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2018.06.05 EDA Meeting PacketAGENDA ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL REGULAR MEETING TUESDAY, JUNE 5, 2018IMMEDIATELY FOLLOWING THE 7:00 P.M. CITY COUNCIL MEETING CRYSTAL CITY HALL COUNCIL CHAMBERS 1. Call to order * 2. Roll call * 3. Approval of minutes from April 17, 2018 regular meeting 4. Public Hearing to consider a resolution approving the sale of 5751 West Broadwayto the owner of the adjacent parcel at 5747 West Broadway for lot consolidation 5. Other business * 6. Adjournment * *Items for which no materials are included in the packet Page 1 of 2 Minutes of the Economic Development Authority of the City of Crystal Regular Meeting April 17, 2018 1. Call to Order President Parsons called the regular meeting of the Economic Development Authority ofthe City of Crystal (EDA) to order at 8:39 p.m. 2. Roll Call Upon call of the roll, the following members were present: Jim Adams, JohnBudziszewski, Elizabeth Dahl, Julie Deshler, Jeff Kolb, Nancy LaRoche and OlgaParsons. The following staff members were present: Anne Norris, Executive Director, John Sutter,Deputy Executive Director, Dan Olson, City Planner, and Troy Gilchrist, City Attorney. 3. Approval of Minutes Motion by Commissioner Kolb (Adams) to approve the minutes of the March 20, 2018regular meeting. Motion carried. 4. 5612 Adair - Lot Sale Public Hearing The EDA held a public hearing to consider a resolution approving the sale of an EDA lotat 5612 Adair Avenue North to Novak-Fleck for construction of a new single familyhome. Mr. Olson presented the staff report and took questions from the Board. President Parsons opened the public hearing. There being no one present to offertestimony, President Parsons closed the public hearing. Motion by Commissioner Deshler (Budziszewski) to adopt the resolution authorizing thesale of 5612 Adair Avenue North to Novak-Fleck for new home construction. Motioncarried. 5. 5618 Adair - Lot Sale Public Hearing The EDA held a public hearing to consider a resolution approving the sale of an EDA lotat 5618 Adair Avenue North to Tollberg Homes for construction of a new single familyhome. Mr. Olson presented the staff report and took questions from the Board. Page 2 of 2 President Parsons opened the public hearing. There being no one present to offer testimony, President Parsons closed the public hearing. Motion by Commissioner Adams (Deshler) to adopt the resolution authorizing the sale of 5618 Adair Avenue North to Novak-Fleck for new home construction. Motion carried. 6. The EDA considered a resolution authorizing the use of available tax increment for the Bass Lake Road Streetscape project. Mr. Sutter presented the staff report and took questions from the Board. Motion by Commissioner LaRoche (Dahl) to adopt the resolution authorizing the use of available tax increment for the Bass Lake Road Streetscape project. Motion carried. 7. Other Business Mr. Sutter provided a status update on 4724 Lakeland Avenue North. 8. Adjournment Motion by Commissioner Budziszewski (Deshler) to adjourn. Motion carried. The meeting adjourned at 8:47 p.m. ______________________________ Olga Parsons, President ATTEST: ______________________________ Elizabeth Dahl, Secretary PAGE 1 OF 4 _____________________________________________________________________ FROM: John Sutter, Community Development Director _____________________________________________________________________ DATE: May 31, 2018 TO: Anne Norris, City Manager (for June 5 EDA meeting) SUBJECT: Public hearing to consider a resolution approving the sale of 5751 West Broadway to the owner of the adjacent parcel at 5747 West Broadway for lot consolidation BACKGROUND Two adjacent parcels on West Broadway, 5751 (parking lot) and 5747 (office building), were owned by the same party prior to 2011. 5751 is encumbered by a parking lot easement in favor of 5747. This means whoever owns 5747 has the right to have a parking lot on 5751 regardless of underlying ownership of 5751. When Kentucky Avenue was reconstructed in 2011, 5751 was assessed in the normal manner but those special assessments were cancelled by tax forfeiture. At this time the balance of cancelled specials is $23,178 comprised of the original assessment ($16,906) plus interest through 2018 ($6,272). As with any tax forfeited property, the city may re-assess cancelled specials after the property returns to private ownership. The former owner stopped paying the mortgage on 5747 and the taxes on 5751. So:  5747 (the office building) was foreclosed and title passed to the lender in 2011. (It was not tax forfeited because the foreclosing lender paid the property taxes.)  5751 (the parking lot) was tax forfeited and title passed to the state in 2014. (It was not foreclosed because the mortgage only encumbered the 5747 parcel.) In 2012 FTK Properties purchased the office building at 5747 from the foreclosing lender. In accordance with the parking lot easement, the office tenants have been using the parking lot at 5751. The parking lot easement makes 5751 essentially useless to anyone other than the owner of 5747. EDA STAFF REPORT 5751 West Broadway (parking lot for 5747 West Broadway) Bass Lake Road Streetscape PAGE 2 OF 4 In 2015 the city completed a study of stormwater problems and potential improvements in the north part of the city where the system frequently surcharges during heavy rain events. One potential improvement would be an underground stormwater detention and infiltration facility under the parking lot at 5751. In fall 2016 Hennepin County determined that the market value of 5751 is $100 and the EDA purchased it for that price in 2017. The purpose of the acquisition was to provide the city with the option of constructing a stormwater infiltration facility under the parking lot at some undetermined point in the future. CURRENT STATUS  FTK Properties has expressed a desire to clean up the relationship between 5747 and 5751 by purchasing 5751, and then replatting it and 5747 into a single lot.  