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HomeMy WebLinkAbout21-145CITY OF LAKEVILLE DAKOTA COUNTY, MINNESOTA RESOLUTION NO. 21-145 RESOLUTION APPROVING THE ACQUISITION OF REAL PROPERTY WHEREAS, the City is proposing to acquire certain property ("Property") legally described in and under the terms of the proposed purchase agreement attached as Exhibit "A" ("Purchase Agreement") between the City of Lakeville ("Buyer") and RDJ Properties, LLC ("Seller"); and WHEREAS, the planning agency has reviewed the acquisition and finds that it is consistent with the City's comprehensive municipal plan. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lakeville that the Mayor, City Administrator, and City Clerk are authorized and directed to execute all documents and take all appropriate measures to convey the Property under the terms of the Purchase Agreement. ADOPTED this 18th day of October 2021 by the City Council of the City of Lakeville. CITY OF LAKEVILLE BY: Douglas P. Anderson, Mayor A 17ST: _ i Charlene Friedges, City Cl r 217549v1 PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (the "Agreement") is made this day of , 2021 ("Effective Date"), by and between RDJ PROPERTIES, LLC, a Minnesota limited liability company, whose address is 8860 Upper 208th St. West, Lakeville, Minnesota 55044 ("Seller"), and the CITY OF LAKEVILLE, a Minnesota municipal corporation, whose address is 20195 Holyoke Avenue, Lakeville, MN 55044 ("Purchaser"). 1. OFFER/ACCEPTANCE. Seller agrees to sell and Purchaser agrees to buy that certain parcel of real property located at 8860 Upper 208th Street West, Lakeville, MN 55044 together with the building(s), and improvement(s) located thereon, if any, situated, lying and being in Dakota County, State of Minnesota and more particularly described in Exhibit A attached hereto (the "Property"). 2. PRICE AND TERMS. Purchaser agrees to purchase the Property for the sum of Seven Hundred Fifty Thousand Dollars and no/100 ($750,000.00) (the "Purchase Price"). The Purchase Price is to be paid to Seller on the Closing Date (as hereinafter defined) by wire transfer or other certified funds. 3. DEED/MARKETABLE TITLE. Upon performance by Purchaser, Seller shall execute and deliver a Warranty Deed, conveying good and marketable title of record, subject to: A. Reservations of minerals or mineral rights by the State of Minnesota, if any; B. Building and zoning laws, ordinances, state and federal regulations; and C. Permitted Exceptions as provided under Paragraph 10 of this Agreement. 4. RELOCATION BENEFITS. Seller is aware of Seller's rights and payments that Seller may be eligible to receive pursuant to the Uniform Relocation Assistance Act (the "Act"). Seller acknowledges that Seller has been given the opportunity to seek and receive the advice of legal counsel with respect to relocation, moving, reestablishment, and other costs, if any, that may be available under the Act. Seller hereby acknowledges that the payment of the Purchase Price does not include a payment for Relocation Benefits. At Closing, and as a condition precedent to Closing, Seller will waive any right to receive any relocation payments pursuant to the Act (or other federal or state law provisions) with respect to the Property. Seller acknowledges that Seller will make such a waiver of Seller's own volition and with full knowledge of the specific relocation benefits to which Seller may be entitled. Seller and Purchaser agree that this is a voluntary sale by Seller. Purchaser represents that Purchaser would not acquire the Property in the event that negotiations between Seller and Purchaser had failed to result in an amicable agreement. If the transaction set forth by this Agreement is not completed, Purchaser has no present intent to acquire the property by eminent 217382v7 domain and has not considered the use of eminent domain. If this Agreement is terminated for any reason, Seller is free to retain ownership of the Property or to sell the Property on the private market. As Purchaser and Seller agree that this is a voluntary sale, state and federal law permit the Purchaser to request a waiver of relocation benefits from Seller, as provided under Minn. Stat. § 117.521. Prior to and as a condition of Closing, Seller will be required to sign a relocation waiver, the form of which is substantially the same as shown on the attached Exhibit B and the final form will be subject to the approval of Purchaser ("Relocation Waiver"). If Seller does not waive relocation benefits, this Agreement will be terminated and Seller will be free to retain ownership of the Property or sell on the private market. 5. REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. A. Prior Years' Delinquent Real Estate Taxes and Delinquent Special Assessments. Delinquent real estate taxes payable in years prior to the year of Closing and delinquent installments of special assessments certified for collection with real estate taxes payable in years prior to the year of Closing, together with penalty, interest and costs, shall be paid by Seller not later than the Date of Closing. B. 