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9a & b. Approval of Draft Purchase Agreement & Draft Loan Agreement for Lakeview Hills Property within 212 Corridor, RALF Funds CITY OF CHAHHASSEH 9UTb. . 690 COULTER DRIVE. P.O. BOX 147. CHANHASSEN, MINNESOTA 55317 (612) 937-1900. FAX (612) 937-5739 Action by City Administrator TO: Don Ashworth, City Manager Endorssd v" ~-L Modified Rejected Date..-~ -5 - ~ '1 Date Submitted to CommissiOI1 MEMORANDUM FROM: Bob Generous, Senior Planner - Date Submitted to Council :3 -/() -f7 DATE: February 25, 1997 SUBJ: Purchase Agreement, Lakeview Hills Property (Highway 212 Corridor) Loan Agreement BACKGROUND In December, 1995, the City Council passed a resolution authorizing staff to submit applications to the Metropolitan Council for Right-of-Way Acquisition Loan Fund (RALF) moneys to purchase the Lakeview Hills property within the Highway 212 corridor. The Metropolitan Council has established a revolving loan fund to assist local governments in purchasing right-of-ways within the state trunk highway system in advance of the actual construction of these highways. These loans bear no interest and are repaid at the time that the state highway department purchases the property from the local government. The repurchase price is the same price established at the time of the purchase of the property by the local government. DISCUSSION The property is located on the south side of Rice Marsh Lake on the eastern city limits of Chanhassen. The total area to be acquired consists of approximately 26.5 acres of which about 16.5 acres are developable and 10 acres are marsh land and lake. The property includes the actual right-of-way for Highway 212 (consisting of5.15 acres) and property north of the highway that will be severed by the highway and thus lose its economic value (consisting of approximately 11 acres of developable land and 10 acres of wetland and lake). This additional property is designated as parks and open space in the City's 2000 Land Use Plan. In 1996, the City purchased the property immediately to the west of this property through the RALF program. The purchase price for that property was $400,000. The parcel consisted of approximately 6.2 acres of right-of-way, 9 acres of severed upland, and 14 acres of wetland and Don Ashworth, City Manager February 25, 1997 Lakeview Hills Property (Highway 212 Corridor) Page 2 lake. The purchase price represented approximately $25,000 per acre for upland and $1,500 per acre for wetland. This property was zoned R12, High Density Residential, the same as the Lakeview Hills property. The Minnesota Department of Transportation (MNDOT), through an agreement with the city, has taken the lead in establishing a purchase price for the property. MNDOT had originally certified an appraisal of the property based on a value of $1,150,000.00. MNDOT has negotiated a purchase price for the property that includes acquisition of 16.5 acres of upland ($1,316,000), 10 acres of wetland ($100,000), damages for the abandonment of the well and connection to the city water ($290,000), and damages to the remnant property south of the highway corridor and north of the apartments ($179,000). MNDOT has approved an administrative settlement and negotiated a purchase price of $1 ,885,000.00. Staff is concerned that the purchase price for this property will set a precedence for land prices in the city, if, in the future, the city needs to acquire property that is guided for high density residential. The city recently acquired property for the Lyman Boulevard upgrade at approximately $30,000 per acre. This property was guided mixed use: high density residential and commercial. In 1996, the city acquired the Rottlund property west of the Lakeview Hills parcel for approximately $25,000 per acre. The proposed purchase amount for this property is $80,000 per acre. One of the buyer contingencies within the purchase agreement is that the Metropolitan Council approve an unconditional commitment acceptable to the city to finance the,purchase of this property. Staff is requesting approval of the loan request to the Metropolitan Council and authorization to execute the agreement when approved by the Metropolitan Council. The estimated loan amount is $1,894,000.00 including the purchase price of$I,885,000.00 and estimated administrative costs of $9,000.00 (legal fees, title search, closing costs, prorated share of taxes, environmental audit and insurance). RECOMMENDATION Staff recommends that the City Council approve the following motion: "The City Council authorizes the Mayor and City Manager to execute the purchase agreement with Lakeview Hills for purchase of property within the Highway 212 corridor and approve the loan request to the Metropolitan Council and authorize a Phase I Environmental Audit." Don Ashworth, City Manager February 25, 1997 Lakeview Hills Property (Highway 212 Corridor) Page 3 Attachments: 1. Property Location Map 2. Property Legal Description 3. Parcel Map 4. Appraisal Certification 5. Administrative Settlement dated 1/24/97 6. Revision to the Administrative Settlement dated 2/21/97 7. Real Estate Purchase Agreement 8. Loan Agreement g: 'plan'bgIRalfl ~ .--.- I' c .~~ EO I F~"'1J-4llil ~ *fi ~~ LJ~ ~ r. t;~U ~ Ic..~ W 78TH 5T ~ [;:/j iif;~r:. . . ',' .' . ; . -,.; .... .... 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IIle ffQIlC n !fag,.. s.c 1.67 feet '"-st Of Notthe&sl Ouartw ( Th81 part III Ill. ~o "6. ~1lQe Z3 .... :~,,,~~1 01 S<<Iion 2~. To Quaner af Seaion t . '-ct West af , me Ouan., 1l111le TATE OF MINNESOTA RBAN PROPERTY REVIEW ANALYSIS DEPARTMENT OF TRANSPORTATION PARTIAL TAKING .P. 1017 (212=12) 902 COUNTY Carver AREA & JOB NO. 58080 PAR.~ EE OWNER Lakeview Hills Inv. Co. PROPERTY ADDRESS 8800 Lk. Rilev Blvd.. Chanhassen. Minnesota .ppraisals by: ---------------------------------------------------------------------------- Terrence Johnson 7/18/96 Richard Marks 10/3/96 "ALUE BEFORE TAKING ($8,100/unit) land Value 20.1 ac/$64.478 $1.225.000 ~tland 10.0 ac/ 4.000 40.000 :mprovements Well house & 2 wells landscaping $ $ 90.000 TOTAL 30.1 ac. $ 1.355.000 ac/ sf/ $ $ $ $ - - - - - - - - - - - - - - - ------ - - - ---- - - - - - --- - --- - - - - - - - ---------- ---- --- -- - - --- - ---- rALUE AFTER TAKING Jand Value 4.3 ac/ sf/ (emaining [mprovements :"andscaping $ 205.000 $ $ ac/ sf/ $ $ $ TOTAL $ 205.000 $ ----------------------------------------------------------------------------- rOTAL DAMAGE $ 1.150.000 $ ----------------------------------------------------------------------------- ~TERNATE COMPUTATION Land Taken 15.8 ac/$64.478 10.0 ac/ 4.000 Improvements Taken Well house & wells Landscaping Severance Access Other $1.020.000 40.000 $ 90.000 $ $ $ $ $ 1. 150.000.00 TOTAL DAMAGE TOTAL TAKING Subdivision Analysis - DCF Gross Sales-44 Expenses Cash Flow Present Value Discount - 11% Absorption-33 lots$ 4.638.000 2.625.567 2.012.433 $ 1. 649 . 846 months ----------------------------------------------------------------------------- $ 1. 650.000.00 The recommended estimate of market value as of October 3. 1996, unencumbered, is $/,/5-('! 00(1,00. Value or damage estimate certified by: Appraisal Supervisor 2:t.f~ 0 C~~~ R' iew Appraiser -- Date /0 - / ,f' - 96" Parcel~ REVIEW APPRAISERS CERTIFICATION I CERTIFY THAT TO THE BEST OF MY KNOWLEDGE AND BELIEF: the facts and data reported by the review appraiser and used in the review process are true and correct. the analyses, opinions, and conclusions in this review report are limited only by the assumptions and limiting conditions stated in this review report, and are my personal, unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and I have no personal interest or bias with respect to the parties involved. my compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this review report. my analyses, opinions, and conclusions were developed and this review report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice. I personally inspected the subject property of the report under review 5-30-96 . I also visually inspected the applicable comparable sales, and made further investigation when considered necessary. no one provided significant professional assistance to the person signing this review report. The appraisal(s) meet(s) the requirements of the Uniform Standards of Professional Appraisal Practice and the Appraisal Specifications of the Minnesota Department of Transportation, unless noted in the review comments. ~a.