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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) R r m G) D r p G m rr' I (nG)m� n°*rn az�� Z zm z O°=� a m -IAaR[tafi k—f9909Md-XS-.Al990609DGieT.AAEA-QA9POSIlE.drva Wc�OZ LoWO- I• -�cOwi H )C o :NO�sm'+" :�o.W,' o 0 0 Gil X 0l C 'n C GI -pi�C -Oi.0 -i F0 -pi.0 +ii D � -pw C 7C OlaCw j' H � 3 � � N =• Ni N N ti`i T` N S Otl F' V1 S OC F' 41 d rn �� m ;� rn v rD r� v�2 rD v�`c rp rt�G� v3� vfD-- vt�D v0-4 v((nb��D �• -DG O� .DG o f O -DG O j{ O C mC p C T p c mL N 0c�D^I p c C m O C mC ,0 Z o N Z �o f�0 Z o m Z L°o N ry 2 o 3o,o-< N ry C Nn R C < C C (Do G Qomort�o�o� 01 = 4) Gl = N Ol N Ol N Ol N C) Z (/1 _� Z N Z N Z N z TO oo N O w w O N O N. 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