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HomeMy WebLinkAboutContract 2012 2463 { i { i I PURCHASE AGREEMENT J THIS PURCHASE AGREEMENT (the "Agreement") is made and entered into this day of eOk-,� , 2012 (the "Effective Date"), by and between Mady-Foss Partnership, a Minnesota general partnership (referred to hereinafter as "Seller"), and Economic Development Authority of the City of Columbia Heights, a public body corporate and politic under the laws of the State of Minnesota(referred to hereinafter as"Buyer"). RECITALS { A. Seller is the fee owner of certain real property located at 3927 Central Avenue t N.E. in Cohunbia Heights, Minnesota, and legally described in Exhibit attached hereto and incorporated herein by this reference(the"Property"). B. Buyer desires to purchase the Property and Seller is willing to sell the Property to Buyer upon the terms and conditions set forth hereinafter. AGREEMENT NOW, THEREFORE, in consideration of the payments to be made hereunder and the foregoing premises and the mutual covenants and agreements set forth herein,it is hereby agreed as follows; i 1. RECITALS INCORPORATED. The foregoing recitals are incorporated as if fully set forth herein. 2. SALE AND PURCHASE OF PROPERTY. Seller agrees to sell, and Buyer agrees to purchase the Property legally described in Exhibit A. subject to and in accordance with the provisions of this Agreement,. The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property is Nine Hundred Five Thousand Dollars ($905,000). Upon execution of this Agreement by all parties,Buyer will deposit with the title company,as escrow agent,Earnest Money in the amount of$27,750, the sufficiency of which is acknowledged by Seller. Buyer shall pay the remainder of the Purchase Price ($877,250) at Closing by check or wire transfer, and Seller shall convey the Property to Buyer at Closing by Warranty Deed. 3. TITLE. Buyer shall be satisfied that title to the Property is good I and marketable. No later than five (5) days after the Effective Date, Seller shall deliver to Buyer, at Seller's sole cost and expense: (a) an abstract(s) covering the portions of the Property that are not registered in the Torrens system, certified to date and including proper searches covering bankruptcy, state and federal tax liens, judgments, unpaid assessments and pending { assessments; (b) all leases relating to any portion of the Property; (c) copies of partnership agreements and other documents confirming the authority of Seller to sell the Property; and (d) any surveys of the Property which are in the possession or control of Seller. Within five (5) I 2 I 4422220 RJL CL205-36 i i , 1 { i I i business days of receipt by Buyer of (a), (b), (c) and (d), Buyer shall order a commitment to issue an ALTA Owner's title insurance policy(the"Title Commitment") for the Property issued by Old Republic Title Insurance Company,400 Second Avenue South, Minneapolis, Minnesota. (the "Title Company"), naming Buyer as the proposed owner/insured of the Property for the insured amount of the Purchase Price, The cost of the Title Commitment and the premium shall be paid by Buyer. Buyer shall pay the policy premium and the cost of any endorsements to the title policy. The Title Commitment shall commit to insure marketable title in fee simple in i Buyer, free and clear of all mechanics' liens, tax liens, judgments, questions of survey, I unrecorded interests or rights of parties in possession and subject only to such matters or exceptions to title as Buyer may approve pursuant to this Agreement. The Title Commitment must be accompanied by legible copies of all title exceptions and Schedule B documents noted i therein. Buyer will be allowed twenty (20) business days after receipt of the Title Commitment and Buyer's survey for examination thereof and for making any objections to the marketability of the title to the Property, said objections to be made by written notice or to be deemed waived. If any objections are so made to the marketability of the title to the Property, Seller shall I immediately commence and diligently endeavor to complete all actions necessary to cure such objections and shall be allowed forty-five(45)days after the making of such objections by Buyer to cure such objections and make the title to the Property good and marketable of record in Seller I and to obtain and deliver to Buyer appropriate endorsements to the Title Commitment, indicating { that any such objections have been cured. Pending the correction of the title, the Closing Date and the payment hereunder required shall be postponed, but upon correction of the title and within 15 days after written notice of such correction given by Seller