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HomeMy WebLinkAbout2022-4052CONTRACT #2022-4052 PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (the "Agreement") is made and entered into as of February 14, 2022 (the "Effective Date") by and between Heartland Properties of Blaine, LLC, a Minnesota limited liability company ("Seller"), and the City of Columbia Heights, Minnesota, a Minnesota municipal corporation ("Buyer"). RECITALS WHEREAS, Seller is the owner of certain real property located at 5233 University Avenue NE, City of Columbia Heights, County of Anoka, State of Minnesota, Parcel ID 26-30- 24-21-0094, which is legally described on the attached Exhibit A (the "Property"); and WHEREAS, Seller desires to sell the Property to Buyer, and Buyer desires to purchase such Property under the terms and conditions provided herein; and NOW, THEREFORE, the parties agree as follows: AGREEMENT SALE AND PURCHASE. Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase from Seller, upon the terms and conditions set forth below, the following: a. Fee simple title to the Property, together with improvements, if any, constructed on the Land; and b. Seller's interest, if any, in: (i) all easements, air rights, and other rights benefiting or appurtenant to the Property; and (ii) all neighboring or contiguous alleys, streets, roads, and utilities servicing, pertaining, or relating to the Property. 2. PURCHASE PRICE. The total purchase price to be paid by Buyer to Seller for the Property (the "Purchase Price") shall be Two Hundred and Fifty Thousand and No/100 Dollars ($250,000.00). The Purchase Price shall be payable as follows: a. Upon execution of this Agreement by both parties, Buyer shall deposit $10,000.00 in earnest money with a title company selected by Buyer until Closing, as defined in Section 3 hereof (the "Earnest Money"). The Earnest Money shall be credited against the Purchase Price at Closing. If Buyer timely exercises any of the Purchaser Contingencies, the Earnest Money shall be returned to Buyer. If Buyer does not timely exercise any of the Purchaser Contingencies, but the transaction does not close, through no fault of Seller, the Earnest Money shall be paid to Seller. b. The balance of the Purchase Price shall be paid to Seller via certified check or wire transfer at the Closing. CL162-62-775651.v4 3. CLOSING AND POST -CLOSING. The Closing on the sale of the Property to Buyer shall be held at 590 40th Ave, N.E., Columbia Heights, Minnesota 55421, or at such other location as agreed to by the parties. Closing shall be on a date mutually agreed upon by the parties, within 30 days after Purchaser has satisfied or waived all contingencies listed in Section 5 below (the "Closing Date"). 3.1 On the Closing Date, Seller shall deliver to Buyer a warranty deed for the Property, subject to only the Permitted Exceptions as defined in Section 9 of this Agreement (the "Deed"); a FIRPTA affidavit; a customary Seller's affidavit; a bring down certificate reaffirming the representations made in Section 7 below; a signed termination of lease as described in Section 4, and a closing statement. 3.2 On the Closing Date, Buyer shall deliver to Seller the funds required hereunder to satisfy the Purchase Price and as required under the closing statement agreed to among Seller, Purchaser and the title company, a customary form Buyer's Affidavit in form and substance reasonably required by the title company; a closing statement pursuant to the terms and conditions of this Agreement, a signed termination of lease as described in Section 4, and such other documents as may be reasonably required by the title company. 3.3 General real estate taxes certified for payment applicable to the Property due and payable in the year of Closing shall be prorated between Seller and Buyer on a daily basis with Seller paying those allocable to the period prior to the date of Closing and Buyer being responsible for those, if any, allocable to the date of Closing and thereafter. Any real estate taxes due and payable in the years prior to Closing, including any deferred real estate taxes, penalties or interest shall be paid by Seller. Buyer shall assume payment of all special assessments levied against the Property as of the date of Closing, and all deferred assessments. Buyer shall assume payment of any special assessments that are pending but not levied against the Property as of the date of Closing. Seller shall be responsible for payment of utilities up to the date of Closing. 3.4 At Closing, Seller shall pay all state or local transfer, conservation fees, or deed taxes in connection with the Deed to be delivered by Seller to Buyer. Seller shall pay recording fees of instruments required to establish marketable title in Seller. Seller shall pay the cost for preparation of the Title Commitment. Buyer shall pay recording charges in connection with the Deed, as well as the costs of any due diligence reports which Buyer may have ordered regarding environmental conditions, soils conditions, or other aspects of the Property. Buyer shall pay the cost of its title insurance premium and any policy endorsements it desires. Seller and Buyer shall split the costs of any closing costs charged by the title company. Seller shall be responsible for satisfying, out of the Purchase Price or otherwise, all mortgages and liens against the Property as of Closing. Each party shall be responsible for its own legal counsel fees. 4. TERMINATION OF LEASE. Seller entered into a Lease Agreement with Buyer in 2019, for a term from January 1, 2020, to December 31, 2026, for the construction and use of a sign on Buyer's property that is adjacent to the Property that is the subject of this 2 CL162-62-775651.v4 Agreement. Buyer agrees that the Lease Agreement shall be terminated as of the Closing Date of this Agreement, with no penalties to Seller for its termination. CONTINGENCIES. Notwithstanding any other provision in this Agreement to the contrary, the parties agree that the purchase of the Property is subject to the following contingencies (collectively, the "Purchaser Contingencies") which must be accepted or waived on or before the expiration of the Due Diligence Period hereafter defined, unless a shorter period is expressly provided herein: a. Title to the Property shall be acceptable to Buyer, in its sole discretion (the "Title Contingency") within the time frames and terms and conditions contained in Section 9. b. The Property's environmental condition shall be acceptable to Buyer, in its sole discretion (the "Environmental Contingency"). Notwithstanding the foregoing, Buyer may conduct such review and other matters during the Due Diligence Period. C. Buyer shall have the right during the Due Diligence Period to conduct such soil tests/geotechnical analyses, building and property inspections, reviews, environmental assessments (collectively, the "Physical Reports"), if any, as Buyer deems necessary and such Physical Reports and the testing/review required therefore shall be subject to the terms and conditions contained in Section 9. The results of the same shall be satisfactory to Buyer in its sole discretion (the "Inspection Contingency"). To facilitate Buyer's due diligence efforts, Seller agrees to deliver copies of all records it has of the Property in its possession, if any, to Buyer within five business days after the Effective Date hereof. d. Seller removing the above -ground waste oil tank that is on the Property at Seller's expense (the "Removal Contingency"). Buyer shall satisfy or waive the Environmental Contingency and the Inspection Contingency on or before the expiration of the Due Diligence Period, the Removal Contingency on or before the Closing Date, and the Title Contingency in the time prescribed in Section 9. If the Purchaser Contingencies are not satisfied within these timeframes, they shall be waived. On or before that date which is 90 days after the Effective Date hereof (the "Due Diligence Period"), Buyer shall, by giving written notice to Seller, either: (i) Terminate this Agreement if the Environmental Contingency or the Inspection Contingency above have not been satisfied; or (ii) Waive the Contingencies. If Buyer elects to terminate this Agreement under paragraph (i) above or because the Title Contingency or the Removal Contingency have not been satisfied within their stated timeframes, then upon Seller's receipt of Buyer's written notice of termination, this CL162-62-775651.v4 Agreement shall be null and void, the Earnest Money shall be refunded to Buyer, and neither party shall have any further obligation to the other. 6. REMOVAL OF FIXTURES. Seller shall remove from the Property all automobile - service related fixtures prior to the transfer of the Property to Buyer, including but not limited to, vehicle hoists and air compressors. Any fixtures relating to automobile services remaining on the Property after its conveyance to Buyer shall deemed to have been abandoned and shall be removed by Buyer at Seller's expense. Seller shall not damage the Property in removing the fixtures. 7. REPRESENTATIONS. The following representations are being made by Seller: (i) that Seller owns fee simple marketable title to the Property; (ii) there are no tenants on the Property; (iii) as of the Closing, there will be no obligations or liabilities of any kind or nature whatsoever, including but not limited to any tax liabilities, contract liabilities, or tort liabilities for which or to which Buyer or the Property will be liable or subject except for non -delinquent real estate tax obligations; (iv) there are no wells, abandoned wells, or septic systems upon the Property; (v) subject to reasonable wear and tear and the removal of fixtures as stated in Section 6, the Property will be substantially in the same condition at Closing as it is as of the date first written above; and (vi) Seller has not filed, voluntarily or involuntarily for bankruptcy relief within the last year under the United States Bankruptcy Code or has any petition for bankruptcy or receivership been filed against Seller within the last year. These representations shall survive Closing. Buyer acknowledges that it is purchasing the Property "AS IS, WHERE IS" and Buyer for itself and for its successors and assigns hereby waives, releases, and discharges Seller from any and all claims, demands, liabilities, damages, obligations, fines, penalties, costs, and expenses, including (without limitation) reasonable attorneys' fees and disbursements (collectively, the "Liabilities"), and covenants not to sue Seller for any Liabilities caused by, arising out of, or related to the condition of the Property or any matters related to the Property. Notwithstanding anything contained herein to the contrary, the provisions of this paragraph shall survive Closing. & SURVEY. Buyer may survey the Property at its cost (the "Survey"). Seller shall be provided with a copy of the Survey at no cost for its own use. 9. EVIDENCE OF TITLE. Buyer shall obtain a commitment for an owner's policy of title insurance ("Title Commitment") from Title Company for the Property within 30 days of the Effective Date. The cost of obtaining such Title Commitment shall be paid by Seller. Buyer shall be allowed 15 days after the date of receipt of the latter of the Title Commitment or the Survey to examine the same and make any objections (the "Title Objections"); any such objections are to be made to Seller in writing or shall be deemed to have been waived. If any Title Objections are so made, Seller shall have 10 days from the date of Seller's receipt of the Title Objections ("Seller Response Date") to confirm in writing to Buyer whether it will be able to remove the Title Objections on or prior to the Closing Date, and if not, which of the Title Objections Seller is unable or unwilling to remove; provided, however, that Seller must satisfy any mortgages, monetary liens, or 4 CL162-62-775651.v4 other monetary encumbrances on or prior to the Closing Date. Buyer shall then have the right to either waive those Title Objections which Seller is unwilling to remove, or to terminate this Agreement on or before the earlier of i) five days after the Seller Response Date; or ii) the end of the Due Diligence Period pursuant to the Title Contingency described in Section 5 above. If Seller fails to remove those Title Objections which Seller agrees to remove on or prior to the Closing Date, Buyer shall have the option of - Declaring this Agreement null and void by written notice to Seller, and the Earnest Money shall be refunded to Buyer; or b. Waiving any defect in title and, in such event, proceeding to close the transaction contemplated by this Agreement on the Closing Date as defined in Section 3 hereof. As used in this Agreement, the term "Permitted Exceptions" shall mean (i) all matters either shown on the Survey or listed in the Title Commitment to which Buyer does not raise a Title Objection within the Title Review Period or, having objected, waives as provided above; (ii) ad valorem real estate taxes for the calendar year in which the Closing occurs and subsequent calendar years, not yet due and payable; and (iii) municipal or other governmental zoning laws, regulations and ordinances. 10. ACCESS TO LAND AND ENVIRONMENTAL ASSESSMENT. Seller hereby grants to Buyer and its agents the right of ingress and egress over, under, and through the Property for the purpose of surveying, inspecting, and testing of the same and making other observations as Buyer deems necessary, and at Buyer's expense. This includes the right of Buyer and its agents to perform soil borings and an environmental assessment of the Property. Buyer shall reasonably repair any damage caused to the Property as a result of Buyer's activities such that the Property is returned to substantially the same condition as it existed prior to Buyer's activities. Buyer agrees to indemnify and hold Seller harmless from all injury, death, or property damage or claim, loss, expense, or lien of any kind whatsoever arising out of or in any way incidental to Buyer's or its employees, contractors, agents, and representatives' presence on the Property. Seller shall reasonably cooperate with Buyer and its due diligence efforts. 11. DESTRUCTION OR EMINENT DOMAIN. If, prior to the Closing Date, all or any substantial part of the Property should be destroyed by any cause, either party shall have the option of canceling this Agreement. If, prior to the Closing Date, all or any part of the Property should be taken, or proceedings are commenced in condemnation with respect thereto, Buyer shall have the option to terminate this Agreement. Said options provided in this Section, if exercised by Buyer, must be exercised in writing, and delivered to Seller within the earlier of: (i) 10 days after a request by Seller as to whether Buyer intends to exercise this option; or (ii) the Closing Date. If Buyer elects to cancel this Agreement in accordance herewith, this Agreement shall thereafter be of no further force and effect and the Earnest Money shall be refunded to Buyer. CL162-62-775651.v4 12. OPERATION PRIOR TO CLOSING. During the period from the date of Seller's acceptance of this Agreement through the Closing Date (the "Executory Period"), Seller shall operate and maintain the Property in the ordinary course of business in accordance with commercially reasonable business practices and standards, including but not limited to maintaining adequate liability insurance and insurance against loss by fire, windstorm, and other hazards, casualties, and contingencies, including vandalism and malicious mischief. Seller shall bear the risk of loss or damage caused by any perils through the Executory Period. 13. AUTHORITY. Each person executing this Agreement, by his or her execution hereof, represents and warrants that he or she is fully authorized to do so, and that no further action or consent on the part of the party for whom he or she is acting is required for the effectiveness and enforceability of this Agreement against such party following such execution. 14. BROKER COMNUSSIONS. Seller and Buyer each represents and warrants to the other that, in connection with this transaction, no third -party broker or finder has been engaged or is entitled to compensation resulting from this transaction. Buyer and Seller agree to indemnify, defend, and hold the other party harmless against any and all claims of brokers, finders, or the like, and against the claims of all third parties, claiming any right to commission or compensation by or through acts of the indemnifying party or its partners, agents, or affiliates in connection with this Agreement. The indemnifying party's indemnity obligations shall include all damages, losses, costs, liabilities, and expenses, including reasonable attorneys' fees and litigation costs, which may be incurred by the other party. 15. RELOCATION BENEFITS; INDEMNIFICATION. Seller acknowledges that it is being displaced from the Property as a result of the transaction contemplated by this Agreement and that Seller may be eligible for relocation assistance and benefits, and Seller agrees to waive any and all relocation assistance benefits. The provisions of this paragraph shall survive Closing. 16. NOTICES. Any notice or election herein required or permitted to be given or served by either party hereto upon the other shall be deemed given or served in accordance with the provisions of this Agreement, if personally served or if mailed by United States registered or certified mail, postage prepaid, properly addressed as follows: If to Seller: Heartland Properties of Blaine, LLC 6885 139t` Ave NW Ramsey, MN 55303 Attn: David Mitchell 6 C1,162-62-775651.0 with a copy to: Fryberger Law Firm 302 West Superior St. Ste. 700 Duluth, MN 55802 Attn: Robert Kanuit If to Purchaser: City of Columbia Heights 590 40th Ave. N.E., Columbia Heights, MN 55421 Attn: City Manager with a copy to: Kennedy & Graven, Chartered 150 South Fifth Street, Suite 700 Minneapolis, MN 55402 Attn: Sarah J. Sonsalla The addresses to which notices are to be mailed to either party may be changed by such party by giving written notice thereof to the other party in the manner above provided. 17. DEFAULT. In the event of a default by Seller hereunder, Buyer may terminate this Purchase Agreement, and the Earnest Money shall be refunded. In the event of a default by Buyer hereunder, Seller may terminate this Agreement by providing 30 days written notice as provided by Minnesota Statutes and may retain the Earnest Money as its sole and exclusive damages. 18. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which will, for all purposes, be deemed to be an original, and all of which are identical. This Agreement may further be evidenced by facsimile and email scanned signature pages. 19. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of Minnesota. 20. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties and there are no other covenants, agreements, promises, terms, provisions, conditions, undertakings, understandings either oral or written, between them concerning the Property. No subsequent alteration, amendment, change, deletion, or addition to this Agreement shall be effective unless it is set forth in writing and executed by both parties. 21. FURTHER ASSURANCES. Each party agrees that it will without further consideration execute and deliver such other documents and take such other action, whether prior or subsequent to Closing, as may be reasonably requested by the other party to consummate more effectively the purposes or subject matter of this Agreement. Without limiting the generality of the foregoing, Buyer shall, if requested by Seller, execute acknowledgments CL162-62-775651 A of receipt with respect to any materials delivered by Seller to Buyer with respect to the Property. 22. NO THIRD -PARTY BENEFICIARIES. The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Buyer only and are not for the benefit of any third parry, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing. 23. ASSIGNS. This Agreement shall inure to the benefit of and be binding on the parties hereto and their respective legal representatives, successors, and permitted assigns. 24. SEVERABILITY. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. 25. NUSCELLANEOUS. All times specified in this Agreement shall be of the essence of this Agreement. If any date set forth for the performance of any obligations by Seller or Buyer or for the delivery of any instrument or notice should be on a Saturday, Sunday or legal holiday, the compliance with such obligations or delivery shall be deemed acceptable on the next business day following such Saturday, Sunday, or legal holiday. The term "legal holiday" means any federal holiday or holiday of the State of Minnesota. 26. WAIVER. The waiver by any party of a breach of any provision of this Agreement shall not be deemed a continuing waiver or a waiver of any subsequent breach whether of the same or another provision of this Agreement. [The Remainder of this Page Left Intentionally Blank.] 8 CL162-62-77565l v4 IN WITNESS WHEREOF, the pasties have entered into and executed this Agreement the day and year first above written, SELLER: HEARTLAND PROPERTIES OF BLAINE, LLC BUYER: CITY OF COLUMBIA HEIGHTS By. By: David Mitchell, President rndda MArquez Sim or Date: 2 Z�1-1-,2 CL162-62-775651.v4 Date: a_1S -,a. By: Kelli J. tug is City Manager Date: a• L5 EXHIBIT A Lep_al Description of the Property Lots 23-24, Block 4, Roslyn Park, according to the recorded plat thereof, Anoka County, Minnesota. PIN: 26-30-24-21-0094 A-10 CL162-62-77565l.v4