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 calendar year basis as of the date of Closing. Purchaser shall assume installments not paid at Closing. Seller shall pay penalty, interest and costs on any delinquent installment of taxes and special assessments payable by Seller in the year of Closing. C. Deferred Real Estate Taxes. Seller shall pay on Date of Closing or provide for payment of 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. Provision for payment shall be by payment into escrow of 1.5 times the estimated payoff amount of the deferred taxes. D. Certified Special Assessments. All installments of special assessments certified for payment with the real estate taxes payable in the year of Closing shall be paid by Seller at Closing. E. All Other Levied Special Assessments. Seller shall pay on the Date of Closing all other special assessments levied as of the date of this Purchase Agreement. 6. SELLER'S BOUNDARY LINE, ACCESS, RESTRICTIONS, AND LIEN WARRANTIES. Seller warrants that, to their knowledge, buildings on adjoining real property, if any, are entirely outside of the boundary lines of the Property, except as may have been disclosed to the Purchaser on the survey obtained by Seller at the time of Seller's acquisition of the property and subsequently provided to Purchaser. Seller warrants that, to their actual knowledge, there has been no labor or material furnished to the Property for which payment has not been made. Seller warrants that, to its knowledge and without duty to make reasonable 2 2173820 inquiry, there are no present violations of any restrictions relating to the use or improvement of the Property. These warranties shall survive for a period of ninety (90) days from the delivery of the Deed. 7. DUE DILIGENCE A. Except as previously provided by Seller to Purchaser, within 10 days after the Effective Date, Seller will provide to Purchaser a copy of all documents and materials in Seller's possession or in the possession of Seller's agents or contractors pertaining to the Property, including, but not limited to, legible copies of any leases, title commitments; title policies; plats; stormwater ponding documents; surveys; soil and geotechnical reports; engineering reports; environmental or physical condition reports; wetland delineations; entitlement documentation; title documents; repair and maintenance reports or records; appraisals; and any other documents which Purchaser reasonably requests, to the extent in the possession or control of Seller (collectively, "Property Documents"). In the event that any new or revised Property Documents become available prior to the Closing Date, Seller shall provide such Property Documents to Purchaser as soon as is reasonably practicable and Purchaser shall have the same rights with respect to such Property Documents as the other Property Documents previously provided. Notwithstanding anything to the contrary herein, in the event that any new or revised Property Documents become available before Closing, Seller shall provide such Property Documents to Purchaser as soon as is reasonably practicable. B. Upon reasonable notice to Seller, Purchaser and Purchaser's authorized agents shall have the right prior to the Closing Date to enter in and upon the Property in order to make, at Purchaser's expense, surveys, measurements, soil tests, and other tests that Purchaser may deem necessary. Purchaser agrees to restore any resulting damage to the Property and to indemnify, hold harmless, and defend Seller from any and all claims by third persons of any nature whatsoever arising from Purchaser's right of entry hereunder, including all actions, proceedings, demands, assessments, costs, expenses, and attorneys' fees. Purchaser shall not perform any invasive testing of the Property without Seller's prior written consent. Purchaser shall indemnify, defend, and hold Seller harmless from all costs, expenses or liabilities incurred during or because of said inspections, testing, surveying and Tests or any other liability, loss, cost, or damages incurred by Seller by reason of such entry. Purchaser shall promptly repair any damage to the Property caused by Purchaser or its agents, contractors or invitees and shall restore the Property to the condition existing prior to entry upon same to the extent the need for restoration arises from Purchaser's or its employees, agents, contractors or invitees entry or activities upon said property. Purchaser's obligations under this Section shall survive the closing or earlier termination of this Agreement. Notwithstanding the foregoing, Purchaser's liability shall not exceed the limits provided under Minn. Stat. Ch. 466. 8. POSSESSION. Seller shall deliver possession of the Property not later than the actual Date of Closing, subject to that certain lease agreement a copy of which is attached as Exhibit C to this Agreement and made a part thereof ("Lease"). Purchaser shall be responsible for capping two wells located on the Property. 