to Buyer, Seller and Buyer shall perform this Agreement according to its terms. If Seller refuses or fails to have such additional objections cured or removed on or before Closing, Buyeremay, at its sole election, either (a)terminate this Agreement without any liability on its pa (b) ure the objections and Buyer's costs incurred in doing so shall be a credit toward t c ase Price at Closing; or I (c)consummate the purchase and sale contemplated hereby and waive all uncorrected tit ' . obiections,6 t frsn ..Pr ' " 1� [Gt�sthe t�- l� �twc� " r 4. SURVEY omptly following receipt by Buyer of the title commitmen ' Y. t, j Buyer shall, at Buyer's expense, order a survey of the Property by a registered land surveyor j (the"Survey"). 5. ENVIRONMENTAL REPORTS. Within five (5) days after the Effective Date, Seller shall provide to Buyer copies of all environmental assessment reports, remediation reports, geotechnical reports, governmental statutory or regulatory filings and reports, and all other correspondence and other documentation regarding the environmental and geotechnical I condition of the Property in the Seller's possession or control (the "Existing Environmental j Reports"). Buyer may obtain, at Buyer's expense, a current environmental site assessment (the `Buyer's Environmental Report"). The Existing Environmental Reports and Buyer's Environmental Report are referred to hereinafter together as the"Environmental Reports". 6. INSPECTION. Buyer shall have the right to undertake inspections, tests, and investigations of the Property for a period of ten (10) business days following the Effective Date ("Inspection Period"). Provided Buyer gives Seller at least two business days' notice, Seller shall provide Buyer with access to the Property without charge and at all reasonable times t 3 ' 402222v9 RJL CL205-36 1 I completion of environmental, engineering, and such additional investigation and testing as is deemed desirable by Buyer. In the event Closing (as hereinafter defined) does not occur for any reason, Buyer shall repair and restore any damage to the Property caused by Buyer's testing and shall return the Property to the same condition as existed prior to the testing. 7. REPRESENTATIONS OF SELLER. Seller hereby represents and warrants to Buyer the following: (a) Environmental Compliance. Seller has received no notice of and is not aware of any violation related to the Property of applicable law, statute, ordinance, rule, regulation, order or determination of any governmental authority with respect to hazardous substances or of the presence of hazardous substances in or on the Property, except as disclosed in any of the Environmental Reports. For purposes hereof, "hazardous substances"means any substance designated pursuant to the Clean Water Act, Title 33 U.S.C. Section 1321, any element, compound, mixture, solution or substance designated pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, Title 42 U.S.C. Section 9602, any hazardous waste having the characteristics identified under or listed pursuant to the Solid Waste Disposal Act, Title 42, U.S.C. Section 6921, any toxic pollutant listed under Section 307(a) of the Clean Water Act, Title 33 U.S.C. Section 1317(a), any hazardous air pollutant listed under Section 112 of the Clean Air Act, Title 342 U.S.C. Section 7412, any imminently hazardous chemical substance or mixture with respect to which the Administrator of the Environmental Protection Agency has taken action pursuant to Section 7 of the Toxic Substances Control Act, Title 15 U.S.C. Section 2606 and any hazardous waste, hazardous substance, pollutant or contaminant, as defined in the Minnesota Environmental Response and Liability Act, Minnesota Statutes, Section 11513.02. The term also includes, but is not limited to, polychlorinated biphenyls, asbestos, petroleum products and various constituents of such products, urea formaldehyde and related substances. (b) Storage Tanks. Seller is not aware of any underground storage tanks located on or in the Property except as disclosed in any of the Environmental Reports. (c) Pending Litigation. There is no condemnation or other litigation presently pending or, to Seller's knowledge, under consideration by any party affecting, directly or indirectly, the Property. (d) Governmental Action. Seller has not received notice of any action, suit or proceeding instituted by any person or entity against or affecting the Property before any federal, state, municipal or other governmental authority, including without limitation notice of any condemnation or taking for any public right-of-way or utility. 