ITEM 3.11 Maintanence Agreement between Duke Realty Limitied Partnership0tSTe F o
MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Legal
Andy MacArthur, City Attorney
February 22, 2016
PRESENTER(s):
REVIEWED BY:
ITEM #:
Consent Agenda
Lori Johnson, City Administrator
3.11
AGENDA ITEM DETAILS
RECOMMENDATION: Staff recommends that the attached Easement and Maintenance Agreement between
the City and Duke be approved.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
No.
No.
BACKGROUND/JUSTIFICATION: Duke is currently selling one of its lots to Wagner for the recently approved
development. Prior to this Duke owned all of the property in the industrial site and thus had not
established recorded agreements regarding use of internal driveways. Duke sent a declaration to the
City's attention and it was pointed out that the City needed easement over the private drives etc. in
order to service municipal utilities and perform work in the ponds. In response, Duke drafted this
agreement providing the City with easement over the internal drives to perform needed work.
Duke intends to have this documented recorded prior to their closing with Wagner which is currently
scheduled for March 4.
SUPPORTING DOCUMENTS: X ATTACHED ❑ NONE
-Agreement
MOTION: (Please word motion as you would like it to appear in the minutes.)
Motion to approve Easement and Maintenance Agreement between Duke Realty Limited Partnership
and the City of Otsego.
BUDGET INFORMATION
FUNDING:
M
ACTION TAKEN
BUDGETED: ❑ YES
❑ APPROVED AS REQUESTED o DENIED ❑ TABLED ❑ OTHER (List changes)
COMMENTS:
This Instrument Prepared by:
Duke Realty Corporation
1301 W. 22nd Street, Suite 800
Oak Brook, IL 60523
Attn: Lisa Starcevich, Esq
After RecordinIz, Return to:
James Karela, National Commercial Services
First American Title Insurance Company
30 N. LaSalle St Suite 2700
Chicago, Illinois 60602
NCS-768486-CHI2
Torrens Property: Certificate of Title Nos. 7005.0, 7006.0, 7007.0, 7008.0
EASEMENT AND MAINTENANCE AGREEMENT
THIS EASEMENT AND MAINTENANCE AGREEMENT made as of this day of
February, 2016 ("Agreement"), by and between the CITY OF OTSEGO, a Minnesota municipal
corporation ("City"), and DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership,
its successors and assigns ("Duke").
RECITALS
WHEREAS, Duke is the fee owner of certain real property located in the City of Otsego,
Wright County, Minnesota (the "City"), which is legally described on Exhibit A, attached hereto and
by this reference made a part hereof (the "Subject Property").
WHEREAS, Duke has entered into various Development Agreements with the City
(collectively, the "Development Agreements") which grant development rights to the Subject Property.
WHEREAS, Duke has constructed, or will construct, certain improvements on portions of the
Subject Property and in the municipal right-of-way dedicated to the City for the common use of the
municipality and for the special benefit of the parcels which comprise the Subject Property.
WHEREAS, in connection, with the development of the Subject Property, the Duke agreed to
grant certain easements over, across, through and under the Subject Property as hereinafter set
forth.
WHEREAS, the parties desire to evidence of record the terms, covenants, and agreements
relating to the maintenance and operation of the municipal improvements by the City and private
improvements by Duke
NOW, THEREFORE, Duke, as the fee owner of the Subject Property, and subject to the terms
and conditions hereinafter stated, does hereby grant to the City for the benefit of the Subject Property,
Duke and its successors and assigns and any of their tenants, invitees, customers, agents, employees,
licensees and guests (collectively the "Duke Parties"), the following:
l . Driveway and Access Easements. Duke does hereby grant to the City a perpetual, non-
exclusive and unobstructed blanket easement on, over, across and through all interior driveways, access
roads, roadways and other paved areas used for ingress and egress now or hereafter existing on the
Subject Property (the "Driveway and Access Easements"), for vehicular and pedestrian ingress and
egress to and from the Subject Property, and in connection with the construction, maintenance, repair
and replacement, if applicable, of municipal improvements located within the Subject Property,
including the easements for drainage and utility purposes, as dedicated and shown on the plat of
Gateway North Fourth Addition, recorded in the office of the Registrar of Titles on October 13, 2015, as
Document No. 31154, and recorded in the office of the County Recorder on October 13, 2015, as
Document No. 1299781, and any subsequent plat recorded in the with the Registrar of Titles or County
Recorder for the Subject Property.
2. Maintenance. Each party will have access to property controlled by the other in order
to carry out its responsibilities under this Agreement.
(a) The City shall:
G) be responsible for ongoing maintenance work, including customary
maintenance, repair and replacement of all municipal improvements and
facilities located within the Subject Property, at its sole cost and
expense, in good condition and repair and in compliance with all
applicable laws, rules, regulations and ordinances;
(ii) clear refuse, debris and sediment from the detention ponds and wetland
areas, including any associated structures, restrictors, and pipes located
on the Subject Property; and
(iii) maintain and repair, as required, damage to or erosion of pond slopes,
structures, and pipes (the "City Maintenance Work").