217382v7 9. TITLE INSURANCE. Within fifteen (15) days of the date of this Agreement, Purchaser shall be responsible for obtaining title evidence and reviewing title to the Property. Purchaser shall be allowed fifteen (15) days after the receipt of the title commitment for examination of title and making any objections, which shall be made in writing or deemed waived. 10. TITLE CORRECTIONS AND REMEDIES. Seller shall have 30 days from receipt of Purchaser's written title objections to make title marketable. Upon receipt of Purchaser's title objections, Seller shall, within ten (10) business days, notify Purchaser of Seller's intention to make title marketable within the 30 day period. Liens or encumbrances for liquidated amounts which can be released by payment or escrow from proceeds of Closing shall not delay the Closing. Cure of the defects by Seller shall be reasonable, diligent, and prompt. Pending correction of title, all payments required herein and the Closing shall be postponed. Upon correction of title and within ten (10) days after written notice to Purchaser, the parties shall perform this Agreement according to its terms. If no such notice is given or if notice is given but title is not corrected within the time provided for, the Purchaser (at Purchaser's option) shall have the right to: (a) terminate this Agreement in which case the parties will have no further rights, duties or obligations hereunder, except those obligations that expressly survive termination, or (b) accept title to the Property subject to the objections Seller has elected not to cure, without reduction in the amount of the Purchase Price, in which case such objections to title will be deemed to have become Permitted Exceptions. 11. SELLER'S COVENANTS, REPRESENTATIONS, AND WARRANTIES. The covenants, representations, and warranties contained in this Section shall be deemed to benefit Purchaser and its successors and assigns and shall survive any termination or expiration of this Purchase Agreement or the delivery of the Warranty Deed. All of Seller's covenants, representations, and warranties in this Agreement shall be materially true as of the date hereof and of the Closing Date, and shall be a condition precedent to the performance of Purchaser's obligations hereunder. If Purchaser discovers that any such covenant, representation, or warranty is not true, Purchaser may elect prior to Closing, in addition to any of its other rights and remedies, to cancel this Agreement, or Purchaser may postpone the Closing Date up to ninety (90) days to allow time for correction. If Purchaser elects to proceed with the Closing following such discovery, Purchaser shall be deemed to have waived its rights to assert a claim against Seller arising from the inaccuracy or untruthfulness of any such covenant, representation, or warranty. Seller indemnifies Purchaser from any breaches of the covenants, warranties, and representations set forth in this Section. Seller represents and warrants to Purchaser as follows: A. Organization; Authorizations. Seller is a Minnesota limited liability company duly qualified to transact business in the State of Minnesota. That Seller has the requisite power and authority to enter into this Agreement and the closing documents relating thereto to be signed by it; that the execution, delivery and performance by Seller of such documents does not conflict with or result in violation of any judgment, order or decree of any court to which Seller is a party; such documents are valid and binding obligations of Seller. B. Title. Seller has marketable and insurable title to the Property of record, free and clear of all liens, encumbrances, leases, claims and charges, all material easements, rights -of - 4 2173820 way, covenants, conditions and restrictions and any other matters affecting the title, except for the Permitted Exceptions. C. Claims. At Closing, there will be no existing claims, actions, suits or other proceedings pending, or to the actual knowledge of Seller, threatened by any governmental department or agency, or any other corporation, partnership or entity or person whomsoever against Seller or the Property, which in any manner or to any extent may detrimentally affect the Property or Purchaser's right, title or interest in and to any part or all of the Property after Closing. D. FIRPTA. Seller is not a foreign person; as such term is defined in Section 1445(f) (3) of the Internal Revenue Code of 1986, as amended, and shall deliver an affidavit to that effect at closing, which shall be in form and substance sufficient to comply with the Internal Revenue Code. E. Individual Sewage Treatment Systems. Solely for purposes of satisfying the requirements of Minn. Stat. § 115.55, Seller certifies that, to Seller's actual knowledge, there is no "individual sewage treatment system" (within the meaning of that statute) on or serving the Property, and that, to Seller's actual knowledge, sewage generated on the Property goes to a facility permitted by the Minnesota Pollution Control Agency. F. Marketable