherwise to comply with the terms of the Construction Contract. 12.4 Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay the Con- tractor as required by the Construction Contract or to perform and complete or comply with the other terms thereof. (Space is provided below for additional signatures of added parties, other than those appearing on the cover page.) CONTRACTOR AS PRINCIPAL Company: (Corporate Seal) SURETY Company: Signature: Name and Title: Address: Signature: Name and Title: Address: AIA DOCUMENT A312 PERFORMANE BOND AND PAYMENT BOND DECEMBER 1984 3D., AIA O THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON, D.C. 20006 THIRD PRINTING - MARCH 1987 (Corporate Seal) A312.1984 3 �` 7 Bond No. GRMN27986A AIA Document A312 Any singular reference to Contractor, Surety, Owner or other party shall be considered plural where applicable. CONTRACTOR (Name and Address): SAUTER & SONS, INC. 6651 -141ST AVENUE NW RAMSEY, MN 55303 SURETY (Name and Principal Place of Business): GRANITE RE, INC. 14001 QUAILBROOK DRIVE OKLAHOMA CITY, OK 73134 OWNER (Name and Address): NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY 4401 XYLON AVENUE NORTH NEW HOPE, MN 55428 CONSTRUCTION CONTRACT Date: 6/1112008 Amount: $ 98,100.00 Description (Name and Location): IMP. PROJ. NO. 836 - DEMO. AND REMOVAL OF FOUNDATION AND OTHER SITE FEATURES ON THE BASS LAKE RD. APARTMENT COMPLEX - PROPERTIES: 8400 & 8420 BASS LAKE RD, 8401, 8411 & 8421 58TH AVE. N., AND ONE SMALL OUTBUILDING CENTRALLY LOCATED ON PROPERTY, NEW HOPE, MN BOND Date (Not earlier than Construction Contract Date): 6/2012008 Amount: $ 98,100.00 ( NINETY EIGHT THOUSAND ONE HUNDRED AND 001100) Modifications to this Bond: [ ] None [X] See Page 6 CONTRACTOR AS PRINCIPAL SURETY COMPANY: (Corporate Seal) COMPANY: (Corporate Seal) SAUTER & SONS, I C - - -- GRANITE RE, I Nc. Signature: ` Signature: Name and Title: 4 Srpu Name and Title` : -nn �7 Boyles, orney -in -Fact (Any additional signatures appear on page 6) FOR INFORMATION ONLY -Name Address and Telephone OWNER'S REPRESENTATIVE (Architect, AGENT OR BROKER: Engineer or other party): Pate Bonding, Inc. CITY ENGINEER 1276 South Robert Street West St. Paul MN 55118 , (651)457 -6842 AIA DOCUMENT A312 PERFORMANCE BOND AND PAYMENT BOND DECEMBER 1984 ED., AIA® THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON, D.C. 20006 A312 -1984 4 THIRD PRINTING - MARCH 1987 1. The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors, and assigns to the Owner to pay for labor, materials and equipment furnished for use in the perfor- mance of the Construction Contract, which is incorpo- rated herein by reference. 2. With respect to the Owner, this obligation shall be null and void if the Contractor: 2.1 Promptly makes payment, directly, or indirectly, for all sums due Claimants, and 2.2 Defends, indemnifies and holds harmless the Owner from claims, demands, liens or suits by any person or entity whose claim, demand, lien or suit is for the payment for labor, materials, or equipment fur- nished for use in the performance of the Construction Contract, provided the Owner has promptly notified the Contractor and the Surety (at the address described in Paragraph 12) of any claims, demands, liens, or suits and tendered defense of such claims, demands, liens or suits to the Contractor and the Surety, and provided there is no Owner Default. With respect to Claimants, this obligation shall be null and void if the Contractor promptly makes pay- ment, directly or indirectly, for all sums due. 4. The Surety shall have no obligation to Claimants under this Bond until: 4.1 Claimants who are employed by or have a direct contract with the Contractor have given notice to the Surety (at the addres described in Paragraph 12) and sent a copy, or notice thereof, to the Owner, stating that a claim is being made under this Bond and, with substantial accuracy, the amount of the claim. 4.2 Claimants who do not have a direct contract with the Contractor: .1 Have furnished written notice to the Con- tractor and sent a copy, or notice thereof, to the Owner, within 90 days after having last performed labor or last furnished materials or equipment included in the claim stating, with substantial accuracy, the amount of the claim and the name of the party to whom the materials were furnished or supplied or for whom the labor was done or performed; and .2 Have either received a rejection in whole or in part from the Contractor, or not received within 30 days of furnishing the above no- tice any communication from the Contractor by which the Contractor has indicated the claim will be paid directly or indirectly; and .3 Not having been paid within the above 30 days, have sent a written notice to the Surety (at the address described in Paragraph 12) and sent a copy, or notice thereof, to the Owner, stating that a claim is being made under this Bond and enclosing a copy of the previous written notice furnished to the Contractor. 5. If a notice required by Paragraph 4 is given by the Owner to the Contractor or to the Surety, that is sufficient compliance. 6. When the Claimant has satisfied the conditions of Paragraph 4, the Surety shall promptly and at the Surety's expense take the following actions: 6.1 Send an answer to the Claimant, with a copy to the Owner, within 45 days after receipt of the claim, stating the amounts that are undisputed and the basis for challenging any amounts that are disputed. 6.2 Pay or arrange for payment of any undisputed amounts. 7. The Surety's total obligation shall not exceed the amount of this Bond, and the amount of this Bond shall be credited for any payments made in good faith by the Surety. 8. Amounts owed by the Owner to the Contractor under the Construction Contract shall be used for the perfor- mance of the Construction Contract and to satisfy claims, if any, under any Construction Performance Bond. By the Contractor furnishing and the Owner accepting this Bond, they agree that all funds earned by the Contractor in the performance of the Construction Contract are dedicated to satisfy obligations of the Contractor and the Surety under this Bond, subject to the Owner's prior- ity to use the funds for the completion of the work. 9. The Surety shall not be liable to the Owner, Claimants or others for obligations of the Contractor that are unrelat- ed to the Construction Contract. The Owner shall not be liable for payment of any costs or expenses of any Claim- ant under this Bond, and shall have under this Bond no obli- gations to make payments to, give notices on behalf of, or otherwise have obligations to Claimants under this Bond. 10. The Surety hereby waives notice of any change, including changes of time, to the Construction Contract or to related subcontracts, purchase orders and other obligations. 11. No suit or action shall be commenced by a Claimant under this Bond other than in a court of competent juris- diction in the location in which the work or part of the work is located or after the expiration of one year from the date (1) on which the Claimant gave the notice required by Subparagraph 4.1 or Clause 4.2.3, or (2) on which the last labor or service was performed by anyone or the last mate- rials or equipment were furnished by anyone under the Con- struction Contract, whichever of (1) or (2) first occurs. If the provisions of this Paragraph are void or prohibited by law, the minimum period of limitation available to sureties as a defense in the jurisdiction of the suit shall be applicable. 12. Notice to the Surety, the Owner or the Contractor shall be mailed or delivered to the address shown on the signature page. Actual receipt of notice by Surety, the Owner or the Contractor, however accomplished, shall be sufficient compliance as of the date received at the address shown on the signature page. 13. When this Bond has been furnished to comply with a statutory or other legal requirement in the location where the construction was to be performed, any provision in this Bond conflicting with said statutory or legal requirement shall be deemed deleted here from and provisions con- forming to such statutory or other legal requirement shall be deemed incorporated herein. The intent is that this AIA DOCUMENT A312 PERFORMANCE BOND AND PAYMENT BOND DECEMBER 1984 ED., AIA® A312 -1984 5 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON, D.C. 20006 THIRD PRINTING - MARCH 1987 Bond shall be construed as a statutory bond and not as a common law bond. 14. Upon request by any person or entity appearing to be a potential beneficiary of this Bond, the Contractor shall promptly furnish a copy of this Bond or shall permit a copy to be made. 15. DEFINITIONS 15.1 Claimant: An individual or entity having a direct contract with the Contractor or with a subcontractor of the Contractor to furnish labor, materials or equip- ment for use in the performance of the Contract. The intent of this Bond shall be to include without limita- tion in the terms 'labor, materials or equipment" that part of water, gas, power, light, heat, oil, gasoline, telephone service or rental equipment used in the MODIFICATIONS TO THIS BOND ARE AS FOLLOWS: Construction Contract, architectural and engineering services required for performance of the work of the Contractor and the Contractor's subcontractors, and all other items for which a mechanic's lien may be asserted in the jurisdiction where the labor, materials or equipment were furnished. 15.2 Construction Contract: The agreement between the Owner and the Contractor identified on the sig- nature page, including all Contract Documents and changes thereto. 15.3 Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay the Con- tractor as required by the Construction Contract or to perform and complete or comply with the other terms thereof. Paragraph 6 of the Bond is deleted in its entirety and replaced with the following provision: Within a reasonable time (1) after the claimant has satisfied the conditions of Paragraph 4 and (2) after the Surety has reviewed all supporting documentation it requested to substantiate the amount of the claim, the Surety shall pay or arrange for payment of any undisputed amounts. Failure of the Surety to satisfy the above requirements shall not be deemed a forfeiture or waiver of the Surety's or the Contractor's defenses under this Bond or their right to dispute such claim. However, in such event the Claimant may bring suit against the Surety as provided under this Bond. (Space is provided below for additional signatures of added parties, other than those appearing on the cover page.) CONTRACTOR AS PRINCIPAL Company: (Corporate Seal) Signature: _ Name and Title Address: SURETY Company: Signature: Name and Title: Address: (Corporate Seal) AIA DOCUMENT A312 PERFORMANCE BOND AND PAYMENT BOND DECEMBER 1984 ED. AIA® A312 -1984 6 THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVE., N.W., WASHINGTON, D.C. 20006 THIRD PRINTING - MARCH 1987 ACKNOWLEDGMENT OF PRINCIPAL (Individual) State of ) County of ) On this day of , in the year before me personally come(s) , to me known and known to me to be the person(s) who (is) (are) described in and executed the foregoing instrument and acknowledge(s) to me that _ he _ executed the same. Notary Public State of County of On this ACKNOWLEDGMENT OF PR INCIPAL p day of I in the year , before me personally come(s) a member of the co- partnership of _ to me known and known to me to be the person who is described in and executed the foregoing instrument and acknowledges to me that he executed the same as for the act and deed of the said co- partnership. Notary Public ACKNOWLEDGMENT OF PRINCIPAL (Corporation) State of 4 ) County of Aveo ) On this ' day of -1/ry. in the year Zvd Z before me personally come(s) � Q /n is _S a _'kQ , to me known, who, being duly sworn, deposes and says that he is the t f of the the corporation described in and which executed the foregoing instrument; that he knows the seal of the said corporation; the seal affixed to the said instrument is such corporate seal; that it was so affixed by the order of the Board of Directors of said corporation, and that he signed his name thereto by like order. STEVEN R. TORNEY NOTARY PUBLIC - MINNESOTA My Commission Expires Jan. 31, 2010 Notary Public ACKNOWLEDGMENT OF SURETY State of Minnesota ) County of Dakota ) On this 20th day of June , in the year 2008 before me personally come(s) Jennifer Boyles Attorney(s) -in -Fact of GRANITE RE, INC. with whom I am personally acquainted, and who, being by me duly sworn, says that he is (are) the Attorney(s) -in -Fact of GRANITE RE, INC. company described in and which executed the within instrument; at he know(s) the corporate seal of such company; and that seal affixed to the within instrument is such corporate seal and that i was affixed by order of he Board of Directors of said company, and that he signed said instrument as Attorney(s) -in -Fact of the said co pany by 1' 6 order " >1 Notary D A l E F! :, i NE 'A R = a m ,,ttEi Jdn ,2 0 10 SETTLEMENT STATEMENT cl r ( - BASS LAKE ROAD APARTMENTS . - 4 CLOS DATE Z a SELLER: Mar-Jil Corporation, a Minnesota corporation DISB DATE BUYER: Economic Development Authority in and for City of New Hop T.I. # PROPERTY ADDRESS: Bass Lake Road Apartments 8400 and 8420 Bass Lake Road, and 8401, 8411 and 8421 - 58th Avenue North SELLER BUYER DEBIT CREDIT DEBIT CREDIT 2,250,000,00 SALE PRICE 2,250,000.00 0.00 0.00 PAID OUTSIDE CLOSING 0.00 50,000.00 EARNEST MONEY 50,000.00 MORTGAGE FROM LENDER 0.0,0 0.00 CLOSING FEE 0.00 ASSESSMENT SEARCH FEE ABSTRACT/RPA FEE NAME SEARCH FEE COMMITMENT FEE 7,650.00 STATE DEED TAX RECORDING FEES 46.00 CONSERVATION FEE 5.00 WELL DISCLOSURE 16,742.31 TAXES 31,507.37 COURIER FEES 1,403.87 ASSESSMENTS PAYABLE Sterling - garbage removal 134,940.00 Sterling - asbestos abatement 134,940.00 27,100.00 Lee Frankman - attorney fees 237,836.18 2,250,000.00 SUBTOTAL 2,416,498.37 50,000.00 1 1 1 2,012,163.82 CHECK TO SELLER 1 2,366,498.37 2,250,000.00 2,250,000.00 TOTAL 2,416,498.37 2,416,498.37 The undersigned, do hereby direct, authorize and instruct the Company to deposit the funds received, or to be received, from or on behalf of the. undersigned, in an account for the benefit of the undersigned in a depository insured by the FDIC. Cost, expense and any benefits derived deposited from the funds depoys,, herein shall be paid by or utilized by, as the case may be, the Company. 6a4"z Mar-lit Irporat* n, a Minne ta Corporation a 1 I , �z , SELLEK/ BUYER TITLE COMPANY TITLE AGENT WARRANTY DEED Corporation to Corporation STATE DEED TAX DUE HEREON: $ Date: May .b , 2008. FOR VALUABLE CONSIDERATION, Mar -Jil Corporation, a Minnesota Corporation, Grantor, hereby conveys and warrants to the Economic Development Authority, in and for the City of New Hope, a Minnesota municipal corporation, Grantee, real property in Hennepin County, Minnesota, described as follows: Lots 1, 2, 3, 4, and 5, Block 1, Gervais and Hunter RepIat, Hennepin County, Minnesota. together with all hereditaments and appurtenances belonging thereto, subject to the following exceptions: Real estate taxes and special assessments due and payable in 2008 and thereafter, drainage and utility easements over the real property as shown on the recorded plat, access easement as shown on the recorded plat, storm sewer easement as contained in Document Number 1092096. Check box if applicable: X The seller certifies that the seller does not know of any wells on the described real property. A well disclosure certificate accompanies this document. I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. Mar -Jil Corporation, a Minnesota Corporation Marshall Lebow, President STATE OF MINNESOTA COUNTY OF HENNEPIN }ss. The foregoing instrument was acknowledged before me this iaday of 2008, by Marshall Lebow the President of Mar -Jil Corporation, a M said corporation. innesota Corporation, Gr ar on, behalf of LELAND J. FRANKMAN Notary Public-Minneacta ' My ^ E"- Jan 31.2810 Notary Public Check here if part or all of the land is Registered (Torrens): X Jensen Anderson Sondrall, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424 -8811 Tax Statements for the real property described in this instrument should be sent to: Economic Development Authority in and for the City of New Hope 4401 Xylon Avenue North City of New hope, MN 55428 Minnesota Unborn Conveyancing Blanks (1978) State of Minnesota ) ss. County of Hennepin ) Affidavit Regarding Corporation Marshall Lebow, President of Mar -Jil Corporation, a Minnesota Corporation, being first duly sworn, on oath says that: 1. He is the President of Mar -JiI Corporation, a Minnesota corporation, the corporation named as Grantor in the document dated May _, 2008, and filed for record as Document No. Book of Page ____j in the Office of the Registrar of Titles of Hennepin County, Minnesota. (or in 2. Said corporation's principal place of business is at 5500 Wayzata Blvd #1425, Minneapolis, MN, 55416 and said corporation's previous principal place of business during the past ten years has been at: 5500 Wayzata Blvd. #1425, Minneapolis, MN. 55416 3. There have been no: a. Bankruptcy proceedings involving said corporation thereof, or dissolution proceedings involving said corporation, during the time said corporation has had any interest in the premises described in the above document ('Premises "); b. Unsatisfied judgments of record against said corporation nor any actions pending in any courts, which affect the Premises; C. Tax liens filed against said corporation. 4. Any bankruptcy or corporation dissolution proceedings of record against corporations or persons with the same or similar names, during the time period in which the above named corporation had any interest in the Premises, are not against the above named corporation thereof. 5. Any judgments or tax liens of record against corporations with the same or similar names are not against the above named corporation. 6. There has been no labor or materials furnished to the Premises at the request of the corporation which payment has not been made. 7. There are no unrecorded leases, unrecorded easements or other unrecorded agreements or interests created by the corporation relating to the Premises except as stated herein: 8. To the best of Affiant's knowledge, there are no persons in possession of any portion of the Premises other than pursuant to a recorded document except as stated herein: 9. To the best of Affiant's knowledge, there are no encroachments or boundary line questions affecting the Premises of which Affiant has knowledge. To the best of Affiant knows the matters herein stated are true and makes this Affidavit for the purpose of inducing the passing of title to the Premises. By: 94arshz4 Lebow Its: President Subsc ' ed and sworn to before me this day ay, 200 . S10NA7URE OF NDTARYP LIC ROTHER OFFlCIAL NTN"o tary +wv�M OR RAMC) AND J. FRANKMAN PubilcrMlnnasota 7a, den st, zoo THIS INSTRUMENT WAS DRAFTED BY (NAME AND ADDRESS) Jensen Anderson Sondrall, P.A. 8525 Edinbrook Crossing Suite 201 Brooklyn Park, MN 55443 CERTIFICATE OF WARRANTIES By Corporations STATE OF MINNESOTA COUNTY OF HENNEPIN ss. Marshall Lebow, as President of Mar -Jil Corporation, a Minnesota Corporation, being first duly sworn, on oath states: I affirm and confirm that the representations and warranties set forth in Section 7 of the parties' Purchase Agreement dated March 10, 2008 signed by and agreed to by Mar -Jil Corporation, a Minnesota Corporation, Grantor and City of New Hope, a Minnesota municipal corporation, Grantee are true and correct as of the date closing. Mar -Jil Corporation, a Minnesota corporation Ik P � - "s ; &/�— Mars all Lebow, President 1 Subscribed and sworn to before me this day of , 2008. Notary Public Stamp or Seal) THIS INSTRUMENT WAS DRAFTED BY: JENSEN ANDERSON SONDRALL, P.A. 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, MN 55443 -1999 (763) .424 -8811 . • 1:9 WHEREAS, Mar -Jil Corporation, a Minnesota. corporation ( "Seller "), Grantor conveyed a Warranty Deed, dated May 2008, to the Economic Development Authority in and for the City of New Hope, a Minnesota municipal corporation ( "Purchaser "), Grantee pertaining to certain real property (the "Land ") in Hennepin County, Minnesota, as shown on the attached Exhibit A and filed for record I , as Document No. in the Office of the Registrar of Titles of Hennepin County, Minnesota. NOW, THEREFORE, the undersigned, having been duly sworn under oath by the subscribing Notary Public, does hereby represent and warrant as follows: I. The undersigned is the President of Seller and is duly authorized to execute and deliver this affidavit on behalf of Seller. 