402222v9 RJL CL205-36 3 (e) Authorization. Seller is the sole owner of the Property, and has the right, power and capacity to enter into this Agreement, to consummate the transactions contemplated hereby, and to comply with the terms, conditions, and provisions hereof. (f) Condition of Property. Except for notices from the Minnesota Pollution Control Agency with respect to environmental contamination present on the Property, Seller has received no notice, order or other communication from any governmental body having jurisdiction over the Property requiring any improvement to or alteration of the Property which has not been remedied, and Seller agrees to give Buyer prompt written notice of any such communication received on or prior to Closing Date. (g) Underground Storage Tanks Affidavit. In the event that there are any underground storage tanks on the Property, Seller agrees to file a storage tank affidavit complying with Minnesota Statutes § 116.48, subd. 6, as amended, prior to Closing. (h) Wells/Septic Systems. Seller certifies and warrants that it is not aware of the existence of any wells on the Property within the meaning of Minn. Stat. § 103I.005. Seller is not aware of any individual sewage treatment system on the Property within the meaning of Minn. Stat. § 115.55. (i) Right to Sell. Seller has not entered into any other unterminated contracts for the sale of the Property, is not aware of any rights of first refusal or options to purchase the Property, and consummation of the sale will not violate the provisions of any governmental regulation or law applicable to Seller, nor of any agreement or instrument by which Seller is bound. (j) Parties in Possession. Seller covenants that there will be no tenants or other parties in possession of the Property as of the Date of Closing, or with the right to possession of the Property or any part thereof after the Closing Date. At Closing, the Seller shall deliver to Buyer written evidence, in form and content reasonably acceptable to Buyer,that there are no parties in possession of a portion of the Property. (k) Removal of Personal Property. Seller shall remove all personal property and debris, if any, from the Property by the Closing Date. 8. RIGTS/DUTIES. At all times prior to Closing, Seller shall comply with the following: (a) Seller shall maintain the Property in the same condition as in existence on the date hereof and shall comply at all times with all applicable codes and ordinances. 402222v9 RJL CL205-36 4 (b) Seller shall continue to pay all real estate taxes and any installments of special assessments certified thereto which become due and payable prior to Closing. (c) Seller shall not permit the storage, release or disposal of hazardous or toxic substances or contaminants on the Property. (d) Seller shall not encumber, permit liens to attach to, or convey any interest in the Property to any other party. (e) No permanent improvements shall be constructed on the Property without Buyer's written consent. (fl Seller shall pay all utilities due up to and including the Closing Date. 9. CONTINGENCIES TO CLOSING. Buyer's obligation to close shall be subject to the following contingencies: (a) Buyer's receipt at Closing of a satisfactorily marked-up Title Commitment to issue an Owner's Title Insurance Policy meeting the requirements set forth in Section 3 hereof as of the Closing Date. (b) Seller's performance of each of its obligations under this Agreement. (c) Seller's representations and warranties being true and correct in all matters on and as of the Closing Date and Seller's delivery of a certificate (a"Bring Down Certificate")to Buyer at Closing to such effect. (d) Seller shall not have entered into any leases, license agreements or material contracts for all or any portion of the Property, or constructed any permanent improvements on the Property, without Buyer's consent. (e) Buyer's satisfaction with the Survey to be obtained by Buyer under Section 4. (f} Buyer having determined, in its sole discretion after inspection of the Property and the Environmental Reports under Section 3(c) and (d), that environmental and soil conditions on the Property are satisfactory. This contingency shall expire upon termination of the Inspection Period. (g) Execution of a Letter of Understanding or Access Agreement by Buyer and Gem Properties, LLC and Columbia Heights Rental, Inc. concerning driveway access for the Columbia Heights Rental property located at 3901 Central Avenue NE, Columbia Heights, Minnesota ("Columbia Heights Rental Property")following Closing ("Access Agreement"). 