(b) Notwithstanding the provisions of subparagraph (a) above, in the event Duke (or
its own employees, agents, customers or invitees) damage the municipal improvements and/or facilities
located on the Subject Property by its own negligence or willful act or through any non -customary use,
Duke shall be responsible for repairing said damage at its sole cost and expense. All such repairs shall be
promptly commenced, and diligently completed within thirty (3 0) days of receipt of written demand
therefor, unless a longer period of time is reasonably required for completion due to no fault of the
repairing party.
(c) Duke, its successors and assigns, may engage the services of a property
management company to perform its maintenance work, and shall be responsible for ongoing
maintenance of all private improvements, including customary maintenance, repair and replacement of
(i) all private streets, driveways and alleys within the Subject Property;
(ii) boulevard areas located within the Subject Property or within the
municipal right of way of Queens Avenue immediately adjacent to the
Subject Property;
(iii) all sod and landscaping, mowing, elimination of weeds, and removal of
any garbage and debris from the Subject Property; and
(iv) existing drainage tiles, including resolution of problems related to the
site drainage tiles or on -site drainage facilities located on the Subject
Property (the "Duke Maintenance Work").
Failure to Perform.
(a) The City shall have the right, but not the duty, to perform the Duke Maintenance
Work (except for snow removal), provided that the City gives written notice of the
alleged default and Duke fails to cure such default within fifteen (15) days
thereafter, unless after review and inspection by the City, which inspection shall
occur prior to the expiration of the fifteen (15) day period, Duke and the City
mutually agree and determine that the alleged default does not constitute a breach
of this Agreement.. If the City performs any of the Duke Maintenance Work, Duke
will within thirty (30) days after written demand for payment, reimburse the City
for its costs. If payment is not received, the City may take whatever action,
including legal, equitable, or administrative action. which may appear necessary or
desirable to collect any payments due under this Agreement and shall be entitled
to its attorney's fees, costs and disbursements.
(b) In addition to any other remedy of the City, the City may also assess the costs
incurred by it in performing the Duke Maintenance Work against the benefited properties in
accordance with Minnesota Statutes Chapter 429, et seq. Duke as to the Subject Property waives any
substantive and procedural objections to any such assessments in an amount equal to the reasonable
costs incurred by the City in performing the Duke Maintenance Work. Duke, separate and apart from
this waiver, also agrees that the benefit to the Subject Property is equal to or greater than the
reasonable costs incurred by the City in performing the Duke Maintenance Work.
(c) Duke shall have the right, but not the duty, to perform the City Maintenance
Work, provided that Duke gives written notice of the alleged default and the City fails to cure such
default within fifteen (15) days thereafter, unless after review and inspection by Duke, which
inspection shall occur prior to the expiration of the fifteen (15 day period, the City and Duke mutually
agree and determine that the alleged default does not constitute a breach of this Agreement. If Duke
performs any of the City Maintenance Work, the City will within thirty (30) days after written demand
for payment, reimburse Duke for its costs. If payment is not received, Duke may take whatever action,
including legal, equitable, or administrative action which may appear necessary or desirable to collect
any payments due under this Agreement and shall be entitledto its attorney's fees, costs and
disbursements.
(d) In the event, both Duke and the City fail to perform its Maintenance Work, any
owner of a Lot ('Owner") benefitted by the easements created hereunder shall have the right, but not the
obligation, to perform any maintenance or repair within the easement areas, which Duke, its successors or
assigns, and/or the City are required but fail to perform, including causing the driveways, parking areas
and easement areas of the Subject Property to be maintained in a safe condition, after thirty (30) days
prior notice to Duke and the City, unless after review and inspection by Duke and the City, which review
shall occur prior to the expiration of the thirty (30) day period, it is determined that the alleged default
does not constitute a breach of this Agreement.. If an Owner performs any such neglected maintenance or
repair, the party who was responsible for performing that maintenance or repair, but who failed to do so,
shall be responsible for reimbursing such Owner for all reasonably costs incurred by such Owner,
including, but not limited to, attorneys' fees, within thirty (30) days after demand by such Owner.
4. Agreement is Binding. The action or inaction of any party shall not constitute a waiver
or amendment to the provisions of this Agreement. To be binding, amendments or waivers shall be in
writing, signed by the parties and approved by written resolution of the City Council. Any party's failure
to promptly take legal action to enforce this Agreement after expiration of time in which the work is to be
completed shall not be a waiver or release.
5. AssijZnment of Rights. This Agreement shall run with the land, shall inure to the benefit
of and be binding upon the Duke, the City and their respective legal representatives, heirs, successors and
assigns, and shall be recorded against the title to the Subject Property in the Wright County Recorder's
Office, including the Torrens records. Any transfer of an ownership interest in the Subject Property is an
assignment of the rights and obligations herein to the subsequent Owner and a release of the previous
Owner from any obligations hereunder.