2. (a) Seller acknowledges that sale of the Land to Purchaser by Seller constitutes a transfer of a "U.S. Real Property Interest" as that term is defined in the Foreign Investors Real Property Tax Act of 1980, as amended ( "FIRPTA "). (b) Seller makes this affidavit to inform the United States Internal Revenue Service ( "IRS ") that Purchaser has no duty to collect withholding taxes for Seller pursuant to FIRPTA and hereby grants permission for Purchaser to file this affidavit with the IRS pursuant to any present or future applicable laws or regulations. (c) The Seller intends to file a United States Income Tax Return with respect to the transfer of the Land, and said entity is the following: . a domestic U.S. corporation (d) The Seller's United States Taxpayer's Identification Number is 41- el 3. This Affidavit is made with the knowledge that the contents hereof will be relied upon by Purchaser in purchasing the Land and by the Title Company by insuring Purchaser's title to the Land. IN WITNESS WHEREOF, the undersigned has executed this document on behalf of Seller this � 4 day of May, 2008. Mar -Jil Corporation, a Minnesota Corporation By: r� s By: Marshall Lebow A -1 Its: President STATE OF MINNESOTA COUNTY OF HENNEPIN ss. The foregoing instrument was acknowledged before me this IW of 2008, by Marshall Lebow, the President of Mar -Jil Corporation, a Minnesota corporation, Gra for on behalf of said corporation. I #L=EL ANDJ. wanraan� NKMAN nnesota t -' My C"Wgvew EOM Jw 31,2010 '"°� Notary Public WHITAMM LEGAL DESCRIPTION Lots 1, 2, 3, 4, and 5, Block 1, Gervais and Hunter Replat, Hennepin County, Minnesota, AudRoruseoniy MINNESOTA- REVENUE PE20 Certificate of Real Estate Value Names of buyers (last, first, MI) -` Address Daytime phone Economic Development Authority in and for the City of New Hope I ) Names of sellers (test, first, MI) Newaddress Mar -JiI, a Minnesota corporation 5500 Wayzata Blvd #1425 Minneapolis Iaybma) phone deco address or rural route of property purchased City or township County Minneapolis Hennepin 1. Date of deed or contract Legal description of property purchased (lot, block and plat) or attach 3 copies of the legal description May 6, 2008 Financial arrangements 2. Total purchase price Was personal property Included in purchase price (e.g„ furniture, inventory, equipment)? y 2 5 250, 000.00 ❑ Yes] No If yes, list property'and $ 3. D payment current (not replacement) value at right, and enter $ .p 50 , 000.00 total in Box 5 below. Use track of forth If needed. $ 4. Points or prepaid interest paid by seller b. Current value of personal property $ $ 6. Type of acquisition (check all that apply) ❑ Buyer and seller are relatives or related businesses ❑ Contract paid off or resold ❑ Property received in trade ❑ Buyer or seller Is religious or charitable organization ❑ Name added or removed from deed ❑ Purchase agreement signed over two years ago ® Buyer or seller is unit of government ❑ Property condemned or foreclosed upon ❑ Buyer purchased partial Interest only ❑ Property received as gift or inheritance 7. Type of property transferred (check all that apply) ❑ Land only [�) Land and buildings ❑ construction of new building after Jan. 1 of year of sale 8. Planned use of property (check one) ❑ Residential: single family ❑ Agricultural. Number of acres: (attach Schedule PE204), ❑ Residential: duplex, triplex 0 Apartment (residential, four or more units). Number of units: (attach Schedule PE20A). ❑ Cabin or recreational (noncommercial) ❑ commercial- industrial. Type of business: (attach Schedule PE20A). ❑ Other. Describe: (attach Schedule PE20A). $a. Will this property be the buyer's principal residence? ❑ Yes ❑ No Method of financing (complete only if seller - financed, Including contracts - for -deed and assumed mortgages) Assumed Contract Mortgage or contract-for -deed Monthly payment Interest rate Number of Date of any lump - mortgage for deed amount at purchase (principal & interest) now in effect payments sum (balloon) payments 9. a ❑ 1o. ❑ ❑ Sign here. / declare under penalty of law that the information on this form Is true, correct and complete to the best of my knowledge and belief. Print name Signature Date Daytime phone Counties: Complete this section. Co C YT sit So Yr Land Bldg Tot T Primary property ID number Acres liable ER RI se Deed Yr n al g o{ Secondary parcel ID number Good for study yes ❑ No If no, glue I. —Vcode b. c . g x NC ST Adjc Atljs Use TIIlable EMY Apt GA C 1 MV 2 MV ID Are there more Parcels? El Yes El No z Put add Tonal ID numbers on back of form. Ca CT PT Dale T I M 5 w MINNESOTA DEPARTMENT OF REVENUE COPY 5 43826 11. Buyer's Social Security numbers 12. Seller's Social Security numbers • 8 (or Minnesota or federal ID numbers) (or Minnesota or federal ID numbers) S 6 1 1 z y 2 2 3 3 MINNESOTA DEPARTMENT OF REVENUE COPY 5 NfR\ ESDTA Department of Revenue Certificate of Rea( Estate Value Supplemental Schedule FE -20A (for apartment, commercial- industriai or farm sales only) Buyer `s name Sequence number from Certificate o f Real Estate Value 1 If the sales price includes any personal property, such as furniture, appliances, supplies, fixtures, machinery, or stock inventories; or any other items, such as the goodwill of the business, the name of the business, franchise, or an agreement not to compete, fill in the total value of those items here: ................. 2 If the buyer or seller paid someone to make an appraisal of the property's value prior to its sale, check this box X and, if known, fill in the appraised value....'. ................... Z Commercial - Industrial properties 3 From the list of property uses on the back of this form, fill in the number for the use that best describes how the property was used just before it was sold ....................... Fill in the number that best describes how the property will be used after the sale 0 Apartment properties 4 If the property sold was an apartment building, fill in: Total number of apartment buildings included in the sale price ............... ............................... Total number of rental units in all buildings . ............................... C� Farm properties 5 How many acres are: Irrigated? Enrolled in RIM? gyp? All properties 6 Was the buyer of this property an owner of a property adjacent to it? ............................... If in opinion, did buyer yes no 1�1j ❑ yes, your the pay a higher price for the property than other potential buyers would have likely for it?... paid .................... ............. 7 Does the total purchase price listed on line 2 of the Certificate of Real Estate Value represent the allocation of a sale price which includes another property or properties sold to the same buyer at the same time? .......................... ........... O 8 Did the buyer lease the property from the seller before the purchase?.... ........... ... ❑ Did the seller lease the property from the buyer after the purchase? .. ............................... 9 Was this sale announced and /or promoted through realtor listings, newspaper (or other publications) advertisements, or through brochure or other promotional or informational mailings? ................... If you answered "no," how did you learn that the roperty was for sale? P ��� p) y2c.� ,l4Qe�r'o�iol •r`i v� Gc1�� . 10 If the property was rental property, was the buyer guaranteed a minimum level of rental income? 11 Were the buyer and seller family members, business partners, business affiliates, one subsidiary to the other, joint owners of the property or stockholders of the business? ..................... .. ❑ 12 When the property was sold, was a foreclosure, court judgment, order or other legal proceeding pending in connection with the property? .............. ❑ 13 In your opinion, is the price the property was sold for considerably different from what you believe other similar properties would sell for? ..................... If yes, please explain briefly: ❑ Your printed name Signature Telephone Date Stock ... 6000401 MINNESOTA DEPARTMENT OF REVENUE COPY RECEIPT AND WAIVER OF MECHANIC'S LIEN RIGHTS DATE: May 6, 2008 This undersigned acknowledges that we have received payment of $7,000.00 From: Mar -Jil Corporation In payment for .Disposal offurniture, garbage, appliances and other regulated material By the undersigned delivered or furnished to (or performed at):. 8400, 8401, 8411, 8420, 8421 Bass Lake Road And hereby waives all rights which may have been or will be acquired by the undersigned and its assigns and its successors to file a mechanic's lien against said premises for labor, skill or material furnished to said premises. THIS DOCUMENT CONSTITUTES A FULL WAIVER OF ANY AND ALL LIENS BY THE UNDERSIGNED ON SAID PREMISES Sterling Systems Inc. 700 Pennsylvania Avenue South Golden Valley, MN 55426 763 - 544 -0768 Fax: 763 - 544 -0211 ITS: CEO RECEIPT AND WAIVER OF MECHANIC'S LIEN RIGHTS DATE: May 6, 2008 This undersigned acknowledges that we have received payment of $269, 880.00 From: Mar -Jil Corporation In payment for Asbestos Abatement Removal By the undersigned delivered or furnished to (or performed at): . 8400, 8401, 8411, 8420, 8421 Bass Lake Road And hereby waives all rights which may have been or will be acquired by the undersigned and its assigns and its successors to file a mechanic's lien against said premises for labor, skill or material furnished to said premises. THIS DOCUMENT CONSTITUTES A FULL WAIVER OF ANY AND ALL LIENS BY THE UNDERSIGNED ON SAID PREMISES Sterling Systems Inc. 700 Pennsylvania Avenue South Golden Vgley, MN 55426 763-544-0209/Fax: Fax: 763 - 544 -0218 w I// OR M i� May 5, 2008 Marshall B. Lebow Mar -Jil Corporation The Colonnade, Suite 1425 5500 Wayzata Boulevard Minneapolis, MN 55416 STATEMENT Professional services rendered regarding sale of Bass Lake Road Apartments to City of New Hope: As per written fee agreement dated April 30, 2007, a flat fee of $75,000.00 plus 2% of $105,000.00 or $2100.00, said fee of $77,100.00 due upon closing. It is agreed that the $50,000.00 in the trust account of Leland J. Frankman paid by the City as earnest money will be applied to the fee and attorney Frankman will withdraw that amount out of his trust account for his benefit upon closing and Frankman will be paid by City check the additional $27,100.00 at the closing. Balance due: / N r -f'j iq COUNCIL Originating Department Community Development By: Kirk McDonald, Acting CM Curtis Jacobsen, CD Special e Approved for Agenda September 24, 2007 Agenda Section Development and Planning Item No. Discuss Bass Lake Road Apartments environmental survey results, purchase agreement addendum, relocation efforts and nronerty manaeement issues. (Improvement Proiect 836) Requested Action Staff requests that the Council review and discuss the latest information regarding the Bass Lake Road Apartment complex acquisition. Policy /Past Practice It is a past practice of the Council to discuss new developments regarding city projects, particularly items that may have a significant financial impact to the project and the city. Background On August 27 the Council authorized action to pursue the acquisition of the Bass Lake Road Apartment complex, selected Evergreen Land Services to pursue relocation of tenants and authorized award of inspection services for a pre - demolition building survey. At the next Council meeting on September 10 the Council considered an addendum to the purchase agreement and directed the city attorney to notify the owner of the city's position related to the addendums approval. On September 13, 2007, Applied Environmental Sciences, Inc. (AES) issued their preliminary survey results for the Bass Lake Road Apartment complex. Within that report they summarize their findings on environmental hazards in the five buildings. The top issue is the existence of asbestos levels that exceed regulatory levels in Minnesota. Chrysotile asbestos readings of one to five percent were found in ceiling wall texturing materials and joint compounds. AES has suggested that if the city desired to have a specific bid specification written for this removal they could do that, and their feeling is that the quality of the specification will directly show up in savings in the demolition bids obtained. Their estimate to draw up bid specifications for this site, $1,500 to $2,000. Motion by . / illilLl Second by To: IM /"f3 t vi _ /,,/) -- I: \RFA \Q - Discuss BLR Apts issue - 4- 24- 07.d Page 2 Request for Action September 24, 2007 AES has estimated the asbestos abatement and hazardous materials cleanup at $100,000 per building for a site total of $500,000. They have also suggested that this is the best time of year to solicit bids for this type of work because this is typically the slow time of the year in the asbestos abatement industry. The city attorney has provided a short letter regarding his most recent communications with the owners. They seem to be unwilling to release their claim to the water heater in the 8400 building and at least their attorney has suggested they are not interested in negotiating a reduced cost in light of the asbestos and the associated clean up costs. Councilmember Nolte had suggested that staff contact local property management companies to see if they would be interested in managing the apartment complex for the city during the relocations and transition period. Two firms have been contacted with one firm rejecting the project as being too small the other is still considering submitting a quote. Steve Carlson from Evergreen Land Services has been working to make contacts with the tenants of the Bass Lake Road Apartment complex and has not received the necessary information from the owner to accomplish this task completely. One tenant has already found a new place to live and is requesting an advanced relocation payment of $2,100.00 which would ultimately be deducted from the total payment due. Others are close to signing leases for the new rental properties and will also be entitled to payment or advances on their relocation benefits in the near future. Tenants will continue to be eligible for payments until relocated or the city rescinds it offer to purchase the property. Tenant names have been removed for privacy reasons. Staff is seeking direction from the City Council regarding how to proceed with these matters. Funding Additional funding related to the acquisition of the Bass Lake Road Apartment would initially be taken from the EDA and possibly reimbursed through the use of tax increment financing for the project. Attachment(s) • AES Environmental Survey Report excerpts (9 -13 -2007) • AES Memo Preliminary Results excerpts (9 -13 -2007) • City Attorney letter (9 -19 -2007) • ELS letters (9 -19 -2007) a �Nz1 L,� APPLIED ENVIRONMENTAL SCIENCES, INC. M emorand um To: Curtis Jacobsen From: Mark Meier, Project SupervisorZe Date: September 13, 2007 Re: Preliminary Results for the Bass Lake Road Apartment Building Survey AES was retained by the City of New Hope to conduct Pre - demolition Hazardous Materials Surveys of the five apartment buildings located on Bass Lake Road in New Hope, Minnesota. AES conducted the preliminary surveys on September 5 and 7, 2007. Josh Gamble and Mark Meier, certified asbestos building inspectors, conducted the surveys. A copy of their licenses is included in Appendix Il. A garbage shed located on the properly was not included in the survey at this time. This building must be inspected if it is to be included in the demolition. AES conducted the full, pre - demolition survey on the vacant 8400 Bass Lake Road apartment building and issued a separate pre - demolition report for this building. AES conducted limited survey work in common areas, along with a walk - through of the majority of the apartments in the other four buildings (8401, 8411, 8420, 8421 Bass Lake Road). AES sampled suspect asbestos - containing materials that could be taken with limited damage in common areas or vacant apartment units. The exterior of the building was not surveyed at this time. After AES concludes the pre - demolition survey of the apartment buildings, AES will issue individual reports for each apartment building. AES did not test any peeling paint for lead content in any of these four occupied apartment buildings. This must be conducted prior to building demolition. A full hazardous materials survey must be completed prior to demolition of the apartment buildings. The laboratory results of the asbestos sampling for each building is included in Appendix I of this report. The results of the partial surveys are as follows: 8401 Bass Lake Road AES collected 17 asbestos bulk samples while on site for the partial survey and analyzed 7. Suspect building materials found to contain asbestos include white textured ceiling spray and white textured wall spray. Asbestos - containing material should not be cut, drilled, sanded or disturbed. 5075 Wayzata Blvd. ❑ Suite 285 ❑ Minneapolis, MN 55416 ❑ 763 - 545 -5510 ❑ Fax 763- 545 -7883 Building materials assumed to contain asbestos include electric panels, wall panel adhesive, 12" x 12" floor tile, 9 x 9" floor tile, floor file mastic, baseboards, baseboard adhesive, sheetrock and joint compound, ceramic file mortar and grout, vibration damper, linoleum, and Transite ducts. Roofing materials were not included in the scope of work at this time and should be treated as asbestos - containing until the apartment building is vacant and can be sampled. 8411 Bass Lake Road AES collected 15 asbestos bulk samples while on site for the partial survey and analyzed 5. Suspect building materials found to contain asbestos include white textured ceiling spray and white textured wall spray. Asbestos - containing material should not be cut, drilled, sanded or disturbed. Building materials assumed to contain asbestos include electric panels, wall panel adhesive, 12" x 12" floor tile, 9" x 9" floor tile, floor tile mastic, baseboards, baseboard adhesive, sheetrock and joint compound, ceramic tile mortar and grout, vibration damper, linoleum, and Transite ducts. Roofing materials were not included in the scope of work at this time and should be treated as asbestos - containing until the apartment building is vacant and can be sampled. 8420 Bass Lake Road AES collected 17 asbestos bulk samples while on site for the partial survey and analyzed 9. Suspect building materials found to contain asbestos include white textured ceiling spray, white textured wall spray, Transite duct and sheetrock joint compound. Asbestos - containing material should not be cut, drilled, sanded or disturbed. Building materials assumed to contain asbestos include electric panels, wall panel adhesive, 12" x 12" floor tile, 9" x 9" floor tile, floor the mastic, baseboards, baseboard adhesive, sheetrock, ceramic the mortar and grout, vibration damper and linoleum. Roofing materials were not included in the scope of work at this time and should be treated as asbestos - containing until the apartment building is vacant and can be sampled. 8421 Bass Lake Road AES collected 22 asbestos bulk samples while on site for the partial survey and analyzed 13. Suspect building materials found to contain asbestos include white textured ceiling spray and white textured wall spray. Asbestos - containing material should not be cut, drilled, sanded or disturbed. Building materials assumed to contain asbestos include electric panels, wall panel adhesive, 12" x 12" floor tile, 9" x 9" floor tile, floor the mastic, baseboards, baseboard adhesive, sheetrock and joint compound, ceramic file mortar and grout, vibration damper, linoleum, and Transite ducts. Roofing materials were not included in the scope of work at this time and should be treated as asbestos - containing until the apartment building is vacant and can be sampled. Conclusions Similar results have been found between the 8400 Bass Lake Road apartment building to the other four apartment buildings. It appears that the same materials were used in the building of the five apartment buildings. AES estimates that the cost of abating all of the asbestos - containing materials (excluding the Transite ducts) in the 8400 Bass Lake Road apartment building to be approximately $100,000. Based on the results that we have seen in the other four apartment buildings, it appears that they will have similar results. Therefore, it appears that the cost to abate all asbestos in each apartment building is $100,000. The total to abate all five apartment buildings could be $500,000. This cost estimate excludes the Transite ducts that appears to be under the concrete slab in all apartment buildings. 