~~ Review Appraiser Date /0 -/8'- Y'1f.; Certified Appraisal of $/./:>'0 ()C)O. 0 () , , /~m.?ts.t-<!.4- Director of Right of Way and Surveys REVIEW COMMENTS: Subject site is a rectangular shaped piece of vacant land which extends south from Rice Marsh Lake with a width of 660 feet and a length of 1,939 feet containing 30.1 acres. The north 10 acres are in the lake with an elevation at that point of about 874 feet with the topography rising to the south to 925 feet which is the approximate center of 9.5 acres of upland. The terrain then slopes downward to a general elevation of 908 feet on the southern half of the property. The north half is heavily wooded with hard and soft wood trees and the south half is open with scattered trees and a ground cover of bushes and grass. Rice Marsh Lake is an environmental lake not a recreational lake. The only improvement is a 32 foot by 16 foot concrete block building which houses two 470 foot deep wells and two pumps. It serves the Lakeview Hills Apartment building which is adjacent to the ;outh of the subject and has the same owners. The apartment building is not )art of this parcel and was not appraised. City sewer and water are available :0 the south from Lake Riley Boulevard through the apartment complex. rhe zoning is R 12, Residential High Density which permits townhouses, two- :amily dwellings and multi-family. The Comprehensive Guide Plan also ;pecifies high density residential development. ~he appraisers have submitted dissimilar values with Mr. Johnson at ;1,650,000 and Mr. Marks at $1,150,000. The principle reasqn is the highest md best use with Mr. Marks values based on a multi-housing use which :omplies with the zoning and Guide Plan. In addition Robert Generous Senior )lanner at the City of Chanhassen stated it is unlikely the planning :omrnission or city council would approve a change in zoning to single family ~esidential. A. compelling reason is the city of Chanhassen made a commitment :0 participate in affordable housing under the Livable Communities Act {herein a municipality would be eligible to receive grants and loans from the 1etro Livable Communities Fund or polluted site clean-up funds from the 1innesota Department of Trade and Economic Development. Chanhassen has a .imited amount of high density zoned land for this commitment and hundreds of icres designated for single family residential so a decrease in supply is lighly unlikely. The owners also approached the City in 1989 and requested ipproval on a concept plan for multi-family units on the subject but were :urned down because of the Th 212 Project. 1r. Johnson did a subdivision analysis with information supplied by RLK ~ssociates -architects and planners who did a Single Family Subdivision Land Jse Analysis report. This was supplied to the owner's appraiser Pete LaSalle ind Mr. Johnson and Mr. Marks. The report also cited the Shoreland Management )verlay zoning on the subj ect property as a reason for not using a high iensity use. This zoning has constraints of one sort or another on both high md low density but does not prohibit either. For the reasons above Mr. ~ark's considered the report but did not use it. Mr. Johnson used the RLK :eport with a zoning change from High Density Residential to Single Family ~esidential with 6 lakeshore lots at $162,000, 13 golf view lots at $120,000 ind 17 interior lots at $90,000 and 8 south lots at $72,000. The gross sales Less expenses were discounted over 33 months at 11 % for total damages of ?1,650,000. It should be noted he did not allocate any damages for the well 10use in the acquisition as Mr. Mark's did. ~r. Mark's value on high density land was based on 8 units per acre x 20 lsable acres =160 units x $8,100 per unit = $1,296,000 less cost to extend ltilities to the site of $71,400 = $1,225,000. The 10 acres of wetland was valued at $4,000 per acre for a total of $40,000 for a total land value of ?1,305,000 plus the cost of the well house and pumps depreciated value per ~arshall Swift of $90,000 = $1,355,000 total before value. The after value ~as based on 8 units per acre x 4.3 acres = 34 remaining units at $8,100 per lnit = $275,000 less cost to extend utilities to the site of $71,400 =$205,000 R. Mr. Johnson was of the opinion that the 4.3 acre remainder should be purchased because it was an uneconomic remainder while Mr. Mark's Jpinion was it had value as a site or assembled to the adjacent southerly 10 lcres that has the apartment unit on it. This remainder accounts for ldditional differences between the appraisers. In my opinion Mr. Mark's estimated value is reasonable and recommended fc~ :ertification. ~ t(t) -.. ....... ~. - - Minnesota Department of Transportation Office of Traffic Engineering Mail Stop 725 1500 West County Road 82, Suite 250 Roseville, MN 55113 F -:-.., 11 .~ ~"'\ .-- _....J ,.,J ) j 1'.7 IvoJ _I, . ...... ,,-, , , --.. _ 1 February 21, 1997 612-582-1041 Mr. Robert Generous Senior Planner City of Chanhassen 690 Coulter Drive P.O. Box 147 Chanhassen, Minnesota 55317 SUBJ: S.P. 1017 (212=12) 902 Parcel 74 - Lakeview Hills Investment Company At 8800 Lake Riley Blvd. In Chanhassen RALF Acquisition Revision to Administrative Settlement Dear Mr. Generous: This letter provides clarification to the January 24, 1997 correspondence I addressed to you concerning the administrative settlement reached on the above captioned parcel. Based on your review of the terms of that agreement, there were flaws in the composition of the proposal. After further discussion of the facts disclosed at the December 19, 1996 meeting held with Steve Liefschultz and Len Levine with those individuals on February 19th, I will reconstruct the package and recommend the earlier agreed upon compensation of$I,885,000. At the December 19th meeting, we discussed two potential development scenarios, establishing land value at either $6,000 per unit at a density of 12 units per acre or $5,000 per unit at a density of 16 units per acre. Mr. Liefschultz reminded me of the written commitment made by Mark O. Senn of the City of Chanhassen allowing 16 units per acre, so we started with the assumption of $80,000 per acre of developable property. At 16.45 acres ofland being acquired, the base line figure is $1,316,000. To this base, we added the $100,000 fur the ten acres of wetland acquired, plus $290,000 for the water line related damages (including the sealing of the well, construction of the new water line and the various connection charges). The final component of the transaction deals with the severance sustained by the 4.3 acre remnant being retained by the owner. At $80,000 per acre, this tract had an indicated before value of$344,000. The appraisers had opinions of after value ranging from $150,000 to $205,000, resulting in severance damages of $139,000 to $194,000. To resolve the issue, I offered to split the difference, which resulted in an offer of$166,500. Using that figure, the gross settlement would have been $1,872,500. As I indicated in my January 24th letter, Mr. Liefschultz was unwilling to accept that offer, pointing to numbers in excess of$2 million. Due to the deteriorating health of some of the partners in the corporation as well as the desire to avoid litigation if possible, we did reach a settlement of - - ~-=u2i -::ccC""...I :it\/ 2lrrlO!() ,::-P" Mr. Robert Generous February 21, 1997 Page two $1,885,000 on January 16, 1997. There is no doubt that the increase of$12,500 beyond the offer would be easily absorbed in court costs as well as interest payments and the potential for an award in excess of the agreed upon figure. In conclusion, I stand behind the tenns of the original settlement and hope that this letter corrects the mathematical and conceptual errors contained in the original recommendation. Sincerely, it&' /B.UlUfI$~- _ Karl F. Rasmussen, Director Office of Traffic Engineering cc: L.W. Levine - LWL and Associates t(i\ ~OFJ1 Minnesota Department of Transportation Office of Traffic Engineering Mail Stop 725 1500 West County Road B2, Suite 250 Roseville. MN 55113 t'\ ,.. , . - ~'I . , J. ,.; :..; .