Title. Seller has or as of the Date of Closing will have marketable and insurable title to the Property of record, free and clear of all liens, encumbrances, leases, claims and charges, all material easements, rights-of-way, covenants, conditions and restrictions, and any other matters affecting the title, except for the Permitted Exceptions. Seller has the present full authority and power to execute this Agreement and, on or prior to the Date of Closing, Seller shall have the full authority and power to close the sale of the Property. To Seller's actual knowledge, the conveyance of the Property pursuant hereto will not violate any applicable statute, ordinance, governmental restriction or regulation, or any private restriction or agreement. G. Well Disclosure. Check one of the following: (1) Seller certifies that Seller does not know of any wells on the Property and will so certify on the deed delivered on Closing Date. [X] (2) Wells on the Property are disclosed by Seller on the M.S.B.A. Real Property Form No. 21 (2005), Well Disclosure Statement. H. Methamphetamine Disclosure. To Seller's knowledge, methamphetamine production has not occurred on the Property. I. Protected Historical Sites. [Select either one of the following.] 5 217382v7 Seller represents that Seller does not know if there are historical, Native American, or archeological materials on or in the Property that might be protected by law. X To Seller's knowledge, the property does not have any American Indian burial grounds, other human burial grounds, ceremonial earthworks, historical materials, and/or other archeological sites that are protected by federal or state law. Purchaser's obligation to close is contingent upon Purchaser determining to Purchaser's satisfaction that the property does not have any American Indian burial grounds, other human burial grounds, ceremonial earthworks, historical materials, and/or other archeological sites that are protected by federal or state law. J. Ag Preserves. No part of the Property is subject to an agricultural preserve covenant or constitutes an agricultural preserve pursuant to Minn. Stat. § 473H.02 to 473H.17. K. Broker. Seller has not engaged a broker in relation to the sale of the Property. L. Operation Prior to Closinsi. Seller covenants and agrees with Purchaser that: 1. At all times from the Effective Date to the Date of Closing, Seller will maintain such insurance on the Property as is presently in force. 2. At all times from the Effective Date to the Date of Closing, Seller will maintain and operate the Property in substantially the same manner in which the Property is currently operated and maintained. 3. Seller will not enter into any lease or other agreement relating to the Property. 12. CLOSING. The closing (the "Closing") of the purchase and sale contemplated by this Agreement shall occur at a location designated by Purchaser, and shall occur on or before December 15, 2021 ("Closing Date"). At Closing, Seller and Purchaser shall disclose their Social Security Numbers or Federal Tax Identification Numbers for the purposes of completing state and federal tax forms. 13. CLOSING DOCUMENTS. A. At the Closing, Seller shall execute and/or deliver to Purchaser the following: (1) Warranty Deed. A Warranty Deed in recordable form and reasonably satisfactory to Purchaser. (2) 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 Property; that there has been no skill, labor, or material furnished to the Property for which payment has not 6 2173820 been made or for which mechanic's liens could be filed; and that there are no other unrecorded interests in the Property. (3) Non -Foreign Person Certification. A certification in form and content satisfactory to the parties hereto and their counsel, properly executed by Seller, containing such information as shall be required by the Internal Revenue Code, and the regulations issued there under, in order to establish that Seller is not a "foreign person" as defined in § 1445(f)(3) of such Code and such regulations. (4) Storage Tanks. If required, an affidavit with respect to storage tanks pursuant to Minn. Stat. § 116.48. (5) Well Certificate. If there is a well located on the Property, a well disclosure certificate in form and substance true to form for recording. (6) Bring Down Certificate. A certification that the representations and/or warranties made by Seller is materially the same as were in existence on the date of this Agreement or noting any changes thereto. (7) Relocation Waiver. A fully executed copy of the Relocation Waiver. (8) Lease. A fully executed copy of the Lease. (9) Other Documents. All other documents reasonably determined by either parry or the title insurance company to be necessary to transfer and provide title insurance for the Property. (10) Building Keys. Keys and or access codes or cards for all buildings located on the Property. B. At the Closing, Purchaser shall execute and/or deliver to Seller the following: (1) Purchase Price. Payment of the purchase price. (2) Lease. A fully executed copy of the Lease. (3) Other Documents. All other documents reasonably determined by either party or the title insurance company to be necessary to transfer and provide title insurance for the Property. 