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HomeMy WebLinkAboutEDA Packet - 10-24-24 ••• Meeting Location: Municipal Center Apple II 7100 147th Street West Valley Apple Valley, Minnesota 55124 October 24, 2024 ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING TENTATIVE AGENDA 6:30 PM 1. Call to Order 2. Approve Agenda 3. Approve Consent Agenda Items Consent Agenda Items are considered routine and will be enacted with a single motion, without discussion, unless a commissioner or citizen requests to have any item separately considered. It will then be moved to the regular agenda for consideration. A. Approve Minutes of July 25, 2024, Regular Meeting and August 8, 2024, Special Meeting B. Approve 2025 Meeting Calendar 4. Regular Agenda Items A. Consider and Approve the Sale and Purchase Agreement Between Apple Valley Economic Development Authority (EDA) and Real Estate Equities, LLC for the Gaslight Site - 15584 Gaslight Drive 5. EDA Items and Communications (For items EDA wishes to discuss) 6. Staff Updates 7. Adjourn Regular meetings are broadcast, live, on Charter Communications Cable Channel 180 and on the City's website at www.applevalleymn.gov • ITEM: 3.A. ••••• • ••• EDA MEETING DATE: October 24, 2024 Apple Valley SECTION: Consent Agenda Description: Approve Minutes of July 25, 2024, Regular Meeting and August 8, 2024, Special Meeting Staff Contact: Department/ Division: Breanna Vincent, Planning Department Assistant Community Development Department ACTION REQUESTED: Approve minutes of regular meeting of July 25, 2024 and special meeting of August 8, 2024. SUMMARY: The minutes of the regular and special Economic Development Authority meetings are attached for your review and approval. BACKGROUND: State statute requires the creation and preservation of meeting minutes which document the official actions and proceedings of public governing bodies. BUDGET IMPACT: N/A ATTACHMENTS: Minutes Minutes ECONOMIC DEVELOPMENT AUTHORITY City of Apple Valley Dakota County, Minnesota July 25, 2024 Minutes of the Regular Meeting of the Economic Development Authority of Apple Valley,Dakota County, Minnesota, held July 25, 2024, at 6:00 p.m., at Apple Valley Municipal Center. PRESENT: President Tom Melander, Commissioners Clint Hooppaw, Torn Goodwin, John Bergman, Ruth Grendahl, Jodi Kurtz, and Ken Johnson ABSENT: none City staff members present: City Administrator Tom Lawell, Finance Director Ron Hedberg, Community Development Director Tim Benetti, City Planner Kathy Bodmer Planning/Economic Development Specialist Alex Sharpe, City Attorney Bob Bauer, and Department Assistant Breanna Vincent APPROVAL OF AGENDA President Melander asked staff if there were any changes to the agenda. —None. MOTION: of Goodwin, seconded by Grendahl, approving the agenda. Ayes—7 -Nays - 0. CONSENT AGENDA MOTION: of Grendahl, seconded by Bergman, approving the minutes of the regular meeting on May 23, 2024. Ayes—7—Nays—O. REGULAR AGENDA A. Convene into Closed Session to Discuss Potential Sale and Negotiation of EDA Owned Property—The Gaslight Site - 15584 Gaslight Drive President Melander requested a motion to close the meeting under the exceptions to the open meeting law to discuss potential sale and negotiation related to lands identified as the Gaslight Site (15584 Gaslight Drive). MOTION: by Goodwin, seconded by Grendahl to convene in closed session. The EDA convened in the Regent Conference Room at 6:07 p.m. In attendance were President Tom Melander, Commissioners Clint Hooppaw, Tom Goodwin, John Bergman, Ruth Grendahl, Ken Johnson, and Jodi Kurtz; City Administrator Tom Lawell, Community Development Director Economic Development Authority City of Apple Valley Dakota County, Minnesota July 25, 2024 Page 2 Tim Benetti, Finance Director Ron Hedberg, City Planner Kathy Bodmer, Planner/Economic Development Specialist Alex Sharpe, City Attorney Bob Bauer, Department Assistant Breanna Vincent, and Tammy Omdal of Northland Securities. The meeting was tape recorded as required by law. The EDA reconvened in open session at 6:49 p.m. STAFF UPDATES None ADJOURNMENT MOTION: by Grendahl, seconded by