HomeMy WebLinkAbout5.e. Old City Hall Lease / Purchase Agreementi"44
April 4, 1987
TO: Mayor Knutson'
Councilmembers:
Napper
Tucker
Walsh
Willard
�ty o�
osernount
CLERK'S
FILE 9 l- 0 7
2875 -145TH ST. W
ROSEMOUNT. MINNESOTA 55068
612--423-4411
FROM: Stephan Jilk, Administrator/Clerk
RE:_ Old City Hall Lease/Purchase Agreement -
Dakota County AVTI
Gentlemen:
Attached is the final draft of lease/purchase agreement for the old city hall
with Dakota County AVTI. The basic content of the agreement has not been
changed from the last draft you received, butthedocument has been revised in
order that it hopefully reads a little better.
I would like to review the highlights or majorpoints' of the agreement for you:
(1) The agreement is for three years commencing July 1, 1987 and terminating
July 1 1990. There is no method set out inthis agreement to
automatically extend it. The purpose of this was to place some pressure
on AVTI to conclude the purchase.
(2) The lease payments are $2500 a month, and AVTI'is to pay all utilities and
is responsible ,for general maintenance of all the property except the
ballfield and the grass area south of the ballfield and west of city hall.
(3) The city will have the use of the ballfield and the grass area until the
property is sold.
(4) Up to 15 months ($37,500) of lease payments may be used as credit toward a
purchase price of $270,000. A decision and notification to us must'be
made within six months of July 1, 1990 if they are going to purchase.
(5) The city retains a one acre easement in the northwest corner of the
property for the location of the civil defense siren and a water system.
We will also receive an access easement to that one acre. This one acre
must be maintained by us if we locate the water system there.
(6) We must provide potable water to the facility. If the property is
purchased we are obligated to either drill a new well, build a new water
supply system or connect the building to a third source; i.e. university
system. I recommend that we begin immediately to do this and not wait
until the AVTI purchases the property.
CLR 's LE 19 8? p
Old City Hall Agreement
April 3, 1987
Page 2
(7) The civil defense siren has to be moved to the one acre site at our cost.
AVTI will do as much of the work, at no cost to us, as they can through
their lineman program.
(8) AVTI will pay the cost of all required insurance for the property either
through us or directly, except for the one acre site if we build a rural
water system there.
(9) Cost of capital improvements not covered by insurance; i.e. roof, boiler,
etc., will be borne in the following manner:
1st year of agreement -- 100% city
2nd year of agreement -- 50% city; 50% AVTI
3rd year of agreement -- 100% AVTI.
The rest of the contract is basic contract language.
I feel the agreement is a good one. We've done a couple of things which we may
not have if this was through a private party; but on the same hand, we have a
responsible buyer with no problems on zoning or use (which is set out
specifically in the agreement). I recommend we approve the agreement. I will
be pleased to receive your comments or questions on this matter before or at
the Council meeting.
In expectation of approval by you, Don McGuire will be present at our meeting
to present the original document for signature. I believe he is doing this as
a "formalization" of the discussions on the contract since he has been dealing
with me up to this point and wants to make just a few comments to you all as
officials of the city.
Respe tfully,
Ste an Jilk
Administrato /Clerk
smj
Attachment
CLEWS
1987 07
3/25/87
LEASE/OPTION TO PURCHASE AGREEMENT
THIS AGREEMENT is entered into between the City of
Rosemount, a Minnesota municipal corporation, as Lessor
(hereinafter referred to as "Lessor"), and Dakota County
Area Vocational Technical Institute Intermediate School
District 917, as Lessee (hereinafter referred to as "Lessee")
in consideration of the convenants herein contained, as
follows:
1. DESCRIPTION OF PROPERTY - Lessor hereby leases to
said Lessee that certain land and premises lying in the
County of Dakota, State of Minnesota, generally known as
the old city hall, legally described as follows:
The SW1/$ of the SE1/4 of the NEI/4, Section
27, Range 115, Township 19, except the
South 230 feet of the West 225 feet
thereof.
