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HomeMy WebLinkAbout9.a. Authorizing various agreements for Life Time project EXECUTIVE SUMMARY City Council Regular Meeting: April 4, 2023 AGENDA ITEM: Execution of Various Agreements related to the Life Time project AGENDA SECTION: New Business PREPARED BY: Logan Martin, City Administrator Dan Schultz, Park & Rec Director AGENDA NO. 9.a. ATTACHMENTS: Resolution, Partial Assignment of PSA APPROVED BY: LJM RECOMMENDED ACTION: Motion to authorize the attached Resolution to execute various agreements related to the Life Time project. BACKGROUND City Staff and the project team from Life Time have been working diligently on final preparation of documents and plans to move the project into its implementation phase. The project is currently out for bid and remains on track for an early summer groundbreaking. At its meeting on April 4, staff is requesting Port Authority approval of two documents under its purview. Specifically, the Port Authority is the responsible entity on the Lease Agreement between the parties and the Construction Management Agreements and action will be taken by that entity at its April 4 meeting. The City Council is required to authorize the Partial Assignment of the Purchase and Sale Agreement. This action allows the City to assign its ability to purchase the remaining property (i.e. property not occupied by the Club) to Life Time, allowing them to buy the outlot property for their future development efforts. The attached resolution also authorizes staff to execute forthcoming agreements currently under negotiation that are connected to / required by the lease, including a Site Development Agreement. The current schedule anticipates a June land closure, with earthwork and construction starting thereafter. Staff will give a report on the results of the Port Authority meeting and can discuss the overall project during its presentation. RECOMMENDATION Staff recommends the City Council authorize the attached Resolution to execute various agreements related to the Life Time project. RESOLUTION 2023-___ RS125-24-863292.v2 City of Rosemount Dakota County, Minnesota Resolution 2023-__ RESOLUTION AUTHORIZING THE EXECUTION OF VARIOUS AGREEMENTS (LIFE TIME PROJECT) WHEREAS, the City of Rosemount (the “City”), as buyer, and Akron 42, LLC, as seller, have executed that certain Purchase and Sale Agreement dated April 5, 2022, as amended and assigned (the “Purchase Agreement”), pursuant to which the City will acquire that certain tract of land with all easements, hereditaments and appurtenances belonging thereto, located at northwest corner of County Road 42 and Akron Avenue in Rosemount, Minnesota, consisting of approximately 21.75 net developable acres in the aggregate (the “Development Property”); and WHEREAS, pursuant to a quit claim deed or the terms of a Partial Assignment of Purchase Agreement, to be entered into between the City and the Rosemount Port Authority, a Minnesota body corporate and politic (the “Port”), with the consent of Akron 42, LLC, as seller, (collectively, the “PA Assignment”), the Port proposes to acquire and become the fee owner of that portion of the Development Property containing approximately 10.9 net developable acres, to be legally described as Lot 1, Block 1, Prestwick Place 23rd Addition, according to the approved plat thereof (the “PA Property”); and WHEREAS, pursuant to the terms of a Partial Assignment of Purchase Agreement, to be entered into between the City and LTF Real Estate Company, Inc., a Minnesota corporation (“LT Owner”) (the “LT Assignment”), LT Owner proposes to acquire and become the fee owner of a portion of the Development Property containing approximately 10.84 net developable acres, to be legally described Outlots A and C, Prestwick Place 23rd Addition, according to the approved plat thereof (the “LT Owner Property”); and WHEREAS, the City will retain ownership of the remaining portion of the Development Property containing approximately 0.00 developable acres, to be legally described Outlot B, Prestwick Place 23rd Addition, according to the approved plat thereof (“Outlot B”); and WHEREAS, the Port, as landlord, and LTF Lease Company, LLC (“LTF Tenant”), which is an affiliate of LT Owner, as tenant, propose to enter into a Lease (the “Lease”), pursuant to which a health and fitness facility with outdoor recreational uses will be developed and constructed by the Port, pursuant to a AIA Document C132 – 2019 Standard Form of Agreement Between Owner and Construction Manager as Adviser and a AIA Document A232 – 2019 General Conditions of the Contract for Construction, Construction Manager