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072699 EDA Official File Copy CITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North July 26, 1999 President W. Peter Enck Commissioner Sharon Cassen Commissioner Don Collier Commissioner Pat LaVine Norby Commissioner Mark Thompson 1. Call to Order 2. Roll Call 3. Approval of Regular Meeting Minutes of June 28, 1999 4. Resolution Approving Purchase Agreement to Acquire Property at 7500 42~ Avenue North by Direct Purchase or Condemnation (Improvement Project No. 474) 5. Adjournment CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 Approved EDA Minutes June 28, 1999 Regular Meeting City Hall CALL TO ORDER President Enck called the meeting of the Economic Development Authority to order at 7:07 p.m. ROLL CALL Present: Enck, Cassen, Collier, Norby, Thompson Staff Present: Sondrall, Hanson, Dona_hue, Leone, McDonald, Henry, Kern, French, Johnson APPROVE MINUTES Motion was made by Commissioner Cassen, seconded by Commissioner Collier, to approve the Regular Meeting Minutes of June 14, 1999. All present voted in favor. Motion carried. IMP. PROJECT 662 President Enck introduced for discussion Item 4, Resolution Approving 1999 Item 4 Amendment to Master Modification to Redevelopment Plans and Tax Increment Financing Plans and Requesting the Approval of the City Council (Improvement Project No. 662). Mr. Dan Donahue, City Manager, acknowledged the presence of school district 281 representatives. He stated a public hearing is required to consider amending the redevelopment and tax increment f'mancing plan area to include the Cooper High School property. The modification meets the goals and purposes of the City and HRA 'by providing recreational facilities available for use by the public which will be of benefit to all residents of the City. The amendment will authorize the expenditure of tax increment revenues derived from tax increment districts to pay for the proposed recreational facilities project. Mr. Donahue explained that the City Council recently held a work session and reviewed several options for gyms at Cooper High School. Included in the discussion was the type of agreement between the City and the School District for use of the space. He noted if the project proceeds, the agreement will be similar to the one presently in place between the City of Plymouth and Armstrong High School. The project will be funded by the City with TIF dollars, but would become the property of the School District; then the School District would pay for operational and maintenance costs. The City would use the facility on week nights, weekends and during the summer months. Mr. Donahue noted the City Council preferred Option 2 which includes two full- size basketball courts, bleachers, storage space, and access to existing restrooms in the school. The gyms would be located on the north side of the building. The plan also calls for the replacement of the existing five tennis courts on the north side of the building with the School District funding the rebuilding of the five existing courts and the City funding the construction of two additional courts. The total estimated cost is approximately $3,000,000. New Hope EDA June 28, 1999 Page 1 The EDA expressed support for the proposal. Commissioner Collier pointed out that the City does not yet have a long-term agreement with the School District regarding usage of the New Hope Ice Arena. He noted he hopes this is not indicative of the School District's action for furore projects. EDA Commissioner Norby introduced the following resolution and moved its adoption: RESOLUTION 99-08 "RESOLUTION APPROVING 1999 AMENDMENT TO MASTER MODIlelCATION TO REDEVELOPMENT PLANS AND TAX INCREMENT FINANCING PLANS AND REQUESTING TIlE APPROVAL OF TIlE CITY COUNCIL ". The motion for the adoption of the foregoing resolution was seconded by Commissioner Cassen, and upon vote being taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Norby, Thompson; and the following voted against the same: None; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. The EDA Meeting was suspended at 7:25 p.m. to conduct the public hearing at the City Council Meeting regarding this matter. The EDA Meeting was reconvened at 8:10 p.m. IMP. PROJECT510 President Enck introduced for discussion Item 5, Resolution Approving Item 5 Subordination of Mortgages to New First Mortgage for New Hope Apartments (Improvement Project No. 510). President Enck noted that this merely involves a refinancing effort. EDA Commissioner Collier introduced the following resolution and moved its adoption: RESOLUTION 99-09 "RESOLUTION APPROVING SUBORDINATION OF MORTGAGES TO NEW FIRST MORTGAGE FOR NEW HOPE APARTMENTS (IMPROVEMENT PROJECT NO. 510)". The motion for the adoption of the foregoing resolution was seconded by Commissioner Norby, and upon vote being taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Norby, Thompson; and the following voted against the same: None; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. 7500 42~ AVE. N. President Enck introduced for discussion Item 6, Discussion Regarding Potential IMP. PROJECT474 Acquisition of Industrial Property Located at 7500 42~ Avenue North Item 6 (Improvement Project No. 474). Mr. Kirk McDonald, Director of Community Development, indicated staff has met with the property owner who is willing to compromise on the selling price of 7500 42~ Avenue North for $482,000. Mr. McDonald noted that the EDA should consider the long term planning and redevelopment goals of the City; no requirement to pay relocation expenses; ground water contamination issues; differences between appraisals; differences in market and taxable values; environmental tests and timeline; availability of Brownfield grants; and costs of 42aa Avenue redevelopment. New Hope EDA June 28, 1999 Page 2 He explained that if the property was rezoned to B4 Community Business, the market value would be approximately $844,000. He reviewed anticipated tax revenues and encouraged the EDA to consider the long-term benefits. Discussion ensued regarding pollution issues. Mr. Steve Sondrall, City Attorney, noted for protection to the City the contractual language would