HomeMy WebLinkAbout15.D.2. Tollefson Property Purchase Agreement-Res. No. 6197
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CITY OF SHAKOPEE
MEMORANDUM
To: Mayor and City Council
Mark McNeill, City Administrator
From: Mark Themig, Parks, Recreation, and Facilities Director
Meeting Date: March 1, 2005
Subject: Tollefson Property Purchase Agreement - Resolution No. 6197
INTRODUCTION
City Council is asked to adopt Resolution No. 6197, A Resolution Authorizing the Sale
of Certain Real Property to Tollefson Development, Inc.
BACKROUND AND DISCUSSION
Resolution No. 6197simultaneously conveys 37.8072 acres of land that the city is
acquiring as part of the purchase of the 103-acre Shutrop parcel authorized by
Resolution No. 6196. The sale of this land to Tollefson Development at a cost of
$2,500,000 will help the city fund the remainder of the property acquisition.
The $2,500,000 equates to approximately $66, 125/acre, and the City's purchase price of
the overall property is approximately $61 ,893/acre. In addition, Tollefson has verbally
committed to constructing the entire length of Pike Lake Trail from CR16 to future CR21
as part of the residential development, at no cost to the city.
The land that is being sold has been identified for future residential development by
Tollefson Development. Based on preliminary concepts, it appears that this development
would provide approximately 38 single-family lots using a conservation development
based approach.
Purchase Agreement Terms
The terms of the purchase agreement were being negotiated through the early evening
of Friday, February 25. At the time of completing this staff report, it appears that we were
able to resolve most of the outstanding issues. However, there may need to be revised
agreements distributed to you prior to Tuesday's meeting.
With that said, the key terms of the purchase agreement are as follows:
. Section 2.: The purchase price is $2,500,000.
. Section 6: The closing shall take place on or before March 11, 2005.
. Section 10: Tollefson agrees to provide the city a temporary access easement
through this parcel so the city can access the city property below the bluff line and
along Dean Lake, should it be needed. The current access to this area via an
existing two lane trail that extends from CR 16 north on the eastern property
boundary, then generally follows the existing sanitary sewer line. (The proposed
purchase agreement states a "power line", and it should state "sanitary sewer line".)
When the residential development is proposed, Tollefson has verbally agreed to
include a public trail that will provide this access in the future. Therefore, the
easement would terminate once the trail and this access is complete.
There are a few remaining issues that hopefully will be resolved by your meeting:
. Pike Lake Trail: Tollefson Development has verbally agreed to pay for the costs of
"constructing Pike Lake Trail. This isn't covered in the current version of the purchase
agreement, and the purchase agreement may not be the appropriate document. We
will have an update for you at the meeting.
. Existing Site Conditions: As with the Shutrop Purchase agreement, there was
significant discussion about representations and warranties, specifically relating to
existing site conditions. There was a Phase 1 environmental site assessment
completed on the property, and it identified visual concerns on the portion that
Tollefson would be acquiring. Tollefson completed a Phase 2 study for those
concerns, and found no soil contamination issues. The portion that the city would
retain had no issues identified in the Phase 1 environmental site assessment.
Initially, the Shutrops requested an "As Is" clause where the city would assume any
liability for the condition of the property. We incorporated the same "As Is" clause into
our purchase agreement with Tollefson in order to transfer any liability to Tollefson,
but Tollefson objected. The current version of the agreement has no "As Is" clause.
The city will need to ensure that the purchase agreement does not pose any liability
for the city for the portion that we are conveying to Tollefson.
REQUESTED ACTION
City Council is asked to adopt Resolution No. 6197, A Resolution Authorizing the Sale of
Certain Real Property to Tollefson Development, Inc.
I would also suggest that City Council consider appointing two members to serve as
representatives of Council as you did with the Quarry project, should any last-minute
issues arise prior to closing.