FTK Properties has said they are reluctant to proceed with purchasing and replatting the property unless the potential re-assessment is eliminated or at least substantially reduced, and to that end has agreed to pay $5,000 towards the cancelled specials at the closing for 5751. FTK has said they are not willing to pay more.  FTK Properties has a pending sale of 5747 to a religious institution. FTK’s proposed purchase of 5751 and combination with 5747 would be included as part of that deal. Staff has not yet received that buyer’s CUP application, so it is possible that some other party in buying the 5747 property. ANTICIPATED SEQUENCE 1. (June 5) EDA holds public hearing on the sale of 5751 to FTK Properties and considers a resolution authorizing the sale and execution of necessary documents 2. (mid June) EDA closes on the sale of 5751 West Broadway to FTK Properties:  Sale is subject to the stormwater easement and lot combination requirement  Stormwater easement runs with the land in perpetuity unless vacated by city  Lot combination must be completed within one year  FTK pays the EDA $100 plus all EDA legal & transaction costs  FTK also pays $5,000 towards cancelled pre-forfeiture specials  EDA pays remaining $18,178 for remainder of cancelled pre-forfeiture specials (the city could make an interfund transfer back to the EDA if desired) 3. (late June) FTK sells 5747 and 5751 West Broadway to [religious institution or someone else TBD] 4. (by June 2019) FTK or its successor in ownership combines 5747 and 5751 into a single lot retaining the city’s stormwater easement over the 5751 portion PAGE 3 OF 4 5. At some future date the city would have the option of installing a stormwater facility under the parking lot:  The work would be coordinated with the property owner and office building tenants, ideally when the parking lot is in need of repair or resurfacing anyway  The city’s decision to proceed with constructing the facility would depend on the city’s desire and financial capacity to do so (it may never happen)  If redevelopment of the area makes the stormwater facility unnecessary or inadvisable, the city has the option of relinquishing its easement CONSIDERATIONS Reasons to proceed: օ City retains right to install and maintain a stormwater treatment facility under the parking lot at 5751 - EDA fund balance reduced by $18,178 (but could be mitigated with an interfund transfer back to the EDA) + City receives $5,000 from private party who otherwise has no obligation to pay anything towards the street assessment for 5751 + Long-term ownership will be cleared up so the office building and its parking are on a single platted lot and cannot once again go their separate ways What if we don’t proceed? օ EDA continues to own the property at 5751 West Broadway օ Office building continues to own, maintain and use the parking lot on 5751 օ EDA could grant stormwater easement to city whenever needed - Street fund would not receive the $5,000 for cancelled specials on 5751 + EDA retains $18,178 in its fund balance In summary, the main reasons to proceed are (1) to get the two parcels consolidated into a single lot and (2) to get the city $5,000 it otherwise wouldn’t receive. REQUESTED EDA ACTION After holding the public hearing, adopt the attached resolution authorizing the sale of the property to the owner of the adjacent parcel for lot consolidation. PAGE 4 OF 4 ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL HENNEPIN COUNTY STATE OF MINNESOTA RESOLUTION NO. 2018 - 07 A RESOLUTION AUTHORIZING THE SALE OF 5751 WEST BROADWAY FOR LOT CONSOLIDATION WITH 5747 WEST BROADWAY WHEREAS, the Economic Development Authority of the City of Crystal (“the EDA”) is the owner of 5751 West Broadway, legally described as Lot 1, Block 2, Tschudy Addition, Hennepin County, Minnesota (“the Property”); and WHEREAS, the Property was tax forfeited in 2014 and the EDA acquired it from the State of Minnesota in 2017; and WHEREAS, the EDA has reviewed the history and status of the property, and has determined that the most desirable outcome would be for the Property to be sold to the owner of the adjacent property at 5747 West Broadway, FTKD Properties, Inc., for lot consolidation, subject to an easement allowing the city to construct an underground stormwater facility on the Property at any point in the future. NOW, THEREFORE, BE IT RESOLVED that the EDA authorizes the sale of the Property to FTKD Properties, Inc. BE IT FURTHER RESOLVED that the sale shall be completed in accordance with the terms of the Purchase Agreement in substantially the form on file in City Hall, and that the President or Vice President and the Executive Director or Deputy Executive Director are hereby authorized to sign said Agreement and other documents required to complete the sale of the Property to FTKD Properties, Inc. Adopted this 5th day of June, 2018. ____________________________________ Nancy LaRoche, Vice President ____________________________________ Anne Norris, Executive Director 1 STORMWATER TREATMENT FACILITY EASEMENT AGREEMENT THIS STORMWATER TREATMENT FACILITY EASEMENT AGREEMENT (the “Agreement”) is made and entered into as of the ____ day of ______________, 2018, by and between the Economic Development Authority of the City of Crystal, a public body corporate and politic organized and existing under the laws of the State of Minnesota (the “EDA”), and the City of Crystal, a municipal corporation under the laws of the State of Minnesota (the “City”). WITNESSETH: WHEREAS, the EDA owns certain real property located in Hennepin County, Minnesota, legally described on Exhibit A attached hereto (the “Property”); and WHEREAS, the City desires to construct certain stormwater improvements, including an underground stormwater treatment and infiltration facility, along with associated pipe connections to the existing systems in the adjacent right-of-way, on the Property (the “Stormwater Improvements”) for the benefit of the Public; and WHEREAS, the EDA is willing to allow the Stormwater Improvements on the Property, subject to the conditions set forth below; and WHEREAS, the City has requested and EDA has agreed to grant the City a permanent easement over the Property in order that the City may install, maintain, inspect, repair and replace the Stormwater Improvements; NOW, THEREFORE, in consideration of mutual covenants of the parties set forth herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Incorporation. The Recitals contained herein are incorporated in and made a part 2 of this Agreement. 2. Grant of Easement. For good and valuable consideration, receipt of which is hereby acknowledged by the EDA, EDA grants and conveys to the City a permanent, non-exclusive drainage and utility easement for Stormwater Improvement purposes over, under, across, and through the Property. The easement includes the rights of the City, its contractors, agents, and employees to enter the Easement Area for purposes of installing, inspecting, accessing, maintaining, replacing and taking corrective action relating to the Stormwater Improvements and all such purposes ancillary thereto, together with the right to excavate, refill and restore the Easement Area as necessary to effectuate said purposes. 3. Installation and Maintenance Rights. City has the right to install, maintain, inspect, repair and replace the Stormwater Improvements and agrees to provide for the adequate long term maintenance and continuation of the Stormwater Improvements including, but not limited to: performing preventative maintenance activities at intervals appropriate for each facility component; performing regular maintenance and repairs necessary to maintain the intended system performance, capacity and operational flows; and replacing all or part of the Stormwater Improvements as necessary. Notwithstanding this or any other provision herein, nothing in this Agreement obligates the City to install the Stormwater Improvements. 4. Duty to Restore. To the extent City disturbs the surface of the Easement Area during installation, maintenance, replacement or any other exercise of its rights hereunder with regard to the Stormwater Improvements, City agrees to restore said surface to the condition it was in prior to any such disturbance, or as near thereto as is practicably reasonable, including repaving and reinstalling any parking surface or curb so disturbed. 5. Hold Harmless. City hereby agrees to indemnify, defend, and hold harmless the EDA and its agents and employees against any and all claims, demands, losses, damages, and expenses arising out of or resulting from City’s, or its agents’ or employees’, negligent or intentional acts, or any violation of any safety law, regulation or code in the performance of this Agreement. EDA hereby agrees to indemnify, defend, and hold harmless the City and its agents and employees against any and all claims, demands, losses, damages, and expenses arising out of or resulting from EDA’s, or its agents’ or employees’, negligent or intentional acts, or any violation of any safety law, regulation or code in the performance of this Agreement. 6. Binding Effect. The terms and conditions of this Agreement shall run with the land and be binding on all parties having any right, title or interest in the Property, and on their heirs, successors and assigns, and shall be recorded with the property records of Hennepin County, Minnesota. It is the intent of the parties hereto that this Agreement shall survive any merger of interests. 7. Environmental Matters. The City shall not be responsible for any costs, expenses, damages, demands, obligations, including penalties and reasonable attorneys’ fees or losses resulting from any claims, actions, suits or proceedings based upon a release or threat of release of any hazardous substances, pollutants, or contaminants which may have existed on, or which relate 3 to, the Easement Area or the Property prior to the date of this Agreement. 8. Effective Date. This Agreement shall be binding and effective as of the date first written above. 9. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. ******************** 4 ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL By: Its: President By: ____________________________________ Its: Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of __________, 2018, by _______________________ and ________________________, the President and Executive Director, respectively, of the Economic Development Authority of the City of Crystal, on behalf of the Authority. Notary Public 5 CITY OF CRYSTAL By: ________________________________ Jim Adams Its: Mayor By: ________________________________ Anne Norris Its: City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this ___ day of ________, 2018, by Jim Adams and Anne Norris, the Mayor and City Manager, respectively, of the City of Crystal, a Minnesota municipal corporation, on behalf of the municipal corporation. Notary Public This instrument drafted by: Kennedy & Graven, Chartered (SJS) 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 A-1 EXHIBIT A TO STORMWATER TREATMENT FACLITY EASEMENT AGREEMENT Legal Description of the Property Lot 1, Block 2, Tschudy Addition, Hennepin County, Minnesota 521462v1 BDL CR150-219 PURCHASE AGREEMENT 1. PARTIES. This Purchase Agreement (the “Purchase Agreement”) is made on this _____ day of ______________, 2018 (the “Effective Date”), by and between the Economic Development Authority of the City of Crystal , a public body corporate and politic under the laws of the State of Minnesota (the “Seller”), and FTKD Properties, Inc., a Minnesota business corporation (the “Buyer”). 2. SUBJECT PROPERTY. The Seller is the owner of that certain real estate located at 5751 West Broadway in the City of Crystal, Hennepin County, Minnesota, with a tax parcel identification number of 05-118-21-42-0061 and legally described as: Lot 1, Block 2, Tschudy Addition (the “Property”) 3. OFFER/ACCEPTANCE. In consideration of the mutual agreements herein contained, the Buyer offers and agrees to purchase and the Seller agrees to sell the Property. 4. CONTINGENCIES. This Purchase Agreement is contingent upon the following: A. Buyer must enter into an agreement with seller to combine the Property with the adjacent parcel it already owns, located at 5747 West Broadway and legally described as Lot 1, Block 2, Holmquist Addition, Hennepin County, Minnesota (“Buyer’s Property”) which agreement will require replatting the Property and Buyer’s Property as a single parcel, pursuant to the lot consolidation requirements of the City of Crystal City Code; and B. Seller passing Resolution authorizing sale of the Property. The contingencies are for the benefit of both Buyer and Seller, and may not be waived. If the contingencies are duly satisfied, then the Buyer and the Seller shall proceed to close the transaction as contemplated herein. If, however, if one or more of the contingencies is not satisfied, or is not satisfied on time, this Purchase Agreement shall thereupon be voidable, at the option of either party. If this Purchase Agreement is voided, the Buyer and the Seller shall execute and deliver to each other a termination of this Purchase Agreement. 5. PERSONAL PROPERTY INCLUDED IN SALE. There is no personal property included in the sale of the Property. 6. PURCHASE PRICE. The Buyer shall pay the Seller as and for the Property the amount of $100.00 (the “Purchase Price”), plus Seller’s costs associated with the sale, including but not limited to Seller’s legal and transaction costs. 2 521462v1 BDL CR150-219 7. CLOSING. The closing of the sale of the Property shall take place on ___________, 2018 (“Closing Date”), unless otherwise mutually agreed by the parties. The closing shall take place at 4141 Douglas Drive North, Crystal, Minnesota, or such other location as mutually agreed upon by the parties. 8. DOCUMENTS TO BE DELIVERED AT CLOSING. The Seller agrees to deliver the following documents to the Buyer at closing: A. A duly recordable quit claim deed conveying fee simple title to the Property to the Buyer, free and clear of any mortgages, liens or encumbrances other than matters created by or acceptable to the Buyer. Said quitclaim deed shall contain a reverter clause causing title to revert to Seller in the event Buyer fails to satisfy the requirements of lot consolidations set forth at 4(A) above. Upon completion of said lot-combination requirement, Seller will grant a quitclaim deed extinguishing said right of reverter. B. An affidavit from the Seller sufficient to remove any exception in the Buyer’s policy of title insurance for mechanics’ and materialmens’ liens and rights of parties in possession; C. Affidavit of the Seller confirming that the Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code; D. A completed Minnesota Well Disclosure Certificate or a statement that the Seller is not aware of any wells on the Property; E. Any notices, certificates, and affidavits regarding any private sewage systems, underground storage tanks, and environmental conditions as may be required by Minnesota statutes, rules or ordinances. 9. CLOSING COSTS AND RELATED ITEMS. The Seller shall be responsible for the following closing costs and related items: (1) all recording fees and charges relating to the filing of any instrument required to make title marketable; and (2) any state deed tax, conservation fee, or other federal, state or local documentary or revenue stamps or transfer tax with respect to the quit claim deed to be delivered by the Seller. The Buyer shall be responsible for the following closing costs and related items: (1) the cost of any survey of the Property required by the Buyer; (2) the cost of preparing the title commitment, if required by the Buyer; (3) all premiums required for issuance of the title insurance policy, if required by the Buyer; (4) any fees for standard searches with respect to the Seller and the Property; (5) the fees of any soil tests, environmental assessments, inspection reports, appraisals, or other tests or reports ordered by Buyer; (6) recording fees and charges related to the filing of the deed; and (7) both Seller’s and its own legal and accounting fees associated with this transaction. All closing fees charged by the title company and any escrow fees charged by any escrow agent engaged by the parties in connection with this Purchase Agreement shall be paid by Buyer. 10. REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. 3 521462v1 BDL CR150-219 A. The Seller shall be responsible for all real estate taxes, including any deferred real estate taxes, penalties or interest, for the years prior to the year in which closing occurs. Real estate taxes that are due and payable in the year of closing shall be prorated between the Buyer and the Seller as of the Closing Date. Seller warrants that, as of the Closing Date, there are no past due real estate taxes. B. The Seller shall pay all special assessments levied against the Property as of the closing date, including special assessments certified for payment with the real estate taxes and all deferred assessments, not including the cancelled pre-forfeiture special assessments that are to be reinstated. Buyer shall pay $5,000.00 of the $23,177.79 in cancelled pre-forfeiture special assessments, and Seller shall pay the remaining $18,177.79 balance. Seller warrants there are no special assessments that are pending but not levied against the Property as of the closing date. 11. TITLE EXAMINATION. The Buyer’s examination of title to the Property shall be conducted as follows: A. TITLE EVIDENCE. The Buyer may order a title commitment for the Property. The Buyer must obtain the title commitment within 30 days of the Effective Date. The cost of obtaining the title commitment shall be paid by the Buyer. B. BUYER’S OBJECTIONS. The Buyer shall make written objections (the “Objections”) to the form or contents of the title commitment or condition of title no later 15 days after the date of receipt of the title commitment. The Buyer’s failure to make Objections within such time period shall constitute waiver of the Objections. The Seller has 30 days after receipt of the Objections to cure the Objections during which period the closing will be postponed, if necessary. The Seller shall use all reasonable efforts to correct any Objections. If the Objections are not cured within such 30 day period, the Buyer will have the option to do either of the following: 1. Terminate this Purchase Agreement, if termination is due to the Seller’s failure to cure title objections or any other default of the Seller; or 2. Cure the objections at the Buyer’s expense. 12. POSSESSION/CONDITION OF THE PROPERTY. The Seller shall deliver possession of the Property to the Buyer at closing in the condition as the Property existed on the date of execution of this Purchase Agreement. 4 521462v1 BDL CR150-219 13. REPRESENTATIONS AND WARRANTIES BY THE SELLER. The Seller hereby represents and warrant to the Buyer as of the closing date that: A. Authority. The Seller is a public body corporate and politic, duly created under and subject to the laws of Minnesota; the Seller has the requisite power and authority to enter into and perform this Purchase Agreement and those closing documents signed by it; such documents have been or will be duly authorized by all necessary action on the part of the Seller and have been or will be duly executed and delivered; such execution, delivery and performance by the Seller of such documents does not conflict with or result in a violation of any judgment, order, or decree of any court or arbiter to which the Seller is a party; such documents are valid and binding obligations of the Seller, and are enforceable in accordance with their terms, subject to bankruptcy, reorganization, insolvency, moratorium and other laws affecting the rights and remedies of creditors generally and principles of equity. B. Rights of Others to Purchase the Property. With the exception of this Agreement entered into between the Buyer and the Seller, the Seller has not entered into any other contracts for the sale of the Property, nor are there any rights of first refusal or options to purchase the Property or any other rights of others that might prevent the sale of the Property contemplated by this Agreement. C. Legal Proceedings. There is no action, litigation, investigation, condemnation or proceeding of any kind pending or, to the best of the Seller’s knowledge without investigation, threatened against the Seller or any portion of the Property. D. Wells. Seller is unaware of any wells located on the Property. E. Sewage Treatment Systems. Seller is unaware of any sewage treatment systems located on the Property. F. Title. The Seller has good, indefeasible and marketable fee simple title to the Property. G. Leases. There are no third parties in possession of the Property, or any part thereof; and there are no leases, oral or written, affecting the Property or any part thereof. H. Legal Proceedings. To the best of the Seller’s knowledge, there are no legal actions, suits, or other legal or administrative proceedings, pending or threatened, that affect the Property or any portion thereof; and the Seller has no knowledge that any such action is presently contemplated. I. Methamphetamine Production. To the best of the Seller’s knowledge, methamphetamine production has not occurred on the Property. 