Loading...
HomeMy WebLinkAboutItem 08September 27, 2012 Proposed Action Overview PURCHASE AGREEMENT FOR THE SALE OF THE FORMER SENIOR CENTER LOCATED AT 20732 HOLT AVENUE Staff recommends adoption of the following motion: Move to approve a resolution authorizing the execution of a purchase agreement for the sale of the former Senior Center to Rose Mountain Spiritual Community Center. Passage of this motion will result in the sale of the property within 90 days or when the purchaser's contingencies have been met. The City has received a signed purchase agreement for the purchase of the former Senior Center by Rose Mountain Community Spiritual Center (RMSCC) currently based in Rosemount. RMSCC is proposing to purchase the property to be used as a church and fellowship hall. The offer from RMSCC is to purchase the building for $345,000. The proposed terms call for RMSCC to pay $200,000 at the date of closing with the balance of $145,000 to be financed on a Contract for Deed over a three year period based on a 20 year amortization with an interest rate of 1% over Prime. A balloon payment for the balance of the purchase price would be due at the end of the three years. The purchase of the property is contingent on completion of a property inspection and approval of a conditional use permit for the proposed use. The proposed purchase agreement requires that the City pay a 4% commission to the buyer's agent. The purchase agreement calls for a closing on the property within 90 days. Staff recommends approval of the proposed purchase agreement. Primary Issues to Consider • Is the proposed sales price and terms appropriate? The proposed sales price is equal to the appraised value as determined by an independent appraiser and proposed terms of the Contract for Deed result in a reasonable return for the City. • Supporting Information • Resolution authorizing the sale of the Senior Center Property Item No. • Co e - the purchas; .greeme igned by Rose Mountain Community Spiritual Center Da i• L. Olson, Community and Economic Development Director Financial Impact: $345,000 less the CDBG Reimbursement Budgeted: Y/N Y Source: Project 4084 Related Documents: Heritage Center Budget Notes: The estimated interest rate of 1% over Prime is currently4.25% Date Motion By RESOLUTION APPROVING THE SALE OF REAL PROPERTY AND DISPENSING WITH STATUTORY REQUIREMENTS FOR REVIEW BY PLANNING COMMISSION OF DISPOSAL OF PROPERTY WHEREAS, the City is proposing to dispose of City property ( "City Property ") legally described in the attached Exhibit "A," under the terms of the proposed purchase agreement between Rose Mountain Spiritual Community Center ( "Buyer ") and the City of Lakeville ( "Purchase Agreement "), attached hereto and incorporated herein as Exhibit "B," and; WHEREAS, Minn. Stat. § 462.356, subd. 2 requires that the Planning Commission review the City's proposed acquisitions and dispositions of property, and; WHEREAS, Minn. Stat. § 462.356, subd. 2 provides for an exception from the Planning Commission review requirement upon 2/3 vote of the City Council dispensing with the requirement and finding that the acquisition or disposal of the property has no relationship to the comprehensive municipal plan. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lakeville: 1. The City Council finds that the disposition of the City Property under the Purchase Agreement has no relationship to the City's Comprehensive Plan. 2. Review by the Planning Commission of the disposal of the City Property is hereby dispensed with, the proposed transaction is hereby approved, and the Mayor and City Clerk are authorized and directed to execute all documents, and take all appropriate measures to convey the City Property under the terms of the Purchase Agreement. ADOPTED this day of , 2012, by a 2/3 vote of the City Council of CITY OF LAKEVILLE BY: the Cit y of Lakeville. ATTEST: Charlene Friedges, City Clerk CITY OF LAKEVILLE DAKOTA COUNTY, MINNESOTA RESOLUTION Resolution Seconded By Mark Bellows, Mayor Legal Description of City Property: EXHIBIT "A" Lots 1 and 2, except the North 7.5 feet of Lot 2, Block 8 Berres Addition to Lakeville; Lot 5, Block 14 Lakeville Village (Town of Fairfield) and the east 20 feet of vacated Walnut (Holt) Street adjacent thereto, which accrued by reason of the vacation thereof, according to the plat on file in the Dakota County Recorder's office. The west 131.0 feet of Lot 12, Block 14 Lakeville Village (Town of Fairfield) and the east 20 feet of vacated Walnut (Holt) Street adjacent thereto, which accrued by reason of the vacation thereof, according to the plat on file in the Dakota County Recorder's office. PURCHASE AGREEMENT EXHIBIT "B" THIS PURCHASE AGREEMENT (the "Agreement ") is effective as of the day of , 2012, by and between CITY OF LAKEVILLE, a Minnesota municipal corporation ( "Seller ") and ROSE MOUNTAIN SPIRITUAL COMMUNITY CENTER, a Minnesota non -profit corporation ( "Purchaser "). 