As used herein the term "premises" refers to the real
property above described and to any improvements located
thereon from time to time during the term hereof.
The existing building consists of approximately 8,000
square feet.
2. TERM - This lease shall be in effect for a period of
three (3) years, commencing on July 1, 1987 and terminating
on June 30, 1990•
3. RENT - The Lessee agrees to pay Lessor as rent for
said land and premises for the full term hereof, the sum of
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Thirty Thousand and no/100 Dollars ($30,000.00) per annum in
equal monthly installments of Two Thousand Five Hundred and
no/100 ($2-,500.00) payable in advance on the first day of
each and every month for and during the full term hereof.
Lessee at its option may prepay rent.
4. UTILITIES - The Lessee agrees to promptly pay all
costs of electricity, gas, oil, sewer, water, and other uti-
lities as may be provided to such leased land and premises.
5. SUBLETTING AND ASSIGNMENT - The Lessee may sublet
the premises in whole or in part, but the making of a
sublease shall not release the Lessee from, or otherwise
affect in any manner, any of the Lessee's obligations under
this agreement. The Lessee shall not assign, transfer, or
sublet this lease, or any interest herein, without the prior
written consent of Lessor. Said consent shall not be
unreasonably withheld, and a consent to an assignment shall
not be deemed to be consent to any subsequent assignment.
Any assignment without such consent shall be void.
6. USE OF LEASEHOLD - During the term hereof, the
Lessee shall comply with all applicable laws affecting the
leased land and premises. The leased land and premises
shall not be used for any unlawful purposes by the Lessee or
any sublessee. The premises shall be.occupied and used pri-
marily as a day care facility to service students, faculty
and staff of Dakota County Technical Vocational Institute.
The intended use by Lessee is the operation of a childcare
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facility, with a maximum of approximately 140 slots.
7. RIGHT OF ENTRY - The Lessor, its employees and
agents shall have the right to enter upon the leased land
and premises at all reasonable times with the Lessee's per-
mission for the purpose of inspecting it or carrying out its
other responsibilities under this lease. The Lessor in
making any such entry shall not disrupt the Lessee's use of
the leased land and premises.
8. QUIET ENJOYMENT - The Lessor agrees that the
Lessee, on performing the covenants herein, shall and may
peaceably and quietly have, hold and enjoy the leased land
and premises for the term hereof, except as otherwise pro-
vided in this lease.
9. MAINTENANCE OF THE LEASEHOLD - The Lessee shall be
responsible for the normal operation and maintenance of the
leased land and premises, except as otherwise provided in
paragraph 11 hereof.
10. ALTERATIONS; IMPROVEMENTS -
(a) Alterations, improvements, and changes permitted.
The Lessee shall have the right to make such alterations,
improvements, and changes to the building from time to time
as it may deem necessary; provided that prior to making any
structural alterations, improvements, or changes, the Lessee
shall obtain Lessor's written approval of plans and specifi-
cations therefor, which approval Lessor shall not unreaso-
nably withhold. In the event of disapproval, Lessor shall
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give to the Lessee an itemized statement of reasons there-
for. If Lessor does not disapprove the plans and specifica-
tions provided for in this paragraph within thirty (30) days
after the same have been submitted to Lessor, such plans and
specifications shall be deemed to have been approved by
Lessor. The Lessee shall in no event make any alterations,
improvements, or other changes of any kind to any building
on the premises that will adversely affect the structural
integrity of the building.
(b) Removal or replacement. At the expiration or
other termination of this lease, the Lessee shall have no
obligation to remove or replace any alterations, improve-
ments or changes to the leased premises or, except as other-
wise provided in the case of injury or damage, to return the
premises to their original condition at the commencement of
the lease.
(c) Disposition of new improvements. Except as other-
wise specified herein, all alterations, improvements,
changes, or additions made in or to the land and premises
shall be the property of Lessor, and the Lessee shall have
only a leasehold interest therein, subject to the terms
hereof, except as otherwise agreed to in writing by the par-
ties at the time of the modifications. The Lessee may
remove any property installed by Lessee in the nature of
equipment or fixtures, which may be removed without adver-
sely affecting the structural integrity of the building,
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provided that the Lessee shall repair any damages caused due
to the removal of fixtures or equipment.