07 A il +M, E m S APPLIED ENVIRONMENTAL SCIENCES, INC. S'.fea,- .a�+.t"iz..,,.! j 11KA A R M Date of Survey: September 5 & 7, 2007 Conducted by: Josh Gamble, Asbestos Building Inspector MN #I10185 Mark Meier, Asbestos Building Inspector MN #I -3893 Applied Environmental Sciences, Inc. 8441 Wayzata Blvd., Suite #103 Minneapolis, MN 55426 (763) 545 -5510 ,. I hereby certify that the survey and inspection referenced by this report, and the report itself, were conducted in accordance with intent of the AHERA regulations to the best of my ability and knowledge. K Mark Meier, Asbestos Building Inspector I have reviewed this report and hereby certify that the information contained within satisfies the intent of the A W regulations to the best of my ability and knowledge. Certification # 2204 F07 -535 8400 Bass Lake.fpcA 5075 Wayzata Blvd. ❑ Suite 285 ❑ Minneapolis, MN 55416 ❑ 763- 545 -5510 ❑ Fax 763 -545 -7883 Applied Environmental Sciences, Inc. (AES) was retained by the City of New Hope to perform a pre - demolition hazardous materials survey of the apartment building located at 8400 Bass Lake Road in New Hope, Minnesota. Survey procedures conducted by AES complied with the applicable Occupational Safety and Health Administration (OSHA), Minnesota Pollution Control Agency (MPCA), and Minnesota Department of Health (MDH) standards for surveys of buildings to be demolished. AES performed an asbestos survey of the apartment building, sampled areas of heavily flaking paint for lead content and compiled a list of other hazardous materials (e.g., those assumed to contain PCBs, mercury, CFCs) present on the property. The survey was conducted on September 5 & 7, 2007. The results of the survey are as follows: 1. AES took 76 bulk asbestos samples and analyzed 66. 2. Suspect building materials found to contain asbestos include white textured ceiling spray, sheetrock joint compound, white textured wall spray, 12" x 12" floor tile, floor file mastic, exterior caulk, 9" x 9" floor tile, tan floor leveling material and exterior chimney caulk. Asbestos - containing material should not be cut, drilled, sanded or disturbed. 3. Building materials assumed to contain asbestos include electric panels and Transite ducts. 4. AES tested a total of seven (7) painted surfaces for lead. No surfaces tested above the MPCA guideline of 1.0 milligrams of lead per square centimeter of surface (mg/cm All seven (7) surfaces tested below this MPCA guideline. See Appendix V for a complete list of all surfaces tested. 5. Relevant State of Minnesota, EPA and OSHA regulations are included in Appendix I. 6. The bulk sampling sheets and diagrams with sample locations and functional spaces are included in Appendix 11. 7. The estimated quantity and location of identified positive materials are included in Appendix III. 8. Minnesota Department of Health certifications are included in Appendix IV. 9. A complete list of hazardous and special wastes observed is included in Appendix VI. 10. The joint compound applied to the gypsum wallboard was found to contain asbestos. This material, as determined by the Environmental Protection Agency (EPA) in response to its applicability to the National Emission Standard for Hazardous Air Pollutants (NESHAPS), becomes an integral part of the wallboard, forming a wall system. In this case, the wall system contains less than one - percent asbestos. Since OSHA regulates the asbestos - containing joint compound, all contractors and employees who may disturb this material must be made aware that the joint compound contains asbestos. 11. AES observed ductwork penetrating the concrete slab of the ground floor. Due to safety concerns, AES was unable to determine if these ducts were Transite. AES did locate Transite ducts under the concrete slab of the 8420 building. 12. Tan floor leveling material was found by the lab under the floor the mastic of Sample 30. This leveling material was found to be asbestos - containing. The extent of this material is unknown. When the floor tile on top of this leveling material is removed, the full extent of the leveling material should be seen. This survey identifies materials as they existed on the day of the survey. Conditions may change over time. This survey should not be used as a bidding document. The ACM quantities provided are estimates and must be verified prior to abatement firm bidding. AES recommends using a licensed asbestos project designer to design and bid projects. Textured ceiling spray, white Sample 1 9,500 square feet Textured wall spray, white Sample 15 3,300 square feet Miscellaneous Materials Sheetrock joint compound Sample 4 not quantified Floor tile, 12 "x 12" Samples 16 & 47 440 square feet Floor tile, 9 "x 9" Samples 26 & 29 2,300 square feet Floor the mastic, black Samples 17 & 48 600 square feet Exterior caulk Sample 23 160 linear feet Chimney caulk Sample 62 20 linear feet *Tan floor leveling material Sample 30 3,000 square feet Assumed Materials Electric panels Transite ducts (under concrete slab) 40 panels unknown quantity For a full description of sample results and sample locations see Appendix H. * The tan floor leveling material was found by the lab under the floor the mastic of Sample 30. This leveling material was found to be asbestos - containing. The extent of this material is unknown. When the asbestos - containing floor tile on top of this leveling material is removed, the full extent of the leveling material should be seen. This is a worst case estimate of this tan floor leveling material and there could be much less present. See Appendix V for lead -based paint results. See Appendix VI for a complete list of hazardous and special wastes observed. The procedures used for this survey meet the sampling standards of EPA's Asbestos Hazard Emergency Response Act (AHERA), the OSHA asbestos standard and the EPA NESHAP rule for demolitions. AES's approach to this survey was to identify, assess, sample and quantify all suspect asbestos - containing materials within the building. Electrical wiring and panels were not sampled. AES does perform bulk sampling of electrical equipment unless it has been shut down and tagged by a licensed electrician. An attempt was made to locate and identify materials inside walls, doors, ducts, roofs or other areas which requires destructive entry. Roofing materials were inspected to determine friability. The quantity of each assessed material was estimated, and may be unreliable. 2.1.1 ASBESTOS SURVEY LIMITATIONS Only accessible materials were sampled. An attempt was made to locate and identify materials inside walls, doors, ducts, roofs or other areas which require destructive entry. The possibility exists that as other walls, doors, ducts, etc. are opened during the demolition of the building, suspect materials may be found. If suspect materials are encountered during demolition, the demolition should stop until these materials can be tested and, if necessary, removed by a licensed asbestos contractor. AES observed ductworkpenetrating the concrete slab of the ground floor. Due to safety concerns, AES was unable to determine if these ducts were Transite. AES did locate Transite ducts under the concrete slab of the 8420 building. Quantities of all materials are estimates and should be verified by bidding demolition contractors. This survey identifies materials as they existed on the day of the survey. Conditions and quantities may change over time. 2.1.2 BULK ASBESTOS SAMPLING Samples were collected utilizing random sampling procedures. Similar systems and materials were grouped into "homogeneous areas of building materials." Multiple random samples were taken of materials in accordance with the EPA -AHERA guidelines. Sample locations were determined using a random sampling process for each homogeneous material. AMOUNT OF MATERIAL MR*IV l # OF SAMPLES Less than 1,000 square feet 3 Between 1,000 and 5,000 square feet 5 Greater than 5,000 square feet 7 Samples were collected by carefully removing a small representative sample of the suspect material and sealing it in a plastic bag. Water was used to control dust during sampling. The sample was identified with a sample number. Where possible, sample locations were tagged with the sample number and designated "A, B, C," etc. The "wounds" where suspect materials were sampled were sealed. Sample locations are noted on the diagram in Appendix II. The bulk samples were analyzed by polarized light microscopy (PLM) with dispersion staining, EPA method 600/R- 93/116. Bulk samples were viewed under a stereoscope at 35X magnification. Samples were prepared in various Cargille refractive index oils and examined under the polarizing microscope. The samples were evaluated under crossed polars (100X) for extinction angle, sign of elongation and morphology. The samples were then analyzed using a Leitz dispersion - staining objective to measure refractive index in various orientations. Mineral identification was based on the unique optical characteristics observed under the polarizing microscope. Quantity determinations are made by visual estimation. EPA NESHAP- Asbestos Rule 40 CFR Part 61 states that samples found to contain less than 10% asbestos by visual estimation may be further quantified by point count analysis. The Asbestos Rule also states that all multi -layer systems, except for wall systems where joint compound was used only at the joints and nail holes, must be analyzed as separate materials. If any layer contains greater than one - percent asbestos, that layer must be treated as asbestos - containing. This requires all layers in a multi- layered system to be treated as asbestos - containing if the layers cannot be separated without disturbing the asbestos - containing layer. In each homogeneous sampling area, once a positive sample was identified, the remaining samples were not analyzed. Asbestos samples will be held for thirty (30) days after the date of this report. AES's approach to this survey was to visually inspect each room for building components assumed to contain hazardous and special- wastes that must be removed from the building or recycled properly prior to demolition. Quantities of these materials are estimates and should be verified by bidding demolition contractors. See Appendix VI for a complete list of hazardous and special wastes observed. AES's approach to this lead paint sampling was to sample all flaking and peeling paint within the building. Only accessible materials were sampled. AES used a Niton XL portable XRF spectrum analyzer (serial number XL 286) for all lead -based paint testing. The Niton XL measures lead L -shell and K -shell electron emissions when exposed to a Cadmium 109 source. An algorithm program is used by the Niton XL to analyze the L -shell and K -shell electron emissions to determine the concentration of lead in the paint. L -shell readings are independent of the substrate and provide the first results of lead concentration. K- shell readings are carried out simultaneously and are used to verify the L -shell results. The Niton XL's sensitivity level is sufficient enough to consider a reading of 0.0 mg/cm as containing no lead. A self - calibration was performed before testing and a manual calibration was performed after testing. To ensure that samples collected in the field are neither lost nor their identity confused, all samples, from the point of collection to receipt in the laboratory, follow these procedures. Each sample is first assigned a unique and distinct sampling number. After a sample is placed into a plastic bag, that unique number is assigned to that bag. This same number is assigned to a bulk sample data sheet. The inspector signs each bulk data sheet before it, along with the samples, is delivered to the lab. Upon receipt of the samples, the lab analyst verifies that each sample matches the corresponding bulk sheet sample number and signs and dates the bulk sheet. The analyst places analytical results on the bulk data sheets, signs each one, and returns the sheets to the inspector for report generation. AES is a successful participant in the NIOSH Proficiency Analytical Testing (PAT) program. Our laboratory has been accredited by the American Industrial Hygiene Association (AIHA certificate 290) since 1986. AES is currently a participant in the AIHA Bulk Asbestos Quality Assurance Program (lab ID# 101101). Participation in the AIHA Bulk Asbestos Quality Assurance Program meets OSHA and Minnesota Department of Health quality assurance criteria for bulk asbestos analysis. All laboratory and field work is supervised by Board Certified Industrial Hygienists. The survey was conducted by accredited asbestos building inspectors. 3.0 DISCUSSION • `• . . Suspect ACM is considered negative for asbestos when all samples of the material are found to contain one percent or less asbestos. Suspect material found to be negative includes: 1. Ceramic tile mortar (Samples 2, 5, 24, 33 and 45). 2. Ceramic tile grout (Samples 3, 6, 25, 34 and 46). 3. Gypsum board (Sample 4). 4. Baseboard (Samples 7, 9, 11 and 20). 5. Baseboard adhesive (Samples 8, 10, 12 and 21). 6. Floor tile mastic (Samples 13, 19, 27, 37, 39, 44 and 50). 7. Splashguard adhesive (Sample 14). 8. Floor tile, 12" x 12" (Samples 18, 36, 38, 43 and 49). 9. Caulk (Samples 22, 53, 54, 55 and 57). 10. Hole filler (Sample 28). 11. Vinyl sheeting (Sample 31). 12. Linoleum (Samples 32, 41 and 42). 13. Vibration damper (Sample 35). 14. Rough ceiling texture (Sample 40). 15. Chimney patch (Sample 51). 16. White foam window sill caulk (Sample 52). 17. Buffalo board (Sample 56). 18. Built -up roofing materials (Sample 58). 19. Roof flashing (Sample 59). 20. Roof caulk (Sample 60). 21. Chimney insulation (Sample 61). 3.2.1 ASBESTOS This survey was conducted to locate asbestos - containing materials that must legally be removed prior to demolition of the building. The EPAIMPCA NESHAP regulations require that asbestos- containing materials which are friable, or will become friable during demolition, must be removed from the building prior to demolition by a licensed asbestos abatement contractor. Suspect building materials found to contain asbestos include white textured ceiling spray, sheetrock joint compound, white textured wall spray, 12" x 12" floor tile, floor file mastic, exterior caulk, 9" x 9" floor file and exterior chimney caulk. Building materials assumed to contain asbestos include electric panels and Transite ducts. Some of the mastic found under the asbestos - containing floor the was found by AES' laboratory to contain no asbestos (Samples 26 & 29). The possibility exists that when asbestos - containing floor tile is separated from mastic, asbestos residue will be left on the surface of the mastic. This residue may contain enough asbestos to cause the floor tile mastic to be considered asbestos - containing. Sampling of the mastic after floor tile removal is recommended to determine whether or not the mastic is asbestos - containing. Floor tile is located under carpeting throughout the building. This floor file contains asbestos. Removal of this carpeting could potentially cause damage to the underlying floor tile and possibly cause an asbestos fiber release. The joint compound applied to the gypsum wallboard was found to contain asbestos. This material, as determined by the Environmental Protection Agency (EPA) in response to its applicability to the National Emission Standard for Hazardous Air Pollutants ( NESHAP), becomes an integral part of the wallboard, forming a wall system. Reference document from the EPA Office of Air Quality Planning and Standards, September 4, 1992, Stationary Source Compliance Division. In this case, the wall system contains less than one - percent asbestos and therefore is not included in the asbestos database. OSHA requires that all contractors and employees who may disturb this material must be made aware that the joint compound contains asbestos. Appropriate precautions should be taken by anyone impacting the joint compound. This building is slab on grade construction. During our inspection, we observed floor penetrations that lead us to believe that Transite is present below the floor slab. A licensed asbestos inspector should be present during removal of the slab. If suspect materials are encountered, demolition should stop until these materials can be tested and, if necessary, removal by a licensed asbestos contractor. Prior to demolition, all hazardous and special waste must be recycled or removed from the building according to Local, State, and Federal regulations. A complete list of building and special wastes observed is included in Appendix VI 3.2.3 LEAD AES located areas of loose lead -based paint throughout the building. No areas of loose lead - based paint were located. All loose lead -based paint must be removed or stabilized prior to demolition. See Appendix V for a complete list of all surfaces tested. This survey should not be used as a bidding document. The ACM quantities provided area estimates and must be verified prior to abatement firm bidding AES recommends using a licensed asbestos project designer to design and bid projects. JENSEN ANDERSON SONDRALL, P.A. Attorneys At Law LESLIE A. ANDERSON GORDON L. JENSEN' Amy E. PAPENHAUSEN STEVEN A.SONDRALL 'Real Property Law Specialist Certified By The Minnesota State Bar Association 8525 EnINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNESOTA 55443 -1968 TELEPHONE (763) 424 -8811 $ TELEFAX (763) 493 -5193 e -mail law@jasattorneys.com Writer's Direct Dial No.: (763) 201 -0211 e -mail sas@jasattorneys.com September 19, 2007 Kirk McDonald Acting City Manager City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Via a -mail to kmcdonald(axLnew- hope.mn.us and by Regular Mail Re: Purchase of Bass Lake Road Apartments Our File No.: 99 -11334 Dear Kirk: In follow up to the September 10 Council Meeting, I have spoken with the attorney for the owners of the Bass Lake Road Apartments concerning the City Councils' issues with the Purchase Agreement Addendum discussed at the September 10 ffi meeting. As was discussed by the Council at their previous meeting, the Council may want to retain the water heater in the 8400 building and they wanted indemnification language from the owners regarding any tenant claim for withheld rent from security deposits. Apparently, the owner is not willing to give up his claim for the water heater. Secondly, I have asked the owners' attorney for an accounting of the security deposits, a list of the tenants in default on the rental payments and the amount of rents the owner would be intending to withhold from the security deposits at the closing. They have agreed to provide this information; but, I have yet to receive it from the owners' attorney. The owners are reluctant to provide the indemnification language but if the security deposits are minimal and the amounts the owners are intending to withhold are small, this issue may resolve itself. However, as you know, we have a more serious issue relating to the AES Pre - demolition Hazardous Materials inspection performed at the property. I have reviewed their September 13, 2007 report which indicates demolition costs for the five buildings could be as high as $500,000.00 due to the presence of asbestos and other materials used in the construction of the buildings. This may be more than the Council wishes to invest in the demolition of these buildings. I have also alerted the owners' attorney to this issue since an apparent solution may be a further reduction in the purchase price for the properties. However, the owners' attorney was not confident his client was willing to reduce his price regardless of the demolition costs. If the City is not willing to bear all of the demolition costs and we cannot come to an agreement on a reduction in the purchase price, the Council will need to exercise its right to void the purchase agreement to insure a refund of our earnest money. This will require mailing a cancellation notification to the property owner on or before September 30, 2007 by the terms of the agreement. Specifically, this cancellation remedy is provided by paragraph 14(d) of the agreement. The cancellation notice requires us to also provide the Seller with a copy of our environmental