CITY OF SHAKOPEE
RESOLUTION NO. 6197
A RESOLUTION AUTHORIZING THE SALE OF
CERTAIN REAL PROPERTY TO TOLLEFSON
DEVELOPMENT, INC.
WHEREAS, by Resolution No.6196 the City Council of the City of Shako pee authorized
the acquisition of property from the Idella Shutrop Revocable Trust legally described as follows:
The Southeast Quarter of the Northwest Quarter and Government Lot 2, all in Section 14,
Township 115, Range 22, Scott County, Minnesota; and That part of the Southwest Quarter of
Section 14, Township 115, Range 22, Scott County, Minnesota, north of the centerline of County
Road No. 16, also known as Eagle Creek Boulevard ("Shutrop Parcel");
WHEREAS, the City has determined that it is in the best interests of the City to sell
approximately 37.8 acres of the Shutrop Parcel to Tollefson Development, Inc. for the purposes
of residential development; and
WHEREAS, the City Council finds that the sale of the 37.8 parcel of land is not
inconsistent with the City's comprehensive municipal plan, in that the comprehensive plan does
not designate the parcel for any future public use.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Shakopee
that the appropriate city officials are authorized and directed to execute a purchase agreement
selling 37.8 acres of the Shutrop Parcel, legally described on Exhibit A to this Resolution, to
Tollefson Development, Inc. for $2,500,000.00.
Adopted in session of the City Council of the City of Shakopee, Minnesota, held
this 1st day of March, 2005.
Mayor of the City of Shakopee
Judy Cox, City Clerk
JJT-259762vl
SH155-156
EXHIBIT A
LEGAL DESCRIPTION
That part of Government Lot 2, that part of the Southwest Quarter, and that part of the Southeast
Quarter of the Northwest Quarter, all in Section 14, Township 115, Range 22, Scott County,
Minnesota, described as follows:
Commencing at the northeast corner of said Southeast Quarter of the Northwest Quarter; thence
South 0 degrees 18 minutes 14 seconds West, assumed bearing along the east line of said
Southeast Quarter of the Northwest Quarter, a distance of 775.94 feet to the point of beginning of
the tract to be described; thence South 80 degrees 43 minutes 35 seconds West 421.77 feet;
thence North 74 degrees 02 minutes 39 seconds West 356.96 feet; thence North 70 degrees 21
minutes 41 seconds West 440.67 feet; thence southerly 339.49 feet, along a non-tangential curve,
concave to the east, having a radius of 1255.54 feet, a central angle of 15 degrees 29 minutes 32
seconds, and a chord which bears South 27 degrees 47 minutes 07 seconds West; thence
southerly 327.48 feet, along a reverse curve, concave to the west, having a radius of 35121.16
feet, and a central angle of 0 degrees 32 minutes 03 seconds; thence South 20 degrees 34 minutes
24 seconds West, tangent to said last described curve 399.67 feet; thence South 18 degrees 56
minutes 26 seconds West 80.14 feet to the center line of Eagle Creek Boulevard; thence easterly
441.46 feet, along said center line being a non-tangential curve, concave to the north, having a
radius of 4800.00 feet, a central angle of 5 degrees 16 minutes 10 seconds, and a chord which
bears South 73 degrees 46 minutes 16 seconds East; thence South 76 degrees 24 minutes 21
seconds East, continuing along said center line, tangent to said last described curve 1215.89 feet
to the east line of said Southwest Quarter; thence North 0 degrees 18 minutes 14 seconds East,
along said east line, and along the east line of said Southeast Quarter of the Northwest Quarter
1287.42 feet to the point of beginning.
Subject to the right of way of Eagle Creek Boulevard, (County Road No. 16).
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JJT -259762vl
SH155.156
VACANT LAND PURCHASE AGREEMENT
This Vacant Land Purchase Agreement ("Agreement") made and entered into as of the Effective
Date set forth below by and between Tollefson Development, Inc, a Minnesota corporation
("Buyer"), whose address is 17271 Kenyon Avenue, Suite 103, Lakeville, MN 55044, and the City
of Shakopee, a Minnesota municipal corporation ("Seller"), whose address is 129 Homes Street
South, Shakopee, MN 55379.
RECITALS
WHEREAS, Seller is the contract purchaser of an approximately 103 acre tract ofland now owned
by the ldella Shutrop Revocable Trust legally described as: The Southeast Quarter of the Northwest
Quarter and Government Lot 2, all in Section 14, Township 115, Range 22, Scott County,
Minnesota; and That part of the Southwest Quarter of Section 14, Township 115, Range 22, Scott
County, Minnesota, north of the centerline of County Road No. 16, also known as Eagle Creek
Boulevard (the "Shutrop Land"); and
WHEREAS, Seller desires to utilize approximately 66 acres of the Shutrop Land for purposes of
public parkland and open space, and to sell and convey the balance thereof, consisting of 37.8072
acres ofland (subject to right-of-way), for private use in order to fund, in part, Seller's acquisition of
the Shutrop Land for public park and open space use; and
WHEREAS, Buyer is desirous of purchasing the balance of the Shutrop land from Seller for the
purposes of residential development; and
WHEREAS, Buyer and Seller are mutually desirous of setting forth in writing in this Agree~ent
their mutual agreements as to the sale, purchase and conveyance of the balance ofthe said Shutrop
Land.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements
contained herein, and for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Buyer and Seller agree as follows:
1. Property. The real property that is the subject of this Agreement ("Property")
consists of 37.8072 acres ofland, is located at 6865 Eagle Creek Road in the City of Shakopee,
County of Scott, State of Minnesota, and is legally described on the attached Exhibit A ("Property");
and includes all hereditaments and appurtenances, and all.development rights and easement rights
concerning the Property.
2. Purchase Price and Payment. Subject to compliance with the terms and conditions
ofthis Agreement; the Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Property.
Seller's obligation is to convey marketable fee title to the Property to Buyer. The purchase price to
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be paid by Buyer shall be the sum of Two Million Five Hundred Thousand and No/lOO Dollars
($2,500,000.00) (the "Purchase Price"). The Purchase Price shall be paid as follows:
2.1 Earnest Money. Buyer agrees, upon the full execution of this Agreement, to
pay earnest money ("Earnest Money") in the amount of Twenty Five Thousand and
No/l 00 Dollars ($25,000.00). The Earnest Money shall be deposited in the escrow
account of United Title, Inc., 17316 Kenyon Avenue, Suite 103, Lakeville, MN
55044 ("Title"), and shall be applied as a credit against the Purchase Price in the
event of Closing (as defined in Section 8, below).
2.2 Balance of Purchase Price. Buyer shall deliver the balance of the Purchase Price,
equal to Two Million Four Hundred Seventy Five Thousand and No/l 00 Dollars ($
2,475,000.00) in cash, in certified funds, or by wire transfer on or prior to the
Closing, as set forth below.
3. Real Estate Taxes and Special Assessments. Seller represents that all real estate
taxes and installments of special assessments due and payable in all years prior to the year in which
the Closing ofthis Agreement takes place have been paid in full. Real estate taxes due and payable
in the year of Closing shall be pro-rated on a calendar year basis as of the date of Closing. Unpaid
levied and/or pending special assessments existing on the Effective Date of this Agreement shall be
paid by Seller. Buyer shall pay all taxes due and payable in the year after Closing together with all
other special assessments payable with respect to the Property thereafter. Seller shall pay at Closing
all "Green Acres" and/or other deferred real estate taxes and assessments.