clarify that Ardell Engineering would be responsible if additional contamination is revealed. Mr. Sondrall commented that Bjorldund's appraisal had a major emphasis on comparable sales of individual properties within the area. He stated the appraisal process is very subjective and oftentimes results in variations. MOTION Motion was made by Councilmember Cassen, seconded by Councilmember Norby, Item 4 authorizing entering into a purchase. All present voted in favor. Motion carried. ADJOURNMENT Motion was made by Commissioner Thompson, seconded by Commissioner Collier, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:32 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA June 28, 1999 Page 3 ~ EDA Originating Department Approved for Agenda Agenda SecUon EDA Community Development ~7 7-26-99~ It~n No. ByKirk McDonald ~ 4 RESOLUTION APPROVING PURCHASE AGREEMENT TO ACQUIRE PROPERTY AT 7500 42ND AVENUE NORTH BY DIRECT PURCHASE OR CONDEMNATION (IMPROVEMENT PROJECT NO. 474) ACTION REQUESTED Staff requests that the Economic Development Authority approve the enclosed resolution prepared by the City Attorney which approves the Purchase Agreement to acquire the property at 7500 42nd Avenue' North by direct purchase or condemnation. The resolution authorizes the Executive Director to acquire the property by direct purchase, per the terms of the agreement, which includes a $482,000 purchase price and all reasonable closing costs associated with the purchase of the property. If direct purchase from the property owner is unsuccessful, the resolution authorizes the Executive Director to commence eminent domain proceedings to acquire the property. POLICY/PAST PRACTICE Since the early 1990s, the City has taken a number of actions to acquire the three industrial properties located at the northeast corner of 42°d and QUebec Avenues for redevelopment purposes. The City acquired and demolished the Electronic Industries building at 7516 42nd Avenue in 1993, and the City acquired and demolished the Foremost building at 7528 42nd Avenue between 1993 and 1995. Over the years, the City has had a number of conversations with the property owner, Terry Jensen, regarding the potential acquisition of the property at 7500 42nd Avenue. The environmental cleanup and future commercial redevelopment of the three industrial sites located at the northeast corner of Quebec Avenue and 42nd Avenue is identified as a goal of the Comprehensive Plan. BACKGROUND At the June 28 EDA meeting, the EDA approved a motion directing staff to prepare a Purchase Agreement for the acquisition of the property at 7500 42n~ Avenue North. The agreed upon purchase price was $482,000, which was a compromise between the owner's appraisal of $545,000 and the City's appraisal of $432,000. The City also will avoid paying relocation expenses due to the unoccupied status of the building. (cont'd) MOTION BY $~X~OND ~Y' Request for Action Page 2 7-26-99 Per the City Attorney's correspondence, the Purchase Agreement for the property consists of three documents: 1. Commercial-Industrial Purchase Agreement (form), 2. Addendum of Seller's Representations and Warranties, and 3. Additional Terms and Conditions to Purchase Agreement. The Purchase Agreement provides for a $500 earnest money payment to the property owner, which has been made. No closing date has been provided, as that date will be determined on when the title work can be performed and the timing on the completion of the environmental study on the property which is being completed by Northern Environmental, the City's environmental consultant. Regarding the Seller's Representations 'and Warranties Addendum, clause f. deals with the contamination issues. The property owner is not required to indemnify the EDA for any contamination caused by the City or Electronic Industries, however, it does require him to indemnify the EDA for contamination to the property caused by him, his tenants, or any persons that have owned or rented the property prior to his ownership. The Northern Environmental report should resolve this issue. Concerning the addendum for Additional Terms and Conditions, there are various dates that should be included in the contract. The closing date needs to be established and a deadline for the Northern Environmental report should be set. Paragraph 6 covers the condemnation issue by indicating there is a present threat of condemnation in connection with this acquisition in the event the property cannot be obtained by direct purchase. The resolution approving this agreement has a reference to condemnation, which will provide the property owner with the ability to defer capital gains on this transaction if he satisfies the time limits for reinvestment of the proceeds from this deal per the Internal Revenue Code. The resolution states that the EDA has determined that the acquisition of this property is reasonably necessary to the furtherance of the goals and objectives of the 42"d Avenue TIF redevelopment plan/project and that the acquisition of this property will be for the benefit of the public health, welfare and safety of the citizens of New Hope. The resolution states that Minnesota Statutes authorize the EDA to acquire the property by direct purchase in lieu of eminent domain proceedings and states that the EDA approves the Purchase Agreement and its addenda to acquire the property by direct purchase for $482,000. The resolution states that it has been determined the additional $50,000 over the EDA's appraisal amount is an equitable compromise between the two appraisals and also constitutes consideration for the property owner's waiver of reimbursement for relocation and moving expenses and appraisal fees required by the Purchase Agreement. Lastly, the resolution states that Minnesota Statutes gives the EDA the authority to acquire property by power of eminent domain and that the EDA has determined it is necessary to acquire this property by either direct purchase or eminent domain proceedings. The property owner has reviewed the Purchase Agreement and is in agreement with the terms and conditions of the agreement and has executed said agreement. Northern Environmental has completed a Phase I Environmental Site Assessment of the property and has determined that there is no evidence' of Recognized Environmental Conditions (RECs) in connection with the property except for the contamination associated with the Electronic Industries site and 'some staining off the northeast corner of the building. Based on the findings, Northern Environmental has recommended that: Request for Action Page 3 6-27-99 1. Remedial activities should continue and the City should seek a "No Association" letter from the MPCA related to the contamination from off-site sources. 