~ (~r.#'J -.", :...." 0"...0" ...._ _I' January 24, 1997 612-582-1041 Mr. Robert Generous Senior Planner City of Chanhassen 690 Coulter Drive P.O. Box 147 Chanhassen, Minnesota 55317 SUBJ: S.P. 1017 (212=12) 902 Parcel 74 - Lakeview Hills Investment Company At 8800 Lake Riley Blvd. In Chanhassen RALF Acquisition Administrative Settlement Dear Mr. Generous: This letter is in follow-up to our recent telephone conversation concerning the proposed RALF acquisition of the above cited parcel for the future construction of Trunk Highway 212 through Chanhassen. As you recall, three appraisals were prepared to estimate the fair market value of the proposed taking, Richard Marks (certified) at $1.15 million, Terrence Johnson at $1.65 million and Pete LaSalle at $2.115 million. In addition to these findings, the owners presented additional information which resulted in a damage figure of $2,617,800. Due to the extreme variation of valuation methodologies employed in this taking, I met with Steven Liefschultz and his representative, Len Levine, on several occasions, in an effort to reach a solution which would avoid the initiation of an eminent domain action. This was a desired outcome due to the advanced age and declining health of two of the partners in the investment company. I have continued this communication subsequent to my assignment to the Office of Traffic Engineering in late December. Two of the key issues which surfaced during negotiations were the development density which the City would allow on the subject, as well as the application of comparable sales which were not directly related to the proposed use of the property. There was considerable debate over whether the City would allow 249 or 332 units to be built on the subject, with the agreement made that 249 was the most likely alternative. After considerable discussion, we agreed that a land value of $6,000 per building unit would best reflect the current market conditions (a similar development in Woodbury has been constructed at this price). Once this core issue was resolved, it was necessary to address the land value of the wetlands being acquired as well as the severance damage attributable to the remnant being retained by Lakeview Hills Investment. Based on recent Mn/DOT experience, I proposed a value of $100,000 for the wetland area being acquired, with $150,000 in damages sustained by the remnant. Based on these assumptions, I proposed a settlement of $1,744,000 to consummate the transaction. Mr. Liefschultz was unwilling to accept that figure, citing Mr. Robert Generous January 24, 1997 Page two other damages and costs outlined in his original statement. He countered with a number slightly in excess of$2 million and after recognition of the mutual desire to close the transaction immediately, an agreed upon figure of$I,885,000 was reached on January 16, 1997. In view of the documentation which Mr. Liefschultz furnished during the series of meetings, I felt comfortable with the $1.744 million figure established above. However, it is my opinion that the compromise settlement of$I,885,000 is in the vicinity ofa probable commission award. Acceptance of this figure by the City negates the need for the filing of an eminent domain action, compensation of fees and professional expenses as well as potential interest costs and the like. I recommend to the City of Chanhassen that the transaction be consummated at the recommended total compensation of$I,885,OOO. Sincerely, J9:!I! Karl F. Rasmussen, Director Office of Traffic Engineering cc: L.W. Levine - LWL and Associates bcc: M.H. Linzie - MS 630 G.E. Lober I A.E. Ridell- MS 630 K.O. Slater I D.K. Pearson - Waters Edge M.F. Strapp I J.A. Callahan - MS 633 112:25:9i TUE 09:50 FAX 612 452 5550 C K S & F +.H CHANHASSEN l4J llll: REAL ESTATE PURCHASE AGREEMENT THIS AGREEMENT (the II Agreement") made and entered into this day of , 1997 by and between the CITY OF CHANHASSEN, a municipal cOIporation under the laws of the State of Minnesota, with offices at 690 Coulter Drive, Chanhassen, Minnesota 55317 (referred to herein as the IIBuyer"), and LAKEVIEW HILLS LLC, a Minnesota corporation, with offices at and its successors, or assigns (the "Seller"). In consideration of the mutual covenants and agreements herein, the receipt and sufficiency of which are hereby acknowledged, it is hereby mutually agreed by Seller and Buyer as follows: SECTION 1. SALE AND PURCHASE OF LAND 1.1) Seller shall sell to Buyer and Buyer shall purchase from Seller, upon the terms and conditions hereof, the following property (all COllectively referred to as the "Subject Property"): 1.1.1) The land in Carver County, Chanhassen, Minnesota, legally described on Exhibit "A" to be attached hereto and incorporated herein, together with all right, title, and interest in and to any roads or alleys adjoining or servicing such land, rights of way, or easements appurtenant thereto, and in and to any ditch, water, or riparian rights and claims appurtenant thereto (the " Land It); 1.1.2) Any improvements located on the Land. 1.1.3) All rents, leases, contract rights, causes of action, permits, licenses, and other rights relating to the Land and Improvements (the "Contract Rights"); and 47209 R2/25/97 02:25:9i TUE 09:50 FAX 612 452 5550 C K S & F -H... CHANHASSEN I4l nll3 SECTION 2. PURCHASE PRICE 2.1) The purchase price for the Subject Property (the "Purchase Pricet,) shall be One Million Eight Hundred and Eighty-five Thousand Dollars ($1,885,000.00) and shall be payable by Buyer to Seller as follows: 2.1.1) One Million Eight Hundred and Eighty~five Thousand Dollars ($1,885,000.00) by cash or wire transfer on the date of Closing. 2.1.2) Buyer shall withhold the sum of Thirty-four Thousand Four Hundred Forty and 00/100 Dollars ($34.440.00) ("Withheld Amount") from Seller until such time that Seller has completed and paid for removal (capping and sealing) of the wells located on the Subject Property in accordance with applicable laws and regulations pertaining to capping and sealing of wells. Buyer shall be under no obligation to pay for any interest which may accrue on the Withheld Amount. Upon verification of the completion of the removal of the wells as required under Section 4.5 of this Agreement, Buyer shall release the Withheld Amount to Seller. SECTION 3. TITLE MATTERS 3.1) Seller, at its own expense, shall furnish to Buyer within five (5) days hereof a current commitment for the issuance of a 1987/1990 ALTA Fonn B owner's policy of title insurance (the "Commitment") issued by Commercial Partners Title CTitle") in the amount of One Million Eight Hundred and Eighty-five Thousand Dollars ($1.885,000.00), committing to insure that Buyer will have good and marketable title to the Subject Property, free of any exceptions to title, except matters to which Buyer may consent in writing. 3.2) In the event any exceptions indicating title to the Subject Property is umnarketable are listed in the Commitment for title insurance, then Buyer shall object to the exception, in writing, within ten (10) days after receiving the Commitment, or the exception shall be deemed waived and accepted by Buyer. If the Seller fails to remove the same within 47209 R2/25/97 2 02:25:9i TUE 09:51 FAX 612 452 5550 C K S & F ...-H CHANHASSE~ l4J ()O~ the time allowed for closing on the SUbject Property, the Buyer (at Buyer's option) shall have the right to: (a) tenninate this Agreement; or (b) waive the objection and proceed to close pursuant to this Agreement. Any exceptions waived or accepted by Buyer shall be deemed "Permitted Encumbrances. I. 3.3) Seller, at its own expense, shall also furnish to Buyer, within fifteen (15) days hereof: 3.3.1) Survey of the SUbject Property prepared by a duly licensed land surveyor in the State of Minnesota certified to Buyer and the Title Company showing the boundaries of the Subject Property and the location of any rights- of way, encumbrances, encroachments, easements, and access and utilities serving or affecting the Subject Property. 