4. Title Evidence. Buyer acknowledges having received a current commitment for an
owner's policy of title insurance identifying.Buyer as the proposed insured, including appropriate
searches covering special assessments, bankruptcies, federal and state judgments and liens, and
federal and state tax liens (the "Title Evidence"), including copies of all documents referenced as
exceptions to title on Schedule B of the said commitment. The Title Evidence is intended to reflect
Seller's marketable title in and to the Property subject only to those matters set forth on any Exhibit B
attached hereto ("Permitted Exceptions"). Buyer shall have fifteen (15) days the Effective Date
hereof to render objections to title in writing to Seller. If any objection is so made, Seller shall have
sixty (60) days from the date of such objection(s) to have such objection(s) removed or satisfied. If
Seller, in the exercise of due diligence, is unable to have such objection(s) removed within that time,
the Buyer may, at Buyer's sole election, either, (a) terminate this Agreement by written notice given
to Seller without any liability on Buyer's part; or (b) if the objection(s) are such that they may be
removed by the expenditures of sums of money, take title to the Property and discharge such
objection(s) out of the Purchase Price, crediting the Purchase Price with the same, or (c) if the
objection(s) are such they may not be removed by expenditures of sums of money, take title subject
to such objection(s). In the event Buyer elects to terminate this Agreement by reason of objection
made pursuant to this paragraph, Seller agrees to promptly return the Earnest Money.
5. Closing. The Closing shall be at Title, and shall take place on or before March 11,
2005.
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6. Contingencies. Seller's obligation to sell the Property is expressly contingent upon
Seller's closing on the purchase of the Shutrop Land.
Subject to the city of Shakopee authorizing the execution of the Vacant Land Purchase
Agreement with Tollefson Development, Inc.
In the event Seller has not closed upon its purchase of the Shutrop Land on or prior to the
date specified in Section 5, above, and unless Seller and Buyer mutually agree to extend the date set
forth for Closing, Buyer shall have the right to terminate this Agreement. In the event of any such
termination, Buyer and Seller agree to execute a written cancellation of this Agreement which shall
expressly authorize Title to return the Earnest Money to Buyer.
7. Seller's Obligations at Closing. Subject to full, complete, and timely performance
by Buyer of its obligations herein, Seller at Closing shall:
7.1 Execute, acknowledge, and deliver to Buyer Seller's deed to the Property, conveying
to Buyer marketable fee simple title to the Property and all rights appurtenant thereto
subject only to any Permitted Exceptions set forth in Exhibit B, which deed shall be
in form suitable for immediate recording in the County where the Property is situated.
7.2 Deliver to Buyer the a standard Affidavit of the Seller in recordable form affirming
that the Property is owned by Seller free and clear of all exceptions except Permitted
Exceptions and any required well disclosures.
7.3 . Provide such other documents as may be reasonably necessary pursuant to this
Agreement and/or required by Title in order to effect an insured Closing.
Seller shall pay costs of preparation ofthe Seller's deed and other documents of conveyance,
the state deed tax, the conservation fee, and the cost of recording any documents necessary to make
title marketable, together with one-half ( ~ ) the closer's fee.
8. Buyer's Obligations at Closing. At Closing, and subject to the terms, conditions,
and provisions of this Agreement, and subject to the full performance by Seller ofits obligations as
setforth above, the Buyer shall:
8.1 Deliver to Seller or the Closer for disbursement to Seller, the unpaid balance of
Purchase Price in accordance with Section 3.
At Closing, Buyer shall pay the recording fee necessary to record Seller's deed, the premium
for any title insurance policy Buyer elects to purchase, and one..half ( ~ ) the closer's fee..
9. Environmental Matters. Seller has not used the Property for, or engaged in the
business of, the generation, transportation, storing, treating or disposing of any Ilhazardous
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substances" or "pollutant", or "contaminant" included within the defInition of such terms under any
federal, state or local statute, law, or ordinance. Seller has no knowledge, and could not reasonably
have had any knowledge or belief, that any other person has used the Property for the disposal of any
such hazardous substance, pollutant, or contaminant as referenced above. Seller has not knowingly
permitted any person to so use the Property for the disposal of any such hazardous substance,
pollutant, or contaminant. The Property is not subject to any liens or claims by any governmental
regulatory agencies or third parties arising from the release or threatened release of hazardous
substances in, on, or about the Property, and Seller is not aware of any pending or contemplated
search or investigation of the Property or any portion thereof with respect to any environmental
matter. Seller has provided to Buyer any and all previous, current and/or pending information
regarding any court or regulatory actions, environmental audit( s), and other information concerning
hazardous waste or soil or ground water contamination on or around the Property.