1.0 Property To Be Purchased. Seller is the owner of four parcels of real property located in the City of Lakeville, Dakota County Minnesota as legally described in the attached Exhibit "A" ( "Subject Property "). Subject to compliance with the terms, covenants and conditions of this Agreement, Seller shall convey to the Purchaser the Subject Property, including one existing building, together with all other existing improvements located thereon, all appurtenant rights, easements, mineral rights, and all right, title and interest of Seller in and to all improvements and fixtures located thereon, including without limitation, all water and sewer taps, all equipment used in connection with the operation thereof, such heating and air conditioning systems, except all roadways, current easements, covenants and restrictions of record which the Seller hereby reserves (all of the foregoing hereinafter collectively referred to as the "Real Property "). 2.0 Purchase Price. The purchase price ( "Purchase Price ") for the Subject Property is Three Hundred Forty Five Thousand Four Hundred Dollars ($345,000.00). Buyer shall pay the Purchase Price to Seller as follows: (a) $25.000.00 (the "Earnest Money ") to be paid to Seller on the effective date of this Agreement, which will be held in escrow by Dakota Abstract Co. ( "Title ") and applied to the Purchase Price at Closing; 3.0 Evidence of Title. Within fifteen (15) days of execution of this Agreement by Seller, Seller shall cause to be issued, with a copy delivered to Purchaser, an acceptable commitment for an Owner's title insurance policy for the Subject Property (the "Commitment ") issued by the Title Company pursuant to which the Title Company agrees to issue to the Purchaser upon the recording of the documents of conveyance referred to herein an Owner's title insurance policy insuring the Subject Property in an amount equal to the total Purchase Price. The Commitment shall include proper searches covering bankruptcies, state and federal judgments and liens and levied and pending special assessments. 166385v4 (b) $175,000.00 in cash at Closing; PURCHASE AGREEMENT (c) The balance pursuant to a Contract for Deed (Minnesota Uniform Conveyancing Form No. 56 -M), to be delivered by Purchaser to Seller at Closing. The principal balance of the Contract for Deed shall be amortized based on twenty (20) years with a balloon payment of the remaining balance to be paid 36 months after the Closing Date, together with interest thereon at the fixed rate of one (1 %) percent over Prime per annum, which shall be calculated upon the Date of Closing. 1 Purchaser shall have twenty (20) days after receipt of the Commitment search to deliver to Seller written objections to title based on marketability of Subject Property, except for Permitted Exceptions, and Seller shall have one hundred twenty (120) days to have such objections removed or satisfied. Seller shall proceed in good faith and use best efforts to cure objections to title within such one hundred twenty (120) day period. If Seller shall fail to have such objections removed within said time, Purchaser may, at its sole election: (a) terminate this Agreement without any liability and provide a quit claim deed in favor of the Seller to the Subject Property; or (b) waive such objections and take title to the Subject Property subject to such objections. Any exceptions waived or accepted by Purchaser shall be deemed to be Permitted Exceptions. 4.0. Conveyance and Title - Property. Subject to performance by the Purchaser, Seller agrees to execute and deliver a recordable Contract for Deed conveying marketable title to the Subject Property, subject only to the following exceptions: 166385v4 a. Building and zoning laws, ordinances and state and federal regulations. b. Restrictions relating to the use or improvement of the Property that do not affect Purchaser's intended use. c. Permitted encumbrances. d. Reservation of minerals and mineral rights to the State of Minnesota. e. Utility and drainage easements which do not interfere with present improvements. 5.0. Closing. The closing for the conveyance of the Subject Property will take place 90 days following the date of this Purchase Agreement, unless otherwise extended pursuant to Sections 3.0 or 13.0, or may occur on such earlier date as Seller and Purchaser may agree in writing ( "Date of Closing ") at a place mutually agreed upon by the parties. However, this contract shall be void and no longer valid if a closing does not occur prior to April 1, 2013, unless this date is otherwise extended in writing by the parties. An extension on behalf of the Seller may be approved in writing by the City Administrator. 