11. DAMAGE, REPAIRS AND DESTRUCTION OF THE
PREMISES -
(a) Damage and Repairs. The Lessee assumes respon-
sibility for loss, damage, or injury to the leased premises
caused by its officers, employees, invitees or others in
connection with the Lessee's activities, or by its occupancy
of the leased premises, other than by reasonable wear and
tear, and except for casualty losses subject to property and
casualty insurance losses insured by the Lessor, or major
capital expenditures as provided in paragraph (c) hereof,
and subject to repair by the Lessor as provided in paragraph
(b) and (e) hereof. Upon the expiration or termination of
this lease as provided herein, the Lessee shall return the
property herein described to the Lessor and the Lessee shall
repair such damage or injury to the premises, other than
ordinary and reasonable wear and tear.
(b) Destruction. If during the term hereof the leased
premises or the improvements thereon shall be injured or
destroyed by fire or the elements, or through any other
cause, so as to render the leased premises unfit for occu-
pancy, or to make it impossible to conduct the business of
the Lessee thereon, or to such an extent that they cannot be
repaired with reasonable diligence within sixty (60) days-
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C 1987 p?
from the happening of such injury, then either party may
terminate this lease from the date of such damage or
destruction, and the Lessee shall immediately surrender the
leased premises and all interest therein to the Lessor, and
the Lessee shall pay rent only to the time of such damage or
destruction; and in case of any such termination, the Lessor
may re-enter and repossess the leased premises discharged of
this Tease, and may dispossess all parties then in
possession thereof. If repairs are not completed within
sixty (60) days, and if neither party terminates this lease,
then rent shall not run or accrue after the injury and
during the process of repairs, and up to the time when the
repairs shall be completed, except only that the Lessee
shall during such time pay a prorata portion of such rent
apportioned to the portion of the leased premises which are
in condition for occupancy or which may be actually occupied
during such repairing period. If, however, the leased pre-
mises shall be so slightly injured by any cause aforesaid,
as not to be rendered unfit for occupancy, then the Lessor
shall repair the same with reasonable promptness, and in
that case the rent shall not cease or be abated during such
repairing period. All improvements or betterments placed by
the Lessee on the leased premises shall, however, in any
event, be repaired and replaced by the Lessee at its own
expense and not at the expense of the Lessor to the extent
said improvements or betterments represent fixtures or
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equipment which may be removed by Lessee at the termination
of this lease.
(e) Major Capital Expenditures. The Lessor shall be
responsible for any major capital expenditures required
during the first tweleve (12) months of the Tease, including
but not limited to boiler replacement, roof repair, or other
major structural repair, provided that written demand is
given to Lessor during the first twelve (12) months of the
lease. During the thirteenth (13th) through twenty-fourth
(24th) months of the lease the Lessor and Lessee shall share
equally any major capital expenditures required, provided
that written demand is given to Lessor during the thir-
teenth (13th) through twenty-fourth (24th) months of the
lease. During the twenty-fifth (25th) through thirty-sixth
(36th) months of the lease the Lessee shall be responsible
for all major capital expenditures.
12. INSURANCE The Lessee shall maintain liability
insurance during the term of the lease. The policies shall
provide coverage of not less than $1,000,000 in the event
of bodily injury or death to one person, not less than
$1,000,000 in the event of bodily injury or death to any
number of persons in any one occurrence, and not less than
$1,000,000 for damage or injury to property. The Lessee
shall eause.the Lessor to be named on said liability poli-
cies as an additional named insured.