10. Temporary Access Easement. Buyer agrees to give Seller a temporary access
easement to Seller's remaining 64 acres through the existing 2 lane trail (proposed Pike Lake Trail)
running northerly to the powerline and then westerly along the powerline. Said easement shall
terminate upon the completion of the public trail that will be constructed when Buyer develops the
Property .
11. Time is of the Essence. Seller and Buyer do hereby acknowledge that time is of the
essence in this Agreement.
12. Specific Performance. Buyer shall have the right to enforce specific performance of
this Agreement.
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IN WITNESS WHEREOF, this Purchase Agreement has been du1y executed by the parties
hereto as of the last of the dates indicated adjacent to the signatures below, which date shall be
deemed to be the effective date ("Effective Date") hereof for all purposes.
BUYER: TOLLEFSON DEVELOPMENT, INC.
a Minnesota corporation
Dated: By:
Its:
and
Dated: By:
Its:
SELLER: CITY OF SHAKOPEE
a Minnesota municipal corporation
Dated:
By:
Its: Mayor
and
Dated: By:
Its: City Clerk
By:
Its: City Administrator
NKE-259716vl
SH155-1S6
EXHIBIT A
LEGAL DESCRIPTION
That part of Government Lot 2, that part of the Southwest Quarter, and that part of the' Southeast
Quarter of the Northwest Quarter, all in Section 14, TO"Yllship 115, Range 22, Scott County,
Minnesota, described as follows:
Commencing at the northeast corner of said Southeast Quarter of the Northwest Quarter; thence
South 0 degrees 18 minutes 14 seconds West, assumed bearing along the east line of said Southeast
Quarter of the Northwest Quarter, a distance of775.94 feet to the point of beginning of the tract to be
described; thence South 80 degrees 43 minutes 35 seconds West 421.77 feet; thence North 74
degrees 02 minutes 39 seconds West 356.96 feet; thence North 70 degrees 21 minutes 41 seconds
West 440.67 feet; thence southerly 339.49 feet, along a non-tangential curve, concave to the east,
having a radius of 1255.54 feet, a central angle of 15 degrees 29 minutes 32 seconds, and a chord
which bears South 27 degrees 47 minutes 07 seconds West; thence southerly 327.48 feet, along a
reverse curve, concave to the west, having a radius of3 5121.16 feet, and a central angle of 0 degrees
32 minutes 03 seconds; thence South 20 degrees 34 minutes 24 seconds West, tangent to said last
described curve 399.67 feet; thence South 18 degrees 56 minutes 26 seconds West 80.14 feet to the
center line of Eagle Creek Boulevard; thence easterly 441.46 feet, along said center line being a non-
tangential curve, concave to the north, having a radius of 4800.00 feet, a central angle of 5 degrees
16 minutes 10 seconds, and a chord which bears South 73 degrees 46 minutes 16 seconds East;
thence South 76 degrees 24 minutes 21 seconds East, continuing along said center line, tangent to
said last described curve 1215.89 feet to the east line of said Southwest Quarter; thence North 0
degrees 18 minutes 14 seconds East, along said east line, and along the east line of said Southeast
Quarter of the Northwest Quarter 1287.42 feet to the point of beginning.
Subject to the right of way of Eagle Creek Boulevard, (County Road No. 16).
NKE-259716vl
SH155-156
EXHIBIT B
PERMITTED EXCEPTIONS
1. Building, zoning and subdivision laws and ordinances, except as set forth in Section 7 of this
Agreement.
2. Reservations of minerals and mineral rights by the State of Minnesota, if any.
3. Easements of record.
4. Right-of-way of Eagle Creek Boulevard (Co. Rd. No. 16)
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