Bergman, to adjourn at 6:50 p.m. Respectfully Submitted, c2) ` v Breanna Vincent, Department Assistant Approved by the Apple Valley Economic Development Authority on October 24, 2024 Thomas O. Melander, President ECONOMIC DEVELOPMENT AUTHORITY City of Apple Valley Dakota County, Minnesota August 8, 2024 Minutes of the Special Meeting of the Economic Development Authority of Apple Valley, Dakota County, Minnesota, held August 8, 2024, at 3:30 p.m., at Apple Valley Municipal Center. PRESENT: President Tom Melander, Commissioners Clint Hooppaw, Tom Goodwin, John Bergman, Ruth Grendahl, Ken Johnson, and Jodi Kurtz ABSENT: None City staff members present: City Administrator Tom Lawell, Community Development Director Tim Benetti, Finance Director Ron Hedberg, City Planner Kathy Bodmer, Planner/Economic Development Specialist Alex Sharpe, Associate Planner Sydnee Stroeing, City Attorney Sharon Hills, and Department Assistant Breanna Vincent APPROVAL OF AGENDA President Melander asked staff if there were any changes to the agenda. —None. MOTION: of Hooppaw, seconded by Bergman, approving the agenda. Ayes—7 -Nays - 0. CONSENT AGENDA None REGULAR AGENDA A. EDA-Owned Property—The Gaslight Site— 15584 Gaslight Drive Interviews Blaine Barker and Patrick Ostrom of Real Estate Equities provided a brief presentation. Commissioners asked questions related to City financial assistance, screening of tenants, and past projects that have been completed. Commissioners expressed a want for more creative design. Mr. Barker and Mr. Ostrom discussed funding of the project including outside investors and CRA credits. Marty O'Connell of MWF provided the next presentation. Economic Development Authority City of Apple Valley Dakota County, Minnesota August 8, 2024 Page 2 Commissioners asked questions related to screening of tenants, improvements made from past projects to current projects, City financing needs, pet friendly amenities, average rental rates, and how the project will be financed. Mr. O'Connell discussed the use of background and credit checks as well as income guidelines, MWF design standards used on every project,City financing and future construction costs, as well as tax credits and private banks and investors. CEO of Noor Companies Nawal Noor, CDA Director Tony Schertler, and Robert Ewert and Chris Palkowitsch of BKV Group provided a brief presentation. Commissioners asked questions regarding City financing needs stated in proposal, Met Council needs,parking, and management once built. The project would be funded with help from tax credits and investor funding. STAFF UPDATES None ADJOURNMENT MOTION: by Hooppaw, seconded by Grendahl, to adjourn at 5:15 p.m. Respectfully Submitted, p N . Breanna Vincent, Department Assistant Approved by the Apple Valley Economic Development Authority on October 24 , 2024 Thomas O. Melander, President • ITEM: 3.B. ••••• • ••• EDA MEETING DATE: October 24, 2024 Apple Valley SECTION: Consent Agenda Description: Approve 2025 Meeting Calendar Staff Contact: Department/ Division: Breanna Vincent, Department Assistant Community Development Department ACTION REQUESTED: Motion to approve the 2025 meeting calendar. SUMMARY: Meetings are held on the fourth Thursday of every other month at 6:00 p.m. at the Apple Valley Municipal Center, 7100 - 147th Street West. Thursday, January 23, 2025 Thursday, March 27, 2025 Thursday, May 22, 2025 Thursday, July 24, 2025 Thursday, September 25, 2025 Tuesday, December 23, 2025* *Odd date due to holiday BACKGROUND: N/A BUDGET IMPACT: N/A • ITEM: 4.A. ••••• • ••• EDA MEETING DATE: October 24, 2024 Apple Valley SECTION: Regular Agenda Description: Consider and Approve the Sale and Purchase Agreement Between Apple Valley Economic Development Authority(EDA) and Real Estate Equities, LLC for the Gaslight Site - 15584 Gaslight Drive Staff Contact: Department/ Division: Tim Benetti, Community Development Director Community Development Department ACTION REQUESTED: The EDA is asked to consider and approve the Sale and Purchase Agreement between the City of Apple Valley's Economic Development Authority (EDA) and Real Estate Equities, LLC for The