2. A soil sample should be collected from the area of the stain and be analyzed. The City is proceeding on both of these recommendations and the City Manager has requested a "No Association" letter from the MPCA. Northern Environmental will now be proceeding with the soil analysis, which will constitute the Phase II work. FUNDING The initial purchase of the property, which is located in the 42nd Avenue TIF District, will be funded internally and those funds will be repaid either upon the sale of the property and/or with grant funds. ATTACHMENTS · Resolution · Attorney Correspondence · Purchase Agreement and Addendums · Northern Environmental Phase I Executive Summary EDA RESOLUTION NO. 99-___ RESOLUTION APPROVING PURCHASE AGREEMENT TO ACQUIRE PROPERTY AT 7500 42ND AVENUE NORTH BY DIRECT PURCHASE OR CONDEMNATION BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope, Minnesota as follows: WHEREAS, the Economic Development Authority in and for the City of New Hope (hereafter the EDA) was organized and established within the City of New Hope by Ordinance No. 89-7 adopted bythe City Council on March 27, 1989 under authorization of Minn. Stat. §469.090 et. seq., and WHEREAS, the New Hope City Council on December 23, 1985 approved the adoption of Redevelopment Plan 85-2, Redevelopment Project 85-2 and Tax Increment Financing Plan 85-2 by its Resolution No. 85-129, and WHEREAS, the EDA was transferred control, operation and authori.ty over Redevelopment Plan 85-2, Redevelopment Project 85-2 and Tax Increment Financing Plan 85-2 pursuant to HRA Resolution No. 89-4, City Resolution No. 89- 73 and EDA Resolution No. 89-3, and WHEREAS, the property located at 7500 42nd Avenue North hereafter legally described is included in the Redevelopment Plan, Redevelopment Project and Tax Increment Financing Plan area: The East 100 feet of the South 350 feet of Lot 5, Auditor's Subdivision No. 324, Hennepin County, Minnesota except road and alley. PID No. 17-118-21-22 0006, and WHEREAS, said redevelopment plan and redevelopment project were established under the authority of Minn. Stat. Chap. 462 pursuant to various studies undertaken by the City of New Hope which have shown that certain redevelopment activities, goals and objectives in the plan area are warranted and would not have occurred through private development alone, and WHEREAS, the Economic Development Authority in and for the City of New Hope does hereby determine that the acquisition of this property is reasonably necessary and convenient to the furtherance of the goals and objectives of the redevelopment plan and redevelopment project, and that in its judgment the acquisition of this property will be for the benefit of the public health, welfare and safety of the citizens of New Hope, and WHEREAS, an appraisal of this property, ordered by the EDA, has been completed establishing a fair market value for the subject property of $432,000.00, and' WHEREAS, the Property Owner has had an appraisal c. ompleted indicating $545,000.00 as the fair market value for the property, and WHEREAS, the Property Owner may also be entitled to reimbursement for relocation and moving expenses and appraisal fees, and WHEREAS, based on the differences in the appraisals and the uncertainty regarding the Owner's right to relocation expenses and appraisal fees the Property Owner has requested an acquisition price of $482,000.00 for the property, and WHEREAS, Minn. Stat. §11 7.232 authorizes the EDA to acquire the subject property by direct purchase in lieu of eminent domain proceedings, and as a result the EDA hereby approves the Purchase Agreement and its addenda (Exhibit A attached) to acquire the property by direct purchase for $482,000.00. It is further determined the additional $50,000.00 over the EDA's appraisal amount is an equitable compromise between the EDA's and the Property Owner's appraisal and also constitutes consideration for the Property Owners waiver of reimbursement for relocation and moving expenses and appraisal fees required by the Purchase Agreement, and ' WHEREAS, Minn. Stat. §469.101, Subd. 4 gives the Economic Development Authority in 'and for the City of New Hope the authority to acquire property by power of eminent domain under Minn. Stat. Chapter 11 7, and WHEREAS, the Economic Development Authority in and for the City of New Hope has determined it is necessary to acquire this property by either direct purchase or eminent domain proceedings, and NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the Executive Director is hereby directed and authorized to sign and deliver to the Property Owner the Purchase ^greement attached hereto as Exhibit A and to acquire by direct purchase per the terms of said Purchase Agreement the property at 7500 42nd Avenue North in the City of New Hope, legally described as follows: The East 100 feet of the South 350 feet of Lot 5, Auditor's Subdivision NO. 324, Hennepin County, Minnesota except road and alley. PID No. 1 7-118-21-22 0006. In addition to the $482,000.00 purchase price, the Executive Director is authorized to pay all reasonable closing costs associated with the purchase of property. 