as Adviser Edition (collectively, the “Construction Management Agreement”) between the Port and LTF Construction Company, LLC, an affiliate of LT Owner (the “Construction Manager”), and leased to and operated on the PA Property by LTF Tenant (the “Health Club Project”); and WHEREAS, LT Owner plans to facilitate the development of an integrated retail/residential development on the LT Owner Property by developing and/or selling the outlots or lots comprising the LT Owner Property to third parties; and RESOLUTION 2023-___ RS125-24-863292.v2 WHEREAS, the Port, pursuant to the Construction Management Agreement, will cause the completion of certain site work, utility, roadway, and signage improvements (the “Improvements”) that will benefit the entire Development Property; and WHEREAS, the Port and LTF Owner, with the consent of the City, propose to enter into a Site Development Agreement (the “Site Development Agreement”), which describes the scope of the Improvements to be performed in connection with the development of the Development Property and the timing of completion of the Improvements and pursuant to which the costs and expenses associated with the completion of such Improvements will be paid for by the Port and LTF Owner pro rata based upon the relative net developable acres comprising each of the PA Property and the LT Owner Property; and WHEREAS, the Port, LTF Tenant, LTF Owner, and the City, propose to enter into a Declaration of Easements and Covenants (the “Declaration”), which describes easement areas for the Improvements and imposes various other restrictions on the Development Property; and NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Rosemount as follows: Section 1. Approval of Agreements. The City Council hereby approves the PA Assignment and the LT Assignment in substantially the forms presented to the City Council, together with any related documents necessary in connection therewith or in connection with the Lease, including but not limited to any documents, exhibits, certifications or consents referenced in or attached to the PA Assignment, the LT Assignment, or the Site Development Agreement as approved by legal counsel to the City (collectively, the “Development Documents”), and hereby authorizes the Mayor and City Administrator to negotiate the final terms thereof and, in their discretion and at such time, if any, as they may deem appropriate, the Mayor and City Clerk are authorized to execute the same on behalf of the City, and to carry out, on behalf of the City, the City’s obligations thereunder. Section 2. Modifications. The approval hereby given to the Development Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the City, by the City Administrator and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the City. The execution of any instrument by the appropriate officers of the City herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. This Resolution shall not constitute an offer and the Development Documents shall not be effective until the date of execution thereof as provided herein. Section 3. Absence of Authorized Officials. In the event of absence or disability of the officers, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the City Council by any duly designated acting official, or by such other officer or officers of the City Council as, in the opinion of the City Attorney, may act in their behalf. Upon execution and delivery of the Development Documents, the officers and employees of the City are hereby authorized and directed to take or cause to be taken such actions as may be necessary on behalf of the City to implement the Development Documents. RESOLUTION 2023-___ RS125-24-863292.v2 Section 4. Public Purpose. The City Council hereby determines that the execution and performance of the Development Documents will help realize the public purposes of Laws of Minnesota 1991, Chapter 291, as codified in under the provisions of Minnesota Statutes, Sections 469.048 to 469.068 and in particular, Minnesota Statutes, Section 469.0813 (collectively, as amended from time to time, the “Act”). ADOPTED this 4th day of April, 2023. _______________________________________ Jeffery D. Weisensel, Mayor ATTEST: Erin Fasbender, City Clerk 1 RS220-402-859619.v3 PARTIAL ASSIGNMENT OF PURCHASE AGREEMENT THIS PARTIAL ASSIGNMENT OF PURCHASE AGREEMENT (this “Assignment”) is entered into this _____ day of April, 2023, by and between the City of Rosemount, Minnesota, a Minnesota municipal corporation, as assignor (“City”), and LTF Real Estate Company, Inc., a Minnesota corporation, as assignee (“Assignee”). RECITALS A. City is the purchaser under that certain