402222v9 RJL CL205-36 5 (h) Execution by Gem Properties, LLC of a Right of First Refusal Agreement ("Right of First Refusal Agreement"), in form acceptable to the Executive Director of the EDA, obligating Gem Properties, LLC, as owner of the Columbia Heights Rental Property, to provide Buyer the right to purchase the Columbia Heights Rental Property upon the same terms of purchase as is offered to Gem Properties, LLC or other owner of the Columbia Heights Rental Property in writing by any bona fide third party. (i) The contingencies set forth in this Section 9 are solely for Buyer's benefit and may be waived or enforced only by Buyer. 10. CONTROL OF PROPERTY, CONDEMNATION, CASUALTY LOSS. (a) Seller's Risk of Loss. Until Closing, Seller shall have the full responsibility and the entire liability for any and all damages or injury of any kind whatsoever to the Property, and to any and all persons, whether employees or otherwise, and all property from and connected to the Property; except that Buyer shall be responsible for damages or injury caused by Buyer or Buyer's representatives during Buyer's inspection and testing of the Property. (b) Condemnation. If the Property (or any part thereof) is threatened with condemnation, or legal proceedings are commenced under the power of eminent domain, Seller shall promptly notify Buyer of such fact in writing, and furnish to Buyer as a part of said notice full copies of all pleadings, correspondence and other documents and data pertaining thereto. Buyer shall have the right, which must be exercised by Buyer on or before the Closing, to (i)proceed to Closing with the Purchase Price of the Property reduced by the amount of condemnation payments and awards payable to Seller as a result of such condemnation or eminent domain proceedings; or (ii) receive all such payments and awards, in which event the Purchase Price shall remain the same, and Seiler shall assign to Buyer, and Buyer shall be entitled to receive, all rights to the condemnation awards. (c) Damage/Destruction. If, prior to Closing, the Property (or any part thereof) is destroyed or damaged, Seller shall notify Buyer of such destruction or damage, and Buyer shall then have the option to terminate this Agreement or to proceed with the Closing. 11. CLOSING. Unless another date is mutually agreed upon in writing by the parties, the Closing shall take place on the date that is ten (10) business days following the last to occur of the following (the "Closing Date"): (a) written waiver by the Executive Director of Buyer of any objections by Buyer to conditions of title, survey, or suitability and condition of the Property; (b) vacation of the Property by Seller and any other occupants of the Property; and (c) execution of the Access Agreement and Right of First Refusal Agreement. The closing of this 402222v9 RJL CL205-36 6 transaction (the "Closing") shall take place at the office of the Title Company, or another location mutually agreeable to the parties. Possession of the Property shall be delivered on the Closing Date. 12. SELLER'S CLOSING OBLIGATIONS. Each of the following shall be a necessary precondition to Buyer's obligation to close hereunder: (a) Seller's Deliveries. At or prior to the Closing, Seller shall execute, acknowledge and/or deliver to Buyer, as appropriate, the following: (i) A Warranty Deed conveying to Buyer marketable fee simple title to the Property, subject only to the Permitted Encumbrances listed in Exhibit B attached hereto and incorporated herein by this reference. If there are no wells on the Property, the Warranty Deed shall include the following statement: "Seller certifies that Seller does not know of any wells on the described Real Property." If there are wells located on the Property, Seller shall deliver a well disclosure certificate as required by Minn. Stat. § 1031.235 disclosing the location and status of all wells located on the Property and providing such well disclosure documentation as required. (ii) Bring Down Certificate confirming that Seller's representations and warranties herein are still true and correct and/or have been satisfied. (iii) Standard Form of Seller's Affidavit, in form and content acceptable to Buyer and sufficient to permit the Title Company to delete from the Title Commitment any exception regarding mechanic's liens, rights of parties in possession and unrecorded interests. (iv) Affidavit required pursuant to Section 1445 of the Internal Revenue Code and/or the regulations relating thereto stating, under the penalties of perjury, that (i)neither Seller nor any other party so swearing is a foreign person, (ii)the U. S. taxpayer identification number of Seller and such other parties, if any, and (iii) such other information as may be required by regulations enacted by the U. S. Department of the Treasury in connection with Section 1445 of the Internal Revenue