2. If direct purchase from the Property Owner is unsuccessful, the Executive Director is authorized and directed to commence eminent domain proceedings under Minn. Stat. Chapter 117 to acquire the subject property. Adopted by the Economic Development Authority in and for the City of New Hope this 26th-day of July, 1999. W. Peter Enck, President Attest: Daniel J. Donahue, Executive Director JENSEN SWANSON & SONDRALL, P.A. Attorneys/it Law 8525 EDINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNESOTA 55443-1999 TELEPHONE (612).424-8811 · TELEFAX (612) 493-5193 GORDON L. SENSEN* E-MAIL jss~jsspa.com WILLIAM G. SWANSON STEVEN A. SONDRALL MARTIN P. MALECHA C. ALDEN PEARSONt July 8, 1999 DEaN A. TROSO/mD~' JULIE A. TltlLL Kirk McDonald Community Development Director o~ cotms~ City of New Hope LORENS Q. BRYNESTAD 4401 Xylon Avenue North New Hope, MN 55428 RE: Ardel Engineering Purchase Agreement Our File: 99.11111 Dear Kirk: Encl6sed is the purchase agreement for the Ardel Engineering property. It consists of three documents: 1. Commercial-Industrial Purchase Agreement (form), 2. Addendum Of Seller's Representations and Warranties, and 3. Additional Terms and Conditions To Purchase Agreement. Regarding the Purchase Agreement, I have provided for a $500.00 earnest money payment. Therefore, you will need to arrange for a check in that amount for Terry Jansen. Also, no closing date has been provided. We will need to determine the closing date based on when title work can be performed and the timing on the completion of the Northern Environmental study for the Property. Jansen will also need to initial paragraph 11 of the Purchase Agreement relating to the number of addenda making up the agreement. Regarding the Seller's Representations and Warranties Addendum, clause f. deals with the contamination issues. Basically, Jansen is not required to indemnify the EDA for any contamination caused by the City or Electronic Industries, however, it does require him to indenmify the EDA for contamination to the property caused by him, his tenants or any persons that have owned or rented the property prior to his ownership. I believe this accurately reflects the understanding we had with him on this issue. The Northern Environmental report should resolve this issue anyway. Concerning the addendum for Additional Terms and Conditions, there are various dates that should be included in the contract. Again, the closing date needs to be established and a deadline for the Northern Environmental report should be set. Also, Paragraph 6 covers the condemnation issue by indicating there is a present threat of condemnation in connection -~.~ ~p~ t~, sp~,.,.t with this acquisition in the event the property cannot be obtained by direct purchase. Also, Certified By The Mi..~o~ S~ ~ the resolution approving this agreement at the July 26~ meeting will have a reference to Assocmion *,~r~dAOe~..,~ condemnation. That will provide Jansen with the ability to defer capital gains on this July 8, 1999 Page 2 transaction if he satisfies the time limits for reinvestment of the proceeds from this deal per the Internal Revenue Code. Contact me if you have any questions regarding this letter or the enclosed documents. V~ours, Steven A. Sondrall JENSEN SWANSON & SONDRALL, P.A. Attachments Form 1519CIPA 1 tNcw) Miller/Davis £o., Si. Paul, MN COMMERCIAL-INDUSTRIAL PURCHASE AGREEMENT This totrn, approved by the Minnesota Association of REALTORS®, which disclaims any liability arising out of use or misuse of this form. Date July 8, 1999 RECEIVED OF Tile Economic Development Authority in and tbr tile City pt' New Hope the sum of Five l[undrcd ............................................................................... ( $500.00 ) DOLLARS .................................... as earnest money and in part payment f~r the purchase of property (check, cash or note - state which) at ................. 7500._42nd A~,enuc_North._Ncw.Hola¢_. situated in the County of Hennepin State of Minnesota, and legally described as follows: the_cast_l. 00_fect._oLthe south_350_feet of Lot_5. Auditor~s_Sutxli~isimLNo.. 324. · except road and alley together with the following personal property: ...... all of which property the undersigned has this day sold to the Buyer for the sum of: Eou£ _Hundred Eighty-Two Thousand No/100_D. ollars. . _ { ..... $482.000.00 ...... } DOLLARS, which the Buyer agrees to pay in the following manner: Earnest money herein paid ......... $.5_00.00 ....... and ______$~.8.1...5_00.00 ...... cash, on the date of closing and the balance of ......... $0.00 ............. by financing as shown on the attached addendum. 1. DEED/MARKETABLE TITLE: Subject to performance by the Buyer, the Seller agrees to execute and deliver a general Warranty Deed conveying marketable title to said premises subject only to the following exceptions: {al Building and zon~g laws, ordinances, State and Federal regulations. {b) Restrictions relating to use or improvement of the premises without effective forfeiture provision. (c) Reservation of any minerals or mineral rights to the State of Minnesota. (d) Utility and drainage easements which do not interfere with present improvements. (e) Rights of Tenants as follows: Seller represents and warrants the property is_vacant_and not subject to any right of tenants ...... 2. REAL ESTATE TAXES. Real estate taxes due and payable in the year of closing shall be prorated between Seller and Buyer on a calendar year basis to the actual date of closing unless otherwise provided in this Agreement. Real estate taxes payable in the years prior to closing shall be paid by Seller. Real estate taxes payable in the years subsequent to closing shall be paid by Buyer. 3. SPECIAL ASSESSMENTS. [strike out one.] BOYER AND SELLER SHALL PRORATE AS OF THE DATE OF CLOSING / Ae:~.J(I~::~X,~II;PA~XI~I~Y on the date of closing all installments of special assessments certified for payment with the real estate taxes due and payable in the .year of closing. [Strike out one.l ~X~J~J~J~K]~ I SELLER SHALL PAY ON DATE OF CLOSING all other special assessments levied as of the date of this Agreement. [Strike out one. I ~)~4t~J~kXal~}~ I SELLER SHALL PROVIDE PAYMENT OF special assessments pending as of the date of this Agreement for improvements that have been ordered by the City Council or other goverrimental assessing authorities. (Seller's provision for payment shall be by payment into escrow of 1 Y~ times the estimated amount of the assessments.) I'f a special assessment becomes pending after the date of this Agreement and before the date of closing, Buyer may, at Buyer's option: (a) Assume payment of the pending