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HomeMy WebLinkAbout6.h. Approval of License and Maintenance Agreement for Clark Road EXECUTIVE SUMMARY City Council Regular Meeting Date: November 20, 2018 AGENDA ITEM: Approval of License and Maintenance Agreement for Clark Road AGENDA SECTION: Consent PREPARED BY: Kim Lindquist, Community Development Director AGENDA NO. 6.h. ATTACHMENTS: Agreement, Map APPROVED BY: LJM RECOMMENDED ACTION: Motion to Approve the License and Maintenance Agreement Between the City and Flint Hills Resources Relating to Clark Road. ISSUE Flint Hills Refinery representatives have requested that the City turnover maintenance control of Clark Road in the vicinity of the Plant, just west of Hwy 52. The City recognizes that the street, while public, is currently used exclusively for access to FHR property. Flint Hills is interested in treating the road similar to other internal road systems, in that there would be restricted access. This would require installation of a gate or some other type of barrier. FHR also has committed to do all maintenance on the road, including plowing and pavement maintenance. The City does have public utilities in the road and therefore is retaining the right of way at this time. The currently installed utilities are for the benefit of FHR. The agreement recognizes that maintenance is the responsibility of the Company and that the City retains right of way ownership. However, Flint Hills is interested in vacating the right of way and maintaining ownership of the property while granting of an easement for the public utilities. This is a much more complex process that will require title work and legal time. Should FHR choose to pursue this action, they would pay the city costs for processing the vacations. The attached agreement has been drafted by the City Attorney and city staff, and FHR representatives are in agreement and feel it accurately reflects the arrangement as initially envisioned. RECOMMENDATION Staff recommends the Council approve the License and Maintenance Agreement between the City and Flint Hills Resources relating to Clark Road. 1 544959v1 BDL RS215-4 LICENSE AND MAINTENANCE AGREEEMENT This License and Maintenance Agreement (the “Agreement”) is made and entered into on the ______ day of ___________________, 2018, by and between the City of Rosemount, a Minnesota municipal corporation, (the “City”), and Flint Hills Resources Pine Bend, LLC, a Delaware limited liability company (the “Company”). RECITALS: WHEREAS, the Company is the owner of property legally described in Exhibit A attached hereto (the “Company Property”), which includes an underlying fee title interest in the land within the Clark Road right-of-way; and WHEREAS, the City has an easement for right-of-way purposes over that part of Clark Road located within the limits of the City (the “ROW”), as depicted in the attached Exhibit B; and WHEREAS, the City has certain utility facilities located within the ROW; and WHEREAS, the Company, its employees, agents, servants, representatives, invitees, and persons or entities making deliveries thereto are the only users of the section of Clark Road located on the Company Property within the city limits of the City of Rosemount (said section of Clark Road hereinafter referred to as the “Road”); and WHEREAS, the Company desires greater control over the access, use and maintenance of the Road; and WHEREAS, the Company has agreed to maintain and repair the Road in return for a license allowing it greater control of access, use and maintenance of the Road; and WHEREAS, the parties wish to set forth the terms and conditions under which the Company will use and maintain the road, allowing for the continued City use of the utility facilities; and NOW, THEREFORE, subject to the license terms and conditions of this Agreement, in reliance upon the above recitals, and in reliance upon the representations, warranties and covenants 2 544959v1 BDL RS215-4 of the parties herein contained, the City and the Company agree as follows: ARTICLE 1 SCOPE OF USE AND MAINTENANCE 1.1 Encroachments. The Company will be allowed exclusive use of the Road, subject to the City’s utility easement rights set forth below, including but not limited to the right to construct, repair, operate and maintain an access gate across the Road. 1.2 Maintenance. The Company agrees to maintain and repair the Road, at its sole expense, for the duration of the Agreement, including any repairs necessitated by City work within the ROW, including but not limited to repairing any section of road damaged or destroyed in the process of accessing City utility facilities, subject to the following: The City will be responsible for any repairs to the road, not including any improvement within the ROW or upon the Road located, installed or constructed by or for the sole benefit of the Company. necessitated by the future installation of City utility facilities or by the replacement or repair of substantial portions of City utility facilities, except to the extent that such facilities predominantly benefit the Company and its affiliates. For the purposes of this Agreement, “maintenance” includes, but is not limited to, the repair or replacement of the pavement, sweeping, snow plowing, and striping. 