Code. (v) Certificate of Real Estate Value required by the Minnesota Department of Revenue. (vi) Septic Disclosure Statements and well sealing certificates, if applicable, in accordance with applicable law. 402222v4 RJL CL205-36 7 (vii) Such other documents as may be reasonably necessary or appropriate to effect the consummation of the transaction contemplated in this Agreement. (b) Title Commitment. Buyer shall be satisfied with the marked-up Title Commitment, which Title Commitment shall reflect that all of the standard exceptions have been deleted, and shall show no exceptions except those known and not objected to by Buyer as provided in Section 3. (c) Leases/Material Contracts. Seller shall not have entered into any new or amended lease or other contract affecting all or any part of the Property. 13. BUYER'S OBLIGATIONS AT CLOSING. At Closing, and subject to the terms, conditions, contingencies and provisions hereof and the performance by Seller of its obligations as set forth herein, the Buyer shall pay to Seller the remainder of the Purchase Price. All sums paid by Buyer to Seller shall be credited against the Purchase Price. 14. CLOSING COSTS. The following costs and expenses shall be paid as follows in connection with the Closing: (a) Seller's Costs. Seller shall pay: (i) The recording fee for recording all documents required to convey marketable title to the Property. (ii) The state deed tax. (iii) One-half of the closing fee charged by the Title Company. (b) Buyer's Costs. Buyer shall pay: (i) One-half of the closing fee charged by Title Company. (ii) The premium for the Owner's Title Policy. (iii) Recording costs for the deed, including the conservation fee due upon recording the deed. (c) Legal Fees. Each party shall pay the fees and costs of their respective legal counsel. 15. PRORATIONS. Real estate taxes, governmental use fees, area charges and the like (collectively "Real Estate Taxes") due and payable in the year of Closing shall be prorated between Seller and Buyer as of Closing Date, based upon a calendar year. Real Estate Taxes due and payable in the years prior to the year of Closing shall be paid in full by Seller on or before the Closing. Any Real Estate Taxes or special assessments which have been deferred and 402222v9 RJL CL205-36 8 become or will become due and payable as a result of the conveyance of the Property shall be paid in full by Seller on or before the Closing. All other special assessments levied and pending as of the date of Closing, including installments due in the year of Closing, shall be paid by Seller at Closing. An assessment shall be deemed pending if the assessing authority has approved the improvement which will result in the assessment and has entered into a contract to construct the improvement. 16. BROKERAGE. Buyer and Seller each represent to the other that they are not liable to any broker or agent with regard to the sale contemplated hereby. Seller agrees to indemnify, defend and hold harmless the Buyer from brokerage fees and commissions and from any claim made by any broker or sales agent or similar party for a commission due under the terms of any agreement entered into by the Seller, including without limitation reasonable attorneys' fees. Buyer agrees to indemnify, defend and hold harmless the Seller from brokerage fees and commissions and from any claim made by any broker or sales agent or similar party for a commission due under the terms of any agreement entered into by the Buyer, including without limitation reasonable attorneys' fees. 17. DEFAULT. (a) Seller's Default. In the event that Seller should fail to consummate the transactions contemplated herein for any reason, except the default by Buyer, Buyer may pursue any remedies available to it under Minnesota law, including seeking specific performance of this Agreement and recovering from Seller all costs, disbursement and attorneys' fees incurred in said specific performance action. (b) Buyer's Default. If Buyer should fail to consummate the transactions contemplated herein for any reason, except the default by Seller, or the failure of any of the contingencies or conditions to the Buyer's obligations set forth herein, the Seller may pursue any remedies available to it under Minnesota law, including seeking specific performance of this Agreement and recovering from Buyer all costs, disbursement and attorneys' fees incurred in said specific performance action. 