speciaJ assessment without adjustment to the purchase price; or {b) Require Seller to pay the pending special assessment {or escrow for payment of same a sum equal to 1 Yz times the projected pending assessment) and Buyer shall pay a commensurate increase in the purchase price of the property, which increase shall be the same as the estimated amount of the assessment; or lc) Declare this Agreement null and void by notice to Seller, and earnest money shall be refunded to Buyer..Seller shall pay on date of closing any deferred real estate or special assessments payment of which is required as a result of the closing of this sale. 4. PRORATIONS. All items customarily prorated and adjusted in connection with the closing of the sale of the property herein including but not limited to rents, operating expenses, inter'est on any debt assumed by Buyer, shall be prorated as of the date of closing. It shall be assumed that the Buyer will own the property for the entire date of the closing. 5. DAMAGES TO REAL PROPERTY. If there is any loss or damage to the property between the date hereof and the date of closing, for any reason, the risk of loss shall be on the Seller. if the property is destroyed or substantially damaged before the closing, this Purchase Agreement shall become null and void, at Buyer's option. Buyer shall have the right to terminate this Purchase Agreement within 30 days after Seller notifies Buyer of such damage. Upon said termination, the earnest money shall be refunded to Buyer and Buyer and Seller agree to sign a cancellation of Purchase Agreement. MNChPA-1 {11/93) Form 1519CLPA 2 INew) Miller/Davis Co., St. Paul, MN COMMERCIAL-INDUSTRIAL PURCHASE AGREEMENT Address 7500 42nd Avenue North. New Hope. MN 6. EXAMINATION OF TITLE. Within a reasonable time after acceptance of this Agreement, Seller shall furnish Buyer with an Abstract of Title or a Registered Property Abstract certified to date including proper searches covering bankruptcies and State and Federal judgments, liens, and levied and pending special assessments. Buyer shall have 10 business days after receipt of the Abstract of Title or Registered Property Abstract either to have Buyer's attorney examine the title and provide Seller with written objections or, at Buyer's own expense, to make an application for a title insurance policy and notify Seller of the application. Buyer shall have 10 business days after receipt of the commitment for title insurance to provide Seller with a copy of the commitment and written objections. Buyer shall be deemed to have waived any title objections not made within the applicable 10 day period set forth above, except that this shall not operate as a waiver of Seller's covenant to deliver a Warranty Deed, unless a Warranty Deed is not specified above· If any objection is so made, Seller shall have 10 business days from receipt of Buyer's written title objections to notify Buyer of Seller's intention to make title marketable within 120 days from Seller's receipt of such written objection. If notice is given, payments hereunder required shall be postponed pending correction of title, but upon correction of title and within 10 days after written notice to Buyer the parties shall perform this Purchase Agreement according to its terms. If no such notice is given or if notice is given but title is not corrected within the time provided for, this Purchase Agreement shall be null and void, at option of Buyer; neither party shall be liable for damages hereunder to the other and earnest money shall be refunded to Buyer; Buyer and Seller agree to sign cancellation 0[ Purchase Agreement. If title to the property be found marketable or be so made within said time, and Buyer shall default in any of the agreements and continue in default for a period of 10 days, then and in that case the Seller may terminate this contract and on such termination all the payments made upon this contract shall be retained by Seller as liquidated damages, time being of the essence. This provision shall not deprive either party of the right to enforce the specific performance of this contract provided this contract has not been terminated and provided action to enforce such specific performance shall be commenced within six months after such right ,or action shall arise. 7. POSSESSION. Seller shall deliver possession of the property on the date of closing. 8. REPRESENTATIONS AND WARRANTIES. See attached addendum. 9. TIME IS OF THE ESSENCE FOR ALL PROVISIONS OF THIS CONTRACT. 0. WELL DISCLOSURE STATEMENT. Buyer I~ r~,ceived the well disclosure state~ent required by Minnesota Statutes Sec. 1031.235. / 1. BUYER AND SELLER INITIAL: Buyer(s) ~g',~l_.. _ Seller(s) ...... ~_~/~-___ _~ ' ADDENDA. Attached are (number) 2_ addenda which are made a part of this Agreement. 2. MISCELLANEOUS PROVISIONS. la) Survival. All of the warranties, representations, and covenants of this Agreement shall survive and be enforceable after the closing. lb) Entire Agreement; Modification. This Agreement constitutes the complete agreement between the parties and super- sedes any prior oral or written agreements between the parties regarding the property, There are no verbal agreements that change this Agreement and no waiver of any of its terms will be effective unless in a writing executed by the parties. (c) Successors and Assigns, If this Agreement is assigned, all provisions of this Agreement shall be binding on successors and assigns. 3.- ACCEPTANCE DEADLINE. This o[fer to purchase, unless accepted sooner, shall be null and void at 11:59 P.M., ............................... and in such event all earnest money shall be refunded to Buyer. Represents .......... Buy_er ~-~t Company Name ...................................... Represents ........... _$~c!1_c~,_ Agent Company Name THIS IS A LEGALLY BINDING CONTRACT. IF NOT UNDERSTOOD, SEEK COMPETENT ADVICE. SELLER ............. BUYER ~'~ SELLER .............. BUYER ...................................... SELLING AGENT .............. ADDITIONAL TERx~IS AND CON-DITIONS TO PURCHASE AGREEMENT This is an Addendum to that certain Purchase Agreement dated July 8, 1999, between the Economic Development Authority in and for the City of New Hope as Buyer, and Terry Jensen as Seller, for Real Property known as 7500 42nd Avenue North, New Hope, Minnesota. If there is any conflict between the terms of the Purchase Agreement and this Addendum, the terms of this Addendum shall control. 