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The Lessor shall maintain casualty, including fine and
extended coverage, for casualty loss to the building in
amounts acceptable to Lessee and Lessor, and name Lessee as
an additional named insured. Lessee agrees to reimburse
Lessor for the cost of the premiums for the casualty
insurance within thirty (30) days following the date that
proof of payment is provided to Lessee.,
13. OPTION TO PURCHASE In consideration of all other
provisions of this agreement, Lessor hereby grants to Lessee
the exclusive option to purchase the real estate, building,
and personal property attached to said facility for the
total sum of Two Hundred Seventy Thousand and no/10'0 Dollars
($270,000.00). It is further agreed that the base rent pur-
suant to paragraph 3 of this lease to a maximum of fifteen
(15) months ($37,500.00)shall be applied as -a credit to said
purchase price for rent actually _paid.
The Lessee shall notify the Lessor of intent to exer-
cise its option no later than six (6) months prior to the
termination of this lease, in writing. Lessee's right to
exercise this option to purchase is conditioned upon this
lease not having been previously terminated, and Lessee
having observed and complied with all terms and conditions
of the lease required of Lessee up to the time of the exer-
cise of the option to purchase. The purchase price of
$270,000.00, less any credit applicable, by the terms of
this lease, shall be paid in cash to Lessor at the date of
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01
.closing, which shall be no more than ninety (90) days after
written notice of intent to purchase. On the date of
closing, Lessor shall convey the premises to Lessee free and
clear of all liens and encumbrances, except those Lessee may
have created or suffered against the premises, or charges
that may have become a lien against the premises during the
period of this lease and except the easement rights of
Lessor hereinafter set forth.
14. EASEMENT - During the term of the lease and
following termination of the lease, if the Lessee exercises
its option to purchase, the Lessor shall retain an easement
as follows. The Lessor shall retain an easement for the
construction, operation and maintenance of a well, water
storage and distribution system. The easement, consisting
of one (1) acre more or less, shall be legally described as
follows, to -wit:
The North 208.7' of the West 208.7'
of the following described tract:
The SW1/4 of the SEI/4 of the NE1/4,
Section 27, Range 115, Township 19,
except the South 230 feet of the
West 225 feet thereof.
Lessor acknowledges that the Lessee intends to use the
real property to operate a childcare facility and other
similar purposes, and agrees that the use of the property
pursuant to the Lessor's easement shall not be inconsistent
with the intended use by Lessee.
The Lessor shall also have an easement for access to
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the above described property, the location of said easement
for access shall be as designated by the Lessee and shall not
be inconsistent with the intended use of the premises by
Lessee.
If Lessor exercises its right to use the above
described one acre tract for the designated purposes, the
Lessor agrees that it will maintain, at its cost, all usual
and customary insurance coverage, including casualty for
fire and extended coverage, liability, and damage to pro-
perty. The Lessee shall be named as an additional insured
on said policies, and the policy limits shall be in amounts
not less than the amounts required of Lessee pursuant to
paragraph 12.
15. EXISTING BALLFIELD Lessee hereby agrees that
during the term of this lease Lessor may continue to use an
existing ballfield, and in conjunction with the use of the
ballfield may use the grass area West of the parking lot and
the area South of the ballfield for parking. Said use, by
Lessor, shall be substantially equivalent to the previous
use of the premises by the Lessor. Lessor shall be respon-
sible for all costs maintaining said areas. Lessor shall
provide written notice to Lessee in advance of its intended
schedule of use of the premises. The parties mutually agree
to cooperate in scheduling the use of the ballfields and
adjacent parking areas.
16. WATER SUPPLY The leased premises are not con-
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nected to City water. The water supply is obtained from a
private well located on the leased premises. Lessor agrees
that prior to the commencement date of said lease, that
Lessor shall provide proof satisfactory to Lessee that the
water supply is potable and that the water complies with the
requirements of applicable federal, state and local laws,
including but not limited to the provisions of Minnesota
Statutes Chapter 156A and Minnesota Rules for Water Supplies
and Wells set forth in Chapters 4720, 4725, and 4727.
Lessor further agrees that it will cause said water and well
to be tested periodically as required by law, and at the
request of Lessee at such additional times as may be
requested and are reasonable. Lessor further agrees that if
the well or water supply fails to meet any federal, state,
or local law, or any of the specific statutes cited herein,
the Lessor, at its expense, shall immediately have such
problems repaired.