7 2173820 14. CLOSING COSTS. The costs relating to the closing of this transaction shall be paid as follows: A. Purchaser shall pay: (1) Recording fee for the Warranty Deed; (2) The closing fees charged by the Title Company; (3) Pro -rated taxes; and (4) All costs for issuance of an owner's title insurance policy. B. Seller shall pay: (1) All costs for the title commitment; (2) The state deed tax; (3) Pro -rated taxes; and (4) Conservation fee attributable to the Warranty Deed. 15. PURCHASER'S CONTINGENCIES. Purchaser's obligations under this Agreement are contingent upon Purchaser's satisfaction with each of the following prior to the dates identified below Closing Date ("Purchaser's Contingencies"): (a) The representations and warranties of Seller set forth in this Agreement must be true as of the date of this Agreement and on the Closing Date, and Seller shall have delivered to Purchaser at Closing a certificate dated the Closing Date, signed by Seller, certifying that such representations and warranties are true as of the Closing Date; (b) Purchaser determining on or before the Closing Date, that it is satisfied, in its sole discretion, with the Property Documents and the results of matters disclosed by a Phase I Environmental Audit or by any additional environmental/engineering investigation or testing of the Property performed by Purchaser or Purchaser's agent. By executing this Agreement, Seller hereby authorizes Purchaser to enter upon the Property at reasonable times to conduct the investigations and/or tests described herein. Purchaser shall be solely responsible for all environmental tests and shall hold Seller harmless from any such costs and shall indemnify Seller for breach of this provision including reasonable attorneys' fees; If the Purchaser's Contingencies have not been satisfied on or before the Closing Date, then Purchaser may, at Purchaser's option, (a) terminate this Agreement in which case the parties will have no further rights, duties or obligations hereunder, except those obligations that expressly survive termination, or (b) waive any such unsatisfied contingency, without reduction in the amount of the Purchase Price, and proceed to Closing. The contingencies set forth in this section are for the sole and exclusive benefit of Purchaser, and Purchaser shall have the right to waive the contingencies by giving notice to Seller. 8 2173820 16. DEFAULT. If either party shall default in any of their respective obligations under this Agreement, the other party, by notice to such defaulting party specifying the nature of the default and the date on which this Agreement shall terminate (which date shall not be less than thirty (30) days after the giving of such notice), may terminate this Agreement, and upon such date, unless the default so specified shall have been cured, this Agreement shall terminate. In the case of any default by the Seller or Purchaser, the non -defaulting party's sole and exclusive remedy shall be termination of this Agreement as provided above. 17. NOTICES. All notices, demands and requests which may be given, or which are required to be given by one party to the other shall be in writing, sent by United States Mail, postage prepaid, certified with return receipt requested as follows: If to Purchaser: City of Lakeville 20195 Holyoke Avenue Lakeville, Minnesota 55044 Attn: City Administrator With copy to: Andrea McDowell Poehler Campbell Knutson, P.A. Grand Oak Officer Center I 860 Blue Gentian Road, Ste. 290 Eagan, Minnesota 55121 If to Seller: RDJ Properties, LLC Attn: Richard J. Krentz 8860 Upper 208th St. West, Box 563 Lakeville, MN 55044 18. MINNESOTA LAW. This contract shall be governed by the laws of the State of Minnesota. 19. TIME IS OF THE ESSENCE. Time is of the essence for all provisions of this Purchase Agreement. 20. SIGNATURES BY COUNTERPART; FASCIMILE OR ELECTRONIC SIGNATURE. This Agreement may be executed in counterparts. Signatures may be transmitted via facsimile or in "PDF" format via e-mail. 9 2173820 IN WITNESS WHEREOF, Purchaser and Seller have caused this Agreement to be duly executed as of the date first written above. PURCHASER: CITY OF LAKEVILLE By: 96uglas P. Andersqi, Mayor By: Charlene Friedges, City SELLER: Print Name:ic.�.Q�f' 1�',.