report. September 19, 2007 Page 2 Also, as previously authorized by the Council, our relocation specialist Steve Carlson from Evergreen Land Services has been working to relocate tenants of the building in anticipation of our acquisition and demolition of the buildings. Some of the tenants have actually initiated the relocation process and have signed new leases at other apartments. Regardless of whether we acquire this property, we will need to pay relocation expenses to the tenants that have actually started the relocation process. It is my understanding Evergreen Land Services will prepare a report for the Council confirming this legal obligation and our current financial liability for the tenants that have started the process. Obviously, we need to immediately stop the relocation work with the tenants until we are sure that we are going to acquire this property. Given the fact that the demolition costs are unexpectedly high, it would be my recommendation that we approach the owner with a request to extend the September 30 "' purchase agreement cancellation date and the October 15"' closing date. This will allow the owner to review the AES Pre - demolition Hazardous Materials inspection report and give us an opportunity to discuss with the owners their willingness to reduce the price in light of the demolition costs set out in the AES report. If the owners are not willing to give us an extension or reduce the price, the City will need to decide if it is going to proceed with the purchase and redevelopment of this property despite the demolition costs. If not, we need to void the agreement, demand the return of the earnest money and put the owners on notice we expect the buildings to be brought up and maintained to minimum building and maintenance code standards within a reasonable period of time. Please contact me if you have any questions or comments regarding this matter I have not answered in this correspondence. Very truly yours, Steven A. Sondrall, City Attorney, City of New Hope cc: Julie Linnihan Valerie Leone Curtis Jacobsen P:`oAttome)ASAS\1 Client Files \2 City of New Hope \99- 11334(Bass Lake Road Apartments)\Ltr k. McDonald re pa addendum and AES report.doe Sep,19a 2007 3:03PM September 13, 2007 Evergreen Land Sery 952 - 935-0862 8411 Bass Lake Road, Unit New Hope, MN 55428 Dear W. Jacobsen: The above- referenced tenants have requested that the City of New Hope provide them with an "advance" relocation payment of $2,100.00 to Delp cover costs of getting into their new rental property. will submit final documentation for their remaining relocation claim in the near ,future. They would be eligible for a rent supplemental payment of approximately $4,200.00 with a flexed moving payment of $850.00. The Uniform Relocation Regulations allow a displacing agency to make a partial relocation payment "in advance" of the move and written relocation claim being filed, to help the displacee avoid financial hardship and to facilitate the move_ Any amount paid "in advance" will be deducted from the total eligible benefits due when a written, documented relocation claim is submitted to the City of New Hope. By this letter, I recommend that the City of New Hope issue an advance relocation payment in the amount of $2,100.00 savable to 011111 1111 "" I' I - I would appreciate your processing this request for relocations advance partial payment at your earliest convenience. I can pick it up and deliver it to the tenant to obtain a receipt for the relocation fide. Thank you for your assistance! Please feel free to call me at 651 - 8820200 if you have any questions. Sincerely, Steven Carlson Relocation Manager 4131 Old Sibley Memorial 14igbway Suitt 201 Eagan, MN 55122 651 -882 -0200 888 -9l1 -1134 Fax 651 -882 -6564 No ,1047— _P . 2 Sep�19- 2001 3:04PM September 13, 2007 1 1B 8411 Bass Lake Road, Um't New Hope, MN 55428 RE: Notice of Relocation Eligibility Project Site: 8411 Bass Lake Road, New Hope, MN 55428 Project: Redevelopment of the Bass Lake Road Apartments. Dear O The City of New Hope is in the process of purchasing the property you rent at 8411 Bass Lake Road, UiutdW, New Hope, MN 55428 This is NOTICE OF RELOCATION ELIGIBILITY Our records indicate that you are a residential teiiaxit/occupant of this property. To carry out our plans to complete the Redevelopment Project, it will be necessary for you to move. However, You do not need to move now You will not be required to move without at least 90 days advance written notice of the date by which you must vacate the property. And when you do move, you may be entitled to relocation payments and other assistance in accordance with Federal regulations implementing the Uniform Relocation ,Assistance and Real Property Acquisition Act of J 970 as amended (Uni.forin Act). As a residential occupant of the property, you may be eligible for relocation benefits: Relocation advisory services including assistance in completing claims for payment. Payment of moving ex ep nses You may choose either: (1) a payment for your actual, documented reasonable and necessary movies- related and reconnection costs, or (2) if you prefer, a fixed moving expense and dislocation allowance based on the number of furnished rooms you occupy. After review of your personal property, a fixed moving benefit of 5850.00 has been calculated for your move. Replacement housing, payment: You may be entitled to a replacement housing payment to help you rent or buy a replacement home. The payment is based on several factors, including the housing costs for a "comparable" replacement dome, the monthly rent and average cost of utilities you pay for your present home, and 30 percent of your average monthly gross household income. Evergreen Land Sery 952- 935-0862 No,1041 P. 3 SERVICES COMPANY Appraisal, Acquisition and Relocation $pecia ;ists 4131 Old Sibley Memorial Highway Suite 201 Eagan, MN 55122 651- 882 -0200 888 -411 -1134 Fax: 651-882-6564 Sep -19. 2007 3:04PM Evergreen Land Sery 952- 935 -0862 No-1047 P. 4 Listed below are two 2-bedroom town homes, which have been identified in our comparable rental study: . Address Rent /Utilities Contact Number 1 0 4510 Rhode Island Ave. N. $775.00 763 -464 -8493 New Hope, 2 7710 36 Ave. N $825.00 763 -546 -3426 New Hope 4309 Rhode Island Ave. N. $820.00 New Hope 507- 227 -5180 (Troy) The 2bedroorn apartment located at 4510 Rhode Island Ave. North, New Hope, MN ($775,00 rent plus utilities) per month, and has been chosen as the comparable dwelling to use in deternnining your maximum rental assistance or down payment assistance benefit. The monthly rent difference in housing costs between the comparable apartment and your Project hotne's costs is $100.00 ($775.00 Based on this difference, you may be eligible for a rental assistance payment up to $4,200.00 ($100.00 x 42 months). If, you rent a decent, safe, and sanitary home with monthly housing costs less than $775.00, your rental assistance payment would be based on the actual rent and utility costs of your replacement dwelling. Additionally, as mentioned above, your household's gross income can be considered in these payment computations. In order to determine whether you would be entitled to receive a replacement housing payment greater than $4,200.00, we would creed written documentation of your household's gross monthly income from all sources. Should you choose to buy (rather than rent) a decent, sale, and sanitary replacement home, you may be eligible for a clown payment assistance payment up to $4,200.00. The actual benefit would depend on several factors including the amount of down payment required to obtain a conventional loan on your chosen replacement and the amount of your closing costs. If applicable, further information on this benefit will be provided to you by your relocation advisor. When you met previously with Steve Carlson, Relocation Consultant with Evergreen Land Services Company, he reviewed with you the relocations information guidebook for residential tenants. Please read the guidebook carefully. It explains your rights and some things you must do to obtain a payment. For example, you must provide Scott with written documentation of your present rent and costs of your chosen replacement home. Also, he must perform a decent, safe, and sanitary housing inspection of the replacement home you choose to rent or buy before any replacement housing payment can be released to you. SeP,]J� 2UU1 3:NPM Evergreen Land Sery 9U2-M-UM No,1U41 P. U Remember, do not move before you have notified Evergreen sand Services and have discussed your chosen rcplacement home with them. This letter is of importance to you and should be carefully filed for safekeeping. Sincerely, �f5� cj�� Steven Carlson Relocation Consultant for Hennepin County LESLIE A. ANDERSON GORDON L. JENSEN' AMY E. PAPENHAUSEN STEVEN A.SONDRALL MELANIE PERSELLIN 'Real Property Law Specialist Certified By The Minnesota State Bar Association Attorneys At Law September 28, 2007 Marshall Lebow 5500 Wayzata Blvd. #1425 Minneapolis, MN 55416 Re: Bass Lake Road Apartments/Notice of Cancellation of Purchase Agreement Our File: 99 -11334 Dear Mr. Lebow: 8525 EDINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNESOTA 55443 -1968 TELEPHONE (763) 424 -8811 $ TELEFAx (763) 493 -5193 e -mail law a�jasattorneys.com Writer's Direct Dial No.: (763) 201 -0211 e -nail sasPgjasattorneys.com Certified Mail (return receipt requested) This Notice of Cancellation letter is hereby served upon you in compliance with paragraphs 14 and 15 of the August 27, 2007 Purchase Agreement. Specifically, the City of New Hope is terminating the Agreement and declining to purchase the Bass Lake Road Apartments under the terms of the August 27, 2007 Purchase Agreement for the following reasons: 1. An AES Environmental Health Survey Report — Pre - Demolition Hazardous Materials Survey has been performed on the 8400 Bass Lake Road building and a limited survey was conducted on the other four buildings. Based on the AES report, disposal of the hazardous substances (asbestos) found within the buildings may cost $100,000.00 per building or $500,000.00 in total costs plus the actual costs to demolish the buildings. At this time, the City is not willing to incur that kind of cost to remove the buildings without additional testing to better determine the actual cost of demolition. Enclosed is a copy of the entire report for your review as required by the Agreement. 2. We have not received from you a signed copy of the Purchase Agreement nor have we been able to come to terms on the addendum to the Agreement requested on your behalf by your attorney Mr. Frankman. 3. We have not received for review copies of any tenant leases or other contracts or permits applicable to the property as was required by paragraph 14(c)(i) of the Agreement. 4. We have not received any accounting for security /rental deposits in connection with your tenants, a listing of tenants that are currently in default on their leases or the amounts you intended to withhold from the security /rental deposits at the closing. 5. We have not resolved our disagreement on the disposition of the water heater within the 8400 Bass Lake Road building. Therefore, given the unresolved issues above and the relatively immediate September 30 deadline of paragraph 14(d) we are forced to provide you with this Notice of Cancellation of the Purchase Agreement at this time. Also, we respectfully request that your attorney Mr. Frankman immediately return the City's $50,000.00 earnest money payment. The earnest money refund may be sent to my attention. September 28, 2007 Page 2 However, not with standing the City must terminate the Agreement at this time, the City Council is still desirous of purchasing this property at a future date. At this time, we think it will take an additional 60 days to sort out the extent of the asbestos contamination at the property. Therefore, despite the fact you have not signed or returned the Purchase Agreement, the City would like to work with you and Mr. Frankman over the course of the next 60 days to see if we can come to a new and acceptable purchase agreement concerning the asbestos issues at the property, the related contamination disposal costs and the other issues listed in the body of this letter. Please have Mr. Frankman contact me concerning the return of our earnest money and what steps Mr. Frankman and you feel would be appropriate to keep our negotiations open and moving forward in a satisfactory manner. Very truly yours, Steven A. Sondrall New Hope City Attorney cc: Lee Frankman Kirk McDonald, City Manager P:'AttomeytSAS \1 Client Files' °.2 City of New Hope199- 11334(Bass Lake Road Apa,tments) \ltr M. Lebow cancellation of pa.doc COUNCIL Request for Action ��) b Originating Department Community Development By: Kirk McDonald, Acting CM Curtis Tacobsen, CD Approved for Agenda 9, )� - 7-6 - 7 Agenda Section Development and Planning Item No. M . Resolution authorizing acquisition of property at 8400 and 8420 Bass Lake Road and 8401, 8411 and 8421 58th Avenue No b y direct negotiation (Bass Lake Road A artments, Project No. 795) Requested Action Staff requests that the City Council consider approval of a resolution authorizing acquisition of the Bass Lake Road Apartment site by direct negotiation, apartment buildings at located at 8400 and 8420 Bass Lake Road and 8401, 8411 and 8421 58th Avenue North. Policy /Past Practice The city has acquired properties previously for redevelopment project sites, when such acquisition is in the best interest of the City of New Hope, complies with the Livable Communities and is identified in the city's comprehensive plan for redevelopment. Background The city has worked for years to acquire this site for redevelopment. The site had previously been identified in a Livable Communities Survey of the city as a potential redevelopment site. This site has also been identified in the city's Comprehensive Plan as a potential redevelopment site. The city attorney has negotiated a purchase price on the city's behalf and is now providing the City council with this resolution and Apartment Complex Purchase Agreement for the Council's consideration. Funding The acquisition with be funded through the use of EDA funds. Attachment(s) • Resolution City Attorney letter 8 -20 -07 artment Complex Purchase 2 L 4 Motion by 16/L ` Second by To: `d Y _ ni & 7' /,) 3 1 I: \REA \PLANNING \Livable Communities \Bass Lake Road Apts \Q & R - Acquisition BLR Apts.doc ENSEN ANDERSON SONDRALL, 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@jasattorneys.com LESLIE A. ANDERSON GORDON L. JENSEN' AMY E. PAPENHAUSEN STEVEN A.SONDRALL Writer's Direct Dial No.: (763) 201 -0211 e -mail sas@jasattorneys.com August 20, 2007 Kirk McDonald Acting City Manager City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Re: Acquisition -Hass Lake Road Apartments Our File: 99 -1134 Dear Kirk: Enclosed please find two copies (clean and red -line) of the Purchase Agreement and a resolution for the Bass Lake Road Apartments acquisition for consideration at the August 27, 2007 Council meeting. Basically, the Purchase Agreement has been amended to incorporate the following changes: 1. new effective date is August 27, 2007, 2. Purchase Price - $2,250,000.00 (paragraph 2) 3. $50,000.00 earnest money payable to Frankman Trust Account (paragraph 2) 4. "AS IS" sale with our right to inspect and terminate the agreement (paragraph 8(c) and 14(c) and (d). 5. Inspection deadline date — September 24, 2007 (paragraph 8(c) — however we have until October 5, 2007 to terminate agreement (paragraph 14(d). 6. Closing date — October 15, 2007 — (paragraph 3) 'Real Property Law Specialist Certified By The Minnesota State Bar Association If the Council accepts this agreement at its August 27, 2007 meeting, I will need a signed copy of the Purchase Agreement and an earnest money check for $50,000.00 payable to the Leland J. Frankman IOLTA Trust Account. Please contact me if you have any further questions or comments Very truly yours, Steven A. Sondrall, City Attorney, City of New Hope cc: Valerie Leone Curtis Jacobsen P:\Attomey',SAS \l Client Files\2 City of New Hope\99- 11334(Bass Lake Road Apartments)\K. McDonald Itr4 re BLR Apts acquisition.doc RESOLUTION NO. 07- 12 3 PROPERTY AT 8400 and 8420 BASS LAKE RO AND 8401, 8411 and 8421 58 AVENUE NORTH C DIRECT •; (Bass Lake Road Apartments) BE IT RESOLVED by the City Council of the City of New Hope as follows: WHEREAS, the property located at 8400 and 8420 Bass Lake Road and 8401, 8411 and 842158 1h Avenue North commonly known as the Bass Lake Road Apartments (hereafter Property) is located within the Bass Lake Road Corridor Redevelopment Project Area established by the City of New Hope; and WHEREAS, the acquisition of the Property is necessary for the successful completion and implementation of the goals of the Bass Lake Road Corridor Redevelopment Project Area; and WHEREAS, the City has caused to be prepared an appraisal of the Propertywhich appraisal indicated the Property has a current market value of $2,145,000.00; and WHEREAS, the City has contacted the fee owner of the Property to determine their interest in selling the Property to the City; and WHEREAS, the fee owner indicated its willingness to sell the Property for $2,250,000.00 in an "As Is" condition subject to the City's right to inspect the Property; and WHEREAS, the City Council hereby determines acquisition of the Property will facilitate a legitimate public purpose, to wit: the successful implementation of the goals of the Bass Lake Road Corridor Redevelopment Project Area; and WHEREAS, the City Council hereby determines it is necessary to acquire the Property through direct purchase with the fee owners per the terms of the "Apartment Complex Purchase Agreement" attached hereto as Exhibit A. NOW, THEREFORE, BE IT RESOLVED by the City Council ofthe City ofNew Hope as follows: 1. That the "Apartment Complex Purchase Agreement" attached hereto as Exhibit A is hereby approved with a Purchase Price of $2,250,000.00. —1— 2. That the Mayor and City Manager are hereby authorized and directed to sign the "Apartment Complex Purchase Agreement" and to take all necessary steps to acquire the Property by direct purchase per the terms of the Apartment Complex Purchase Agreement. Attest: Valerie Leone, City Clerk PB.ATTORNMSAS' I CLIENT FILES \2 CITY OF NEW HOPE:99- I1334(BASS LAKE ROAD APARTMENTS) \RESO2 AUTH ACQ OF BLR APTS: 5- 21 -0ZDOC —2— ., THIS AGREEMENT made effective the 27th day of August, 2007 by and between liar -Jil Corporation, a Minnesota corporation (hereinafter referred to as "Seller ") and City of New .Hope, a Minnesota municipal corporation (hereinafter referred to as "Purchaser "). In consideration of the mutual covenants contained herein, Seller and Purchaser agree as follows: 1. Purchase and Sale Subject to and in reliance upon the within representations, warranties and agreements of Seller on the one part, and Purchaser on the other part, and subject to the agreements, covenants and conditions of this Apartment Complex Purchase Agreement (the "Agreement "), Seller agrees to sell and Purchaser agrees to purchase: (a) That certain real estate and improvements commonly known as The Bass Lake Road Apartments located at 8401 and 8420 Bass Lake Road, and 8401, 8411 and 8421 - 58t Avenue North, New Hope, Minnesota, legally described on Exhibit A, including five apartment buildings and one utility /maintenance building containing 60 dwelling units /apartments (12 units in each apartment building), together with all component mechanical, structural, heating, plumbing, electrical, air conditioning and roofing elements, and all other improvements located on the real estate (the "Real Property "). (b) All and singular the rights and appurtenances pertaining to the Real Property, including any right, title and interest of Seller in and to adjacent streets, alleys, rights - of -ways and easements for all five parcels. (c) All plans, code enforcement reports, environmental reports, engineering reports and any other studies and reports involving the Real Property in Seller's possession or reasonably available at no cost to Seller. (d) The personal property, machinery and equipment located upon said Real Property (if any) described on Exhibit B (the "Personal Property "). (e) All right, title and interest of Seller in the lease agreements, contracts and warranties to be assigned in accordance with this Agreement. (f) Unless otherwise stated or otherwise evident to the contrary, the assets listed in subparagraphs (a) through (e) above, are hereinafter collectively referred to as the "Property ". 