Lessor further agrees that if Lessee exercises its
option to purchase that the Lessor will immediately cause a
new well to be dug in conformity with local, state and
federal laws and the specific statutes and rules cited
herein. That in addition to any such requirements of law,
that said well will provide adequate supplies of potable
water to meet the intended uses and needs of Lessee. The
requirements set forth in this provision, including but not
limited to testing, any necessary modifications or repairs,
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and the providing of a new well, shall be at the sole
expense of the Lessor. Lessor as an alternative may provide
water through a third party source, or through a city
operated system. If either of these alternatives is
elected, the Lessor shall provide at its cost all labor and
materials to connect the Lessee with the water source.
17. CIVIL DEFENSE SIREN - The Lessor agrees, prior to
the commencement of the lease, to remove the existing civil
defense siren from the present location. The Lessee agrees
that said civil defense siren may be relocated on the one
acre tract described at paragraph 14.
18. SUCCESSORS BOUND - It is mutually agreed that all;
the _terms and conditions of this agreement shall, subject to
the provisions on assignment, transfer and subletting,
extend, apply to and bind the successors and assigns of the
respective parties hereto as fully as the respective parties
are themselves bound.
19. TERMINATION FOR CAUSE If either the Lessor or
the Lessee fails to keep and perform the covenants herein
contained, or hereafter entered into, then the party so
failing does hereby authorize and fully empower the other
party to terminate and annul this lease. Said right to
terminate this agreement requires the party alleging a
default to provide written notice to the other party, as set
forth in this lease, specifying the default(s) and the
action required to remedy said default(s). The defaulting
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party shall have a reasonable time to correct said default,
but, in any event, no less than fourteen (14) days following
the service of notice. In the event of Lessor's failure,
Lessor further empowers the Lessee to quit the leased,premi-
ses and to declare any and all rents not otherwise due and
payable abated. In the event of the Lessee's failure, the
Lessee further empowers the Lessor to perfect such removal
as it may deem advisable to recover exclusive possession of
all of said premises, including any and all improvements,
building or otherwise of a permanent nature, upon the premi-
ses at that time.
20. SURRENDER - The voluntary or other surrender of
the lease by the Lessee, or a mutual cancellation thereof,
shall not work a merger, and shall, at the option of Lessor,
terminate all or any existing subleases or subtenancies, or
may, at the option of Lessor, operate as an assignment to it
of any or all such subleases or subtenancies
21. REPRESENTATIONS - There are no promises or repre-
sentations except those contained in this agreement and this
agreement may only be changed in writing signed and
acknowledged by both parties and not by any verbal represen-
tations made by either party hereto.
22. NOTICES - The following individuals have been
designated by the Lessor and the Lessee to respond to
inquiries regarding the leased land and premises and are
further authorized to accept service of process and receive
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• CLERK'S 1987 * 0
and give receipt for notices and demands, and in the case of
the Lessor, accept the rental payments required herein, in
connection with this lease.
LESSOR'S DESIGNEE:
Name: City Administrator
Address: 2875 -145th Street W.
Rosemount, Minnesota 55068
LESSEE'S DESIGNEE:
Name: Superintendent of Schools
Address: 1300 E. 145th Street
Rosemount, Minnesota 55068
The individual or address to which any notice, demand
or other writing may be given or made or sent to either
party may be changed by written notice given by such party.
23. REMEDIES - In addition to the rights and remedies
for default set forth in this lease, the parties shall have
such rights and remedies as provided by law in the event of
default.
IN WITNESS WHEREOF, THE Lessor and the Lessee by their
respective officers on the dates indicated, have signed and
executed this agreement.
Executed by Lessor LESSOR: City of Rosemount
on the day of
19 by
Mayor
by
City Administrator
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Dakota County Area Vocational Technical School
Executed by Lessee LESSEE: Intermediate District 917
on the day of
19 by
Chairman
by
Clerk
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