1. Investigation and Testing.. Seller shall allow Buyer, and Buyer's agents, access to the Real Property without charge and at all reasonable times for the purpose of Buyer's investigation and testing the same. Buyer shall pay all costs and expenses of such investigation and testing and shall hold Seller and the Real Property harmless from all costs and liabilities relating to the Buyer's activities on the Real Property. Buyer shall further repair and restore any damage to the Real Property caused by Buyer's investigation or testing and return the Real Property and/or Personal Property to substantially the same condition as existed prior to such entry. The Purc, l:tase A~reement shall be contingent upon Buyer being completely satisfied, on or before - . --.~)r . , with the results of any matters disclosed by soil tests, well tests, eng~neenng tnspecttons, hazardous waste and environmental reviews of the Property, all such tests, inspections and review to be obtained at Buyer's sole cost and expense. 2. Vacant Property. This Purchase Agreement shall be contingent upon Seller's representation and warranty that the Real Property is vacant and not subject to any rental agreement or leasehold interest of any tenant of the Real Property. 3. Closing. The closing of the purchase and sale contemplated by this Agreement (the "Closing") shall 'occur on ¢;~/--~ (the "Closing Date"). The Closing shall take place at 9:00 a.m. local time at the office of Jensen, Swanson & Sondrall, P.A., 8525 Edinbrook Crossing, Suite 201, Brooklyn Park, Minnesota, or at such other place as may be specified by Buyer. Seller agrees to deliver possession of the Real Property to Buyer on the Closing Date. A. Seller's Closin~ Documents. On the Closing Date, Seller shall execute and/or deliver to Buyer the following (collectively, "Seller's Closing Documents"): (1) Deed. A Warranty Deed, in form reasonably satisfactory to Buyer, conveying the Real Property to Buyer, free and clear of all encumbrances, except the Permitted Encumbrances hereafter defined. (2) Bill of Sale. A Warranty Bill of Sale, in form reasonably satisfactory to Buyer, conveying the Personal Property to Buyer, free and clear of all encumbrances. (3) Assignment of Permits. An Assignment of Permits, in form reasonably satisfactory to Buyer, conveying with warranties the Permits to Buyer, free b. nd clear of all encumbrances, together with the consent of all parties having a right to consent to such Assignment. (4) Seller's Affidavit. An Affidavit of Title by Seller indicating that on the Closing Date there are not outstanding, unsatisfied judgments, tax liens or bankruptcies against or involving Seller or the Real Property; that there has been no skill, labor or material furnished to the Real Property for which payment has not been made or for which mechanics' liens could be filed; and that there are no other unrecorded interests in the Real Property, together with whatever standard owner's affidavit and/or indemnity which may be required by Title to issue an Owner's Policy of Title Insurance with the standard exceptions waived. (5)' FIRPTA Affidavit. A non-foreign affidavit, properly executed and in recordable form, containing such information as is required by IRC Section 1445(b)(2) and its regulation. (6) Owners' Duplicate Certificate of Title or Abstract. The owner's duplicate certificates of title or the Abstract of Title regarding the Real Property. (7) IRS Form. A Designation Agreement designating the "reporting person" for purposes of completing Internal Revenue Form 1099 and, if applicable, Internal Revenue Form 8594. (8) Well Certificate. A Certificate signed by Seller warranting that there are no "Wells" on the Real Property within the meaning of Minn. Stat. § 103I or if there are "Wells", a Well Certificate in the form required by law. (9) Storage Tanks. If the Real Property contains or contained a storage tank, an affidavit with respect thereto, as required by Minn. Stat. §116.48. (10) Other Documents. All other documents reasonably determined by Buyer to be Necessary to a, ansfer the Real Property to Buyer free and clear of all encumbrances. 4. Operation Prior to Closing. During the period from the date of Seller's acceptance of this Agreement to the Closing Date (the Executor~ Period"), Seller shall operate and maintain the Real Property in the ordinary course of business in accordance with prudent, reasonable business standard, including the maintenance of adequate liability insurance and insurance against loss by fire, windstorm and other hazards, casualties and contingencies, including vandalism and malicious mischief. However, Seller shall execute no contracts, leases or other agreements regarding the Real Property during the Executory Period without the written consent of Buyer, which consent may be withheld by Buyer at its sole discretion. 5. Broker's Commission. Seller and Buyer represent and warrant to each other that . they have dealt with no brokers, finders or the like in connection with this transaction, and agree to indemnify each other and to hold each other harmless against all claims, damages, costs or expenses of or for any other such fees or commissions resulting from their actions or agreements regarding the execution or performance of this Agreement, and will pay all costs of defending any action or lawsuit brought to recover any such fees or commissions incurred by the other party, including reasonable attorney's fees. 6. Condemnation of Property. This Agreement is hereby entered into between the parties under threat of condemnation per Minn. Stat. § 117.232 as a direct purchase, it being the intent of the Buyer to initiate a condemnation proceeding to acquire the Real Property in the event Seller does not agree to the herein terms. By agreeing to the terms of this Agreement, Seller waives any claim to payment of any appraisal fees, relocation expenses, moving expenses or any other related expense Seller may be entitled to per Minn. Stat. §§ 117.232 or 117.50 through 117.56. Further, that Seller acknowledges and agrees Buyer has made Seller aware of his right to the reimbursement of appraisal fees and relocation expenses and Seller agrees the reimbursement of said fees and costs are included in the purchase price paid to the Seller for the Property in that said price is in excess of the Buyer's appraised fair market value for the Property. 