ITEM 3_.12 ISD 728to
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MINNESOTA ! 7
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT
REQUESTOR:
MEETING DATE:
Legal
City Attorney
October 28, 2019
PRESENTER(s)
REVIEWED BY:
ITEM #:
Consent
City Administrator/Finance Director Flaherty
3.12
STRATEGIC VISION
MEETS:
I THE CITY OF OTSEGO:
Otsego and Independent School District 728.
Is a strong organization that is committed to leading the community through innovative
communication.
X
Has proactively expanded infrastructure to responsibly provide core services.
No
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
The parcel in question is approximately one half of an acre on the School District's elementary school
Is a social community with diverse housing, service options, and employment opportunities.
sell it to the City.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff recommends the City Council approve the attached Purchase Agreement between the City of
Otsego and Independent School District 728.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
Yes
No
BACKGROUND/J USTI FICATION:
The parcel in question is approximately one half of an acre on the School District's elementary school
property. The School District has recently acted to designate this parcel as surplus property and agreed to
sell it to the City.
The attached Purchase Agreement is in standard form, very similar to the Purchase Agreement with
Berning Family Dairy, Inc. recently approved by the Council. The form Agreement has been transmitted to
the School District for review. Council approval will authorize the City Administrator to execute the
Agreement on behalf of the City and authorize City Staff to make changes in the Agreement in response to
School District input.
The purchase price for the property is $20,000.00, as previously authorized by the City Council. There is an
existing City well on the property so the City will provide the required well disclosure information.
Construction on the new City well next year. The proposed closing date for this transaction is January 31,
2020.
SUPPORTING DOCUMENTS ATTACHED:
• Purchase Agreement
• School District Resolution Declaring Surplus and Sale of Property
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to Approve Purchase Agreement between the City of Otsego and Independent School District No.
728, to approve $20,000.00 payment to ISD No. 728 for the subject parcel, to approve payment of
applicable closing costs, and to authorize the City Administrator to execute the Purchase Agreement.
BUDGET INFORMATION
FUNDING: ' BUDGETED:
Fund #601— Water Utility Yes
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is effective as of the day of ,
2019, by and between INDEPENDENT SCHOOL DISTRICT NO. 728, a political subdivision of
the State of Minnesota corporation, 11500 193rd Avenue NW, Elk River, Minnesota, 55330
("Seller"), and CITY OF OTSEGO, a Minnesota municipal corporation, 13400 90th Street NE,
Otsego, Minnesota, 55330 ("Purchaser").
RECITALS:
A Seller is the owner of property identified as Parcel ID No. ---------- located in the City of
Otsego, County of Wright, State of Minnesota, a portion of that property to be conveyed is
legally described in Exhibit A attached hereto and made a part hereof (the "Property").
B. Seller desires to convey the Property thereon to Purchaser and Purchaser is desirous of
purchasing the Property.
C. Purchaser desires the property for the purpose of constructing and maintaining a Municipal
Well.
D. Purchaser shall have the Property properly subdivided prior to closing.
AGREEMENT:
In consideration of the mutual covenants and agreements herein contained and other
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. OFFER/ACCEPTANCE. Subject to compliance with the terms, covenants and conditions
of this Purchase Agreement, Seller shall convey the Property to the Purchaser.
2. PRICE AND TERMS. The price for the Property included under this Purchase
Agreement is Twenty Thousand and 00/100 Dollars ($20,000.00) which amount shall be paid in
cash at closing.
3. DEED/MARKETABLE TITLE. Upon performance by Purchaser, Seller shall execute
and deliver a Warranty Deed, conveying good and marketable title of record, subject to the
following Permitted Encumbrances:
A. Reservations of minerals or mineral rights by the State of Minnesota, if any;
B. Building and zoning laws, ordinances, state and federal regulations;
C. The lien of real property taxes and the lien of special assessments and interest due
thereon, if any, payable in the year of closing which by the terms of this Purchase
Agreement are to be paid or assumed by the Purchaser; and
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4. REAL ESTATE TAXES AND SPECIAL ASSESSMENTS.