1.3 Notice. The Company must notify the City Engineer at least 48 hours before the Company performs any construction, repair or maintenance work within the ROW that would have a materially-adverse effect on the future use of the ROW for a roadway. No such work shall take place without City staff being given the opportunity to be present at the site. Further, if the City determines in its reasonable estimation that any proposed work may potentially cause an unsafe condition or damage or impair the Road, the City shall have the authority to prevent such work from being done by giving notice to the Company. Notwithstanding the foregoing, in the event of an emergency situation or the existence of an unsafe condition of Company’s land, the prescribed 48 hour notice requirement shall be waived by the City. However, in the event of such situation, said waiver shall not relieve the Company from the Company’s obligation to notify the City of the work as soon as possible. The City shall have no obligation to notify the Company of its intent to do work within the ROW. ARTICLE 2 CITY LICENSE GRANT 2.1 License Grant. The City hereby grants the Company a license to occupy, access, use, maintain and repair the Road and to install upon it and within the ROW such improvements as Company determines to be necessary to effectuate the same, pursuant to the terms and conditions of this Agreement. The City makes no representations or warranties as to the condition of the Road or ROW, or their suitability of use for any improvements or use contemplated herein. 2.2 License. The terms of this Agreement shall only create a license for the Company to occupy, access, use, maintain and repair the Road and to install upon it and within the ROW certain improvements, including without limitation an access gate. This Agreement does not create an interest in real property such as an easement or any other property right. 3 544959v1 BDL RS215-4 2.3 No Taking. The termination of this Agreement by the City shall not constitute a taking as defined in Minnesota Statutes Section 117.025. The City and the Company acknowledge and agree that the City continues to have a right-of-way easement over the Road, and must have the ability to use the Road and the ROW for any public purpose (subject to the terms of this Agreement) and that such use may eliminate part or all of the rights granted under this Agreement. ARTICLE 3 INDEMNIFICATION OF CITY 3.1 Indemnification of City. The Company hereby agrees to indemnify, defend and hold the City, its council, agents, employees, attorneys and representatives (collectively, “Indemnitees”) harmless against and in respect of any and all claims, demands, actions, suits, proceedings, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including interest, penalties and attorneys' fees, that the City incurs or suffers, which arise out of, result from or relate to: a) the installation and maintenance of any improvements located within the ROW, and the maintenance and repair of the Road; and b) any other activity in the Right-of-Way Property or on the Road pursuant to this Agreement or under the assumed authority of the City by the Company, its contractors, its members or any party acting under the authorization or direction of the Company. The Company shall not be responsible to indemnify, defend or hold harmless the Indemnitees for any claim, demands, actions, suits, proceedings, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties and attorneys’ fees, that are incurred due to the negligence or intentional misconduct of the Indemnitees or their contractors. 3.2 Governmental Immunity. Nothing contained herein shall be deemed a waiver by the City of any governmental immunity defenses, statutory or otherwise. Further, any and all claims brought by Company, its successors or assigns, shall be subject to any governmental immunity defenses of the City under common law and the maximum liability limits provided in Minnesota Statutes, Chapter 466. 3.3 Hazardous Substances. The Company agrees that no hazardous substances, pollutants or contaminants (other than materials normally and commonly used for installation/maintenance of roadways and the type of improvements located on the ROW and the Road) shall be used for any installation or maintenance of improvements in the ROW or in the maintenance and repair of the Road. The City shall not be responsible for any costs, expenses, damages, demands, obligations, including penalties and reasonable attorneys’ fees, or losses resulting from any claims, actions, suits, or proceedings based upon a release of any hazardous substances, pollutants, or contaminants, caused by the Company. 3.4 Risk. The Company assumes all risk with respect to its activities within and use 4 544959v1 BDL RS215-4 of the Road and ROW. ARTICLE 4 CITY MAINTENANCE RIGHTS 4.1 Failure to Maintain. If the Company fails to maintain or repair the Road or any improvements installed therein in accordance with the terms of this Agreement, the City may, but is not obligated to, make such repairs or provide such maintenance as it determines, in its sole judgment, to be necessary for public health and safety, as provided in this paragraph, or terminate this Agreement. If the City reasonably believes that the Company has failed to maintain or repair the Road or any improvements installed therein in accordance with the terms of this Agreement and such failure continues for 30 days after the City gives the Company written notice of such failure or, if such tasks cannot be completed within 30 days, after such time period as may be reasonably required to complete the required tasks provided that Company is making a good faith effort to complete said task. If Company does not complete the repair or maintenance tasks within the required time period after such notice is given by the City, the City shall have the right to enter upon the ROW to perform such repair or maintenance tasks as in its reasonable judgment it determines are required, at the sole cost of the Company. In such case, the City shal l send the Company an invoice of for all costs associated with the repair or maintenance performed by the City including, but not limited to, all staff time, engineering and legal and other reasonable costs and expenses incurred by the City. ARTICLE 5 TERM 5.1 Term and Termination. This Agreement shall be effective on the date set forth above (the “Effective Date”). The Company shall become responsible for maintaining and repairing the Road, at its sole expense, from