6. Notices. Any notice sent to the parties pursuant to this Agreement shall be in writing and
sent by depositing it with the United States Postal Service or any official successor thereto, certified or
registered mail, return receipt requested, with adequate postage prepaid, addressed to the appropriate
party. Each notice shall be effective upon being so deposited, but the time period in which a response to
any notice must be given or any action taken with respect thereto shall commence to run from the date of
receipt of the notice by the addressed thereof as evidenced by the return receipt. Rejection or other
refusal by the addressed to accept or the inability to deliver because of an incorrect address or a changed
address of which no notice was given of such change of address shall be deemed to be the receipt of the
notice sent. In the event that registered or certified mail service is not being provided by the United States
Postal Service or any of its successors thereto at the time in questions, each notice may then be served by
personal service or sent by regular mail and shall be deemed effective upon receipt. The initial address
for the parties shall be as set forth below:
To Duke: Duke Realty Limited Partnership
c/o Duke Realty Corporation
Attn: Josh Budish
1600 Utica Ave S, Suite 250
Minneapolis, MN 55416
Telephone: (952)543-2926
e-mail: josh.budishAdukereal .com
With a Copy to; Duke Realty Corporation
Attn: Lisa Starcevich
1301 W. 22nd Street, Suite 800
Oak Brook, IL 60523
Telephone: (847) 232-5410
e-mail: lisa.starcevich@,dukerealty.com
To the City: City of Otsego
Otsego City Hall
13400 90`h' Street NE
Otsego, MN 55330
With a Copy to: Andy MacArthur, Esq.
MacArthur Law Office LLC
3601 Thurston Ave N.
Suite 103
Anoka, MN 55303
Telephone: (763) 231-5850
AimacarthurA,g.com
7. Modifications. This Agreement may be amended only by a written instrument executed
by the City and Duke, or its successors and assigns.
8. Counterparts. This Amendment may be executed in multiple counterparts which,
when combined together, shall constitute an original of this Agreement.
9. Governine Law. The laws of the State of Minnesota shall govern this Agreement. Any
provisions of this Agreement which shall prove to be invalid, void or illegal, shall in no way affect,
impair or invalidate any other provisions hereof.
10. Author i . The parties represent and warrant that the persons executing this Agreement
on their behalf are duly authorized officers or agents of such party and have all power and authority
necessary to execute this Agreement.
[Signatures Contained on Following Pages]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed,
effective as of the date fast written above.
STATE OF
SS:
COUNTY OF
1
DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership
By: Duke Realty Corporation,
an Indiana corporation, its general partner
By: _
Name:
Title:
Before me, a Notary Public in and for said County and State, personally appeared
by me known and by me known to be a of Duke
Realty Corporation, an Indiana corporation, the general partner of Duke Realty Limited Partnership, an
Indiana limited partnership, who acknowledged the execution of the foregoing Agreement on behalf of
said corporation and limited partnership.
WITNESS my hand and Notarial Seal this day of February, 2016.
Notary Public
(Printed Signature)
My Commission Expires:
My County of Residence:
CITY:
CITY OF OTSEGO
Vern Heidner, Acting Mayor
Tami Loff, City Clerk
STATE OF )
SS:
COUNTY OF )
Before me, a Notary Public in and for said County and State, personally appeared Vern
Heidner, as Acting Mayor, and Tami Loff, as City Clerk, by me known to be the Acting Mayor
and City Clerk for the City of Otsego, a Minnesota municipal corporation, who both
acknowledged the execution of the foregoing Agreement on behalf of the City of Otsego.
WITNESS my hand and Notarial Seal this day of February, 2016.
My Commission Expires:
My County of Residence:
Notary Public
(Printed Signature)
7
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
[see attached]
Tax Parcel Nos:
118-288-000010 (Outlot A, Fourth Addition — Torrens Certificate No. 7008,0)
118-288-000020 (Outlot B, Fourth Addition - Abstract)
118-288-000030 (Outlot C, Fourth Addition — Torrens Certificate No. 7008.0 )
118-288-000040 (Outlot D, Fourth Addition — Torrens Certificate No. 7008.0 )
118-288-000050 (Outlot E, Fourth Addition — Torrens Certificate No. 7008.0 )
118-277-001010 (Lot 1, Block 1, Third Addition - Abstract)
118-288-001010 (Lot 1, Block 1, Fourth Addition — Torrens Certificate No. 7005.0)
118-288-001020 (Lot 2, Block 1, Fourth Addition — Torrens Certificate No. 7006.0)
118-288-001030 (Lot 3, Block 1, Fourth Addition — Torrens Certificate No. 7007.0)
118-256-001010 (Lot 1, Block 1, Second Addition - Abstract)
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