5 521462v1 BDL CR150-219 J. Foreign Status. The Seller is not a “foreign person” as such term is defined in the Internal Revenue Code. K. Legal Compliance. The Seller has complied with all applicable laws, ordinances, regulations, statutes, rules and restrictions pertaining to and affecting the Property and the Seller shall continue to comply with such laws, ordinances, regulations, statutes, rules and restrictions. L. Condemnation. There is no pending or, to the actual knowledge of the Seller, threatened condemnation or similar proceeding affecting the Property or any portion thereof, and the Seller has no actual knowledge that any such action is contemplated. The Seller’s representations and warranties set forth in this Section shall be continuing and are deemed to be material to the Buyer’s execution of this Purchase Agreement and the Buyer’s performance of its obligations hereunder. All such representations and warranties shall be true and correct on and as of the closing date with the same force and effect as if made at that time; and all of such representations and warranties shall survive the closing and any cancellation or termination of this Purchase Agreement, and shall not be affected by any investigation, verification or approval by any party hereto or by anyone on behalf of any party hereto. The Seller agrees to defend, indemnify, and hold the Buyer harmless for, from, and against any loss, costs, damages, expenses, obligations and attorneys’ fees incurred should an assertion, claim, demand, action, or cause of action be instituted, made, or taken, which is contrary to or inconsistent with the representations or warranties contained herein. 15. “AS IS, WHERE IS.” The Buyer acknowledges that it has inspected or has had the opportunity to inspect the Property and agrees to accept the Property “AS IS” with no right of set off or reduction in the Purchase Price. Such sale shall be without representation of warranties, express or implied, either oral or written, made by the Seller or any official, employee or agent of the Seller with respect to the physical condition of the Property, including but not limited to, the existence or absence of petroleum, asbestos, hazardous substances, pollutants or contaminants in, on, or under, or affecting the Property or with respect to the compliance of the Property or its operation with any laws, ordinances, or regulations of any government or other body, except as stated above. The Buyer acknowledges and agrees that the Seller has not made and does not make any representations, warranties, or covenants of any kind or character whatsoever, whether expressed or implied, with respect to warranty of income potential, operating expenses, uses, habitability, tenant ability, or suitability for any purpose, merchantability, or fitness of the Property for a particular purpose, all of which warranties the Seller hereby expressly disclaims, except as stated above. 16. CONDEMNATION. If, prior to the closing, eminent domain proceedings are commenced against all or any part of the Property, the Seller shall immediately give notice to the Buyer of such fact and at the Buyer’s option (to be exercised within 15 days after the Seller’s notice), this Agreement shall terminate, in which event neither party will have further obligations under this Agreement. If the Buyer fails to give such notice, then there shall be no reduction in the Purchase Price, and the Seller shall assign to the Buyer at the closing all of the Seller’s right, 6 521462v1 BDL CR150-219 title, and interest in and to any award made or to be made in the condemnation proceedings. Prior to the closing, the Seller shall not designate counsel, appear in, or otherwise act with respect to the condemnation proceedings without the Buyer’s prior written consent. 17. BROKER COMMISSIONS. The Seller and Buyer represent and warrant to each other that they have not dealt with any brokers in connection with the transaction contemplated by this Purchase Agreement. Each party agrees to indemnify, defend, and hold each other harmless from the claims of any broker, or real estate agent. 18. REMEDIES. If the Buyer defaults in any of the agreements herein, the Seller may terminate this Purchase Agreement. If this Purchase Agreement is not so terminated, the Buyer or the Seller may seek actual damages for breach of this Purchase Agreement or specific performance of this Purchase Agreement; provided that any action for specific enforcement must be brought within six months after the date of the alleged breach. 19. ASSIGNMENT. The Buyer may not assign its rights under this Agreement without the written approval of the Seller. 20. AMENDMENT AND MODIFICATION. No amendment, modification, or waiver of any condition, provision or term of this Purchase Agreement shall be valid or have any effect unless made in writing, is signed by the party to be bound and specifies with particularity the extent and nature of such amendment, modification, or waiver. Any waiver by either party of any default by the other party shall not affect or impair any right arising from any previous or subsequent default. 21. BINDING EFFECT. This Purchase Agreement binds and benefits the parties and their successors and assigns. 