A. Prior Years' Delinquent Real Estate Taxes and Delinquent Special Assessments.
Delinquent real estate taxes payable in years prior to the year of Closing and
delinquent installments of special assessments certified for collection with real
estate taxes payable in years prior to the year of Closing, together with penalty,
interest and costs, shall be paid by Seller not later than the Date of Closing.
B. Real Estate Taxes Payable in the Year of Closing. Real estate taxes payable in the
year of Closing shall be prorated between Seller and Purchaser on a calendar year
basis to the Date of Closing. Purchaser shall assume installments not paid at
Closing. Seller shall pay penalty, interest and costs on any delinquent installment
of taxes and special assessments payable by Seller in the year of Closing.
C. Certified Special Assessments. All installments of special assessments certified
for payment with the real estate taxes payable in the year of Closing shall be paid
by Purchaser at Closing.
D. Pending Special Assessments. Seller shall provide for payment of special
assessments pending as of the date of this Purchase Agreement for improvements
that have been ordered by the City Council or other governmental authorities.
Seller's provision for payment shall be by payment into escrow of 1.5 times the
estimated amount of the assessments. If a special assessment becomes pending
after the date of this Purchase Agreement and before the Date of Closing,
Purchaser may, at Purchaser's option:
(1) Assume payment of the pending special assessment without adjustment to
the purchase price of the real property; or
(2) Require Seller to pay the pending special assessment (or escrow for
payment of same as provided above) and Purchaser shall pay a
commensurate increase in the purchase price of the real property, which
increase shall be the same as the estimated amount of the assessment; or
(3) Rescind this Agreement, in which case all Earnest Money shall be
refunded to Purchaser.
E. All Other Levied Special Assessments. Seller shall pay on the Date of Closing all
other special assessments levied as of the date of this Purchase Agreement.
5. SELLER'S LIEN WARRANTIES. Seller warrants that there has been no labor or
material furnished to the Property for Seller for which payment has not been made.
6. ACCESS PRIOR TO CLOSING. Upon reasonable notice to Seller, Purchaser and
Purchaser's authorized agents shall have the right during the period from the date of this
Agreement to the Date of Closing to enter in and upon the Property in order to make, at
Purchaser's expense, surveys, measurements, soil tests and other tests that Purchaser shall deem
r
necessary. Purchaser agrees to restore any resulting damage to the Property and to indemnify, hold
harmless and defend Seller from any and all claims by third persons of any nature whatsoever
arising from Purchaser's right of entry hereunder, including all actions, proceedings, demands,
assessments, costs, expenses and attorneys' fees.
7. POSSESSION. Seller shall deliver possession of the Property not later than the actual
date of closing.
8. TITLE INSURANCE. Purchaser shall be responsible for obtaining title evidence and
reviewing title to the Property. Purchaser shall be allowed twenty (20) business days after the
receipt of the title commitment for examination of title and making any objections, which shall be
made in writing or deemed waived.
9. TITLE CORRECTIONS AND REMEDIES. Seller shall have 120 days from receipt of
Purchaser's written title objections to make title marketable. Upon receipt of Purchaser's title
objections, Seller shall, within ten (10) business days, notify Purchaser of Seller's intention to make
title marketable within the 120 day period. Liens or encumbrances for liquidated amounts which
can be released by payment or escrow from proceeds of closing shall not delay the closing. Cure
of the defects by Seller shall be reasonable, diligent, and prompt. Pending correction of title, all
payments required herein and the closing shall be postponed.
If any objection is so made, Seller shall have ten (10) business days fiom receipt of Purchaser's
written title objections to notify Purchaser of Seller's intention to make title marketable within one
hundred twenty (120) days from Seller's receipt of such written objection. If notice is given,
payments hereunder required shall be postponed pending correction of title, but upon correction of
title and within ten (10) days after written notice to Purchaser, the parties shall perform this
Agreement according to its terms. If no such notice is given or if notice is given but title is not
corrected within the time provided for, the Purchaser (at Purchaser's option) shall have the right to
terminate this Agreement.