�1•.r ;" z Its: .,,4le& AJ4 6 C ,<Zzf5�s'- 10 2173820 EXHIBIT "A" TO PURCHASE AGREEMENT Legal Description The legal description shall be governed by the Title commitment for the following Parcel Identification Numbers: 22-02900-80-010 22-44450-11-070 22-44450-11-050 11 217382v7 EXHIBIT B TO PURCHASE AGREEMENT Agreement Regarding Release, Payment and Assignment of Relocation Benefits THIS AGREEMENT REGARDING RELEASE, PAYMENT AND ASSIGNMENT OF RELOCATION BENEFITS (this "Agreement") is made as of the _ day of , 2021, by and between RDJ PROPERTIES, LLC, a Minnesota limited liability company, whose address is 8860 Upper 208 h Street West, Lakeville, Minnesota 55044 ("Seller"), and the CITY OF LAKEVILLE, a Minnesota municipal corporation, whose address is 20195 Holyoke Avenue, Lakeville, MN 55044 ("Purchaser"). RECITALS A. Seller and Purchaser entered into a purchase agreement (the "Purchase Agreement") dated as of , 2021, related to property located in the City of Lakeville, Minnesota and legally described in Exhibit A attached hereto. B. Seller has been advised of their rights and payments that Seller may be eligible to receive pursuant to the Uniform Relocation Assistance Act (the "Act"), including payments for Minimum Compensation under Minn. Stat. 117.87. C. Seller and Purchaser acknowledge that this is a voluntary sale. D. Seller acknowledges that Seller has sought and received the advice of legal counsel and have been specifically advised as to relocation, moving, reestablishment, and other costs that may be available to the Seller under the Act. E. Seller and Purchaser desire to enter into this Agreement to confirm their understanding of the Seller's release, sale and assignment of any claim for any relocation benefits and/or other relocation costs due or payable to Seller, whether pursuant to the Act or otherwise. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: 1. Effective as of the date hereof, Seller hereby acknowledges that the sale of the Property is a voluntary sale and not under threat of condemnation and the payment of the Purchase Price does not include payment for Relocation Benefits and Minimum Compensation Benefits and hereby release Purchaser from any liability for payment of additional relocation payments pursuant to the Act (or other federal or state law provisions) with respect to the Property. 12 2173820 2. Effective as of the date hereof, Seller hereby sells, transfers and assigns to Purchaser any benefits, payments, claims, or other rights due or payable to Seller pursuant to the Act (or other federal or state law provisions) with respect to the Property. 3. Seller acknowledges that Seller has freely waived such rights of their own volition. 4. Seller acknowledges that Seller has waived such rights with full knowledge of the specific relocation benefits to which Seller would otherwise be entitled. 5. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 6. This Agreement shall be null and void if the Purchase Agreement shall terminate or if Closing under the Purchase Agreement shall fail to occur for any reason. 7. Seller hereby indemnifies the City from any claims or other rights asserted by a tenant or user of the Property pursuant to the Act (or other federal or state law provisions). IN WITNESS WHEREOF, this Waiver of Relocation Benefits Agreement has been executed by the parties hereto as of the day and year first above written. PURCHASER: CITY OF LAKEVILLE By: Do las P. Anders Mayor By: Charlene Friedges, City C SELLER: Print Name: 1tli l4,AIeo -:f- It -� 17>z Its: 13 217382v7 EXHIBIT A TO AGREEMENT REGARDING RELEASE, PAYMENT AND ASSIGNMENT OF RELOCATION BENEFITS Legal Description of Property The legal description shall be governed by the Title commitment for the following Parcel Identification Numbers: 22-02900-80-010 22-44450-11-070 22-44450-11-050 14 2173820 EXHIBIT C TO PURCHASE AGREEMENT LEASE AGREEMENT THIS LEASE AGREEMENT (the "Lease") made and entered into this day of , 2021, by and between RDJ PROPERTIES, LLC, a Minnesota limited liability company ("Lessee"), and the CITY OF LAKEVILLE, a Minnesota municipal corporation ("City"). WHEREAS, the City and Lessee entered into a Purchase Agreement dated , 2021 ("Purchase Agreement') for the sale of the Property located at 8860 Upper 208th Street West, Lakeville, MN 55044 and legally described on the attached Exhibit A, by Lessee to the City ("Premises"); and WHEREAS, under the terms of the Purchase Agreement, the City agreed to lease to Lessee the Premises from the date of closing on the Purchase Agreement pursuant to the terms of this Lease; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein, it is hereby mutually agreed by the parties as follows: 1. LEASED PREMISES. The property to be leased under this Lease is the Premises. 2. OCCUPANCY AND USE OF PROPERTY. Lessee shall have the right to continue to use the Premises during the term of this Lease solely for storage of unsold inventory already present in the building located on the Premises and for no other purpose. 3. TERM. This Agreement shall commence on , 2021, and shall terminate on March 31, 2022. 4. PAYMENT OF RENT. Lessee shall pay the City as "Rent' for the Premises the sum of $1,000.00 per month. Rent shall be due and payable beginning on the day of , 2021 and on or before the 1 st day of each month thereafter until the end of the Lease term. The Rent shall be payable to the City at 20195 Holyoke Avenue, Lakeville, MN 55044. In the event the Lessee fails to pay the Rent due by the l Oh day of any month during the term of this Lease, the Lessee shall pay a late fee of $25.00 which shall be due and payable immediately. Rent shall be pro -rated for any partial month. 