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HomeMy WebLinkAbout9.a. Amendment to Purchase Agreement-Canada Circle EXECUTIVE SUMMARY City Council Meeting Date: January 15, 2019 AGENDA ITEM: Amendment to Purchase Agreement- Canada Circle AGENDA SECTION: New Business PREPARED BY: Kim Lindquist, Community Development Director AGENDA NO. 9.a. ATTACHMENTS: Amendment APPROVED BY: LJM RECOMMENDED ACTION: Motion to Approve the Purchase Agreement Amendment for the sale of City owned property on Canada Circle. ISSUE In March, the Port Authority and City Council approved a purchase agreement with Symnabdre properties LLC for a lot off of Canada Circle. Based upon the previously completed Phase II for the adjoining landfill site, and recent testing undertaken by the PCA, there were additional questions regarding potential impacts to the site. An amendment to the purchase agreement was approved in July to give the City more time to address potential environmental concerns, and another amendment occurred in October. The final testing was conducted in November and the only clean up necessary is the oil spill from the prior gas station use. Any affects from the adjoining land use are not above acceptable thresholds and do not require clean up. Staff has spoken with the developer regarding timing and construction of the project. He has indicated that the delay in construction will affect him financially and has requested some assistance to facilitate construction of the project this spring. He is requesting a slight reduction in land cost in exchange for the contaminated soils clean-up, which will occur during site grading. He has also requested paying only ½ of the area charges associated with site development in consideration that the remaining portion of the site is vacant and available for future development. Typically, all site area charges are paid at the time of platting or obtaining building permit, depending upon the circumstances, although staff can support the request at this time. The purchase agreement notes that any development that requires city approval, including expansion of the proposed building, proposed parking, or a new project, will trigger payment of the remaining area charge fees. Finally, staff has suggested that the area charges and connection charges associated with the development, with the exception of the SAC which are directly paid to the Met Council, could be assessed over 10 years. That process will reduce the amount of upfront costs necessary for development of the site. A separate assessment agreement would be brought to the City Council for approval if this condition is acceptable to both the Council and Port Authority. Both parties continue to be supportive of the project. Staff is bringing an amendment to the Port Authority and City Council for action to amend the purchase agreement to have a closing by March 30, 2019. RECOMMENDATION Staff recommends the City Council approve a motion to amend the Purchase Agreement between the Rosemount Port Authority and Symnabdre Properties LLC for the property at Canada Circle. 550724v4 BDL RS220-387 THIRD AMENDMENT TO PURCHASE AGREEMENT THIS THIRD AMENDMENT TO PURCHASE AGREEMENT (the “Third Amendment”) is made and entered into effective as of this ___ day of January, 2019, by and between the Rosemount Port Authority, a body corporate and politic in the State of Minnesota, and the City of Rosemount, a Minnesota municipal corporation (together, the “Seller”), and Symnabdre properties LLC, a Minnesota limited liability company (the “Buyer”), with reference to the following facts and circumstances: A. Seller and Buyer have entered into that certain Purchase Agreement dated April 17, 2018 (the “Agreement”). The Agreement provides for the sale by Seller and the purchase by Buyer of certain real property located in the City of Rosemount, Dakota County, Minnesota legally described on Exhibit A attached hereto and made a part hereof (the “Sale Property”). B. The Agreement includes as a contingency Buyer being satisfied with environmental conditions on the Sale Property after any such testing or inspection determined by Buyer, which contingency must be satisfied or waived within 90 days after the Effective Date, as defined in the Agreement. C. Seller and Buyer have amended the Agreement by that certain Amendment to Purchase Agreement dated July 13, 2018 (the “Amendment”), which Amendment extended the Contingency Date an additional 90 days and extended the Closing Date to no later than 10 days after Buyer satisfied or waived all contingencies, according to the extended Contingency Date. D. Seller and Buyer have amended the Agreement by that certain Second Amendment to Purchase Agreement dated October 12, 2018 (the “Second Amendment”), which Amendment further extended the Contingency Date and extended the Closing Date to no later than 10 days after Buyer satisfied or waived all contingencies, according to the extended Contingency Date, and amended the Purchase Price to $302,278.90 to reflect a reduction in the area of the Sale Property. E. Seller and Buyer have reached agreement regarding environmental remediation and other closing terms, which the parties wish to memorialize in this Third Amendment. NOW, THEREFORE, in consideration of the foregoing facts and circumstances, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties hereto, Seller and Buyer hereby agree that the Agreement shall be amended as follows: 1. The Purchase Price, as defined in the Agreement, shall be reduced by $17,500 to offset remediation costs incurred by the Buyer, resulting in a new Purchase Price of $284,778.90. 2. The Contingency Date, as defined in the Agreement, shall expire March 22, 2019, except for those contingencies set forth at Section 4(A), (G) and (H). 550724v4 BDL RS220-387 2 3. The Closing Date, as defined in the Agreement, is likewise extended to no later than 10 days after Buyer has satisfied or waived all contingencies pursuant to Section 2 above, which calculation shall include the new Contingency Date set forth above. 4. Section 4 of the Agreement is amended to add the following subsection: “L. Assessment Agreement. Prior to or at the Closing, the parties shall enter into a written agreement for assessment charges to be levied against the Property (the “Assessment Agreement”). The terms of this Assessment Agreement shall include the following: buyer will be assessed one-half (1/2) of the area charges, the off-site ponding cost, and all of the connection charges with the exception of the SAC charges. This agreement shall be for a term of 10 years.” 5. Section 15 of the Agreement is amended by deleting in its entirety Subsection Q and replacing it with the following: “Q. Intentionally deleted.” 6. Section 16 of the Agreement is amended by adding the following paragraph: “Buyer is aware of the extent of environmental remediation that has been identified by the Parties as necessary for the Property and acknowledges that any remediation or clean-up required in accordance with applicable regulations and MPCA standards, including any documentation required to be submitted to the MPCA in relation to such remediation, is the Buyer’s sole responsibility. Seller does not assume any liability for any release, threatened release or other conditions at the Property or for any actions taken or omitted by Buyer with regard to the release, threatened release, or other conditions at the Property, and Buyer hereby indemnifies Seller for any release that occurs at the Property during the time of Buyer’s ownership. Nothing in the Agreement is intended to authorize any response action under Minnesota Rules. It is intended by the Parties that this provision of the Agreement shall survive closing and will not merge with the deed.” 7. Section 29 is added to the Agreement as follows: “29. Future Development. In the event of future site development, building or parking expansion requiring approval by the City of Rosemount, Buyer agrees to pay the remaining one-half (1/2) of area charges not assessed per the Assessment Agreement. This agreement shall survive the closing and will not merge with the deed.” 8. Except as amended herein, the Agreement shall remain in full force and effect. [Remainder of page intentionally left blank.] 550724v4 BDL RS220-387 3 IN WITNESS WHEREOF, Seller and Buyer have caused this Third Amendment to Purchase Agreement to be executed as of the day and year first above written. SELLER: ROSEMOUNT PORT AUTHORITY By: _______________________________ Its: Chair By: _______________________________ Its: Executive Director CITY OF ROSEMOUNT By:____________________________________ William Droste Its: Mayor By: ___________________________________ Erin Fasbender Its: City Clerk 550724v4 BDL RS220-387 4 BUYER: Symnabdre properties LLC _____________________________ By: Nathan A. Bry Its: President 550724v4 BDL RS220-387 5 EXHIBIT A TO THIRD AMENDMENT TO PURCHASE AGREEMENT Sale Property - Legal Description: Lot 1, Block 1, CANADA CIRCLE, Dakota County, Minnesota