6.0 Real Estate Taxes and Special Assessments. a. Real Estate Taxes Payable in the Year of Closing. Real estate taxes payable in the year of closing shall be prorated between Seller and Purchaser on a per diem basis to the Date of Closing. b. Deferred Real Estate Taxes. Seller shall pay on the Date of Closing any deferred real estate taxes (including "Green Acres" taxes under Minn. Stat. §273.111) payment of which is required as a result of the closing of this sale and the recording of the deed. 2 7.0. Possession. Possession of the Subject Property shall be delivered to Purchaser on the Date of Closing. 8.0. Representations and Warranties of Seller. Seller represents and warrants to Purchaser: 166385v4 c. Special Assessments. Seller shall pay all levied special assessments as of the date of closing. d. Taxes and Special Assessments in the Years Following Closing. Purchaser shall pay real estate taxes payable in the years following the Date of Closing and special assessments payable therewith, the payment of which is not otherwise provided herein. Seller makes no representation concerning the amount of future real estate taxes or of future special assessments. a. At Closing Seller will have good and marketable title, free and clear of all liens, security interests and encumbrances, except as otherwise provided under this Agreement. b. To the best of Seller's knowledge, without investigation, there are no actions, suits or proceedings pending or threatened against or affecting either Seller or the Subject Property. c. Seller has operated the Subject Property in compliance with all applicable federal, state and local environmental laws, ordinances, rules and regulations relating to the handling, storage and disposal of hazardous and toxic wastes and substances, petroleum products and other regulated substances. Seller's operation of the Subject Property is now and shall on the Date of Closing be in compliance with all such environmental laws, ordinances, rules and regulations, including but not limited to the maintenance of all required permits and approvals. Seller has not used or stored hazardous wastes or substances, petroleum products and other regulated substances on the Subject Property, nor has Seller discharged or released any such substances upon the Subject Property, including, but not limited to, underground injection of such substances, in violation of any federal, state or local environmental law, ordinance, rule or regulation. To the best of Seller's knowledge, no other party has engaged in any such use, storage, discharge or release. d. The representations and warranties of Seller contained in this Agreement must be true now and on the Closing Date as if made on the Closing Date and Seller shall have delivered to Buyer on the Closing Date a certificate dated the Closing Date, signed by Seller, certifying that such representations and warranties are true as of the Closing Date and survive the Closing ( "Bring Down Certificate "). 3 9.0 Representations of Purchaser. As an essential part of this Agreement and in order to induce Seller to enter into this Agreement and to sell the Subject Property to Purchaser, Purchaser hereby represents and warrants to Seller: 10.0. Seller's Closing Documents. At closing, Seller shall execute and deliver to Purchaser the following: 166385v4 9.1 Purchaser has the requisite power and authority to enter into and perform this Agreement and the Closing documents relating thereto signed by it; such documents have been duly authorized by all necessary action on the part of Purchaser and have been duly executed and delivered; such execution, delivery and performance by Purchaser of such documents does not conflict with or result in a violation of any judgment, order, mortgage, contract, agreement, or decree of any court or arbiter to which Purchaser is a party nor result in any lien, charge or encumbrance of any nature whatsoever on the Subject Property; such documents are valid and binding obligations of Purchaser, and are enforceable in accordance with their terms. a. Contract for Deed. Statutory Contract for Deed in recordable form and reasonably satisfactory to Purchaser and Seller. b. Well Disclosure Certificate. c. Certificate of Non - Foreign Status. e. Seller's Affidavit. A standard form Affidavit by Seller indicating that on the date of closing there are no outstanding unsatisfied judgments, tax liens or bankruptcies against or involving Seller or the Subject Property. f. Bring Down Certificate. g. Other Documents. All other documents reasonably determined by either party and the title insurance company to be necessary to transfer and provide title insurance for the Subject Property. 