Purchase and Sale Agreement dated on or about April 22, 2022 (as amended, “Purchase Agreement”), by and between Akron 42, LLC, a Minnesota limited liability company (“Seller”) and City, affecting certain real property located in Rosemount, Minnesota (as legally described in the Purchase Agreement, the “Property”). B. As permitted under Section 12.4 of the Purchase Agreement, City and Assignee have agreed to assign to Assignee the City’s right and obligation to purchase the “Residual Property”, as defined in the Purchase Agreement, legally described on Exhibit A, and depicted on Exhibit B, each Exhibit attached hereto and incorporated herein by this reference pursuant to the terms and conditions contained in this Assignment and in the applicable provisions of the Purchase Agreement (the “Assumed Obligations”). AGREEMENT NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Definitions. Capitalized terms used but not defined herein shall have the meanings ascribed to each of them in the Purchase Agreement. 2. Recitals Incorporated. The foregoing Recitals are incorporated into this Assignment as if fully set forth herein. 3. Partial Assignment of Purchase Agreement. The City does hereby assign to Assignee all of the City’s rights, and delegates to Assignee all of the City’s obligations, in and to the Purchase Agreement, solely with respect to the purchase of the Residual Property. The Purchase Price for the Property shall be allocated to the Residual Property and the Health Club Property pro rata based upon the net developable acres of the Property, as follows: (a) the Health Club Property shall be allocated 51.03% of the Purchase Price, and (b) the Residual Property shall be allocated 48.97% of the Purchase Price (the “Residual Property Purchase Price”). The City shall be obligated to purchase the Health Club Property (i.e., the balance of the Property) in accordance with the terms and conditions of the Purchase Agreement. In assuming the Assumed Obligations, except to the extent expressly modified by this Assignment, Assignee agrees to comply with, to perform, and to be bound by, all provisions of the Purchase Agreement that are applicable to the Residual Property, as if Assignee were the “Buyer”, including without limitation all representations, warranties, covenants, conditions and 2 RS220-402-859619.v3 contingencies set forth therein. The City and Assignee further acknowledge and agree that Assignee is a “Permitted Assignee” as provided in Section 12.4 of the Purchase Agreement. Life Time, Inc., a Minnesota corporation, hereby agrees to guarantee the performance of each obligation of Assignee set forth in this Section 3. 4. Closing. The Closing on the Residual Property shall occur simultaneously with the closing of the Health Club Property by the City, and the Assignee expressly acknowledges and agrees that such Closing shall occur in strict accordance with Section 7.1 of the Purchase Agreement. Assignee shall be responsible to pay for all closing costs, as set forth in Section 7.4 of the Purchase Agreement, to the extent applicable to the Residual Property. Any Buyer closing costs applicable to the Property generally will be prorated between the City and Assignee pro rata based upon the net developable acres comprising the Property, with the City paying 51.03% of such costs and Assignee paying 48.97% of such costs. 5. Title Review, Due Diligence, Inspections. Assignee shall be subject to all provisions in the Purchase Agreement with respect to the Residual Property, including without limitation the provisions contained in Articles 3 and 4 of the Purchase Agreement. 6. Earnest Money. The City has previously deposited $100,000.00 in earnest money (“Earnest Money”), with the Title Company. Within three (3) Business Days after the execution of this Assignment, the Assignee shall deposit $50,000.00 with the City. Subject to receipt of such deposit from Assignee, $50,000.00 of the Earnest Money previously deposited by the City in escrow pursuant to the Purchase Agreement shall be credited to the City’s purchase of the Property at its closing with Seller, and $50,000.00 shall be credited toward the Residual Property Purchase Price. 7. Residual Property Fees and Assessments. In addition to the provisions contained in Article 8 of the Purchase Agreement, the City and Assignee agree and acknowledge that Assignee will be responsible for the fees and assessments as set forth in attached Exhibit C. Notwithstanding anything to the contrary, Assignee’s portion of the Existing Assessments (e.g., Akron Ave, CR 42 Access and Connemara Extension) as set forth on Exhibit C shall not be due at Closing, but shall continue to be due and payable with the real estate taxes for the Residual Property for the remainder of the current assessment term for such Existing Assessments. 8. Notices. In addition to the Buyer notices provided in Section 12.5 of the Purchase Agreement, all Buyer notices also shall also be sent to: LTF Real Estate Company, Inc. 2900 Corporate Place Chanhassen, MN 55317 Attn: Aaron Koehler 3 RS220-402-859619.v3 Email: akoehler@lt.life with a copy to: LTF Real Estate Company, Inc. 2900 Corporate Place Chanhassen, MN 55317 Attn: Kari Broyles Email: kbroyles@lt.life 9. Warranty and Covenant of the City. The City warrants that the executed version of the Purchase Agreement attached hereto as Exhibit D, and incorporated by reference hereby, is the complete and correct copy of the Purchase Agreement. 10. Residual Property Contingency. The City agrees that it will not give notice that the conditions in Section 4.5(a) or Section 4.5(b) of the Purchase Agreement have been satisfied or waived without the prior written consent of Assignee. 11. Site Improvement Work. In connection with the development of the Residual Property and the Health Club Property, the parties shall enter into a site development agreement, substantially in the form attached hereto as Exhibit E, to be executed on or before Closing and recorded at the Closing. 12. Interpretation. The parties hereto agree that no presumption of interpretation will be imposed for or against any party. 13. Applicable Law. This Assignment shall be construed in accordance with the laws of the State of Minnesota. 14. Counterparts; Signatures. This Assignment may be executed in multiple counterparts which, when taken together as a whole, constitute one document. A signed copy of this Assignment transmitted by email or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Assignment for all purposes. [Signature page follows.] 4 RS220-402-859619.v3 IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed as of the day and year first above written. CITY: City of Rosemount, Minnesota By: Name: ____________________________________ Its: Mayor By: ______________________________________ Name: Erin Fasbender Its: City Clerk ASSIGNEE: LTF Real Estate Company, Inc. By: Name: ________________________ Its: CONSENT AND JOINDER Life Time, Inc. as guarantor of Assignee’s obligations set forth in Section 3 of the foregoing Partial Assignment of Purchase Agreement, hereby joins in the execution of this Partial Assignment of Purchase Agreement and agrees to be bound by the terms and condition of the foregoing Partial Assignment of Purchase Agreement. Life Time, Inc. By: Name: ________________________ Its: A-1 RS220-402-859619.v3 EXHIBIT A Legal Description of Residual Property The property to be platted at Closing as Outlots A and C, Prestwick Place 23rd Addition, according to the recorded plat thereof, County of Dakota, State of Minnesota. B-1 RS220-402-859619.v3 EXHIBIT B Depiction of Residual Property C-1 RS220-402-859619.v3 EXHIBIT C Residual Property Fees and Assessments City Planning Fees (as the Residual Property is developed) Preliminary Plat Residential $ 2,000* (plus $10 per unit) Preliminary Plat Commercial $ 2,000* (plus $50 per acre) Final Plat $ 1,200* PUD / Master Dev. Plan w/ Re- Zone $ 2,500* Comp Plan Amendment $ 3,000* City Utility Connections / City Fees (as the Residual Property is developed) Sanitary Sewer $1,075/acre* Storm Sewer (trunk) $6,685/acre* Water (trunk) $6,500/acre* Park Dedication $9,000/acre* Existing Assessments Project Amount City Portion (51.03%) Assignee Portion (48.97%) Akron Ave $ 19,017 $ 9,704.38 $ 9,312.62 CR 42 Access $ 371,470 $ 189,561.14 $ 181,908.86 Connemara Extension $ 598,187 $ 305,254.83 $ 292,932.17 $ 988,674 $ 504,520.35 $ 484,153.65 *All fees will be charged in accordance with the City’s schedule of fees at the time of development of the applicable parcel, fees listed in this Exhibit are based on the current schedule as of the date hereof and are for example only. D-1 RS220-402-859619.v3 EXHIBIT D Purchase Agreement D-2 RS220-402-859619.v3 D-3 RS220-402-859619.v3 D-4 RS220-402-859619.v3 D-5 RS220-402-859619.v3 D-6 RS220-402-859619.v3 D-7 RS220-402-859619.v3 D-8 RS220-402-859619.v3 D-9 RS220-402-859619.v3 D-10 RS220-402-859619.v3 D-11 RS220-402-859619.v3 D-12 RS220-402-859619.v3 D-13 RS220-402-859619.v3 D-14 RS220-402-859619.v3 D-15 RS220-402-859619.v3 D-16 RS220-402-859619.v3 D-17 RS220-402-859619.v3 D-18 RS220-402-859619.v3 D-19 RS220-402-859619.v3 D-20 RS220-402-859619.v3 D-21 RS220-402-859619.v3 D-22 RS220-402-859619.v3 D-23 RS220-402-859619.v3 EXHIBIT E Site Development Agreement [See attached. ___ pages follow.]