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-___
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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
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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
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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
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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.]
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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:
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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.
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EXHIBIT B
Depiction of Residual Property
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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.
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EXHIBIT D
Purchase Agreement
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EXHIBIT E
Site Development Agreement
[See attached. ___ pages follow.]