2. Purchase Price The total purchase price to be paid by the Purchaser for the Property shall be Two Million Two Hundred Fifty Thousand and 001100 Dollars ($2,250,000.00), which shall be paid as follows: (a) $50,000.00 earnest money, payable to the Leland J. Frankman, Esq. Trust Account, the receipt of which is acknowledged. (b) $2,200,000.00 cash at Closing. 3. Closing Consummation of this transaction (the "Closing ") shall be on or before October 15, 2007 (the "Closing Date "), at the offices of the City of New Hope, 4401 Xylon Avenue North, New Hope, Minnesota 55428. 4. Possession. Date Subject only to the rights ofparties in possession pursuant to Lease Agreements accepted by and assigned to Purchaser on the Closing Date, the Purchaser shall be entitled to possession of the Property as of the Closing Date. 5. Seller's Obligations at Closing At the Closing, Seller shall: (a) Execute and deliver to Purchaser a Warranty Deed subject to the Permitted Encumbrances. (b) Deliver to the Purchaser copies of any certificates of occupancy, licenses, permits, authorizations, and approvals issued by governmental authorities having jurisdiction over the Property in the possession of Seller. (c) Execute and deliver a Bill of Sale with general warranties for all Personal Property (if any) included in the transfer. (d) Deliver the originals of all lease agreements for the Property and execute and deliver to the Purchaser an assignment of said leases in a form mutually acceptable to Purchaser and Seller. (e) Deliver to Purchaser letters executed by the Seller ready for delivery to each respective tenant directing that rental payments be sent to the Purchaser or at Purchaser's direction. (f) Pay to Purchaser the amount of all security deposits, including all interest accrued thereon as of the Closing Date held or received by Seller with respect to the tenants. (g) Deliver an assignment in a form acceptable to Purchaser of any assignable warranties, guaranties, permits and licenses applicable to the Property. 2 (h) Deliver a non - foreign affidavit, properly executed in recordable form containing such information as required by IRC Section 1445(B)(2) and its regulations. (i) Provide an appropriate federal income tax reporting form, if any is required. (j) Pay the state deed tax due for conveyance of the Property. (k) Pay the cost of recording all documents necessary to place record title to the Property in the condition warranted and required of Seller by this Agreement. (1) Execute and deliver to Purchaser a seller's affidavit indicating no judgments or liens against Seller. (m) Execute all other documents reasonably necessary to perform this Agreement and to transfer the Property to Purchaser free and clear of any and all encumbrances other than permitted encumbrances. (n) Provide Seller's corporate resolution authorizing this sale and indicating the person or persons signing this agreement have full legal authority to act on behalf of Seller. 6. Purchaser's Obligations at Closing Subject to the terms and conditions hereof, and contemporaneously with the performance by Seller of its obligations, Purchaser shall do the following: (a) Deliver a City check payable to the Seller for the amount due at Closing. (b) Accept delivery of the Property. (c) Accept assignment of the lease agreements and execute documents assuming future obligations of the lessor under said leases. (d) Execute and deliver such additional documents as are necessary and incidental to closing the transaction consistent with the terms and conditions of this Agreement. 7. Rent and Operating Ex ]2ense Pro - Ration The following pro- rations shall be made as of the Closing Date: (a) Rents (including, without limitation, payments for operating costs, common area costs and real estate taxes) interest, and all other income and operating expenses relating to the Property shall be made as of the Closing Date, with the Seller responsible for the expenses and entitled to the revenues accrued or applicable to the period prior to the Closing Date. Purchaser is responsible for the expense and entitled to the revenues accrued or applicable after the Closing Date. If on the Closing Date any of the amounts to be apportioned 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 estimates of the Seller and Purchaser of the amount or amounts of the item or items in question, subject to adjustment (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. S. Seller's Representations, Warranties and Covenants Seller covenants, represents and warrants to the Purchaser as follows: (a) Any certificates of occupancy, underwriters' certificates relating to electrical work and building, safety, fire and health codes and approvals and all other permits issued to and in possession of the Seller to operate the Property will be assigned, where appropriate, to Purchaser at Closing. (b) The Purchaser acknowledges and agrees the Property is being sold in an "As Is" condition and Purchaser shall accept the Property in its "As Is" condition as of the Closing Date. Purchaser shall be entitled to full and complete access to all areas of the Property including any rental units after reasonable notice is provided to the tenant in the event said unit is occupied. Purchaser, in its sole discretion, shall be allowed to make any reasonable inspection and examination of the Property to determine if the Property is suitable for Purchaser's intended use. Purchaser shall be allowed this access to the Property until September 24, 2007 (e) That there are no service and/or employment contracts or other contracts, unrecorded easements, covenants or restrictions or agreements of any kind or description, either written or verbal, pertaining to the Property as of the date hereof, except as may be canceled or terminated at the Seller's discretion on or before the Closing Date scheduled herein. (d) During the period between the date hereof and the Closing Date, Seller shall continue to operate and maintain the Property in the usual and customary manner. (e) Seller owns the Property, free and clear of all encumbrances and the person or persons signing this agreement on behalf of the Seller have the full right to sell and convey the Property on behalf of the Seller. 11 (f) Seller has received no notice of actual or threatened special assessments or reassessments of the Real Property. (g) 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 the consummation of this Agreement. (h) 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. (i) Seller will provide to Buyer on or before September 24, 2007, a true, correct and complete copy of each lease applicable to the Property. Such leases are in full force and effect and permits Seller to terminate the lease by providing tenant with no more than ninety (90) days notice. Neither Seller nor tenant is, to the best of Seller's knowledge, in default under any such lease. There are no other leases or possessory rights regarding the Property, except such leases provided to Purchaser. (�) Seller will make available to Purchaser on or before September 24, 2007, a true, correct and complete copy of each contract applicable to the Property which extends beyond the Closing Date. To the best of Seller's knowledge, such contracts are in full force and effect and neither Seller, nor any other party to such contract, is in default under such contract. All other contracts in effect as of the date of this Agreement regarding the Property are terminable on or before the Closing Date. (lc.) Seller shall execute no lease agreement during the period of time from the date of this Agreement to the Closing Date. (1) On or before September 24, 2007, Seller will deliver to Buyer true and correct copies of all permits in connection with the Property. To the extent available to Seller, Seller will also deliver to Buyer true and correct copies of all warranties, plans, specifications, surveys, and environmental reports pertaining to the Property. Seller will indemnify Purchaser, its successors and assigns, against, and will hold Purchaser, its successors and assigns, harmless from any expenses or damages, including reasonable attorneys' fees, that Purchaser incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or after Closing. Consummation of this Agreement by Purchaser with knowledge of any such breach by Seller will not constitute a waiver or release by Purchaser of any claims due to such breach. 9. Seller's Warranty of 'Title Subject to performance by the Purchaser, the Seller agrees to execute and deliver the Warranty Deed conveying marketable title to said Property subj ect only to the following exceptions ( "Permitted Encumbrances "): (a) Reservation of any minerals or mineral rights to the State of Minnesota. (b) Utility and drainage easements which do not interfere with present improvements. (c) The lien of real estate taxes and special assessments not the obligation of the Seller pursuant to the terms of this agreement. (d) Exceptions to title which are not objected to by Purchaser as provided in Paragraph 10 below. (e) Lease agreements accepted by Purchaser and assigned to Purchaser at Closing. 10. Obligations of Seller and Purchaser as to Title Matters It is understood and agreed that the title herein required to be furnished to the Property and to appurtenant easements, if any, by the Seller shall be marketable of record and that marketability shall be determined as of the Closing Date. Seller agrees to record all documents necessary to show of record a marketable title in Seller, all at Seller's cost and expense. (a) Delivery of 'Title Commitment Within twenty (20) days after the Effective Date, Buyer shall cause a Title Company to issue and deliver to Buyer a Title Commitment for the Property, together with complete copies of all instruments identified as conditions or exceptions on Schedule B of the Title Commitment. Seller shall be responsible for the cost of the Title Commitment. Seller agrees that not more than ten (10) days nor less than five (5) days before the Closing, Buyer shall have the right at Buyer's expense to cause the Title Company to issue a Title Update. (b) Buyer's Review of 'Title Commitment After Buyer's receipt of the final Title Commitment, together with all supporting documents, Buyer shall have ten (10) days in which to notify Seller of any objections to the condition of the Title Commitment that Buyer determines, in its sole and absolute discretion, have an adverse affect on the Property. If Buyer fails to notify Seller in writing of objections to the Title Commitment within the ten (10) -day review period, Buyer shall be deemed to have no objections to the Title Commitment. (c) Seller's Cure of Title and Survey ®biections If Buyer objects to the condition of title, Seller shall have thirty (30) days after Buyer provides Seller with notice of Buyer's objections, or such other time period agreed to by Buyer and Seller in writing, to use reasonable efforts to cure Buyer's objections. Prior to the expiration of said applicable cure period, Seller shall notify Buyer in writing stating either that Seller has cured Buyer's objections to Buyer's satisfaction or that Seller is unable to cure said objections. If Seller does not cure Buyer's objections to Buyer's satisfaction within the above- referenced applicable cure period, then within fifteen (15) days after Buyer's receipt of Seller's notice, then at any time prior to Closing, Buyer shall notify Seller in writing of Buyer's election to: (i) terminate this Contract, 6 whereupon the Deposit shall be returned to Buyer; (ii) waive said objections; or (iii) extend the time period to cure Buyer's objections for a period of sixty (60) days from the date of Buyer's election to extend, in order to provide Seller and/or Buyer with the opportunity to cure Buyer's objections provided, however, if Buyer's objections are not cured to Buyer's satisfaction prior to the expiration of said sixty (60) -day period, then Buyer shall notify Seller in writing of Buyer's election either to: (i) terminate this Contract, whereupon the Deposit shall be returned to Buyer; (ii) waive said objection; or (iii) Buyer may cure said objection, and in such event at Closing, Buyer shall be entitled to a credit against the Purchase Price in an amount equal to Buyer's cost to cure said objection. If Buyer objects to the condition of title as provided herein and if Closing is scheduled to occur prior to the expiration of the applicable time periods set forth in this subsection, then the date of Closing shall be postponed until the earlier of the expiration of said sixty (60) -day additional cure period or ten (10) days after the cure to Buyer's satisfaction of Buyer's objection. (d) Title Insurance Policy At Closing, Buyer shall cause the Title Company to issue in Buyer's name the Title Policy for the Property. The Title Policy shall be in an amount equal to the Purchase Price and subject only to the Permitted Exceptions, and the Standard Exceptions shall be deleted from the Title Policy. At Closing, Buyer shall pay for the cost of the title insurance premium for the Title Policy and any endorsements thereto that are necessary in order for the condition of title to the Property to comply with the provisions herein. 11. Special assessments Seller agrees to pay on the Closing Date all special assessments levied, pending or approved including installments of special assessments certified and payable with the real estate taxes due and payable in the year 2007. 12. Real Estate Taxes Seller shall pay all real estate taxes and installments of special assessments due and payable in the year 2006 and prior years. Purchaser shall pay all real estate taxes and installments of special assessments (not paid by Seller pursuant to paragraph 11 above) due and payable therewith in the year 2008 and subsequent years. Real estate taxes due and payable in the year 2007 shall be prorated between Seller and Purchaser as of the Closing Date based upon a calendar year commenced January 1, 2007. 13. Real Estate Brokerage Commission The parties represent to each other that neither has engaged a real estate broker or agent in connection with the sale and purchase contemplated by the terms of this Agreement. Each party agrees to indemnify and hold harmless the other party for any claim relating to the services of a real estate broker. 14. Conditions to Closing All obligations of Purchaser under this Agreement are subject to the fulfillment, prior to or on the Closing Date, or within applicable time periods, of each of the following conditions: 7 (a) The representations and warranties of the Seller contained in this Agreement shall be true as of the Closing Date, as though such representations and warranties were made at such time. (b) Marketability of title to said heal Property has been established pursuant to the provisions of this Agreement. (c) Purchaser shall have until September 24, 2007, or the date which is ten (10) days, after the date when Purchaser shall have received the last of the items which Seller is required to deliver to Purchaser pursuant to the provisions of this Agreement, whichever is later, to review, inspect, investigate and/or test, at Purchaser's sole cost and expense, the following matters: (i) All leases, contracts and permits applicable to the Property. (ii) The condition of any buildings, structures and improvements located on the Property including all the structural components of such buildings, structures and improvements and all mechanical, electrical, heating, air conditioning, drainage, sewer, water and plumbing systems located therein. (iii) To determine whether Hazardous Substances, inoperable wells or aboveground or underground storage tanks are located in, on or under the Property or improvements thereon. In the event Purchaser determines in his sole discretion that it is in his best interest to obtain a Phase I environmental report for the Property, the Phase I environmental report shall be ordered at the cost and expense of the Purchaser. Seller shall allow Purchaser and Purchaser's agents, access to the Property at all reasonable times for the purpose of Purchaser's investigation and testing. Purchaser shall pay all costs and expenses of such investigation and testing and shall hold Seller and the Property harmless from all costs and liabilities relating to Purchaser's activities. Purchaser shall further repair and restore any damage to the Property caused by Purchaser's inspection and testing and return the Property and/or any improvements or personal property to substantially the same condition as existed prior to such entry. (d) If, as a result of the investigation and testing conducted pursuant to subparagraph (c) above, Purchaser determines in its sole discretion: (i) that the leases, contracts and/or permits are not acceptable; (ii) that the buildings, structures, improvements, mechanical, electrical or other internal systems are not in proper working order; or (iii) that Hazardous Substances, including but not limited to the existence of friable or non - friable asbestos, inoperable wells or aboveground or underground storage tanks exist in, on or under the Property or improvements located thereon as evidenced by a written report prepared by an environmental expert, then, in any of 8 such events, Purchaser shall have the right to give notice to Seller that it wishes to terminate this Agreement and upon such notice being given this Agreement shall be null and void and all earnest money shall be promptly refunded. To be effective, this notice must be given to Seller by October 5, 2007. Along with the notice, Purchaser shall also provide Seller with a copy of any written report prepared in connection with any inspection and testing done by Purchaser including, without limitation, any environmental report prepared by an environmental expert. Provided, however, and notwithstanding Purchaser's right to terminate and have all earnest money refunded, Seller shall have the right upon receipt of the above- described notice from Purchaser to cure the defect noted by Purchaser within sixty (60) days from the receipt of the notice from Purchaser. If Seller gives Purchaser notice of its intent to cure within ten (10) days of notice to terminate from Purchaser, this Agreement shall not be terminated. If the defect noted by Purchaser relates to an environmental problem, including but not limited to the existence of asbestos at the Property, the cure shall be to the reasonable satisfaction of Purchaser's environmental expert. If the defect noted is with regard to any other problem, the cure will be to the reasonable satisfaction of Purchaser. Seller shall use reasonable diligence to cure the problem as soon as possible and if necessary, the Closing shall be delayed pending such cure. If the defect is cured, the parties will proceed to Closing under the terms of this Agreement within ten (10) days of the completion of such cure. If after Seller's sixty (60) day cure period, the problem is not cured, Purchaser shall once again have the right to give written notice that this Agreement is terminated and upon Seller receiving such written notice this Agreement shall be deemed to be null and void and all earnest money promptly refunded to Purchaser. At any time prior to the expiration of Purchaser's right to terminate this Agreement, or during Seller's sixty (60) day cure, Purchaser shall have the right to waive any defect in writing and upon such waiver, the parties shall proceed to Closing. If after giving a notice of termination pursuant to this paragraph Purchaser closes on this transaction, Purchaser waives its right to make any claims in the future based on any representations and warranties in this Agreement to the extent that such representations and warranties relate to the claim made by Purchaser. 