10. NOTICES. All notices required herein shall be in writing and delivered personally or
mailed to the address for each party as shown above and if mailed, are effective as of the date of
mailing.
11. MINNESOTA LAW. This contract shall be governed by the laws of the State of
Minnesota.
12. WELL DISCLOSURE. [Check one of the following.]
Seller certifies that Seller does not know of any wells on the Property.
X Wells on the Property are disclosed by Seller on the attached Well Disclosure form.
13. DISCLOSURE OF INDIVIDUAL ON-SITE SEWAGE TREATMENT SYSTEM.
Seller discloses that there are no individual on-site sewage treatment systems on the
Property.
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14. PROTECTED HISTORICAL SITES. [Select either one of the following.]
X Seller represents that Seller does not know if there are historical, native
American, or archeological materials on or in the Property that might be protected
by law.
To Seller's knowledge, the property does not have any American Indian burial
grounds, other human burial grounds, ceremonial earthworks, historical materials,
and/or other archeological sites that are protected by federal or state law.
Purchaser's obligation to close is contingent upon Purchaser determining to
Purchaser's satisfaction that the property does not have any American Indian burial
grounds, other human burial grounds, ceremonial earthworks, historical materials,
and/or other archeological sites that are protected by federal or state law.
15. LEAD PAINT DISCLOSURE. [Check one of the following]
Seller represents that the dwelling was constructed on the real property in 1978 or
later.
Seller represents that the dwelling was constructed on the real property before 1978.
(If such housing is located on the real property, attached and made a part of this
Purchase Agreement is "LEAD PAINT ADDENDUM FOR HOUSING
CONSTRUCTED BEFORE 1978".)
16. METHAMPHETAMINE DISCLOSURE STATEMENT.
[Check one of the following: ]
X To the best of Seller's knowledge, methamphetamine production has not occurred
on the Property.
To the best of Seller's knowledge, methamphetamine production has occurred on
the Property and Seller makes the following disclosure:
A county or local health department or sheriff has not ordered that the Property or some
portion of the Property is prohibited from being occupied or used until it has been assessed
and remediated as provided in the Department of Health's Clandestine Drug Labs General
Clean-up Guidelines.
If such order or orders have been issued complete the following statement:
The above orders issued against the Property [strike one] have / have not been vacated.
If such order has not been issued, state the status of removal and remediation on the
Property: [Use additional sheets, if necessary.]
0
17. CLOSING. The closing (the "Closing") of the purchase and sale contemplated by this
Agreement shall occur at a location designated by Purchaser, and shall occur on or before January
31, 2020 ("Closing Date"). At closing, Seller and Purchaser shall disclose their Federal Tax
Identification Numbers for the purposes of completing state and federal tax forms.
18. CLOSING DOCUMENTS.
A. At the Closing, Seller shall execute and/or deliver to Purchaser the following
(collectively the "Closing Documents"):
(1) Warranty Deed. A Warranty Deed in recordable form and reasonably
satisfactory to Purchaser.
(2) Storage Tanks. If required, an affidavit with respect to storage tanks
pursuant to Minn. Stat. § 116.48.
(3) Well Certificate. If there is a well located on the Property, a well
disclosure certificate in form and substance true to form for recording.
(4) Other Documents. All other documents reasonably determined by either
party or the title insurance company to be necessary to transfer and provide
title insurance for the Property.
B. At the Closing, Purchaser shall pay the Purchase Price and execute and deliver to
Seller the following:
(1) All documents reasonably determined by either party or the title insurance
company to be necessary to provide title insurance for the Property;
19. CLOSING COSTS. The costs relating to the closing of this transaction shall be paid as
follows:
A. Purchaser shall pay:
(1) Recording fee for the Warranty Deed;
(2) The closing fees charged by the Title Company;
(2) All costs of the premium for owner's title insurance;
(3) State deed tax
(4) All costs associated with obtaining a Title Commitment
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20. PURCHASER'S CONTINGENCIES. Purchaser's obligations under this Agreement are
contingent upon Purchaser's satisfaction with each of the following ("Purchaser's Contingencies"):
A. The representations and warranties of Seller set forth in this Agreement must be
true as of the date of this Agreement and on the Closing Date.