the Effective Date until termination. Upon termination, the City shall resume maintenance and repair responsibilities. In the event that Company defaults with respect to the terms of this Agreement, after providing Company with 30 days’ written notice of the default and the Company fails to cure the default, the City may terminate this Agreement. If the City determines, in its sole judgment, that the Road is required for public use, it may terminate this Agreement by providing 90 days’ written notice to Company. The Company may terminate this Agreement at any time by providing 90 days’ written notice to the City. In such event and prior to termination, Company shall, at its sole expense, remove any and all improvements installed, constructed or located within the ROW or on the Road as directed by City. If the Company fails to timely remove improvements, the City may do so and charge the Company for its reasonable costs. ARTICLE 6 MISCELLANEOUS 6.1 Incorporation. The recitals contained herein are incorporated in and made a part of this Agreement. 6.2 No Third Party Recourse. Third parties shall have no recourse against the City or Company 5 544959v1 BDL RS215-4 under this Agreement. The covenants and conditions of this Agreement are intended for the benefit of the parties hereto and are not intended to create any third party beneficiaries. 6.3 Validity. If any portion, section, subsection, sentence, clause, paragraph or phrase of this Agreement is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion of this Agreement. 6.4 No Assignment. The parties mutually recognize and agree that this Agreement shall not be assigned by the Company to a non-affiliated entity unless said assignment is agreed to by the City in writing. 6.5 Amendment. The parties hereto may by mutual written agreement amend this Agreement in any respect. Any agreement on the part of any party for any such amendment must be in writing. 6.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Minnesota. 6.7 Notice. Any notice required to be given under this Agreement shall be sufficiently given by one party to the other if in writing and if and when delivered or tendered either in person or by depositing it in the United States mail in a sealed envelope, by certified mail, return receipt requested, with postage prepaid, addressed as follows: a) If to Company: Flint Hills Resources Pine Bend, LLC 4111 East 37th Street North Wichita, KS 67220 b) If to City: City of Rosemount 2875 145th Street West Rosemount, MN 55068 Attention: Community Development Director With a copy to: Kennedy & Graven, Chartered ATTN: Rosemount City Attorney 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 or to such other address as the party addressed shall have previously designated by notice given in accordance with this section. Notices shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, or on the third day after mailing if mailed as provided above. 6.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. 6 544959v1 BDL RS215-4 6.9 Headings. The subject headings of the paragraphs and subparagraphs of this Agreement are included for purposes of convenience only, and shall not affect the construction of interpretation of any of its provisions. 6.10 No Additional Waiver Implied By One Waiver. In the event any agreement contained in this Agreement is breached by the Company and thereafter waived in writing by the City, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. All waivers by the City must be in writing. 6.11 Insurance. The Company represents that the Company has general liability insurance and hereby agrees to provide the City with a formal letter stating that its general liability insurance is current and providing the coverage limits of the policy. The Company agrees to keep its general liability policy in place and active at all times during the term of this Agreement and the Company agrees to give the City written notice of any policy cancellation or changes in the general liability policy limits. 6.12 Entire Agreement. This Agreement shall constitute the entire agreement between the parties, and any prior understanding or representation of any kind preceding the date of the Agreement shall not be binding upon either party except to the extent incorporated into this Agreement. [Remainder of page intentionally left blank.] 7 544959v1 BDL RS215-4 IN WITNESS WHEREOF, the parties have executed this License and Maintenance Agreement. FLINT HILLS RESOURCES PINE BEND, LLC By: Its: ________________________________ STATE OF MINNESOTA ) ) ss. COUNTY OF __________ ) The foregoing instrument was acknowledged before me this ___ day of _________, 2018, by _________________, the _____________________ of Flint Hills Resources Pine Bend, LLC, a Delaware limited liability company, in their authorized capacity as representative of the company. Notary Public 8 544959v1 BDL RS215-4 CITY OF ROSEMOUNT By William Droste, Mayor By Erin Fasbender, City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this ____ day of ____________, 2018, by William Droste and Erin Fasbender, the Mayor and City Clerk, respectively, of the City of Rosemount, a Minnesota municipal corporation, on behalf of the municipal corporation. Notary Public This instrument drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 A-1 544959v1 BDL RS215-4 EXHIBIT A TO LICENSE AGREEMENT Legal Description of the Company Property (Insert description of Flint Hills property adjacent to Clark Road) B-1 544959v1 BDL RS215-4 EXHIBIT B TO LICENSE AGREEMENT Depiction of Clark Road ROW (Insert depiction of Clark Road right-of-way) 13095 12800 12895 12730 12100 12555 12250 13005 ÍÍÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ ÍÍ !(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(!(G!. G!. G!. G!. G!. G!. G!. G!. G!. G!. G!. G!. G!. G!. G!. G!. G!. ! ! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! !! Clark Road