15. Notice Any notice given under this agreement shall be deemed given on the date the same is deposited in the United States Mail (registered or certified), postage prepaid, addressed or personally delivered as follows: If to the Seller: Marshall Lebow 5500 Wayzata Blvd., #1425 Minneapolis, MN 55416 With a copy to: Leland J. Frankrnan, Esq. 2000 U.S. Bank Plaza C 220 South Sixth Street Minneapolis, MN 55402 If to the Purchaser: Kirk McDonald Acting City Manager City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 (763) 531 -5100 (763) 531 -5136 (fax) With a copy to: Steven A. Sondrall New Hope City Attorney Jensen Anderson Sondrall, P.A. 8525 Edinbrook Crossing, #201 Brooklyn Park, MN 55443 (763) 424 -8811 (763 )493 -5193 (fax) 16. Default by Seller In the event that Seller should fail to consummate the transaction contemplated herein for any reason, except Purchaser's default, Purchaser may: (a) Enforce the specific performance of this Agreement provided action to enforce such specific performance shall be commenced within six (6) months after the date the right of action has arisen. (b) Cancel this Agreement and upon cancellation, all earnest money shall be refunded to Purchaser. 17. Default by Purchaser In the event the Purchaser shall fail to consummate the transaction contemplated herein, except for default by Seller or notice of termination given to Seller by Purchaser per paragraph 14(d) of this Agreement, Purchaser shall pay to Seller the Fifty Thousand Dollars ($50,000.00) earnest money, such sum being agreed upon as liquidated damages for the failure of Purchaser to perform the duties, liabilities and obligations imposed upon it by the terms and provisions of this agreement and because of the difficulty, inconvenience, and.uncertainty of ascertaining actual damages, no other damages, rights or remedies shall, in any case, be collectable, enforceable, or available to Seller other than as provided in this paragraph, and Seller agrees to accept and take the $50,000.00 as its total damages and relief hereunder in such event. 18. Miscellaneous (a) This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Minnesota. 10 (b) Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. (c) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their successors and assigns. (d) This Agreement may be executed in any number of counterparts or may be, where the same are not required, certified or otherwise delivered without the testimonium clause and signatures; each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one Agreement. (e) In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. [S gncature page to follow] 11 MAR-JIL CORPORATION, a Minnesota CITY OF NEW HOPE corporation By: _ Its: By: _ Its: 0 -0 Martin E. Opem Sr. Its Mayor Kirk McDonald Its Acting City Manager P:ATTORNEY\SAS\1 CLMNTFILES\2 CITY OF NEW HOPE\99-11334(BASS LAKE ROAD APARTNMNTS)\PURCHASEAGREENENT-002-CLEAN.DOC 12 Lot 5, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0012) Lot 4, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0011) Lot 3, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0010) Lot 2, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0009) Lot 1, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0008) EXHIBIT PERSONAL PROPERTY APARTMENT COMPLEX PURCHASE AGREEMENT THIS AGREEMENT made effective the 271 day ofg�Eaost, 2007 by and between Mar -Jil ` Formatted: Superscript Corporation, a Minnesota corporation (hereinafter referred to as "Seller ") and City ofNew Hope, a Deleted: 23� Minnesota municipal corporation (hereinafter referred to as "Purchaser" )• Deleted: April In consideration of the mutual covenants contained herein, Seller and Purchaser agree as follows: 1. Purchase and Sale Subject to and in reliance upon the within representations, warranties and agreements of Seller on the one part, and Purchaser on the other part, and subject to the agreements, covenants and conditions of this Apartment Complex Purchase Agreement (the "Agreement "), Seller agrees to sell and Purchaser agrees to purchase: (a) That certain real estate and improvements commonly known as The Bass Lake Road Apartments located at 8401 and 8420 Bass Lake Road, and 8401, 8411 and 8421- 58 Avenue North, New Hope, Minnesota, legally described on Exhibit A, including five apartment buildings and one utility /maintenance building containing 60 dwelling units /apartments (12 units in each apartment building), together with all component mechanical, structural, heating, plumbing, electrical, air conditioning and roofing elements, and all other improvements located on the real estate (the "Real Property "). (b) All and singular the rights and appurtenances pertaining to the Real Property, including any right, title and interest of Seller in and to adjacent streets, alleys, rights - of -ways and easements for all five parcels. (c) All plans, code enforcement reports, environmental reports, engineering reports and any other studies and reports involving the Real Property in Seller's possession or reasonably available at no cost to Seller. (d) The personal property, machinery and equipment located upon said Real Property (if any) described on Exhibit B (the "Personal Property"). (e) All right, title and interest of Seller in the lease agreements, contracts and warranties to be assigned in accordance with this Agreement. (f) Unless otherwise stated or otherwise evident to the contrary, the assets listed in subparagraphs (a) through (e) above, are hereinafter collectively referred to as the "Property". Deleted: < # >This offer to purchase shall automatically terminate if not accepted on or before May 11, 2001. Accepted shall mean signed by Seller and physically received by Buyer.¶ 2. Purchase Price The total purchase price to be paid by the Purchaser for the Property shall be Two Million a Hundred Fi f tv Thousand and 00 /100 Dollars ($2,2 which shall be paid as follows: (a) $p0 t 0Q0 OQ earnest money, payruble tc thz Lei ai�d J. Frankinail � r`,l , Ac wotirtl. the receipt of which is acknowledged. Deleted: One Deleted: Forty -Five L�Dele 145 _. _..... Deleted: 0.00 (b) $2,` 99,000.00 cash at Closing. Deleted. 145 3. Closing Consummation of this transaction (the "Closing ") shall be on or before �C}ctoter 1 >, 2007 (the "Closing Date "), at the offices of the City of New Hope, 4401 Xylon Avenue Deleted: rune 18 North, New Hope, Minnesota 55428. 4. Possession Date Subject only to the rights of parties in possession pursuant to Lease Agreements accepted by and assigned to Purchaser on the Closing Date, the Purchaser shall be entitled to possession of the Property as of the Closing Date. 5. Seller's Obligations at Closing At the Closing, Seller shall: (a) Execute and deliver to Purchaser a Warranty Deed subject to the Permitted Encumbrances. .._ .......... .-__._..........._._.. .._•- --- - -_..__.._..-........ . (b) Deliver to the Purchaser copies of,�nv of occupancy, licenses, permits, Deleted: all authorizations, and approvals issued by governmental authorities having jurisdiction over the Property in the possession of Seller. (c) Execute and deliver a Bill of Sale with general warranties for all Personal Property (if any) included in the transfer. (d) Deliver the originals of all lease agreements for the Property and execute and deliver to the Purchaser an assignment of said leases in a form mutually acceptable to Purchaser and Seller. (e) Deliver to Purchaser letters executed by the Seller ready for delivery to each respective tenant directing that rental payments be sent to the Purchaser or at Purchaser's direction. (t) Pay to Purchaser the amount of all security deposits, including all interest accrued thereon as of the Closing Date held or received by Seller with respect to the tenants. Deliver an assignment in a form acceptable to Purchaser of assignable warranties Deleted: all service, maintenance and (g) g p may...... ign .. management c ontracts that Purchaser guaranties, permits and licenses applicable to the Property. elects n ot to terminate, and of (h) Deliver a non - foreign affidavit, properly executed in recordable form containing such information as required by IRC Section 1445(B)(2) and its regulations. (i) Provide an appropriate federal income tax reporting form, if any is required. (j) Pay the state deed tax due for conveyance of the Property. (k) Pay the cost of recording all documents necessary to place record title to the Property in the condition warranted and required of Seller by this Agreement. (1) Execute and deliver to Purchaser a seller's affidavit indicating no judgments or liens against Seller. (m) Execute all other documents reasonably necessary to perform this Agreement and to transfer the Property to Purchaser free and clear of any and all encumbrances other than permitted encumbrances. (n) Provide Seller's corporate resolution authorizing this sale and indicating the person or persons signing this agreement have full legal authority to act on behalf of Seller. 6. Purchaser's OblilZations at Closing Subject to the terms and conditions hereof, and contemporaneously with the performance by Seller of its obligations, Purchaser shall do the following: (a) Deliver a City check payable to the Seller for the amount due at Closing. (b) Accept delivery of the Property. (c) Accept assignment of the lease agreements and execute documents assuming future obligations of the lessor under said leases. (d) Execute and deliver such additional documents as are necessary and incidental to closing the transaction consistent with the terms and conditions of this Agreement. 7. Rent and Operating Expense Pro - Ration The following pro- rations shall be made as of the Closing Date: (a) Rents (including, without limitation, payments for operating costs, common area costs and real estate taxes) interest, and all other income and operating expenses relating to the Property shall be made as of the Closing Date, with the Seller responsible for the expenses and entitled to the revenues accrued or applicable to the period prior to the Closing Date. Purchaser is responsible for the expense and entitled to the revenues accrued or applicable after the Closing Date. If on the Closing Date any of the amounts to be apportioned 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 estimates of the Seller and Purchaser of the amount or amounts of the item or items in question, subject to adjustment (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. Seller's Representations, Warranties and Covenants Seller covenants, represents and warrants to the Purchaser as follows: (b) , A , , certificates of occupancy, underwriters' certificates relating to electrical work and building, safety, fire and health codes and approvals and all other permits l."Su d to and in possession of the Seller to operate the Property will be assigned, where appropriate, to Purchaser at Closing. (c) The Purchaser acknowledzes and agrees the Property is being sold in all _'As is conditionnd shall accept the Property In its " sls" condition as of the ._.._._ ... _.�...�_..w Closing Date P urcha s er shall be e ntitled to full and cOmclete access to all areas of ",`, the Property includinsi any rental units after reasonable notice is provided to the _...... -.. . _.. .. .. tenant ]r the event lnt said unit is occupied Purchaser in its sole discretion shall be _..._ _ .. .... ..... . ailov ed to make any reasonable inspe ction and ex amination of the Property to determine if the Property is suitable for „Pu Purchaser's intended use_ Purchaser Shull be allowed this access to the Property inn iI Septe�n ber 24, 007 ( d). .._..__..........._....._.. ... _ (e) , ... _.._ ......... _. _ .............._ ._ ... - _ (f) That there are no service and/or employment contracts or other contracts, unrecorded easements, covenants or restrictions or agreements of any kind or description, either written or verbal, pertaining to the Property as of the date hereof, except as may be canceled or terminated at the Seller's discretion on or before the Closing Date scheduled herein. Deleted: The Property presently ;” complies with all laws, ordinances, rules and regulations of the city, state and federal government and of all their agencies and departments ( "laws "), including but not limited to all zoning and environm laws Deleted: ted: All required Deleted. necessary i Deleted: , have been issued and 3' " Deleted: That Seller is not aware of any l code violation nor to Sellers knowledge has any governmental agency, official or employee ticketed, red - tagged, threatened to ticket or red -tag, or otherwise indicated that any aspect of the Property violates any such code. .n� Deleted: There are no structural defects or deficiencies in the foundations, walls or roofs of the Property; there is no water leakage through the floor, walls or roof of the Property. That all heating and air- conditioning units and systems, all plumbing all electrical and mechanical systems located in and upon the Property are and will be in proper working order as of the d ate of Closing. Deleted: shall be entitled to access to i the Property for the purpose of making such examinations as the Purchaser deems i necessary in its sole discretion and as of t Closing Date, the Deleted: as Deleted: is Deleted: That the buildings and improvements located on the Real Property are entirely within the boundary lines and applicable set -back lines of the Real Property "i Deleted: That there is no litigation, proceeding (eminent domain or otherwise), claim, investigation, notice of charge or deficiency pending or threatened against the Property, nor does Seller know j or have reason to know any basis for any such action, which might adversely affect the Property (g) During the period between the date hereof and the Closing Date, Seller shall continue Deleted: No toxic or hazardous to operate and maintain the Property in the usual and customary manner. substances or was tes, pollutants or contaminants (including, without limitation, asbestos, urea formaldehyde, (h) Seller owns the Property, free and clear of all encumbrances and the person or the g r oup of organic compounds known as persons signing this agreement on behalf of the Seller have the full right to sell and polychorinated biphenyls, petroleum products including gasoline, fuel oil crude convey the Property on behalf of the Seller. oil and various constituents of su products, and any hazardous substance as defined in the Comprehensive (i) Seller has received no notice of actual or threatened special assessments or Environmental Response, Compensation reassessments of the Real Pro e p rty 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, Ve....._ ............. _ _ .............. _ 1111...... _ _................ _.._ ._ 1111..... _ 1111_ ................ _1111..._ ............. _.._ .. _.._ ._ _ ... _' deposited in or located on the Property, nor has any activity been undertaken on (k) Seller has not entered into any other contracts for the sale of the Property, nor are j the Property that would cause or contribute to (i) the Property to become a there any rights of first refusal or options to purchase the Property or any other rights treatment, storage or disposal facility of others that might prevent the consummation of this Agreement. within the meaning of, or otherwise bring the Property within the ambit of, the Resource Conservation and Recovery Act (1) Seller is not a "foreign person ", "foreign partnership ", "foreign trust" or "foreign ! of 1976 ( "RCRA "), 42 U.S.C. 16901 gl seq or any similar state law or local estate" as those terms are defined in Section 1445 of the Internal Revenue Code. ordinance, (ii) a release or threatened release of toxic or hazardous wastes or substances, pollutants or contaminants, (m) Seller will provide to Buyer on or before September 24 2007 a true correct and ;from the Property within the meaning of, _1111 _... ? .............. ?1111 _ ..................... complete copy of each lease applicable to the Property. Such leases are in full force or otherwise bring the Property within the I ambit of, CERCLA or any similar state and effect and permits Seller to terminate the lease by providing tenant with no more law or l ordinance, or (iii) the than ninety (90) days notice. Neither Seller nor tenant is, to the best of Seller's discharge of pollutants or effluents into an ware= source or s the dredging knowledge, in default under any such lease. There are no other leases or possessory or filling of an waters or the discharge rights regarding the Property, except such leases provided to Purchaser. into the air of any emissions, that would i require a permit under the Federal Water Pollution Control Act, 33 U.S.C. ' 1251 et n O 20 Seller will make available to Purchaser on or before Se renlber 07 , a true, p '.4 1M or any similar state law or local ordinance. There are no substances or , ,11.11_ ? .. _. _ correct and complete copy of each contract applicable to the Property which extends ` on ditions ;n or on the Pr opert y that ma beyond the Closing Date. To the best of Seller's knowledge, such contracts are in full '; support a claim or cause of action under ; RCRA CERCLA or any other federal, force and effect and neither Seller, nor any other party to such contract, is in default ., '. state or local environmental statutes, i regulations, ordinances or other under such contract. All other contracts in effect as of the date of this Agreement environmental regulatory requirements, regarding the Property are terminable on or before the Closing Date. including without limitation, the Minnesota Environmental Response and Liability Act, Minn. Stat. 115B (o) Seller shall execute no lease agreement during the period of time from the date of this o ug I ' T RLA ") and the Minnesota Petroleum s Tank Release Cleanup Act, Minn. Stat. Agreement to the Closing Date. i 115C. No asbestos has been installed or exists within any improvements on the Property. No above ground or (p) On or before '-epte nber 24 2007, Seller will deliver to Buyer true and correct copies underground tanks, are located in or about . m . __ ..... .....1. ..... ..... . .. . ._ .. . .. ......1.11 .11 .. of all permits in connection with the Property. To the extent available to Seller, the Property and have subsequently been removed or filled. To the extent storage Seller will also deliver to Buyer true and correct copies of all warranties, plans, tanks are located on the Property they specifications, surveys, and environmental reports pertaining to the Property. have been duly registered with all appropriate regulatory and governmental bodies and otherwise are in compliance Seller will indemnify Purchaser, its successors and assigns, against, and will hold Purchaser, with applicable Federal, state and 1 (�. (11 W - its successors and assigns, harmless from any expenses or damages, including reasonable attorneys' Deleted May 18 W fees, that Purchaser incurs because of the breach of any of the above representations and warranties, Deleted: May 18 Deleted: May 18 whether such breach is discovered before or after Closing. Consummation of this Agreement by Purchaser with knowledge of any such breach by Seller will not constitute a waiver or release by Purchaser of any claims due to such breach. 9. Seller's Warranty of Title Subject to performance by the Purchaser, the Seller agrees to execute and deliver the Warranty Deed conveying marketable title to said Property subject only to the following exceptions ( "Permitted Encumbrances "): (a) Reservation of any minerals or mineral rights to the State of Minnesota. (b) Utility and drainage easements which do not interfere with present improvements. (c) The lien of real estate taxes and special assessments not the obligation of the Seller pursuant to the terms of this agreement. (d) Exceptions to title which are not objected to by Purchaser as provided in Paragraph 10 below. (e) Lease agreements accepted by Purchaser and assigned to Purchaser at Closing. 