22. NOTICES. Any notice, demand, request, or other communication which may or shall be given or served by the Seller on the Buyer or by the Buyer on the Seller, shall be deemed has been given or served on the date the same is hand delivered or the date of receipt or the date of delivery if deposited in the United States mail, registered or certified, postage prepaid, and addressed as follows: If to the Seller: Economic Development Authority in and for the City of Crystal 4141 Douglas Drive North Crystal, MN 55422 Attn: John Sutter With a copy to: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 Attn: Martha N. Ingram 7 521462v1 BDL CR150-219 If to the Buyer: FTKD Properties, Inc. 6000 Bass Lake Road, #200 Crystal, MN 55429 Attn: Dennis S. Walsh or such other address as either party may give to another party in accordance with this Section. 23. NO PARTNERSHIP OR JOINT VENTURE. Nothing in this Purchase Agreement shall be construed or interpreted as creating a partnership or joint venture between the Seller and the Buyer relative to the Property. 24. CUMULATIVE RIGHTS. Except as may otherwise be provided herein, no right or remedy herein conferred on or reserved by either party is intended to be exclusive of any other right or remedy provided by law, but such rights and remedies shall be cumulative in and in addition to every other right or remedy given herein or elsewhere or existing at law, equity or by statute. 25. ENTIRE AGREEMENT. This Purchase Agreement constitutes the entire agreement between the parties and no other agreement prior to this Purchase Agreement or contemporaneous herewith shall be effective except as expressly set forth or incorporated herein. 26. BINDING EFFECT. This Agreement binds and benefits the parties and their successors and assigns. 27. CONTROLLING LAW. This Agreement has been made under the substantive laws of the State of Minnesota, and such laws shall control its interpretation. 8 521462v1 BDL CR150-219 IN WITNESS WHEREOF, the parties have executed this Purchase Agreement as of the date written above. SELLER Economic Development Authority of the City of Crystal By: ____________________________________ Olga Parsons Its: President By: ____________________________________ Anne Norris Its: Executive Director BUYER FTKD Properties, Inc. By:___________________________________ Its: 1 521794v2 BDL CR150-219 LOT COMBINATION AGREEMENT THIS LOT COMBINATION AGREEMENT (the “Agreement”) is made this ___ day of _______________________, 2018, by and between the Economic Development Authority of the City of Crystal , a public body corporate and politic under the laws of the State of Minnesota ("EDA"), and FTKD Properties, Inc., a Minnesota business corporation ("FTKD"). The EDA and FTKD may be collectively referred to herein as the “Parties.” RECITALS WHEREAS, the EDA is the fee owner of certain real estate located in Crystal, Hennepin County, Minnesota, legally described on Exhibit A attached hereto (the “EDA Property”); and WHEREAS, FTKD is the fee owner of certain real estate located in Crystal, Hennepin County, Minnesota, legally described on Exhibit B attached hereto (the “FTKD Property”); and WHEREAS, pursuant to that certain purchase agreement between the Parties dated ______________, 2018 (the “Purchase Agreement”), FTKD is purchasing the EDA Property; and WHEREAS, said purchase is contingent upon FTKD agreeing to consolidate the EDA Property and the FTKD Property into a single lot in accordance with Crystal City Code; NOW, THEREFORE, in consideration of the promises and the mutual obligations of the Parties hereto, each of them does hereby covenant and agree with the other as follows: AGREEMENT 1. Incorporation of Recitals and Exhibits. The Recitals set forth above and the Exhibits attached to this Agreement are incorporated into this Agreement as if fully set forth herein. 2. Obligations of FTKD. Within 12 months of closing on its purchase of the EDA Property, FTKD shall submit a complete and fully executed application for lot consolidation to the City of Crystal, pursuant to and in accordance with all requirements for lot consolidation set forth in the City Code, including but not limited to the submission of an approved final plat. 2 521794v2 BDL CR150-219 Failure to comply with this requirement shall constitute a breach of this Agreement and shall trigger the reverter contained in the deed conveying the EDA Property, unless FTKD is granted, in writing, an extension to this deadline by the EDA. 3. Obligations of EDA. The EDA hereby agrees to cooperate in any way reasonably necessary to assist FTKD in fulfilling its obligations under this Agreement, including but not limited to allowing access to the EDA Property in preparing the final plat. 4. Amendment. Any amendment to this Agreement must be in writing and signed by both Parties. 5. Assignment. FTKD may not assign any of its obligations under this Agreement without the prior written consent of the City. 6. Agreement to Run with Land. This Agreement may be recorded among the land records of Hennepin County, Minnesota. The provisions of this Agreement shall run with the EDA Property and be binding upon FTKD and its assigns or successors in interest. 7. Termination. This agreement will automatically terminate upon the occurrence any of the following events: a. Filing of the final plat consolidating the EDA and FTKD Properties; or b. Reversion of title to the EDA Property revesting fee title in the name of the EDA; or c. Cancellation of the Purchase Agreement. 8. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. 