18. MISCELLANEOUS. The following general provisions govern this Agreement. (a) Time of Essence. Time is of the essence of this Agreement. (b) Governing Law. This Agreement is made and executed under and in all respects to be governed and construed by the laws of the State of Minnesota. (c) Notices. Any notice required to be given to Seller or Buyer pursuant to this Agreement shall be in writing and shall be deemed duly given at the date of delivery by messenger or by recognized overnight courier, or on the date of mailing if sent by certified mail, return receipt requested, to the addresses 402222v9 RJL CL205-36 9 stated below. Any party, by notice given as aforesaid, may change the address to which subsequent notices are to be sent. If to Buyer: Columbia Heights Economic Development Authority Attn: Executive Director 590—40th Avenue N.E. Columbia Heights, MN 55421 And Kennedy& Graven, Chartered Attn. Robert J. Lindall. 470 U. S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 If to Seller: Mady-Foss Partnership Attn: Douglas and Denise Foss 5530 Old Viking Boulevard N.W. Anoka, MN 55303 and Gem Properties, LLC Attn: Mark Moser 3901 Central Avenue NE Columbia Heights, MN 55421 (d) Buyer's Waiver Rights. Buyer, at its option, may waive any right conferred upon the Buyer by this Agreement. Except as provided otherwise herein, such waiver may be made by, and only by, giving Seiler written notice specifically describing the right waived. (e) Amendment. This Agreement shall be amended only by a written instrument signed by Seller and Buyer. (f) 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 the singular and the masculine, feminine and neuter shall be freely interchangeable. (g) Assignment. Neither party shall have the right to assign its interest under this Agreement, without first obtaining the consent of the other party. (h) Invalidity. If for any reason any portion or section of this Agreement shall be declared void and unenforceable by any court of law or equity it shall only affect such particular portion or section of this Agreement and the 402222v9 RJL CL205-36 10 1 j i '! binding upon the parties hereto. (i) Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and either of the parties hereto may execute this Agreement by signing any such counterpart. (j) Merger/Survival. All prior understandings and agreements between the parties are merged into this Agreement which alone fully and completely expresses their agreement. All representations, covenants, obligations and agreements contained herein shall survive the Closing and delivery of the Warranty Deed by Seller. IN WITNESS WHEREOF,the parties hereto have executed this Agreement on the date set forth after their signature below: SELLER: MARY-FOSS PARTNERSHIP,a Min esvta general tnersMP By: Denise Foss,a Partner Date- 2012 ,2012 By' 1 Do%F s,/aPar r I Date: /!�/���3/ .. ,2012 GEM PROPERTIES,LLC By: i Mark Moser,Manager i I Date:_ ,2012 i i 12 { i 4022220 RJL CL205-36 3 balance of this Agreement shall remain in full force and effect and shall be binding upon the parties hereto. (i) Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and either of the parties hereto may execute this Agreement by signing any such counterpart. (j) Merger/Survival. All prior understandings and agreements between the parties are merged into this Agreement which alone fully and completely expresses their agreement. All representations, covenants, obligations and agreements contained herein shall survive the Closing and delivery of the Warranty Deed by Seller. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date set forth after their signature below: SELLER: MADY-FOSS PARTNERSHIP, a Minnesota general partnership By: Denise Foss, a Partner Date: , 2012 By: Douglas Foss, a Partner Date: , 2012 GEM PROPERTIES,LLC Mark Moser,Manager Date: 12012 402222v9 RJL CL205-36 l BUYER: ECONOMIC DSEVELENT AUaTHORI Y OF T E Cl Y OF COLUMI3 HEI T By. J2 ft-s--'Presi"dent By: Azzz Its Executive Director Date: ' 2012 402222v9 RJL CL205-36 12 EXHIBIT A Legal Description of the Property C.Z File No. 2613612 Block 4,Wallows Rearrangement of Lots 33 arxJ 34,Block 6,Reservoir Hills,excepting therefrom however,the two following clescritiod tracts: Tract 1: The North 330 feet thereof, )0 Tract 2; Commencing at the Southwest corner of Block 4,Walton's Rearrangement of Lots 33 and 34,Block 6,Reservoir Hills; thence Northerly along the West line of said Block 4,100 feet;thence Easterly parallel with the South line of sad Black 4, 163 feet;thence Southerly parallel with the-Webt line of said Block 4,IOU feet to a point within sold South boundary line; thence Woelerly along the South line of said Sfock4,163 feet to the point of begInnfrig,according to the plot thereof on the or of rocord In the office of the County Recorder,Anolis County,Minnew4, 402222v9 RJL CL205-36 A-1 EXHIBIT B Permitted Encumbrances 402222v9 RJL CL205-36 B-1 EXHIBIT C Well Disclosure Statement 402222v9 RJL CL205-36 C_1