10. Obligations of Seller and Purchaser as to Title Matters It is understood and agreed that the title herein required to be furnished to the Property and to appurtenant easements, if any, by the Seller shall be marketable of record and that marketability shall be determined as of the Closing Date. Seller agrees to record all documents necessary to show ofrecord a marketable title in Seller, all at Seller's cost and expense. (a) Delivery of Title Commitment Within twenty (20) days after the Effective Date, Buyer shall cause a Title Company to issue and deliver to Buyer a Title Commitment for the Property, together with complete copies of all instruments identified as conditions or exceptions on Schedule B of the Title Commitment. Seller shall be responsible for the cost of the Title Commitment. Seller agrees that not more than ten (10) days nor less than five (5) days before the Closing, Buyer shall have the right at Buyer's expense to cause the Title Company to issue a Title Update. (b) Buyer's Review of Title Commitment After Buyer's receipt of the final Title Commitment, together with all supporting documents, Buyer shall have ten (10) days in which to notify Seller of any objections to the condition of the Title Commitment that Buyer determines, in its sole and absolute discretion, have an adverse affect on the Property. If Buyer fails to notify Seller in writing of objections to the Title Commitment within the ten (10) -day review period, Buyer shall be deemed to have no objections to the Title Commitment. (c) Seller's Cure of Title and Survey Obiections If Buyer objects to the condition of title, Seller shall have thirty (30) days after Buyer provides Seller with notice of Buyer's objections, or such other time period agreed to by Buyer and Seller in writing, to use reasonable efforts to cure Buyer's objections. Prior to the expiration of said applicable cure period, Seller shall notify Buyer in writing stating either that Seller has cured Buyer's objections to Buyer's satisfaction or that Seller is unable to cure said objections. If Seller does not cure Buyer's objections to Buyer's satisfaction within the above- referenced applicable cure period, then within fifteen (15) days after Buyer's receipt of Seller's notice, then at any time prior to Closing, Buyer shall notify Seller in writing of Buyer's election to: (i) terminate this Contract, whereupon the Deposit shall be returned to Buyer; (ii) waive said objections; or (iii) extend the time period to cure Buyer's objections for a period of sixty (60) days from the date of Buyer's election to extend, in order to provide Seller and /or Buyer with the opportunity to cure Buyer's objections provided, however, if Buyer's objections are not cured to Buyer's satisfaction prior to the expiration of said sixty (60) -day period, then Buyer shall notify Seller in writing of Buyer's election either to: (i) terminate this Contract, whereupon the Deposit shall be returned to Buyer; (ii) waive said objection; or (iii) Buyer may cure said objection, and in such event at Closing, Buyer shall be entitled to a credit against the Purchase Price in an amount equal to Buyer's cost to cure said objection. If Buyer objects to the condition of title as provided herein and if Closing is scheduled to occur prior to the expiration of the applicable time periods set forth in this subsection, then the date of Closing shall be postponed until the earlier of the expiration of said sixty (60) -day additional cure period or ten (10) days after the cure to Buyer's satisfaction of Buyer's objection. (d) Title Insurance Policv At Closing, Buyer shall cause the Title Company to issue in Buyer's name the Title Policy for the Property. The..Title Policy shall be in an amount equal to the Purchase Price and subject only to the Permitted Exceptions, and the Standard Exceptions shall be deleted from the Title Policy. At Closing, Buyer shall pay for the cost of the title insurance premium for the Title Policy and any endorsements thereto that are necessary in order for the condition of title to the Property to comply with the provisions herein. 11. Special Assessments Seller agrees to pay on the Closing Date all special assessments levied, pending or approved including installments of special assessments certified and payable with the real estate taxes due and payable in the year 2007. 12. Real Estate Taxes Seller shall pay all real estate taxes and installments of special assessments due and payable in the year 2006 and prior years. Purchaser shall pay all real estate taxes and installments of special assessments (not paid by Seller pursuant to paragraph 11 above) due and payable therewith in the year 2008 and subsequent years. Real estate taxes due and payable in the year 2007 shall be prorated between Seller and Purchaser as of the Closing Date based upon a calendar year commenced January 1, 2007. 13. Real Estate Brokerage Commission The parties represent to each other that neither has engaged a real estate broker or agent in connection with the sale and purchase contemplated by 7 the terms of this Agreement. Each party agrees to indemnify and hold harmless the other party for any claim relating to the services of a real estate broker. 14. Conditions to Closing All obligations of Purchaser under this Agreement are subject to the fulfillment, prior to or on the Closing Date, or within applicable time periods, of each of the following conditions: (a) The representations and warranties of the Seller contained in this Agreement shall be true as of the Closing Date, as though such representations and warranties were made at such time. (b) Marketability of title to said Real Property has been established pursuant to the provisions of this Agreement. _ ..... __ .. .. (c) Purchaser shall have untilSeptemb.�, 2007,_or the date which is ten (10)_days Deleted: June i after the date when Purchaser shall have received the last of the items which Seller is required to deliver to Purchaser pursuant to the provisions of this Agreement, whichever is later, to review, inspect, investigate and /or test, at Purchaser's sole cost and expense, the following matters: (i) All leases, contracts and permits applicable to the Property. (ii) The condition of any buildings, structures and improvements located on the Property including all the structural components of such buildings, structures and improvements and all mechanical, electrical, heating, air conditioning, drainage, sewer, water and plumbing systems located therein. (iii) To determine whether Hazardous Substances, inoperable wells or aboveground or underground storage tanks are located in, on or under the Property or improvements thereon. In the event Purchaser determines in his sole discretion that it is in his best interest to obtain a Phase I environmental report for the Property, the Phase I environmental report shall be ordered at the cost and expense of the Purchaser. Seller shall allow Purchaser and Purchaser's agents, access to the Property at all reasonable times for the purpose of Purchaser's investigation and testing. Purchaser shall pay all costs and expenses of such investigation and testing and shall hold Seller and the Property harmless from all costs and liabilities relating to Purchaser's activities. Purchaser shall further repair and restore any damage to the Property caused by Purchaser's inspection and testing and return the Property and/or any improvements or personal property to substantially the same condition as existed prior to such entry. (d) If, as a result of the investigation and testing conducted pursuant to subparagraph (c) above, Purchaser determines in its s ole di scretion: (i) that the leases, contracts and/or permits are not acceptable; (ii) that the buildings, structures, improvements, mechanical, electrical or other internal systems are not in proper working order; or (iii) that Hazardous Substances,.inclUdin but not limited to the existence of triable or on- feiabie asbestos, inoperable wells or aboveground or underground storage tanks hlst in, on or under the Property or improvements located thereon as _ .. `Deleted: are evidenced by a written report prepared by an environmental expert, then, in any of such events, Purchaser shall have the right to give notice to Seller that it wishes to terminate this Agreement and upon such notice being given this Agreement shall be null and void and all earnest money shall be promptly refunded. To be effective, this _..........._...... ...._..._........._...._.__._.. ,..._....._.... notice must be g �reil_to Seiler by October 5.2 Along with the notice, Purchaser 11 . .._.. ._... . shall also provide Seller with a copy of any written report prepared in connection with any inspection and testing done by Purchaser including, without limitation, any F _ environmental report prepared by an environmental expert. Provided howe and .. ''' Deleted: Such notice must be given by notwithstanding Purchaser's right to terminate and have all earnest money refunded, the date hereinbefore specified for Purchaser to complete its inspection and Seller shall have the right upon receipt of the above - described notice from Purchaser investi to cure the defect noted by Purchaser within sixty (60) days from the receipt of the notice from Purchaser. If Seller gives Purchaser notice of its intent to cure within ten (10) days of notice to terminate from Purchaser, this Agreement shall not be terminated. If the defect noted by Purchaser relates to an environmental problem, includintr but not i imitd to the existence of asbestos at tlie Prop ert�, the cure shall be to the reasonable satisfaction of Purchaser's environmental expert. If the defect noted is with regard to any other problem, the cure will be to the reasonable satisfaction of Purchaser. Seller shall use reasonable diligence to cure the problem as soon as possible and if necessary, the Closing shall be delayed pending such cure. If the defect is cured, the parties will proceed to Closing under the terms of this Agreement within ten (10) days of the completion of such cure. If after Seller's sixty (60) day cure period, the problem is not cured, Purchaser shall once again have the right to give written notice that this Agreement is terminated and upon Seller receiving such written notice this Agreement shall be deemed to be null and void and all earnest money promptly refunded to Purchaser. At any time prior to the expiration of Purchaser's right to terminate this Agreement, or during Seller's sixty (60) day cure, Purchaser shall have the right to waive any defect in writing and upon such waiver, the parties shall proceed to Closing. If after giving a notice of termination pursuant to this paragraph Purchaser closes on this transaction, Purchaser waives its right to make any claims in the future based on any representations and warranties in this Agreement to the extent that such representations and warranties relate to the claim made by Purchaser. _.._._.._ . _ ...... _ .... ___ ...... __..__...__........... ._._, Deleted: 15.. Condition of f'ronerty - The parties acknowledge and agree all warranties and representations made as to the physical condition of the Property shall survive the closing. M 16. Notice Any notice given under this agreement shall be deemed given on the date the same is deposited in the United. States Mail (registered or certified), postage prepaid, addressed or personally delivered as follows: If to the Seller: Marshall Lebow 5500 Wayzata Blvd., #1425 Minneapolis, MN 55416 With a copy to: Leland J. Frankman, Esq. 2000 U.S. Bank Plaza 220 South Sixth Street Minneapolis, MN 55402 If to the Purchaser: rrk McDonald Deleted: Daniel J. Donahue .r_ _._.._......, .,._............_......_......_ ... _... _ ...._ .......... _. _ _. _.._ ... _.... _ ...._ _.._ .......... Acting City Manager City of New Hope 4401 XyIon Avenue North New Hope, MN 55428 (763) 531 -5100 (763) 531 -5136 (fax) With a copy to: Steven A. Sondrall New Hope City Attorney Jensen Anderson Sondrall, P.A. 8525 Edinbrook Crossing, 9201 Brooklyn Park, MN 55443 (763) 424 -8811 (763 )493 -5193 (fax) 17. Default by Seller In the event that Seller should fail to consummate the transaction contemplated herein for any reason, except Purchaser's default, Purchaser may: (a) Enforce the specific performance of this Agreement provided action to enforce such specific performance shall be commenced within six (6) months after the date the right of action has arisen. (b) Cancel this Agreement and upon cancellation, all earnest money shall be refunded to Purchaser. 18. Default by Purchaser In the event the Purchaser shall fail to consummate the transaction contemplated herein, except for default by Seller or notice of termination µiv e _ co. Seisk - by Purchaser per paraG r_ aph14( d) ofthisAgreenent, Purchaser shall pay toSellerrh Deleted:Te Dollars ($50,000 00) earnest znanev, such sum being agreed upon as liquidated damages for the Deleted. to failure of Purchaser to perform the duties, liabilities and obligations imposed upon it by the terms 10 and provisions of this agreement and because of the difficulty, inconvenience, and uncertainty of ascertaining actual damages, no other damages, rights or remedies shall, in any case, be collectable, enforceable, or available to Seller other than as provided in this paragraph, and Seller agrees to accept and take the $,5 as its total damages and relief hereunder in such event. Deleted: to ............ _ .... _ .... - �.. ... __ 19. Miscellaneous (a) This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Minnesota. (b) Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. (c) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their successors and assigns. (d) This Agreement may be executed in any number of counterparts or may be, where the same are not required, certified or otherwise delivered without the testimonium clause and signatures; each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one Agreement. (e) In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal. or unenforceable provision had never been contained herein. [Signature page to follow) I1 SELLER: PURCHASER: MAR-JIL CORPORATION, a Minnesota CITY OF NEW HOPE corporation By: By: Martin E. Opem Sr. Its: Its Mayor By: By: J�irk McDonald Deleted: Daniel J. Donahue Its: Its Acting City Manager p !�'W'l Y"%'! CIA ajj Deleted: P:\ATTORNEY\SAS\I .. i CLIENT FILES\2 CITY OF NEW .. ... . . . HOPE\99-11334(BASS LAKE ROAD APARTMENTS)\PURCHASE AGREEMENT-00I.DOC 12 EXHIBIT A LEGAL DESCRIPTION Lot 5, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0012) Lot 4, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0011) Lot 3, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0010) Lot 2, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0009) Lot 1, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0008) EXHIBIT B PERSONAL PROPERTY Page S: [1] Deleted Steven A. Sondrall 8/20/2007 8:25:00 AM No toxic or hazardous substances or wastes, pollutants or contaminants (including, without limitation, asbestos, urea formaldehyde, the group of organic compounds known as polychorinated 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 Property, nor has any activity been undertaken on the Property that would cause or contribute to (i) the 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.C. '6901 et seq. or 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 Property within the meaning of, or otherwise bring the Property within the ambit of, CERCLA, or any similar state law or local ordinance, or (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 seq., or any similar state law or local ordinance. There are no substances or conditions in 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, including without limitation, the Minnesota Environmental Response and Liability Act, Minn. Stat. 115B ( "MERLA ") and the Minnesota Petroleum Tank Release Cleanup Act, Minn. Stat. 115C. No asbestos has been installed or exists within any improvements on the Property. No above ground or underground tanks, are located in or about the Property and have subsequently been removed or filled. To the extent storage tanks are located on the Property they have been duly registered with all appropriate regulatory and governmental bodies and otherwise are in compliance with applicable Federal, state and local statutes, regulations, ordinances and other regulatory requirements. APARTMENT PU RCH A SE AGRE EMENT THIS AGREEMENT made effective the 27 day of August, 2007 by and between Mar -Jil Corporation, a Minnesota corporation (hereinafter referred to as "Seller ") and City of New hope, a Minnesota municipal corporation (hereinafter referred to as "Purchaser "). Recital: The City of New Hope, having the power to acquire property by Eminent Domain, after notifying Mar -Jil Corporation of its intention to acquire its property by Eminent Domain, the City of New Hope and Mar -Jil Corporation have now reached an agreement instead whereby the City will purchase, and Mar -Jil Corporation will sell the property upon the terms and conditions contained in this agreement. Therefore, In consideration of the mutual covenants contained herein, Seller and Purchaser agree as follows: 1. Purchase and Sale Subject to and in reliance upon the within representations, warranties and agreements of Seller on the one part, and Purchaser on the other part, and subject to the agreements, covenants and conditions of this Apartment Complex Purchase Agreement (the "Agreement "), Seller agrees to sell and Purchaser agrees to purchase: (a) That certain real estate and improvements commonly known as The Bass Lake Road Apartments located at 8401 and 8420 Bass Lake Road, and 8401, 8411 and 8421- 58 Avenue North, New Hope, Mimnesota, legally described on Exhibit A., including five apartment buildings and one utility /maintenance building containing 60 dwelling units /apartments (12 units in each apartment building), together with all component mechanical, structural, heating, plumbing, electrical, air conditioning and roofing elements, and all other improvements located on the real estate (the "Real Property "). (b) All and singular the rights and appurtenances pertaining to the Real Property, including any right, title and interest of Seller in and to adjacent streets, alleys, rights - of -ways and easements for all five parcels. (c) All plans, code enforcement reports, environmental reports, engineering reports and any other studies and reports involving the Real Property in Seller's possession or reasonably available at no cost to Seller. (d) The personal property, machinery and equipment located upon said Real Property (if any) described on Exhibit B (the "Personal Property "). (e) All right, title and interest of Seller in the lease agreements, contracts and warranties to be assigned in accordance with this Agreement. (f) Unless otherwise stated or otherwise evident to the contrary, the assets listed in subparagraphs (a) through (e) above, are hereinafter collectively referred to as the "Property ". 2. Purchase Price The total purchase price to be paid by the Purchaser for the Property shall be Two Million Two Hundred Fifty Thousand and 00 /100 Dollars ($2,250,000.00), which shall be paid as follows: (a) $50,000.00 earnest money, payable to the Leland J. Frankman, Esq. Trust Account, the receipt of which is acknowledged. (b) $2,200,000.00 cash at Closing. 3. Cl— osin Consummation of this transaction (the "Closing ") shall be on or before October 15, 2007 (the "Closing Date "), at the offices of the City of New Hope, 4401 Xylon Avenue North, New Hope, Minnesota 55428. 4. Possession Bate Subject only to the rights ofparties in possession pursuant to Lease Agreements accepted by and assigned to Purchaser on the Closing Date, the Purchaser shall be entitled to possession of the Property as of the Closing Date. 5. Seller's Obligations at Closing At the Closing, Seller shall: (a) Execute and deliver to Purchaser a Warranty Deed subject to the Permitted Encumbrances. (b) Deliver to the Purchaser copies of any certificates of occupancy, licenses, permits, authorizations, and approvals issued by governmental authorities having jurisdiction over the Property in the possession of Seller. (c) Execute and deliver a Bill of Sale with general warranties for all Personal Property (if any) included in the transfer. (d) Deliver the originals of all lease agreements for the Property and execute and deliver to the Purchaser an assignment of said leases in a form mutually acceptable to Purchaser and Seller. (e) Deliver to Purchaser letters executed by the Seller ready for delivery to each respective tenant directing that rental payments be sent to the Purchaser or at Purchaser's direction. (f) Pay to Purchaser the amount of all security deposits, including all interest accrued thereon as of the Closing Date held or received by Seller with respect to the tenants. 2 (g) Deliver an assignment in a form acceptable to Purchaser of any assignable warranties, guaranties, permits and licenses applicable to the Property. (h) Deliver a non - foreign affidavit, properly executed in recordable form containing such information as required by IRC Section 1445(B)(2) and its regulations. (i) Provide an appropriate federal income tax reporting form, if any is required. (j) Pay the state deed tax due for conveyance of the Property. (k) Pay the cost of recording all documents necessary to place record title to the Property in the condition warranted and required of Seller by this Agreement. O Execute and deliver to Purchaser a seller's affidavit indicating no judgments or liens against Seller. (m) Execute all other documents reasonably necessary to perform this Agreement and to transfer the Property to Purchaser free and clear of any and all encumbrances other than permitted encumbrances. (n) Provide Seller's corporate resolution authorizing this sale and indicating the person or persons signing this agreement have full legal authority to act on behalf of Seller. 