9. Effective Date. This Agreement shall be binding and effective as of the date first written above. [The remainder of this page to remain intentionally blank]. 3 521794v2 BDL CR150-219 IN WITNESS OF THE ABOVE, the Parties have caused this Agreement to be executed on the date and year written above. THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL: By: ____________________________________ Olga Parsons, President By: ____________________________________ Anne Norris, Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this _____ day of ________________, 2018, by Olga Parsons and Anne Norris, the President and Executive Director, respectively, of the Economic Development Authority of the City of Crystal, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the Authority. ____________________________________ Notary Public 4 521794v2 BDL CR150-219 FTKD Properties, Inc.: By: ____________________________________ Its: ____________________________________ STATE OF MINNESOTA ) ) SS. COUNTY OF ___________ ) The foregoing instrument was acknowledged before me this ______ day of ____________________, 2018, by ________________________, the ________________ of FTKD Properties, Inc., a Minnesota business corporation, on behalf of the corporation. __________________________________ Notary Public This document drafted by: KENNEDY & GRAVEN, CHARTERED 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 A-1 521794v2 BDL CR150-219 EXHIBIT A Legal Description of EDA Property Lot 1, Block 2, Tschudy Addition, Hennepin County, Minnesota. B-1 521794v2 BDL CR150-219 EXHIBIT B Legal Description of FTKD Property Lot 1, Block 1, Holmquist Addition, Hennepin County, Minnesota. 521801v1 BDL CR150-219 QUITCLAIM DEED Deed Tax Due: $_____ ECRV: ___________________ Date: _____________________, 2018 FOR VALUABLE CONSIDERATION, the Economic Development Authority of the City of Crystal, a public body corporate and politic under the laws of the State of Minnesota, Grantor, hereby conveys and quitclaims to FTKD Properties, Inc., a Minnesota business corporation, Grantee, real property in Hennepin County, Minnesota, described as follows: Lot 1, Block 2, Tschudy Addition, Hennepin County, Minnesota Check here if part or all of the land is Registered (Torrens)  together with all hereditaments and appurtenances and subject to easements of record, and further subject to the right of re-entry for breach of a condition subsequent in favor of Grantor as set forth in the attached Exhibit A.  The Seller certifies that the Seller does not know of any wells on the described real property. A well disclosure certificate accompanies this document or has been electronically filed. (If electronically filed, insert WDC number: 1025002).  I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously filed well disclosure certificate. ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL By ____ Olga Parsons Its President By Anne Norris Its Executive Director 521801v1 BDL CR150-219 STATE OF MINNESOTA COUNTY OF HENNEPIN } } ss.: The foregoing was acknowledged before me this ______ day of __________, 2018, by Olga Parsons and Anne Norris, the President and Executive Director, respectively, of the Economic Development Authority of the City of Crystal, a public body corporate and politic under the laws of Minnesota, on behalf of the Authority, Grantor. ________________________________ NOTARY STAMP SIGNATURE OF PERSON TAKING ACKNOWLEDGMENT This instrument was drafted by: Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 Tax Statements should be sent to: FTKD Properties, Inc. 6000 Bass Lake Road, #200 Crystal, MN 55429 521801v1 BDL CR150-219 EXHIBIT A TO QUITCLAIM DEED EXECUTED BY THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL, GRANTOR, IN FAVOR OF FTKD PROPERTIES, INC., GRANTEE The ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF CRYSTAL, Grantor, is conveying the property described in the attached Quit Claim Deed (the “Property”) to FTKD PROPERTIES, INC., Grantee, subject to a right of re-entry for breach of condition subsequent in favor of Grantor. The condition subsequent, as set forth in Section 8(A) of that certain Purchase Agreement between the Grantor and Grantee dated as of __________________, 2018 (the “Purchase Agreement” – Capitalized terms used in this Exhibit A but not defined have the meanings ascribed to them in said Purchase Agreement), is that Grantee must combine the Property with an adjacent property it currently owns and legally described as Lot 1, Block 2, Holmquist Addition, Hennepin County, Minnesota (“Grantee’s Property”), according to the lot-consolidation requirements of the city of Crystal City Code. If Grantee breaches the condition subsequent, Grantee shall re-convey the Property back to Grantor. If Grantee fails to re-convey the Property to the Grantor, Grantor may elect to exercise its right of re-entry by commencing an action in Hennepin County District Court to establish the breach of the condition subsequent. If Grantor establishes a breach of the condition subsequent, title to and the right to possession of the Property, and title to all improvements located thereon reverts to Grantor, and Grantee is not entitled to any compensation from Grantor for the value of any improvements Grantee has made to the Property. The filing of a final plat consolidating the Property conveyed hereby with Grantee’s Property shall conclusively satisfy and terminate the right of re-entry of the Grantor in this Quit Claim Deed or pursuant to the Purchase Agreement.