3.3.2) All environmental assessments, audits or studies and all soil tests and reports now in Seller's possession or under Seller's control with respect to the Subject Property. 3.3.3) Copies of all documents affecting title to the Subject Property. 3.4) Buyer shall have thirty (30) days after receipt of the items specified in 3.3 above, to review the above items and object in writing and if no objections are made. the Buyers rights hereunder shall be waived. If the Buyer objects to any of the items in Section 3.3 above, Seller shall have sixty (60) days from the date that Seller receives notice of any objections to the condition of the SUbject Property under this Section 3.4 to correct such objections of Buyer. If Seller is unwilling to correct any of the objections of the Buyer to the condition of the Subject Property or is unable to correct the condition of the Subject Property, then Buyers exclusive rights shall be (i) either accept the Subject Property subject to the condition, or (ii) elect to terminate this Agreement. 47209 R2/2S/97 3 1I2.'25.'97 TUE 09:51 FAX 612 452 5550 C K S & F ",,-H CHANHASSEN 141 1I11 5 SECTION 4. CLOSING 4.1) The closing (the "Closing") shall be at a location designated by Buyer, and shall occur within thirty (30) days after the removal of the Buyer Contingencies described in Section 7.1 (the "Closing Date"). 4.2} On the Closing Date, Seller shall use Seller's best efforts to deliver to Buyer possession of the Subject Property vacant and free of any and all debris (including, but not limited to, trash, garbage, rubbish, personal property) and all other personalty not included in the sale of the Subject Property. Until possession is delivered to Buyer, Seller shall keep and maintain the Subject Property in a neat and orderly condition and shall not alter or damage any part thereof. Seller shall not remove any dirt, trees, shrubs, or other natural growth, except as to keep the Subject Property in a neat and orderly condition. 4.3) Seller shall execute and deliver to Buyer: 4.3.1) At the Closing, a duly executed warranty deed free from exceptions except those specifically set forth in the Commitment which are acceptable to Buyer under the tenus of this Agreement and any Pennitted Encumbrances; 4.3.2) At the Closing, a customary affidavit that there are no unsatisfied judgments of record, no actions pending in any state or federal courts, no tax liens, and no bankruptcy proceeding filed against Seller, and no labor has or materials have been furnished to the Subject Property for which payment has not been made, and that to the best of Seller's actual knowledge there are no unrecorded interests relating to the Subject Property. 4.4) Seller shall pay at Closing all general real estate taxes levied against the Subject Property due and payable for all years prior to the year of closing. together with any unpaid installments of special assessments due therewith ("Taxes"), and any Taxes deferred. Buyer and Seller shall prorate to the date of Closing based on the parties' respective period of ownership during calendar year 1997 all general real estate taxes due in the year of Closing. 47209 R2/25/97 4 02,' 25,' 9i TUE 09: 52 FAX 612 452 5550 C K S & F ............ CHANHASSEN I4J Ill) 6 All general real estate taxes levied against the Subject Property due in the years following the year of Closing shall be the responsibility of Buyer. The prorated taxes due on the Subject Property shall be determined by dividing the square footage of the Subject Property by the square footage of the tax parcel constituting the Subject Property and other lands. Seller and Buyer agree that all special assessments levied on the Subject Property prior to Closing shall be the obligation of Seller including all special assessments described in the Special Assessment Agreement dated October 24, 1994. The remaining balance of special assessments described in said Special Assessment Agreement shall be reallocated to the remaining portion of the tax parcel constituting the Subject Property and other lands. Any special assessments pending or levied against the Subject Property after the Closing shall be the responsibility of the Buyer. 4.5) On the Closing Date, Seller and Buyer agree that Buyer shall withhold Thirty- four Thousand Four Hundred Forty and 00/100 Dollars ($34,440.00) of the Purchase Price as provided in Section 2.1 of this Agreement to assure Seller's capping and abandoning of all wells located on the Subject Property, no later than October 1, 1997. The Withheld Amount shall also cover any costs incurred by Buyer (including but not limited to insurance costs) due to Buyer's failure to cap any wells following the Closing. If any wells located on the Subject Property are not capped and abandoned by October 1, 1997, then Seller shall forfeit the Withheld Amount. 4.6) Seller shall pay at Closing: 4.6.1) state deed tax; 4.6.2) all costs of obtaining and updating the abstract to the Subject Property, including name searches, tax searches, bankruptcy searches, and all charges by the title insurance company for issuing a title insurance commitment; 47209 R2/25/97 5 112:25:9i TUE 09:53 FAX 612 452 5550 C K S & F +-.... CHANHASSEN l4J lI1.1i 4.6.3) recording fees for corrective instruments required to remove encumbrances and place marketable title in Buyer's name; 4.6.4) all real estate tax obligations as outlined in paragraph 4.4; and 4.6.5) all fees and costs owed for the survey of the Subject Property required under Paragraph 3.3.1. 4.6.6) recording fees for the easement described in Section 8 of this Agreement. 4.7) Buyer shall pay at Closing: 4.7.1) all recording fees and charges relating to the filing of the deed; and 4.7.2) title insurance premiums. 4.8) Seller and Buyer shall equally share the Closing fee charged by the title company. SECTION S. COVENANTS. REPRESENTATIONS. AND WARRANTIES OF SELLER 5.1) Seller represents, warrants, and cov~nants with Buyer and its successors and assigns that to the best of Seller's actual knowledge and without any investigation or inquiry; 5.1.1) There are no leases, options, purchase agreements, rights to redeem, tenancy agreements, or rights of occupancy, written or verbal, and no person or party has, or will have any rights of adverse possession, regarding the Subject Property; 5.1.2) Seller will maintain in force insurance against public liability from such risk in the amount of One Million Dollars ($1,000,000.00) from the date hereof to the Closing Date; 5.1.3) To the best acroal knowledge of Seller and without any investigation or inquiry, no entity or person has, at any time: i) "released" or actively or passively consented to the "release" or "threatened release" of any Hazardous Substance (as defined below) from any "facility" or "vessel" located on or used in connection with the Subject Property; or 4n09 R2/25/97 6 02:25:9i TUE 09:53 FAX 612 452 5550 C K S & F +.H CHANHASSEN I4J III1S ii) taken any action in "response" to a "release" in connection with the Subject Property; or Hi) otherwise engaged in any activity or omitted to take any action which could subject Seller or Buyer to claims for intentional or negligent torts, strict or absolute liability. either pursuant to statute or common law, in connection with Hazardous Substances (as defmed below) located in or on the Subject Property, including the generating, transporting, treating, storage, or manufacture of any Hazardous Substance (as defmed below). The terms set within quotation marks above shall have the meaning given to them in the Comprehensive Environmental Response and Liability Act, 42 U.S.C. Sec. 9601 et seq., as amended ("CERCLA") and any state environmental laws. "Hazardous Substances" means hazardous waste, toxic substances, formaldehyde, urea, polychlorinated biphenyls, asbestos, petroleum, natural gas, synthetic gas usable for fuel or mixtures thereof, any materials related to any of the foregoing, and substances defined as "hazardous substances", "toxic substances", "hazardous waste", "pollutant", or "contaminant" in CERCLA, Resource Conservation and Recovery Act as amended, 41 U.S.C. Sec. 9601 et seq., the Hazardous Materials Transportation Act, 49 D.S.C. Sec. 1801 et seq., the Clean Water Act, 33 U.S.C. Sec. 1251 et seq., any state laws regarding environmental matters, or any regulations promulgated pursuant to any of the foregoing statutes; 5.1.4) To the best actual knowledge of Seller and without any investigation or inquiry, no entity or person has, at any time, installed, used, or removed any underground storage tank on or in connection with the Subject Property; 5.1. 5) As part of this agreement, Seller shall execute a well disclosure certificate in the for required by applicable statute. Seller shall deliver the well certificate to Buyer on the date of execution of this agreement. Seller warrants that all statements set forth in the well certificate are true, accurate, and complete to the best of Seller's knowledge. 5.2) The covenants, representations, and warranties contained in Section 5 shall be deemed to benefit Buyer and its successors and assigns and shall survive any termination or expiration of this Purchase Agreement or the giving of the Deed. All of Seller's covenants, representations and warranties in this Agreement shall be true as of the date hereof (and shall be a condition precedent to the performance of Buyer's obligations hereunder) and as of the Closing Date. In addition to Buyer's remedies as outlined in Section 3.2, if Buyer discovers 47209 R2/25/97 7 1l2:25:9i TUE 1.19:54 FAX 612 452 5550 C K S & F ...-H CHANHASSEN I4J 11119 that any such covenant, representation, or warranty is not true, Buyer may elect prior to closing, in addition to any of its other rights and remedies, to cancel this Agreement, or Buyer may postpone the Closing Date up to ninety (90) days to allow time for correction. Buyer shall not be deemed to have waived any claims for breach of warranty if Buyer consummates the transaction set forth in this Agreement with the knowledge that one or more of Seller's warranties are false. 5.3) Seller is, or by Closing will have all requisite power and authority to execute and deliver this Agreement and the documents listed in Section 4 above. SECTION 6. TESTING 6.1) Buyer and its agents shall have the right, at Buyer's sole option, to enter the Subject Property without charge and at all reasonable times after the execution of this Agreement, to perform investigation and tests as Buyer may reasonably deem appropriate. If Buyer investigates and tests the Subject Property pursuant to this section, Buyer shall pay all costs and expenses of such investigation and testing and shall indemnify and hold Seller harmless from all costs and liabilities arising out of Buyer's activities. If the purchase and sale contemplated by this Agreement is not closed, Buyer shall repair and restore any damage to the Subject Property caused by Buyer's investigation or testing, at Buyer's expense, and shall return the Subject Property to substantially the same condition as existed prior to such entry. The provisions of this Section shall survive closing or cancellation of the Purchase Agreement. 47209 R2/2S/97 8 02,' 25,' 9i TIlE 09: 54 FAX 612 452 5550 CKS&F ~-H CHANHASSEN I4Jll111 SECTION 7. CONTINGENCIES 7.1) The obligations of Buyer under this Agreement are contingent upon each of the following (the "Buyer Contingencies"): 7.1.1) The representations and warranties of Seller set forth in Section 5 of this Agreement must be true as of the date of this Agreement and on the Closing Date, and Seller shall have delivered to Buyer at Closing a certificate dated the Closing Date, signed by Seller. certifying that such representations and warranties are true as of the Closing Date. 7.1.2) Within 60 days of the date of execution of this Agreement, Buyer shall have determined, that it is satisfied, in its sole discretion. with the results and matters disclosed by a Phase I Environmental Audit or by any environmental/engineering or soil investigation or testing of the Subject Property performed by Buyer or Buyer's agent. By executing this Agreement, Seller hereby authorizes Buyer to enter upon the Subject Property at reasonable times to conduct any such investigations andlor tests as reasonably determined by Buyer. 7.1.3) Buyer shall have detennined that it is satisfied, in its sole discretion, with the results of and matters disclosed by the survey described in Section 3.3.1, within 30 days of the later of the receipt of the surveyor the date of execution of this Agreement. 7.1.4) Buyer obtaining a written unconditional commitment from the Metropolitan Council Right-of-Way Acquisition Loan Fund on terms acceptable to Buyer on or before the Closing Date, which serves to secure Buyer's funding of the purchase described herein. 7.1.5) Buyer obtaining an administrative settlement from the Minnesota Department of Transportation on or before the Closing Date approving the Purchase Price. If the Buyer Contingencies have not been satisfied on or before the Closing Date, then Buyer may, at Buyer's option, terminate this Agreement by giving written notice to Seller on or before the Closing Date. Upon such termination, neither party shall have any further rights or obligations under this Agreement. The Buyer Contingencies are for the sole and 47209 R.2/2.5/97 9 Cl2:25:9i TUE 09:55 F.U 612 452 5550 C K S & F -H-'> CHANHASSEN 141011 exclusive benefit of Buyer, and Buyer shall have the right to waive the Buyer Contingencies by giving written notice to Seller. SECTION 8. TEMPORARY ACCESS AND UTILITY EASEMENT 8.1) Buyer shall grant Seller at the time of closing a Temporary Access and Utility Easement, on the fonn attached as Exhibit B, over the Subject Property and appurtenant to the Seller's property as legally described in Exhibit C for access to and use of the existing wells on the Subject Property by Seller's appurtenant property until the earlier of October 1, 1997 or the date that Seller's appurtenant property is hooked up to City water. SECTION 9. MISCELLANEOUS 9.1) The covenants and representations made by Seller shall survive the Closing of this transaction. 9.2) Seller hereby indemnifies Buyer for any claim, cost, or damage related to any brokerage fee incurred by Seller due because of this Agreement. Buyer hereby indemnifies Seller for any claim, cost, or damage related to any brokerage fee incurred by Buyer due because of this Agreement. 9.3) Any notice, demand, or request which may be permitted, required or desired to be given in connection herewith shall be in writing and sent by certified mail, hand delivery, overnight mail service such as Federal Express, or Western Union telegram Or other form of telegraphic conununication, directed to Seller or Buyer. Any notice shall be deemed effective when delivered to the party to whom it is directed. Unless other addresses are given in writing, notices shall be sent to Seller or Buyer at the applicable address stated on the first page of this Agreement. 47209 R2125/97 10 U2:25:97 TUE 09:56 FAX 612 452 5550 CKS&F ......... CHANHASSEN !4J 1112 9.4) Time shall be of the essence in this Agreement. Where any date or time prescribed by this Agreement falls on a Saturday, Sunday or statutory holiday, such date or time shall automatically be extended to the next normal business day. ,9.5) Each party hereto shall promptly, on the request of the other party, have acknowledged and delivered to the other party any and all further instruments and assurances reasonably requested or appropriate to evidence or give effect to the provisions of this Agreement. 9.6) This Agreement represents the entire agreement of the parties with respect to the Subject Property and all prior agreements, understan4ings, or negotiations between the parties are hereby revoked and superseded hereby. No representations, warranties, inducements, or oral agreements have been made by any of the parties, except as expressly set forth herein, or in other contemporaneous written agreements. This Agreement may not be changed, modified or rescinded, except by a written agreement signed by both parties hereto. Seller and Buyer shall have the right to modify, amend, or cancel this Agreement without the consent or approval of any real estate broker or agent. Under no circumstances, including, without limitation, any default(s) of Seller and/or Buyer under this Agreement, will: (a) any real estate broker or agent be entitled to any commission unless the Closing actually occurs, or to any notice under this Agreement; or (b) Buyer have any liability and/or obligation for payment of any commission or other compensation to any real estate broker or agent regarding this Agreement incurred by Sellerj or (c) Seller have any liability and/or obligation for payment of any commission or other compensation to any real estate broker or agent regarding this Agreement incurred by Buyer. 47209 R2nS/97 11 ll2:25:9i TUE ll9:56 FAX 612 452 5550 CKS&F +..-* CHANHASSEN 1411113 9.7) If Buyer defaults under any of the terms hereof, then Seller shall have the right, in addition to whatever other remedies are available to Seller at law or in equity, including without limitation, specific performance, damages, including attorney's fees, to cancellation of this Agreement. 9.8) If Seller defaults under any of the terms hereof, including, without limitation, the delivery of marketable title to the Subject Property as set forth in Section 4 hereof, and any of Seller's representations, covenants, and warranties in Section 5 hereof, then Buyer shall have the right to specific performance or to cancellation of this Agreement. 9.9) If any provision of this Agreement is declared void or unenforceable, such provision shall be deemed severed from this Agreement, which shall otherwise remain in full force and effect. 9.10) Failure of any party to exercise any right or option arising out of a breach of this Agreement shall not be deemed a waiver of any right or option with respect to any subsequent or different breach, or the continuance of any existing breach. 9.11) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal representatives, successors and assigns. 9.12) This Agreement shall be construed in accordance with the laws of the State of MhUlesota. 47209 R2I2S/97 12 1I2:25:9i rUE 09:57 FAX 612 452 5550 CKS&F ...H-+ CHANHASSEN l4lou 9.13) At Buyer's request, a memorandum of this Agreement shall be executed by Buyer and Seller and filed of record in Carver County, Minnesota. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year frrst above written. BUYER: SELLER: CITY OF CHANHASSEN LAKEVlEW InLLS LLC By; By: Nancy K. Mancino, Mayor Its President By: Don Ashworth City Manager/Clerk STATE OF MINNESOTA) ) 5S. COUNTY OF CARVER ) The foregoing instrument was acknowledged before me this day of , 1997, by Nancy K. Mancino and by Don Ashworth, respectively the Mayor and City Manager/Clerk of the CITY OF CHANHASSEN, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public 4n09 R2I2S/97 13 02:25:9i TUE 09:5i FAX 612 452 5550 C K S & F -H... CHANHASSEN [4J 1115 STATE OF MINNESOTA) ) S8. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1997, by Steven B. Liefschultz the President of Lakeview Hills LLC, a Minnesota corporation. on its behalf. Notary Public THIS INSTRUMENT WAS DRAFTED BY; CAMPBELL, KNUTSON, SCOTT & FUCHS, P .A. 317 Eagandale Office Center 1380 Corporate Center Curve Eagan, MN 55121 Telephone: (612) 452-5000 AMP 47209 R2125/97 14 02.'25.'97 TUE 09:58 FAX 612 452 5550 C K S & F ~~~ CHANHASSEN @1l16 EXHlBIT II A" to REAL ESTATE PURCHASE AGREEMENT EXISTING P..ROPERTY DESCRIPTION All that part of the Northeast Quarter of the Northeast Quarter and Government Lot 1 of Section 24~ Township 116, Range 23, and the Southeast Quarter of the Southeast Quarter of Section 13, Township 116, Range 23t which lies east of a line drawn 641.67 feet west of, measured at a right angle to and parallel with the east line of Northeast Quarter of the Northeast Quarter of Section 24~ Township 116t Range 23 and its extensions. PROPOSED T.R. 212 RIGHT-OF.WAY ACOUISITION DESCRIPTION That part of the Northeast Quarter of the Northeast Quarter of Section 24, Township 116, Range 23 lying southerly of "Line A" and northerly of nLine B". Said Line "A" and "Line B" are described as follows: ItLine A 10 BegiIllling at a point on the east line of said Northeast Quarter of the Northeast Quarter distant 81.52 feet south of the Northeast comer thereof; thence westerly, deflecting to the right 85 degrees 25 minutes 52 seconds a distance of 665.50 feet to a line drawn 641.67 feet west of, measured at a right angle to and parallel with the east line of said Northeast Quarter of the Northeast Quarter and said line there terminating. tlLine Bit Beginning at a point on the east line of said Northeast Quarter of the Northeast Quarter distant 386.74 feet south of the Northeast comer thereof; thence westerly, deflecting to the right 77 degrees 37 minutes 49 seconds a distance of 656.92 feet to a line drawn 641.67 feet west of, measured at a right angle to and parallel with the east line of said Northeast Quarter of the Northeast Quarter and said line there tenninating. PROPOSED UPLAND/WETLAND PARCEL DESCRIPTION All that part of the Northeast Quarter of the Northeast Quarter and Govenunent Lot 1, of Section 24, Township 116, Range 23, and the Southeast Quarter of the Southeast Quarter of Section 13, Township 116, Range 23, which lies east of a line drawn 641.67 feet West of~ measured at a right angle to and parallel with the east line of Northeast Quarter of the Northeast Quarter of Section 24, Township 116, Range 23 and its extensions~ lying northerly of the above described "Line A". 47209 R2t25/97 15 02:25:9i TUE 09:59 FAX 612 452 5550 C K S & F ......H CHANHASSEN l4IlJl i EXHWIT "B" TO REAL ESTATE PURCHASE AGREEMENT TEMPORARY ACCESS AND UTILITY EASEMENT THIS AGREEMENT made this day of , 1997, by and between the CITY OF CHANHASSEN, a municipal corporation under the laws of the State of Minnesota, with offices at 690 Coulter Drive, Chanhassen, Minnesota 55317 (referred to herein as the "City"), and LAKEVmW HILLS LLC, a Minnesota corporation, with offices and its successors, or assigns (the "Grantee"). at WITNESSETH: The City, in consideration of One Dollar ($1.00) and other good and valuable consideration to them in hand paid by the City, the receipt and sufficiency of which is hereby acknowledged, does hereby grant unto the Grantees, its successors and assigns, a temporary easement for access and utility purposes, over, on, across, under, and through the land situated in the County of Carver, State of Minnesota, as legally described on the attached Exhibit "A" ("Easement Premises") to benefit and be appurtenant to the property described on Exhibit "B" ("Apartment Property"). TO HAVE AND TO HOLD the same, unto the Grantee, its successors and assigns, commencing upon execution of this agreement and expiring upon the earlier of the date that the Apartment Property hooks up to city water or October 1, 1997) together with the right to use wells located within the Easement Premises to provide water to the Apartment Property and the right of ingress to and egress from the Easement Premises, for the purpose of inspecting, repairing, and maintaining the wells and any other related equipment necessary to 47209 R2I25/97 16 02/25/9i rUE 09:59 FAX 612 452 5550 CKS&F ....H CHANHASSEN I4J n18 provide water to the Apartment Property, at the will of the Grantee, its successors and assigns; it being the intention of the parties hereto that the City hereby grant the uses herein specified without divesting itself of the right to use and enjoy the above described temporary easement premises, subject only to the right of the Grantee to use the same for the purposes herein expressed. Upon termination, Grantee shall be responsible for removal (capping and sealing) of the wells on or before October 1, 1997, in accordance with applicable laws and regulations pertaining to capping and sealing wells. Grantee shall be responsible for operating and maintaining the wells in confonnity with all applicable statutes and city ordinances. Grantee shall be responsible for procuring and maintaining general liability insurance covering the Easement Premises in the amount of One Million Dollars ($1,000,000.00), naming the City as an additional insured. Grantee indemnifies and holds the City hannless from and against any claims that may arise in connection with the maintenance and use of the Easement Premises. City shall not be responsible for restoration, replacement costs or damages to the wells located on the Easement Premises. Grantee accepts Easement Premises, wells and related equipment in its current condition with all faults and the City makes no representations or warranties as to the condition of the Easement Premises, the wells or related equipment. The above named City for itself, its successors and assigns, does covenant with the Grantees, its successors and assigns, that it is well seized in fee title of the Easement Premises; that it has the sole right to grant and convey the easement to the Grantees; that 47209 R2I25/97 17 (J2.'25.'9i TUE 10:0u FAX 612 452 5550 C K S & F ........... CHANHASSEN f4J (J19 there are no unrecorded interests in the Easement Premises; and that it will indemnify and hold the Grantees harmless for any breach of the foregoing COvenants. IN TESTIMONY WHEREOF, the parties hereto have signed this agreement the day and year frrst above written. BUYER: SELLER: CITY OF CHANHASSEN LAKEVIEW HILLS LLC By: Nancy K. Mancino, Mayor By: Its President By: Don Ashworth City Manager/Clerk STATE OF MINNESOTA ) ) SS. COUNTY OF CARVER ) The foregoing instrument was acknowledged before me this day of , 1997, by Nancy K. Mancino and by Don Ashworth, respectively the Mayor and City Manager/Clerk of the CITY OF CHANHASSEN. a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public 47209 R2I25/97 18 02:25:97 TUE 10:00 FAX 612 452 5550 C K S & F -H~ CHANHASSEN I4J 1I211 STATE OF MINNESOTA ) ) S5. COUNTY OF ) The foregoing instroment was acknowledged before me this _ day of t 1997, by Steven B. Liefschultz the President of Lakeview Hills LLC, a Minnesota corporation, on its behalf. Notary Public THIS INSTRUMENT WAS DRAFTED BY: CAMPBELL, KNUTSON, SCOTT & FUCHS, P.A. 1380 Corporate Center Curve #317 Eagan, MN 55121 Telephone: (612) 452-5000 47209 R2/25/97 19 112:25:9i TUE 10:01 FAX 612 452 5550 C K S & F EX A TO TEMPORARY EASEMENT = EASEMENT PREMISES EX B TO TEMPORARY EASEMENT=: APARTMENT PROPERTY 47209 R2/2S/97 ...+-, CHANHASSEN 14I1121 02:25:97 TUE 10:01 FAX 612 452 5550 C K S & F ......... CHANHASSEN I4J 022 EXHIBIT "c" TO REAL ESTATE PURCHASE AGREEMENT LEGAL DESCRIPTION OF SELLER'S APPURTENANT PROPERTY: 47209 P,2125/97 21 LOAN AGREEMENT NO. L-97- LOAN AGREEMENT BETWEEN THE METROPOLITAN COUNCIL AND THE CITY OF CHANHASSEN FOR PROTECTIVE ACQUISITION OF HIGHWAY RIGHT-OF - WAY THIS AGREEMENT is entered into this _ day of , 1997, by THE METROPOLITAN COUNCIL ("the Council"), and THE CITY OF CHANHASSEN ("the Recipient"). WHEREAS, the Council is authorized by Minnesota Statutes section 473.167, subdivision 2, to make loans to counties, towns, and cities situated within the metropolitan area for the purpose of acquisition of property within a proposed state trunk highway right-of-way when acquisition is necessary to avert the imminent conversion of such property to a use which would jeopardize the property's availability for highway construction; and WHEREAS, the Recipient is an eligible governmental unit and has applied for such a loan to accomplish the acquisition of threatened right-of-way within the offiCIally-mapped trunk highway 2 1 2 corridor; and WHEREAS, the Council has authorized that such a loan be made to the Recipient from the Metropolitan Right-of-Way AcquiSItion Loan Fund. NOW, THEREFORE, in consideration of the mutual promises and covenants in this agreement, the Council and the Recipient agree as follows: 1. LOAN FUNDS 1.01 Total Loan Amount. The Council shall loan to the Recipient, in accordance with the loan schedule set forth in paragraph 1.02, a total loan amount not to exceed $ ,,8Cf~ J OC 0 l.02 Loan Schedule. Upon execution of this loan agreement, the Council will advance $ I b 8 g "5' : ()(JD to the Recipient for the purchase price of that real property described in Exhi it A, which is attached to and incorporated in this agreement. The purchase price of the real property includes any buildings or structures located on any parcel of the real property. Upon receipt by the Council of satisfactory and complete documentation describing the Recipient's actual appraisal, title evaluation, and other acquisition costs, the Council will advance to the Recipient such actual costs, in an amount not to exceed $~, ()OD . 1.03 Authorized Use of Loan Funds. The parties agree that loan funds may be used only for the purchase price of the property described in Exhibit A and the acquisition costs actually incurred by the Recipient to acquire the property described in Exhibit A. The parties agree that no part of the loan proceeds shall be used for relocating or moving persons or property. The parties further agree that loan proceeds shall not be used to clean up contaminated soil or other pollutants, if any are discovered on the site. II. ACCOUNTING, AUDIT, AND RECORDS REQUIREMENTS 2.01 Separate Account. The Recipient agrees to establish and maintain a separate account for the loan and to maintain accurate and complete records and accounts relating to the receipt and expenditure of all loan funds. Such accounts and records shall be kept and maintained for a period of at least three (3) years following discharge of the loan. 2.02 Audit. The above accounts and records of the Recipient shall be audited in the same manner as all other accounts and records of the Recipient are audited, and may be audited and/or inspected on the Recipient's premises or otherwise by individuals or organizations designated and authorized by the Council at any time, following reasonable notification, during the loan period, and for a period of three (3) years following discharge of the loan. 2.03 Acquisition Report. The Recipient agrees that upon completion of any acquisition, the Recipient will submit to the Council an acquisition report, in a format to be determined by the Council, summarizing the acquisition costs of the property, including all eligible expenses and acquisition costs. 2.04 Annual Report. The Recipient agrees to submit, on or before June 30 of each year during which this agreement is in effect, an annual report on the status of the loan, in a form to be determined by the Council. III. INCOME FROM PURCHASED PROPERTY 3.01 Net Rents Defined. For purposes of this agreement, "net rents" means the total gross rent received by the Recipient from any and all tenants or users of the property, less the Recipient's actual costs for necessary maintenance, repairs, taxes, insurance, and operating expenses, and attorneys' fees associated with preparing or terminating any lease with respect to the property. 3.02 Transfer of Net Rents. The Recipient agrees to transfer to the Council, within forty- five (45) days of receipt, all net rents or other money received as a result of the Recipient's ownership of the property. For any given payment to the Council, the Recipient may estimate the actual costs to be deducted from gross rent. 3.03 Adjustment for Actual Costs. Twelve (12) months from the commencement of receipt of any rent by the Recipient from any property acquired with loan proceeds, the Recipient shall provide, in a form acceptable to the Council, documentation for all actual costs for necessary maintenance, repairs, taxes, insurance, and operating expenses, and attorneys' fees with respect to the property. Upon verification and acceptance of the documentation by the Council, the Recipient shall pay to the Council the amount, if any, determined by the Council to be necessary to adjust the estimated deduction from gross rent to reflect the actual costs. IV. LOAN DISCHARGE 4.01 Discharge Due to Conveyance to Highway Authority. If any parcel purchased with the loan funds is conveyed to a highway authority for construction of a highway, the Recipient shall repay to the Council, within thirty (30) days of receipt, the amount received from the highway authority for the parcel. The amount to be repaid shall include the amount actually disbursed pursuant to paragraph 1.02 for acquisition costs attributable to the parcel. Upon payment of the specified amount, the Council will discharge the loan. 4.02 Discharge Due to Changes in Plan for Highway. If the Council notifies the Recipient that the plan to construct the highway has been abandoned or the anticipated location of the highway has changed, the Recipient shall seek the prior approval of the Council to sell the acquired property. The Recipient shall repay to the Council, within thirty (30) days of receipt, the fair market value of the property as determined by sale of the property in accordance with the RecIpient's procedures required for the disposition of real property. Upon payment of the specified amount, the Council will discharge the loan. 4.03 Discharge Due to Breach or Other Circumstances. If the property for any other reason is sold, or if the Recipient materially breaches any term of this agreement, the Recipient shall repay the amount specified in paragraph 1.02 for the purchase price of the property and the amount actually disbursed pursuant to paragraph 1.02 for acquisition costs. The Council agrees to notify the Recipient of any material breach of the agreement and to provide a reasonable opportunity for the Recipient to cure the breach. If the Recipient fails to cure the breach, the Recipient will repay the amount specified within thirty (30) days. Upon payment of the specified amount, the Council will discharge the loan. V. GENERAL CONDITIONS 5.01 Duration of Agreement. The agreement is effective on the execution of this agreement and remains in force and effect untll the loan is discharged. 5.02 Interest. The loan made in this agreement shall bear no interest. 5.03 Agreement and Restrictive Covenant. The Recipient and the Council each agree that they will execute, and the Recipient agrees that it will cause to be recorded at its own expense, an agreement and restrictive covenant with reference to each parcel of land in which an interest is acquired in whole or in part from loan proceeds. The agreement and restrictive covenant shall be substantially in the form contained as a sample in Exhibit B, which is attached to and made a part of this agreement. It is the purpose of such agreement and restrictive covenant to limit the right of the Recipient to conveyor encumber land or interests in land acquired with loan proceeds without the consent of the Council, and to insure that such lands and interests therein be devoted exclusively to the state highway purposes for which they were acquired. 5.04 Agreement to Convey. The Recipient agrees that upon the request of the authority authorized to construct the highway for which this right-of-way has been reserved, the Recipient will convey the property to the authority at the same price the Recipient paid for the property, including costs identified in paragraph 1.02 for acquisition costs. 5.05 Rights Reserved. If the Council finds that there has been a failure to comply with the provisions of this agreement, the Council reserves the right to take any and all actions as it deems necessary or appropriate to protect the Council's interest, provided that the Council agrees to notify the Recipient of any such failure to comply and to provide a reasonable opportunity to comply. The Recipient agrees that discharge of the loan does not invalidate continuing obligations imposed on the Recipient by this agreement. Termination of this agreement does not alter the Council's authority to disallow costs and recover funds on the basis of a later audit or other review, and does not alter the Recipient's obligation to return any funds due to the Council as a result oflater audits or corrections. 5.06 Amendments. The terms of this agreement may be changed by mutual agreement of the parties. Such changes shall be effective only upon the execution of written amendments signed by authorized representatives of the Council and the Recipient. 5.07 Compliance with Law. The Recipient agrees to conduct the activities contemplated by this agreement in compliance with all applicable provisions of Federal, state, and local laws. The Recipient further agrees to comply with all applicable laws relating to nondiscrimination, affirmative action, and public purchase, contracting, and employment. In particular, the Recipient agrees not to discriminate against any employee or applicant for employment because of race, color, creed, religion, sex, sexual orientation, national origin, marital status, disability, status with regard to public assistance, membership or activity in a local civil rights commission, or age, and to take affirmative action that applicants and employees are treated equally with respect to all areas of employment, rates of pay and other forms of compensation, and selection for training. 5.08 Indemnification. The Recipient assumes liability for, and agrees to indemnify, protect and hold harmless the Council from any liabilities, obligations, losses, damages, claims, injuries, penalties, costs and expenses, including reasonable attorney's fees, arising out of the Recipient's performance of the activities contemplated by this agreement. The Recipient shall protect and hold the Council harmless from any liability arising out of contamination of the property by hazardous substances or releases of hazardous substances from the property, whether known or unknown at the time of acquisition. 5.09 Property Maintenance. The Recipient agrees to make reasonable efforts to maintain the property acquired with loan funds provided under this agreement in a manner compatible with the surrounding environment, as appropriate. IN WITNESS WHEREOF, the parties have caused this agreement to be executed by their duly authorized representatives on the day and year first above written. METROPOLITAN COUNCIL Approved as to form By Lynn M. Belgea Assistant General Counsel Natalio F. Diaz Transportation Planning Director CITY OF CHANHASSEN By Its Chnagree (lakeview) EXHIBIT A LEGAL DESCRIPTION EXHIBIT B SM1PLD ONLY"" AGREEMENT AND RESTRICTIVE COVENANT THIS AGREEMENT is plade and entered into this day of , 19_, between the City of c.V\.t<.. V\ I" ~/'1---o:.,~--" , a Minnesota municipal corporation, ("the City"), and the Metropolitan Council, a political subdivision of the State of Minnesota, ("the Council"). .PL c. 4-rl- le 0 u- .....-..~.'. "~ l..: ,) /b WHEREAS, the City has acquired [.Q.e~tlib", llalun: uf ~ntcresti.tn the real property described in Exhibit A attached hereto and incorporated herein; and WHEREAS, the Council has contributed funds toward the acquisition of the City's interest in the real property pursuant to the Council's Loan Program and a Loan Agreement between the Council and the City as authorized by Minnesota Statutes section 473.167; and WHEREAS, the Loan Program was established to provide for the acquisition of property within the right-of way ofa state trunk highway shown on an official map when necessary toffivoid imminent conversion of such property to a use which would jeopardize the property's availability for highway construction ~rdsh~f.hemeste~.gp@rty 16(akJ ill de pror()~~d lltate trunk ftiglu.F~Y right Qf; 'vay...o.r..pro~ NOW, THEREFORE, in consideration of the loan made by the Council to the City and in consideration of the mutual agreements and covenants, the Council and City agree as follows: 1. No sale, lease, mortgage, or other conveyance, nor the creation of any easement, restriction or other encumbrance against the real property described in Exhibit A shall be valid for any purpose unless the written approval of the Council, or its successors, is duly filed and recorded at the time of the filing and recording of the instrument to which such approval pertains. 2. The real property described in Exhibit A shall not be used for any purpose except the construction of trunk highway Zl 2 unless the Council, or its successors, shall consent to such other use or uses by instrument in writing duly filed and recorded and designating the nature, extent and duration of the use for which such consent is given. This Agreement and Restrictive Covenant may be enforced by the Council, its successors, or by any citizen residing within the metropolitan area as defined by appropriate action in the courts of the State of Minnesota. IN WITNESS WHEREOF, the parties have caused this instrument to be executed in their respective names all as of the above date. METROPOLITAN COUNCIL By Regional Administrator CITY OF By Its NtJTE:rHtSFORM IS-PROVIOCI} 1\"5 2'\N-oIix.AMpr ..F....I-H~mrqT 5MOUt:~. PR EP ARJ;.k'f1tOyI!lt'1'NS-'f~EhTI ~~n .s~~R-&1.GN ~ ILJ.lk~..HE ~