5. MAINTENANCE OF PREMISES. Lessee shall be responsible for all costs associated with operating the Premises including but not limited to all personal taxes and real estate taxes, operating expenses, insurance, utilities, and capital repairs and replacements. Lessee must produce proof of insurance upon request. 6. ACCEPTANCE OF PROPERTY. Lessee acknowledges that Lessee is familiar with the Premises and accepts the Premises and buildings located thereon "as is" during the term of 15 2173820 this Agreement. Lessee further acknowledges that no representations as to the repair of the Premises or buildings or promises to alter, remodel, or improve the Premises or the buildings have been made by the City except as expressly provided under this Agreement. 7. UTILITIES. Lessee shall be responsible for arranging for and paying for all utility services required for the use of the Premises including, but not limited to all gas, water, sewer, and electric as hereinafter set forth. 8. LESSEE'S PROMISES: A. Lessee shall abide by and conform to all statutes, ordinances, rules, and regulations of duly constituted public authorities relating to the use and occupancy of the Premises. B. Lessee shall not use the Premises in any way that would cause a cancellation, restriction, or increase in premium of the City's insurance on the Premises. C. Lessee shall at all times keep and maintain the Premises in a neat, clean, and sanitary condition, free from waste or debris, and shall remove, at Lessee's expense, all ashes, garbage, and refuse of any kind and shall neither permit nor commit any waste or nuisance thereon. Lessee shall recycle or dispose of trash in the outside containers provided for those purposes. D. Lessee shall maintain the Premises in good condition including mowing and snowplowing. E. Lessee covenants and agrees that Lessee, Lessee' agents, contractors, licensees, and invitees shall not handle, use, manufacture, store, or dispose of any flammables, explosives, radioactive materials, hazardous wastes, or materials (as may be defined by Federal or State Law), toxic wastes or materials, petroleum products, or other similar substances or derivatives thereof (collectively "Hazardous Materials"), on, under, or about the Premises, without the City's prior written consent (which consent may be withheld or denied for any or no reason). 9. PERSONAL PROPERTY. All personal property belonging to Lessee on the Premises shall be at the risk of Lessee and the Lessee shall carry insurance on the Lessee's personal property and the City shall not be liable for any damage thereto. Lessee waives all claims against the City for damages to persons or property sustained by Lessee or Lessee's occupants or invitees, except those claims caused by the gross negligence or intentional malicious act or omission of the City or its agents. The Lessee shall procure and maintain general liability insurance against all claims for injuries and damages occurring on the Premises. 10. THE CITY'S RIGHT TO ENTER. The City may enter the Premises for a reasonable business purpose. Prior to entering the Premises, the City must first make a good faith effort to give reasonable notice to the Lessee of the intent to enter. Notwithstanding the foregoing, the City may enter the Premises in an emergency. The City must disclose the date, time, and 16 2173820 purpose of the emergency entry in writing. The writing must be left in a conspicuous place on the Premises. 11. NOTICE OF DANGEROUS CONDITIONS. Lessee shall promptly notify the City of any conditions that might cause damage to the Premises. The notice may be oral or in writing. 12. ASSIGNMENT AND SUBLETTING. Lessee may not assign or sublet the Premises. 13. TERM; TERMINATION; NOTICE TO TERMINATE LEASE. A. Lessee may terminate this Lease by giving ten (10) days written notice to the City. B. Upon termination, Lessee shall remove all personal property and equipment from the Premises and return all keys to all buildings located on the Premises to the City. Upon termination, Lessee may remove any fixtures or appliances from the Premises with permission of the City. Any possessions or property remaining on the Premises upon termination of the Lease may be considered by the City to have been abandoned. The City may dispose of the possessions and personal property in the manner that the City deems appropriate. The City shall not be liable to Lessee, Lessee's representatives, heirs, or assigns for disposing of the possessions or property. 14. PREMISES DESTROYED, UNINHABITABLE OR UNFIT FOR OCCUPANCY. If the Premises is destroyed or becomes totally uninhabitable or completely unfit for occupancy for whatever reason, either the City or Lessee may terminate this Lease. To terminate the Lease, the City or Lessee shall give prompt written notice to the other. Utilities shall be prorated as of the date the Premises became unfit for occupancy. The City shall be entitled to receive the proceeds of any ("all risk") insurance (if any) that the City has on the building located on the Premises. 