11.0 Purchaser's Closing Documents. At closing, Purchaser shall execute and deliver to Seller the following: a. Contract for Deed. Statutory Contract for Deed in recordable form and reasonably satisfactory to Purchaser and Seller. b. Purchaser's Affidavit. A standard form Affidavit by Purchaser indicating that on the date of closing there are no outstanding unsatisfied judgments, tax liens or bankruptcies against or involving Purchaser. 4 166385v4 c. Other Documents. All other documents reasonably determined by either party and the title insurance company to be necessary to transfer and provide title insurance for the Subject Property. 12.0 Closing Costs. The costs relating to this transaction shall be paid as follows: 12.1 Seller shall pay: a. Deed transfer tax. b. Issuance of a title commitment, c. One -half (1/2) of the closing fee. 12.2 Purchaser shall pay: a. One -half (1/2) of the closing fee. b. Recording fee for the Contract for Deed. c. Mortgage registration tax. d. Premiums for owner's title insurance. e. The costs for engineers or other consultants, if any engaged by Purchaser regarding the Subject Property. 13.0 Purchaser's Contingencies. Purchaser's Contingencies. The following items are Purchaser's contingencies to this Agreement. If the contingencies are not performed, satisfied or waived prior to the Date of Closing, then this Agreement may at Purchaser's option by written notice from Purchaser to Seller. All of the contingencies set forth in this Agreement are specifically stated and agreed to be for the sole and exclusive benefit of the Purchaser, and only Purchaser shall have the right to unilaterally waive any contingency by written notice to the Seller. a. Government Approval and Costs. Purchaser shall have obtained at its sole cost and expense conditional use approval, necessary in Purchaser's judgment in order to make use of the Subject Property which Purchaser intends. Seller agrees to waive any escrow required as a condition for conditional use permit approval. b. Physical Condition of the Subject Property. Purchaser, in its sole judgment, shall have determined that it is satisfied with its inspection of the physical condition of the Subject Property, improvements constructed on the Subject Property and personal property located in or on the Subject Property, which inspection and determination must be made within 7 days of the date of this Purchase Agreement. 14.0 Access to Property. Seller shall allow Purchaser and its agents access to the Subject Property for an inspection thereof. Purchaser may conduct soil tests, soil borings and other tests of the Subject Property. As a condition of such entry, Purchaser indemnifies and saves Seller harmless from and against any liability (including liability for bodily injury, death and reasonable attorneys' fees) and any mechanic lien attaching to the Subject Property as a 5 result of the work performed in making any such inspection. If, as a result of Purchaser's inspection of the Subject Property and such documents, Purchaser, for any reason, is dissatisfied with the Subject Property or such documents, Purchaser shall have the absolute right to terminate this Agreement. 15.0 Default. If either party shall default in any of their respective obligations under this Purchase Agreement, the other party, by notice to such defaulting party specifying the nature of the default and the date on which this Purchase Agreement shall terminate (which date shall not be less than seven (7) days after the giving of such notice), may terminate this Purchase Agreement, and upon such date, unless the default so specified shall have been cured, this Purchase Agreement shall terminate. In the case of any default by the Purchaser, Seller's sole and exclusive remedy shall be termination of this Purchase Agreement as provided above. 16.0 Brokerage. Seller represents that it has not contracted with a broker, sales agent or similar party in connection with this transaction. Purchaser has contracted with Ed Hanlon, an Edina Realty Commercial Specialist, ( "Purchaser's Sales Agent ") for sales agent services. Seller agrees to pay 4% of the Purchase Price to Purchaser's Sales Agent at closing. Except for the identified Purchaser's Sales Agent, each party agrees to indemnify and hold the other harmless of any claim made by a broker or sales agent or similar party for a commission due or alleged to be due on this transaction on the basis of an agreement with said broker made by the indemnifying party. The parties' obligations set forth in this paragraph shall survive termination of this Agreement. 166385v4 17.0 "As is" Purchase. 