B. Purchaser determining on or before the Closing Date, that it is satisfied, in its sole
discretion, with the results of matters disclosed by any Phase I Environmental Audit
or by any additional environmental/engineering investigation or testing of the
Property performed by Purchaser or Purchaser's agent. By executing this
Agreement, Seller hereby authorizes Purchaser to enter upon the Property at
reasonable times to conduct the investigations and/or tests described herein.
Purchaser shall be solely responsible for all environmental tests and shall hold
Seller harmless from any such costs and shall indemnify Seller for breach of this
provision including reasonable attorneys' fees.
C. Purchaser determining that it is satisfied with the title to the Property.
If the Purchaser's Contingencies have not been satisfied on or before the Closing Date, then
Purchaser may, at Purchaser's option, extend the Closing Date in order to satisfy the
Purchaser's Contingencies or terminate this Agreement by giving notice to Seller on or
before the Closing Date. The contingencies set forth in this section are for the sole and
exclusive benefit of Purchaser, and Purchaser shall have the right to waive the
contingencies by giving notice to Seller.
21. SELLERS'S CONTINGENCIES. Sellers's obligations under this Agreement are contingent
upon Sellers's satisfaction with each of the following ("Sellers's Contingencies"):
A. This Agreement is contingent upon Seller having marketable title to the Property,
and Purchaser legally subdividing the property prior to Closing.
If the Seller's Contingencies have not been satisfied on or before the Closing Date, then
Seller may, at Seller's option, extend the Closing Date in order to satisfy the Seller's
Contingencies or terminate this Agreement by giving notice to Purchaser on or before the
Closing Date.
22. TIME IS OF THE ESSENCE. Time is of the essence for all provisions of this Purchase
Agreement.
BUYER:
CITY OF OTSEGO
LOW
Adam Flaherty, City Administrator
0
Dated: , 2019
SELLER:
INDEPENDENT SCHOOL DISTRICT NO. 728
By: Dated: , 2019
EXHIBIT A
TO
PURCHASE AGREEMENT
CERTIFICATION OF MINUTES RELATING
TO
DECLARATION OF SURPLUS AND SALE OF PROPERTY
ISSUER: INDEPENDENT SCHOOL DISTRICT NO. 728
(ELK RIVER AREA SCHOOLS)
ELK RIVER, MINNESOTA
BODY: SCHOOL BOARD
KIND, DATE, TIME AND PLACE OF MEETING: A Regular meeting held on October 14,
2019, at 6:00 o'clock p.m., in the District.
MEMBERS PRESENT: Kim Michels, Shane Steinbrecher, Holly Thompson, Christi
Tullbane, Tony Walter, Sara Weis
MEMBERS ABSENT: Joel Nelson
Documents Attached: Extract of Minutes of said meeting.
RESOLUTION RELATING TO THE DECLARATION OF SURPLUS AND SALE OF
20,750 SQUARE FEET OF PROPERTY LOCATED AT 8125 RIVER ROAD NE,
OTSEGO, MN 55330
I, the undersigned, being the duly qualified and acting recording officer of the public
corporation issuing the obligations referred to in the title of this certificate, certify that the
documents attached hereto, as described above, have been carefully compared with the original
records of said corporation in my legal custody, from which they have been transcribed; that
said documents are a correct and complete transcript of the minutes of a meeting of the
governing body of said corporation, and correct and complete copies of all resolutions and
other actions taken and of all documents approved by the governing body at said meeting, so
far as they relate to said obligations; and that said meeting was duly held by the governing
body at the time and place and was attended throughout by the members indicated above,
pursuant to call and notice of such meeting given as required by law.