15. BREACH OF LEASE [RE-ENTRY CLAUSE]. If Lessee materially breaches this Lease, the City may: A. Demand in writing that Lessee immediately give up possession of the Premises. If Lessee does not give up possession, the City may bring an eviction (unlawful detainer) action. B. Demand in writing that Lessee give up possession of the Premises to the City at a certain date in the future. If Lessee do not give up possession on that date, the City may bring an eviction (unlawful detainer) action. C. Bring an eviction (unlawful detainer) action immediately. 16. SUBROGATION. The City and Lessee give up all rights of subrogation against the other for loss or damage covered by insurance. 17 21'73820 17. NOTICES. Any notice or document required or permitted to be delivered under the terms of this Lease shall be deemed to be delivered, whether actually received or not, when deposited in the United States mail, postage prepaid, certified or registered mail, addressed to the parties hereto at the addresses set forth above, or at such other address as they have previously designated in written notice delivered in accordance with this Section. 18. AMENDMENTS. The City and Lessee may only amend the terms of this Lease in writing signed by both parties. 19. INDEMNIFICATION. Lessee shall indemnify and save harmless the City against all liabilities, damages, claims, fines, penalties, costs, and other expenses, including all attorneys' fees, which may be imposed upon, incurred by, or asserted against the City by reason of the following, except for any of the following that result from the grossly negligent or intentionally malicious act or omission of the City or its agents: (a) any use or condition of the Premises or any part thereof; (b) any personal injury or property damage occurring on the Premises; (c) any negligence on the part of Lessee, Lessee's agents, contractors, licensees, or invitees; (d) any failure by Lessee, any agent or invitee of Lessee to comply with any requirement of any governmental authority; (e) any prosecution or defense of any suit or other proceeding in discharging the Premises or any part thereof from any liens, judgments, or encumbrances created upon or against the same by Lessee, any agent or invitee of Lessee or against Lessee's interest in the Premises; (f) any proceedings in obtaining possession of the Premises after the termination of this Lease by forfeiture or otherwise; (g) any litigation commenced by or against Lessee to which the City is made a party without any fault on the part of the City; (h) any response costs, other damages and expenses (including attorneys' fees) which may be imposed upon, incurred by, or asserted against the City by reason of the use, release, threatened release, or disposal of Hazardous Wastes at the Premises by Lessee or any agent or invitee of Lessee; and (i) any failure on the part of Lessee to perform or comply with any covenant or agreement required to be performed or complied with by Lessee hereunder. 20. ALTERATIONS AND IMPROVEMENTS. Lessee shall make no alterations to the buildings or improvements on the Premises or construct any building or make any other improvements on the Premises without the prior written consent of the City. 21. ATTORNEYS' FEES. Should it become necessary for the City to employ an attorney to enforce any of the conditions or covenants hereof, including the collection of rentals or gaining possession of the Premises, Lessee agree to pay all expenses so incurred, including reasonable attorneys' fee. 22. RECORDING OF AGREEMENT. Lessee shall not record this Agreement on the Public Records of any public office. In the event that Lessee shall record this Agreement, this Agreement shall, at the City's option, terminate immediately and the City shall be entitled to all rights and remedies that it has at law or in equity. 23. GOVERNING LAW. This Agreement shall be governed, construed, and interpreted by, through and under the Laws of the State of Minnesota. 18 2173820 24. SEVERABILITY. If any provision of this Agreement or the application thereof shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of this Agreement nor the application of the provision to other persons, entities, or circumstances shall be affected thereby, but instead shall be enforced to the maximum extent permitted by law. 25. BINDING EFFECT. The covenants, obligations, and conditions herein contained shall be binding on and inure to the benefit of the heirs, legal representatives, and assigns of the parties hereto. 26. NON -WAIVER. No indulgence, waiver, election, or non -election by the City under this Agreement shall affect Lessee's duties and liabilities hereunder. CITY OF LAKEVILLE Drglas'And, �a Mayor Charlene d:'es, City 61 Print Name:�0 G IJA " ,T / V� ^/r'Z Its: Ally i(m G r: --e— Grp _ 19 2173820 EXHIBIT A TO LEASE AGREEMENT Legal Description of Premises The legal description shall be governed by the Title commitment for the following Parcel Identification Numbers: 22-02900-80-010 22-44450-11-070 22-44450-11-050 20 2173820