7. Mutual Indemnification. Seller and Buyer agree to indemnify each other against, and hold each other harmless from all liabilities (including reasonable attorneys' fees in defending against claims) arising out of the ownership, operation or maintenance of the Property for their respective periods of ownership. Such rights to indemnification will not arise to the extent that (a) the party seeking indemnification actually received insurance proceeds or other cash payments directly attributable to the liability in question (net of the cost of collection, including reasonable attorneys' fees) or (b) the claim for indemnification arises out of the act or neglect of the party seeking indemnification. If and to the extent that the indemnified party has insurance coverage, or the right to make claim against any third party for any amount to'be indemnified against as set forth above, the indemnified party will, upon full performance by the indemnifying party of its indemnification obligations, assign such rights to the indemnifying party or, if such rights am not assignable, the indemnified party will diligently pursue such rights by appropriate legal action or proceeding and assign the recovery and/or right of recovery to the indemnifying party to the extent of the indemnification payment made by such party. 8. Survival. All of the terms of this Agreement will survive and be enforceable after 3 the Closing. 9. Notices. Any notice required or permitted to be given by any party upon the other is given in accordance with this Agreement if it is directed to Seller by delivering it personally to the Seller; or if is directed to Buyer, by delivering it personally to Buyer; or if mailed in a sealed wrapper by United States registered or certified mail, return receipt requested, postage prepaid; or if transmitted by facsimile, by a copy followed by mailed notice as above required; or if deposited, by costs paid with a nationally recognized, repmable overnight courier, properly addressed as follows: If to Seller: Mr. Terry Jensen 5600 Vicksburg Lane Plymouth, MN 55446 If to Buyer: New Hope EDA ATTN: Daniel J. Donahue, Executive Director 4401 Xylon Avenue North New Hope, MN 55428 Notices shall be deemed effective on the earlier of the date of receipt or the date of deposit as aforesaid; provided, however, that if notice is given by deposit, that the time for response to any notice by the other party shall commence to run one business day after any such deposit. Any party may change its address for the service of notice by giving written notice of such change to the other party, in any manner above specified, 10 days.prior to the effective date of such change. 10. Entire Agreement; ModifiCation. This written Agreement, the addendum of Sellers representations and warranties and the commercial Industrial Purchase Agreement constitute the complete agreement between the parties and supersedes'any prior oral or written agreements between the parties regarding the Property. There are no verbal agreements t that change this Agreement and addendum or Purchase Agreement. and no waiver of any of its terms will be effective unless in a writing executed by the parties. I 1. Binding Effect. This Agreement binds and benefits the parties and their successors and assigns. However, this Agreement shall not be binding on Buyer until it is approved by Buyer's governing body at its July 26, 1999 meeting. If this Agreement is not approved at said meeting, this Agreement shall be void and Buyer's Earnest Money shall be promptly returned. 12. Controllin*. Law. This Agreement has been made under the laws of the State of Minnesota, and such laws will control its interpretation. 13. Remedies.. If Buyer defaults under this Agreement, Seller shall have the right to terminate this Agreement by giving written notice to Buyer. If Buyer fails to cure such default within 30 days of the date of such notice, this Agreement will terminate, and upon such 4 termination Seller will retain the Earnest Money as liquidated damages, time being of the essence of this Agreement. The termination of this Agreement and retention of the Earnest Money will be the sole remedy available to Seller for such default by Buyer, and Buyer will not be liable for damages or specific performance. If Seller defaults under this Agreement, this provision does not preclude Buyer from seeking and recovering from Seller damages for nonperformance or specific performance of this Agreement. Seller and Buyer have executed this Agreement as of the Date first written above. Date · · By Te r ry/;(e~en SELLER Economic Development Authority in and for the City of NEW HOPE Date 'By: Daniel J.-D~nahue Its Executive Director BUYER ADDENDUM OF SELLER'S REPRESENTATIONS AND WARRANTIES Pursuant to paragraph 8 of the Purchase Agreement dated July 8, 1999 between the Economic Development Authority in and for the City of New Hope as Buyer, and Terry Jensen as Seller, for Real Property known as 7500 42nd Avenue North, New Hope, Minnesota, Seller represents and warrants to Buyer as follows: a. Title to Real Property.. Seller owns the Real Property, free and clear of all encumbrances except the' Permitted encumbrances identified on Erd'dbit ~ attached hereto (the "Permitted Encumbrances"). b. Permits. No permits are required from any governmental entity in order to use or operate the Property in its existing manner. c. Utilities. Seller has received no notice of actual or threatened reduction or curtailment of any utility service now supplied to the Real Property. d. Certificates of Occupancy. Seller has received no notice of actual or threatened cancellation or suspension of any certificates of occupancy for any portion of the