17.1 Except as specifically set forth in this Agreement or any document contemplated hereby, (i) the Subject Property is being sold, conveyed, assigned, transferred and delivered "as is, where is" on the date hereof and in its condition on the date hereof, "with all faults," and Seller is not making, and expressly disclaims, any other representation or warranties written or oral, statutory, express or implied, concerning the Subject Property, including but not limited to, representations or warranties relating to value or quality of the Subject Property or the prospects, financial or otherwise, risks or other incidents of the Subject Property or with respect to this Agreement or the transactions contemplated hereby or thereby, and (ii) Seller specifically disclaims any representation or warranty of merchantability, usage, suitability or fitness for any particular purpose with respect to the Subject Property or any part thereof, or as to the workmanship thereof, or the absence of any defects therein, whether latent or patent. 17.2 Purchaser acknowledges that the provision of this Section is a material part of the consideration to be received by Seller under this Agreement, and that Seller has agreed to the Purchase Price by reason of such understanding. This representation by Purchaser shall survive Closing. 18.0 Miscellaneous. The following general provisions govern this Agreement: 18.1 Time is of the Essence. The Date of Closing is of the absolute essence. 6 166385v4 18.2 Governing Law. This Agreement is made and executed under and in all respects is to be governed and construed under the laws of the State of Minnesota. 18.3 Notices. Any notice required to be given to Seller or Purchaser pursuant to this Agreement shall be in writing and shall be deemed duly given: (i) on the date of personal delivery; (ii) one day following dispatch by Express Mail or equivalent or (iii) two (2) days following mailing certified or registered mail, postage prepaid, return receipt requested, to the respective addresses of the parties set out below: Seller: With a copy to: Purchaser: City Administrator City of Lakeville Lakeville City Hall 20195 Holyoke Avenue Lakeville, MN 55044 Andrea McDowell Poehler Campbell Knutson, P.A. 317 Eagandale Office Center 1380 Corporate Center Curve Eagan, MN 55121 George Maverick Rose Mountain Spiritual Community Center 12790 Dodd Boulevard Rosemount, MN 55068 18.4 Purchaser's Waiver Rights. Purchaser may, at Purchaser's option, waive any right conferred upon the Purchaser by this Agreement. 18.5 Amendment. This Agreement shall be amended only by a written instrument signed by Seller and Purchaser. 18.6 Construction. The captions and headings of the various sections of this Agreement are for convenience only and are not to be construed as defining or as limiting in any way the scope or intent of the provisions hereof. Wherever the context requires or permits, the singular shall include the plural, the plural shall include singular, and the masculine, feminine and neuter shall be freely interchangeable. 18.7 Entire Agreement. This Agreement sets forth the entire understanding of the parties and may be amended, modified or terminated only by an instrument signed by the parties. 18.8 Counterparts. For the convenience of the parties, any number of counterparts hereof may be executed and each such executed counterpart shall be deemed an 7 166385v4 original, but all such counterparts together shall constitute one in the same Agreement. 18.9 Survival. The terms, covenants, conditions and obligations of the Seller and Purchaser shall survive the Closing under this Agreement. The parties have executed this Agreement as of the day and year set forth above. [Signature pages to follow] 8 Seller: CITY OF LAKEVILLE By: Mark Bellows, Mayor By: Charlene Friedges, City Clerk STATE OF MINNESOTA ) (SS COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this day of 2012, by Mark Bellows and Charlene Friedges, the Mayor and City Clerk of the above -named Seller. 166385v4 Notary Public 9 Purchaser: ROSE MOUNTAI COMMUNITY SPIRITUAL CENTER Bv: STATE OF MINNESOTA ) (SS COUNTY OF ��'`�"� € %/ ) The foregoi g instrument was acknowledged befoye me this A day of 2012, by N yew Y-2_ , the /1 oh ,ty f i C_,_, o he above -named Purchaser. I / j- otary Publi Mary F. Vellmure NOTARY PUBLIC STATE OF MINNESOTA My Commission Expires 1-31-2014 EXHIBIT A LEGAL DESCRIPTION Lots 1 and 2, except the North 7.5 feet of Lot 2, Block 8 Berres Addition to Lakeville; Lot 5, Block 14 Lakeville Village (Town of Fairfield) and the east 20 feet of vacated Walnut (Holt) Street adjacent thereto, which accrued by reason of the vacation thereof, according to the plat on file in the Dakota County Recorder's office. The west 131.0 feet of Lot 12, Block 14 Lakeville Village (Town of Fairfield) and the east 20 feet of vacated Walnut (Holt) Street adjacent thereto, which accrued by reason of the vacation thereof, according to the plat on file in the Dakota County Recorder's office. 166385v4 11