2019.
WITNESS MY HAND officially as such recording officer this 14th day of October,
INDEPENDENT SCHOOL DISTRICT NO. 728
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Dat
STATE OF MINNESOTA )
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COUNTY OF SHERBURNE }
The foregoing instrument was acknowledged before me this 14kh day of October, 2019, by Tony
Walter, the Clerk of the Independent School District No. 728 (Elk River), Minnesota, an
independent school district of the State of Minnesota, on behalf of said school district.
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EXTRACT OF MINUTES OF A MEETING
OF THE SCHOOL BOARD OF
INDEPENDENT SCHOOL DISTRICT NO. 728
(ELK RIVER AREA SCHOOLS)
STATE OF MINNESOTA
HELD: October 14,200
Pursuant to due call and notice thereof, a regular meeting of the School Board of
Independent School District No. 728, State of Minnesota, was duly held on October 14, 2019,
at 6:00 o'clock p.m., for the purpose, in part, of declaring a 20,750 square foot portion of the
property located at 8125 River Road Northeast Otsego, MN 55330 as surplus and no longer
needed for school purposes and authorizing the sale of said property.
Member Walter introduced the following resolution and moved its adoption:
RESOLUTION RELATING TO THE DECLARATION OF SURPLUS AND SALE OF
20,750 SQUARE FEET OF PROPERTY LOCATED AT 8125 RIVER ROAD NE,
OTSEGO, MN 55330
BE IT RESOLVED by the School Board of Independent School District No. 728,
State of Minnesota, as follows:
The Board, has determined that a 20,750 Square Foot portion of the property located at
8125 River Road NE Otsego, MN 55330 with the following legal description:
Sect -22 Twp -121 Range -023 UNPLATTED LAND OTSEGO2 46.69 AC S 1/2 OF SE 1/4 EX
BEG NW COR OF SW'/4 OF SE '/4 TH E ALG N LN 28FT TH SWLY 40 FT M/L TO PT ON
WLN28FTSOFPOB THNALG WLN28FTTOPOB EXTHPRT OFS'/20FSE1/ODES
BEG AT PT ON S LN 826.72 FT W OF SE COR OF SE 1/4 TH E ALG S LN 472.67 FT TH
N45D53'42" 135.98 FT TO CTR LN OF HWY 36 TH N44D06'18"W ALG SD CTR LN
427.26 FT TH S39D19'52" W 258.65 FT TH S28D25'44" W 228.98 FT M/L TO POB EX TH
PRT OF S 1/20F SE 1/4 LY N&E OF CTY RD 130 EX TH PRT TAKEN FOR CTY R/W PLT
#8 EX TH PRT OF S 1/20F SE 1/4 DES COM SW COR OF SD S 1/2 TH E ALG S IN 926.60
FT TH N 881.54 FT TO PT KNOWN AS PTA TH N45D54' 08" E 502.06 FT M/L TO INT/SEC
SWLY LN OF R/W OF CTY HWY 42 SD PT BGN POB TH RET S45D54'08" W TO PT A
TH S44D05'52" E 466.70 FT TH N45D54'08" E 466.70 FT TO INT/SEC HWY R/W TH
N44D05' 52" W ALG SD R/W 246.20 FT TO PT OF CRV ON SD R/W PLT TH CONT ALG
SD R/W BNG TAN CRV CONC TO NE RAD 704.81 FT FOR CTRL AGL 18D 13'33" &
224.20 FT M/L TO POB
is no longer needed for School Purposes, Declared as Surplus, and the Board hereby authorizes
the sale of the above-described property to the City of Otsego.
The motion for the adoption of the foregoing resolution was duly seconded by Member
Thompson, and upon vote being taken thereon, the following voted in favor thereof:
Kim Michels, Shane Steinbrecher, Holly Thompson, Christi Tullbane, Tony Walter, Sara Weis
and the following voted against the same: none
whereupon said resolution was declared duly passed and adopted: