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HomeMy WebLinkAbout15.F.5. Superior Supply Company-MNDOT Parcel 81 /jj FS:: CITY OF SHAKOPEE Memorandum TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: Superior Supply Company - MNDOT Parcel 81 DATE: December 1,2005 INTRODUCTION: The Council is asked to consider a transaction which would allow the acquisition of 2.68 acres of U.S. 169 excess Right-of-Way, by Superior Supply Company. BACKGROUND: Superior Supply is a Shakopee business, located on Stagecoach Road, adjacent to U.S. 169. I have been contacted by Bill Cherne, President of the company, asking that the City facilitate the purchase of a 2.68 acres parcel of land owned by MNDOT. It is an excess remnant parcel that was acquired many years ago for U.S. 169 highway construction. The parcel is roughly triangular in shape, and is bounded on the north by Superior Supply First Addition, on the south by U.S. 169, and on the west by Stagecoach Road. There is a significant grade separation from Stagecoach to the parcel. For practical purposes, consolidation ofthis parcel with the adjacent Superior Supply property is the best use for this. Mr. Cherne has been in contact with MNDOT, and has been informed that the State does not need this parcel. MNDOT policy is to offer surplus parcels for sale either to the party from whom it was originally purchased, or to the City; if there is no interest on the part of either party, it can be offered for sale to others. To the best ofMr. Cherne's knowledge, the original consortium from whom the parcel was purchased no longer exists. Accordingly, MNDOT has suggested than an acquisition by the City with subsequent transfer by the City to Superior Supply would be the most expedient method of completing the transaction. I have checked with City staff, who indicates that there is no City need for the property. The final acquisition of the parcel by Superior Supply would allow for future development of the parcel. The attorney for Superior Supply has drafted a "term sheet", which indicates the City's interest in acquiring the parcel, for transfer as a "pass through" to Superior Supply. That is necessary before MNDOT begin through the process of reconveyance. ; BUDGET IMP ACT: Superior Supply will reimburse the City for any out of pocket expenses. Therefore, there is no financial impact on the City. RECOMMENDATION: I recommend that the City execute the term sheet, which would start the process for a reconveyance from MNDOT to the City, and from the City to Superior Supply. It is not a binding agreement, should it later be determined not to proceed with the transfer. ACTION REQUIRED: If the Council concurs, it should, by motion, authorize the appropriate City officials to sign the term sheet provided by Superior Supply, relating to the transfer of a 2.68 acre parcel ofproperty located on the east side of Stagecoach Road, and north of U.S. 169. ~~ Mark McNeill City Administrator MM:th ~OO1/001 :! /") i s ~ . 1l /1 :l 1I-~ \1 \\ \) I . : : / . , , . . ,. , \ . I /}1ftl MMAC ~ctJ(..;/I qS;l- :2- ~')- ;J'o 1 , Message Page 1 of 1 Mark McNeill ~ To: Mark McNeill Subject: FW: MnDot Parcel #81 r'~~'~~-~~'~- -~^ -~,~- From: Bill Cherne Sent: Wednesday, November 16, 2005 2:51 PM To: 'mmcneill@ci.shakopee.mn.us' Subject: MnDot Parcel #81 Mark, I want to thank you for looking into this matter. By way of background: The parcel was orginally acquired by MnDot to serve as a ramp for west bound Bypass traffic to exit onto Stage Coach Road. The final Bypass configuration eliminated this exit ramp and thereafter Superior Supply (which owns the parcel adjoining to the north) asked MnDot to whether it desired to sell the parcel. MnDot has now concluded that it does not need to retain this parcel but cannot sell it directly to Superior Supply. MnDot can, however, sell the parcel to the City of Shakopee, and the City can thereafter sell the parcel to Superior Supply. If Shakopee would assist in this transaction, not only would it place this parcel back on the tax roles, it would also increase the acreage available to amortize future costs of providing the sewer line extension into this area. Acquisition of the parcel by Superior would facilitate its placement of a future access drive to the east portion of Superior Supply First Addition without reconfiguration of the improvements already in place on the west portion of Superior Supply First Addition. Attached is the draft "Term Sheet" prepared by my attorney laying out how the transaction could be completed. MnDot tells me that they would like some written aCknowledgement that the City of Shakopee agrees to acquire the parcel before MnDot goes through the formal process of getting approval for reconveyance. I believe this term sheet would serve that purpose. Any comments you may have would be appreciated. I understand you will also evaluate whether Shakopee has any interest in acquiring the parcel for its own use. Thanks again for your consideration. Bill Cherne President Superior Supply Company 952-944-4411 PS I will fax to you a sketch of the parcel 12/1/2005 - PROPOSED TERM SHEET FOR TRANSFER OF PROPERTY Property: Approximately 2.68 acres located south of Superior Supply First Addition, north of the Shakopee bypass and east of old County Road 89. 1. The Minnesota Department of Transportation ("MnDot") and Superior Supply Company, Inc. ("Superior") would agree upon a purchase price to be paid by Superior for the Property (the "Purchase Price"). 2. MnDot, Superior and the City of Shakopee, MN (the "City") would enter into a purchase agreement under which: a. MnDot would agree to convey the Property to the City for the Purchase Price; and b. the City would agree to convey the Property to Superior for the Purchase Price. 3. A closing would be held with a title insurance company (the "Title Company") at which: a. Superior would deposit the Purchase Price with the Title Company; b. MnDot would convey the Property to the City by way of a Quit Claim Deed; c. the City would convey the Property to Superior by way of a Quit Claim Deed; and d. using Superior's deposit, the Title Company would pay the Purchase Price to MnDot (the Purchase Price will thus be considered to have been paid by Superior to the City and then by the City to MnDot). STATEMENT OF INTENT It is the present intent of Superior, MnDot and the City to proceed with the transactions described in this Term Sheet. However, this Term Sheet is non-binding and neither Superior, MnDot nor the City will be legally obligated to any course of action relative to such transactions until definitive written agreements concerning such transactions are agreed upon and executed. SUPERIOR SUPPLY COMPANY, INC. By: Dated; ,2005 A. William Cherne, Jr. lts President MINNESOTA DEPARTMENT OF TRANSPORTATION By: Dated: ,2005 Its: CITY OF SHAKO PEE By: Dated; ,2005 Its; F:\Shawn\WPDATA\1141\1\MN DOT PROPERTy\TERM SHEET.doc