6. Purchaser's Obligations at Closing Subject to the terms and conditions hereof, and contemporaneously with the performance by Seller of its obligations, Purchaser shall do the following: (a) Deliver a City check payable to the Seller for the amount due at Closing. (b) Accept delivery of the Property. (c) Accept assignment of the lease agreements and execute documents assuming future obligations of the lessor under said leases. (d) Execute and deliver such additional documents as are necessary and incidental to closing the transaction consistent with the terms and conditions of this Agreement. 7. Rent and Operating Expense Pro - Ration The following pro- rations shall be made as of the Closing Date: (a) Rents (including, without limitation, payments for operating costs, common area costs and real estate taxes) interest, and all other income and operating expenses relating to the Property shall be made as of the Closing Date, with the Seller responsible for the expenses and entitled to the revenues accrued or applicable to the 3 period prior to the Closing Date. Purchaser is responsible for the expense and entitled to the revenues accrued or applicable after the Closing Date. If on the Closing Date any of the amounts to be apportioned 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 estimates of the Seller and Purchaser of the amount or amounts of the item or items in question, subject to adjustment (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. Seller's Representations, Warranties and Covenants Seller covenants, represents and warrants to the Purchaser as follows: (a) Any certificates of occupancy, underwriters' certificates relating to electrical work and building, safety, fire and health codes and approvals and all other permits issued to and in possession of the Seller to operate the Property will be assigned, where appropriate, to Purchaser at Closing. (b) The Purchaser acknowledges and agrees the Property is being sold in an "As Is" condition and Purchaser shall accept the Property in its "As Is" condition as of the Closing Date. Purchaser shall be entitled. to full and complete access to all areas of the Property including any rental units after reasonable notice is provided to the tenant in the event said unit is occupied. Purchaser, in its sole discretion, shall be allowed to make any reasonable inspection and examination of the Property to determine if the Property is suitable for Purchaser's intended use. Purchaser shall be allowed this access to the Property until September 24, 2007 (c) That there are no service and/or employment contracts or other contracts, unrecorded easements, covenants or restrictions or agreements of any kind or description, either written or verbal, pertaining to the Property as of the date hereof, except as may be canceled or terminated at the Seller's discretion on or before the Closing Date scheduled herein. (d) During the period between the date hereof and the Closing Date, Seller shall continue to operate and maintain the Property in the usual and customary manner. M (e) Seller owns the Property, free and clear of all encumbrances and the person or persons signing this agreement on behalf of the Seller have the full right to sell and convey the Property on behalf of the Seller. (f) Seller has received no notice of actual or threatened special assessments or reassessments of the Real Property. (g) 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 the consummation of this Agreement. (h) 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. (i) Seller will provide to Buyer on or before September 24, 2007, a true, correct and complete copy of each lease applicable to the Property. Such leases are in full force and effect and permits Seller to terminate the lease by providing tenant with no more than ninety (90) days notice. Neither Seller nor tenant is, to the best of Seller's knowledge, in default under any such lease. There are no other leases or possessory rights regarding the Property, except such leases provided to Purchaser. (j) Seller will make available to Purchaser on or before September 24, 2007, a true, correct and complete copy of each contract applicable to the Property which extends beyond the Closing Date. To the best of Seller's knowledge, such contracts are in full force and effect and neither Seller, nor any other party to such contract, is in default under such contract. All other contracts in effect as of the date of this Agreement regarding the Property are terminable on or before the Closing Date. (k) Seller shall execute no lease agreement during the period of time from the date of this Agreement to the Closing Date. (1) On or before September 24, 2007, Seller will deliver to Buyer true and correct copies of all permits in connection with the Property. To the extent available to Seller, Seller will also deliver to Buyer true and correct copies of all warranties, plans, specifications, surveys, and environmental reports pertaining to the Property. Seller will indemnify Purchaser, its successors and assigns, against, and will hold Purchaser, its successors and assigns, harmless from any expenses or damages, including reasonable attorneys' fees, that Purchaser incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or after Closing. Consummation of this Agreement by Purchaser with knowledge of any such breach by Seller will not constitute a waiver or release by Purchaser of any claims due to such breach. 9. Seller's Warranty of Title Subject to performance by the Purchaser, the Seller agrees to execute and deliver the Warranty Deed conveying marketable title to said Property subject only to the following exceptions ( "Permitted Encumbrances "): (a) Reservation of any minerals or mineral rights to the State of Minnesota. (b) Utility and drainage easements which do not interfere with present improvements. (c) The lien of real estate taxes and special assessments not the obligation of the Seller pursuant to the terms of this agreement. (d) Exceptions to title which are not objected to by Purchaser as provided in Paragraph 10 below. (e) Lease agreements accepted by Purchaser and assigned to Purchaser at Closing. 10. Obligations of Seller and Purchaser as to Title Matters It is understood and agreed that the title herein required to be furnished to the Property and to appurtenant easements, if any, by the Seller shall be marketable of record and that marketability shall be determined as of the Closing Date. Seller agrees to record all documents necessary to show of record a marketable title in Seller, all at Seller's cost and expense. (a) Delivery of Title Commitment Within twenty (20) days after the Effective Date, Buyer shall cause a Title Company to issue and deliver to Buyer a Title Commitment for the Property, together with complete copies of all instruments identified as conditions or exceptions on Schedule B of the Title Commitment. Seller shall be responsible for the cost of the Title Commitment. Seller agrees that not more than ten (10) days nor less than five (5) days before the Closing, Buyer shall have the right at Buyer's expense to cause the Title Company to issue a Title Update. (b) Buyer's Review of Title Commitment After Buyer's receipt of the final Title Commitment, together with all supporting documents, Buyer shall have ten (10) days in which to notify Seller of any objections to the condition of the Title Commitment that Buyer determines, in its sole and absolute discretion, have an adverse affect on the Property. If Buyer fails to notify Seller in writing of objections to the Title Commitment within the ten (10) -day review period, Buyer shall be deemed to have no objections to the Title Commitment. (c) Seller's Cure of Title and Survey Objections If Buyer objects to the condition of title, Seller shall have thirty (30) days after Buyer provides Seller with notice of Buyer's objections, or such other time period agreed to by Buyer and Seller in writing, to use reasonable efforts to cure Buyer's objections. Prior to the expiration of said applicable cure period, Seller shall notify Buyer in writing stating either that Seller has cured Buyer's objections to Buyer's satisfaction or that Seller is unable to 6 cure said objections. If Seller does not cure Buyer's objections to Buyer's satisfaction within the above- referenced applicable cure period, then within fifteen (15) days after Buyer's receipt of Seller's notice, then at any time prior to Closing, Buyer shall notify Seller in writing of Buyer's election to: (i) terminate this Contract, whereupon the Deposit shall be returned to Buyer; (ii) waive said objections; or (iii) extend the time period to cure Buyer's objections for a period of sixty (60) days from the date of Buyer's election to extend, in order to provide Seller and/or Buyer with the opportunity to cure Buyer's objections provided, however, if Buyer's objections are not cured to Buyer's satisfaction prior to the expiration of said sixty (60) -day period, then Buyer shall notify Seller in writing of Buyer's election either to: (i) terminate this Contract, whereupon the Deposit shall be returned to Buyer; (ii) waive said objection; or (iii) Buyer may cure said objection, and in such event at Closing, Buyer shall be entitled to a credit against the Purchase Price in an amount equal to Buyer's cost to cure said objection. If Buyer objects to the condition of title as provided herein and if Closing is scheduled to occur prior to the expiration of the applicable time periods set forth in this subsection, then the date of Closing shall be postponed until the earlier of the expiration of said sixty (60) -day additional cure period or ten (10) days after the cure to Buyer's satisfaction of Buyer's objection. (d) Title Insurance Policy At Closing, Buyer shall cause the Title Company to issue in Buyer's name the Title Policy for the Property. The Title Policy shall be in an amount equal to the Purchase Price and subj ect only to the Permitted Exceptions, and the Standard Exceptions shall be deleted from the Title Policy. At Closing, Buyer shall pay for the cost of the title insurance premium for the Title Policy and any endorsements thereto that are necessary in order for the condition of title to the Property to comply with the provisions herein. 11. Special Assessments Seller agrees to pay on the Closing Date all special assessments levied, pending or approved including installments of special assessments certified and payable with the real estate taxes due and payable in the year 2007. 12. Real Estate Taxes Seller shall pay all real estate taxes and installments of special assessments due and payable in the year 2006 and prior years. Purchaser shall pay all real estate taxes and installments of special assessments (not paid by Seller pursuant to paragraph 11 above) due and payable therewith in the year 2008 and subsequent years. Real estate taxes due and payable in the year 2007 shall be prorated between Seller and Purchaser as of the Closing Date based upon a calendar year commenced January 1, 2007. 13. Real Estate Brokerage Commission The parties represent to each other that neither has engaged a real estate broker or agent in connection with the sale and purchase contemplated by the terms of this Agreement. Each party agrees to indemnify and hold harmless the other party for any claim relating to the services of a real estate broker. 7 14. Conditions to Closing All obligations of Purchaser under this Agreement are subject to the fulfillment, prior to or on the Closing Date, or within applicable time periods, of each of the following conditions: (a) The representations and warranties of the Seller contained in this Agreement shall be true as of the Closing Date, as though such representations and warranties were made at such time. (b) Marketability of title to said Real Property has been established pursuant to the provisions of this Agreement. (e) Purchaser shall have until September 24, 2007, or the date which is ten (10) days after the date when Purchaser shall have received the last of the items which Seller is required to deliver to Purchaser pursuant to the provisions of this Agreement, whichever is later, to review, inspect, investigate and/or test, at Purchaser's sole cost and expense, the following matters: (i) All leases, contracts and permits applicable to the Property. (ii) The condition of any buildings, structures and improvements located on the Property including all the structural components of such buildings, structures and improvements and all mechanical, electrical, heating, air conditioning, drainage, sewer, water and plumbing systems located therein. (iii) To determine whether Hazardous Substances, inoperable wells or aboveground or underground storage tanks are located in, on or under the Property or improvements thereon. In the event Purchaser determines in his sole discretion that it is in his best interest to obtain a Phase I environmental report for the Property, the Phase I environmental report shall be ordered at the cost and expense of the Purchaser. Seller shall allow Purchaser and Purchaser's agents, access to the Property at all reasonable times for the purpose of Purchaser's investigation and testing. Purchaser shall pay all costs and expenses of such investigation and testing and shall hold Seller and the Property harmless from all costs and liabilities relating to Purchaser's activities. Purchaser shall further repair and restore any damage to the Property caused by Purchaser's inspection and testing and return the Property and/or any improvements or personal property to substantially the same condition as existed prior to such entry. (d) If, as a result of the investigation and testing conducted pursuant to subparagraph (c) above, Purchaser determines in its sole discretion: (i) that the leases, contracts and/or permits are not acceptable; (ii) that the buildings, structures, improvements, mechanical, electrical or other internal systems are not in proper working order; or (iii) that Hazardous Substances, including but not limited to the existence of friable or non - friable asbestos, inoperable wells or aboveground or underground storage tanks exist in, on or under the Property or improvements located thereon as evidenced by a written report prepared by an environmental expert, then, in any of such events, Purchaser shall have the right to give notice to Seller that it wishes to terminate this Agreement and upon such notice being given this Agreement shall be null and void and all earnest money shall be promptly refunded. To be effective, this notice must be given to Seller by September 30, 2007. Along with the notice, Purchaser shall also provide Seller with a copy of any written report prepared in connection with any inspection and testing done by Purchaser including, without limitation, any environmental report prepared by an environmental expert. Provided, however, and notwithstanding Purchaser's right to terminate and have all earnest money refunded, Seller shall have the right upon receipt of the above - described notice from Purchaser to cure the defect noted by Purchaser within sixty (60) days from the receipt of the notice from Purchaser. If Seller gives Purchaser notice of its intent to cure within ten (10) days of notice to terminate from Purchaser, this Agreement shall not be terminated. If the defect noted by Purchaser relates to an environmental problem, including but not limited to the existence of asbestos at the Property, the cure shall be to the reasonable satisfaction of Purchaser's environmental expert. If the defect noted is with regard to any other problem, the cure will be to the reasonable satisfaction of Purchaser. Seller shall use reasonable diligence to cure the problem as soon as possible and if necessary, the Closing shall be delayed pending such cure. If the defect is cured, the parties will proceed to Closing under the terms of this Agreement within ten (10) days of the completion of such cure. If after Seller's sixty (60) day cure period, the problem is not cured, Purchaser shall once again have the right to give written notice that this Agreement is terminated and upon Seller receiving such written notice this Agreement shall be deemed to be null and void and all earnest money promptly refunded to Purchaser. At any time prior to the expiration of Purchaser's right to terminate this Agreement, or during Seller's sixty (60) day cure, Purchaser shall have the right to waive any defect in writing and upon such waiver, the parties shall proceed to Closing. If after giving a notice of termination pursuant to this paragraph Purchaser closes on this transaction, Purchaser waives its right to make any claims in the future based on any representations and warranties in this Agreement to the extent that such representations and warranties relate to the claim made by Purchaser. 15. Notice Any notice given under this agreement shall be deemed given on the date the same is deposited in the United States Mail (registered or certified), postage prepaid, addressed or personally delivered as follows: If to the Seller: Marshall Lebow 5500 Wayzata Blvd., #1425 9 Minneapolis, MN 55416 With a copy to: Leland J. Frankman, Esq. 2000 U.S. Bank Plaza 220 South Sixth Street Minneapolis, MN 55402 (612)375 -1600 (612)335 -3572 (fax) If to the Purchaser: Kirk McDonald Acting City Manager City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 (763) 531 -5100 (763) 531 -5136 (fax) With a copy to: Steven A. Sondrall New Hope City Attorney Jensen Anderson Sondrall, P.A. 8525 Edinbrook Crossing, #201 Brooklyn Park, MN 55443 (763) 424 -8811 (763) 493 -5193 (fax) 16. Default by Seller In the event that Seller should fail to consummate the transaction contemplated herein for any reason, except Purchaser's default, Purchaser may: (a) Enforce the specific performance of this Agreement provided action to enforce such specific performance shall be commenced within six (6) months after the date the right of action has arisen. (b) Cancel this Agreement and upon cancellation, all earnest money shall be refunded to Purchaser. 17. Default by Purchaser In the event the Purchaser shall fail to consummate the transaction contemplated herein, except for default by Seller or notice of termination given to Seller by Purchaser per paragraph 14(d) of this Agreement, Purchaser shall pay to Seller the Fifty Thousand Dollars ($50,000.00) earnest money, such sum being agreed upon as liquidated damages for the failure of Purchaser to perform the duties, liabilities and obligations imposed upon it by the terms and provisions of this agreement and because of the difficulty, inconvenience, and uncertainty of ascertaining actual damages, no other damages, rights or remedies shall, in any case, be collectable, enforceable, or available to Seller other than as provided in this paragraph, and Seller agrees to accept and take the $50,000.00 as its total damages and relief hereunder in such event. 10 18. Miscellaneous (a) This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Minnesota. (b) Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. (c) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their successors and assigns. (d) This Agreement may be executed in any number of counterparts or may be, where the same are not required, certified or otherwise delivered without the testimonium clause and signatures; each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one Agreement. (e) In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. [Signature page to follow] 11 MAR -JIL CORPORATION, a Minnesota CITY OF NEW HOPE J° q4 P:\ATTORNEYSAS\1 CLIENT FILES \2 CITY OF NEW HOPE\99- 11334(EASS LAKE ROAD APARTMENTS)\PURCHASE AGREEMENT- 003 -RED LINE.DOC 12 Lot 5, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0012) Lot 4, Block 1, Gervais & Hunter Replat (PID No. 06-118-21-42-0011) Lot 3, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0010) Lot 2, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0009) Lot 1, Block 1, Gervais & Hunter Replat (PID No. 06- 118 -21 -42 -0008) EXHIBIT B