Real Property. e. Assessments. Seller has received no notice of actual or threatened special assessments or reassessments of the Real Property. f. Hazardous Substances and Pollution Issues. Buyer acknowledges that the adjacent property commonly known as the Electronic Industries site is contaminated and that contaminated ground water from the adjacent Electronic Industries site has m/grated north and east contaminating ground water under Seller's Real Property which is the subject of this Agreement. Buyer agrees Seller is not responsible for any contamination caused by the discharge of hazardous waste or material caused by the use of the Electronic Industries property that has or may impact the subject Real Property. However, Seller does warrant and represent Seller has neither caused, nor permitted any tenant to cause, the burying, depositing or disposal of any hazardous or toxic wastes or substances on the Real Property during the entire period of time Seller has owned a legal or equitable interest in the subject Real Property. Further, Seller represents and warrants he has no knowledge of the contamination of the subject Real Property by any of Seller's predecessors in title to this Real Property or their tenants. Setter agrees to indemnify and hold harmless Buyer from any 1 claims, expenses, damages or losses, including reasonable attorneys fees, incurred by Buyer in the event contamination is found to exist on the Real Property relating to use of the Real Property by either the Seller, Seller's tenants or anyone acting directly or indirectly under the control of the Seller. This indemnification and hold hm'mless provision specifically does not extend to any actions taken by Buyer that would have caused contamination on the property or to any contamination directly or indirectly caused by contamination from the adjacent Electronic Industries site. The terms of this paragraph expressly survive the closing. Indemnification and Hold Harmless. Seller will indemnify Buyer, its successors and assigns, against, and will hold Buyer, its successors and assigns, harmless from, any claims, expenses, damages, or losses including reasonable attorneys' fees, that Buyer incurs because of the breach of any of the above representations and warranties, whether such breach is discovered before or after closing. Each of the representations and warranties herein contained shall survive the Closing. Except as herein expressly stated, Buyer is purchasing the Property based upon its own investigation and inquiry and is not relying on any representation of Seller or other person and is agreeing to accept and purchase the Property "as is, where is" subject to the conditions of examination herein set forth and the express warranties herein contained. Consummation of this Agreement by Buyer with knowledge of any such breach by Seller will not constitute a waiver or release by Buyer of any claims due to such breach. Date By: T'err~ns/n SELLER/ Economic Development Authority in and for the City of NEW HOPE Its Executive Director BUYER 2 PHASE I ENVIRONMENTAL SITE ASSESSMENT FORMER ARDEL ENGINEERING SITE 7500 42ND AVENUE NORTH NEW HOPE, MINNESOTA 55428 JULY 13, 1999 Northern Environmental~ Hydrologists · Engineers · Geologists i Y~lO~O~i~ · En~i~ · ~o~o~i~ New B#ghton, MN 55112 651-635-9100 800-776-7169 July 13, 1999 ~ (CNH-02-1207-5373) Far 651-635-0643 Phil Kern City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428-4898 RE: Phase I Environmental Site Assessment, Former Ardel Engineering Site, 7500 42nd Avenue North, New Hope, Minnesota 55428 1.0 EXECUTIVE SUMMARY Northern Environmental Technologies, Incorporated (Northern Environmental) has performed a Phase I Environmental Site Assessment of the Former Ardel Engineering site, at 7500 42nd Avenue North in New Hope, Minnesota. Figure 1 depicts the general location of the property. One unoccupied building, with manufacturing and office areas, is present. Past occupants of the property have included Soley Iron Works, Ardel Engineering and Manufacturing, and Reger Grinding. Prior to development in the early 1960s, the property was used agriculturally or was undeveloped. During operation as a metal working shop, chemicals used are believed to have consisted primarily of small quantities of heavy lubrication oils and machine coolant. This Phase I Environmental Site Assessment was performed in conformance with the scope and limitations of the American Society of Testing and Materials Standard Process E 1527-97. This Phase I Environmental Site Assessment has revealed no evidence of Recognized Environmental Conditions (RECs) in connection with the property, except for: REC 1: Contamination associated with the adjacent release site has been documented at the subject property. Equipment associated with remedial activities is currently in operation to treat contaminated groundwater in the area. REC 2: Staining was observed off the northeast comer of the building. RECOMMENDATIONS Based on the findings and conclusions of this Phase I Environmental Site Assessment, Northern Environmental recommends the following: REC 1. Remedial activities should continue and the City of New Hope should seek a Association" letter related to the contamination from off-site sources. REC 2: A soil sample should be collected from the area of the stain and should be analyzed for the presence of contamination. 1 WISCONSIN, Milwaukee · Green Bay · Waupun · Park Falls ILLINOIS · Northbrook CANADA · Calgary MINNESOTA · St. Paul° Brainerd · Rochester MICHIGAN ° Detroit i In addition, trash observed in the wooded area off the northwest comer of the building should be I removed and disposed of properly. If additional information regarding past site activities or potential off-site sources of contamination becomes available, this information should be reviewed and the need for additional assessment should be re-evaluated. I Should you have any questions regarding the scope or conclusions of our assessment, please contact us at 635-9100. I Sincerely, Northern Environmental I Technologies, Incorporated I Director, Special Projects CHMM LRF/njf Attachments © 1999 Northern Environmental Technologies, Inc. I 2