Gaslight Site, located at 15584 Gaslight Drive. SUMMARY: At the July 25th regular EDA meeting, the EDA Board convened in closed session to review a number of proposals from various developer/real estate groups interested in purchasing and developing the Gaslight Site. A few weeks later on August 8th, the EDA convened in a special meeting to interview three groups: Real Estate Equities, MWF Properties, and Noor Cos./Dakota County CDA. Upon the completion of these interviews, the EDA directed staff to work with Real Estate Equities in completing a purchase agreement for future consideration. This Sale and Purchase Agreement (SPA) has been prepared by the City Attorney; and is for the full appraised value of $2,125,000, which includes two separate (initial) payments of $25,000 and $50,000 each, to be held as earnest money for completing the due diligence work and eventual purchase of the subject property by Real Estate Equities. The SPA also contains an added Repurchase Agreement between both parties, which gives the EDA the right to repurchase the property back from the Developer (Real Estate Equities) within one year from date of purchase, should the Developer fail to commence construction on the subject site. BACKGROUND: The Gaslight Site consists of 3.1 acres; and is generally located at the SE corner of 155th Street and Gaslight Drive, and immediately south of the Apple Valley (MVTA) Transit Station. The site is guided "SIHD" (Suburban Intensive High Density Residential) and is situated in the PD No. 507, Zone No. 2. Planning staff, along with the City Attorneys, worked with MVTA and Metropolitan Council officials in releasing their leasehold and other interests in the subject property, which has been completed and fulfilled. The EDA/City now has fully signed and recorded Quit Claim Deeds and easement releases from the MVTA and Met Council authorities. BUDGET IMPACT: The EDA/City is expected to receive a total of $2,125,000 from the proceeds on the final sale and transaction of this property. The EDA and/or City Council will need to decide how or where to allocate these funds for specific City needs, projects or improvements. The City can also expect the housing development proposed on the property to generate additional property tax revenues for the overall benefit of the community. ATTACHMENTS: Map Agreement 15584 GASLIGHT DRIVE pow— •r-4 - halbr .s., —v•-••• Air. • '. Lirf i i L` ), 4� i �_ _' �, i'i . . . , 4 !, L L,' i i, r ,,. .__:,......1 , / . , 4 , ,,,f: s 'LRIIrSm^ Ali it 1W ,4 - it 1 IL ,- :Alba hilirli‘gli `� L k Ie71-'S9el'lA19l un 1 , itoai-4,m4.4.. .' . __ s 3 ., , i 1 • ;#.1- ,Ai6. 'w _.... UG`JU W\'JU .mnnrra..L " y.7 UC�'lUlnJ 401111 . 1 $:4-1? — li , k ..a"....J M� r; At a a re li , .! ter - , l►p : , . -. _ j 0104,.9_,,, otio . - s‘is-41+‘ : i ,'' ,• ly .� w mar y� C d14 , ..; , 1 _ ..,..‘, I. li. ,I i 1. , . 4, . . :, , Da4 tl v�PrLi 4 1 ,, , „.,.....,, , I Alit , . . — — z 1 1I1 Disclaimer:Map and parcel data are believed to be accurate,but accuracy is not guaranteed. Map Scale ; F, 4 This is not a legal document and should not be substituted for a title search,appraisal,survey,or 1 inch = 150 feet for zoning verification. 1/17/2024 SALE AND PURCHASE AGREEMENT This Sale and Purchase Agreement (the "Agreement") is entered into effective as of the last date set forth below on the signature page (the "Effective Date") by and between Apple Valley Economic Development Authority, a body corporate and politic under the laws of the State of Minnesota(hereinafter referred to as "Seller") and Real Estate Equities, LLC, a Minnesota limited liability company (hereinafter referred to as"Buyer"). Seller and Buyer are collectively referred to as the Parties. In consideration of the foregoing and the mutual covenants, and agreement hereinafter expressed, and for other good, fair and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Seller and Buyer hereby agree as follows: 1. Purchase and Sale. Upon the terms and conditions hereinafter stated, Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase, all of Seller's right,title and interest in and to that those certain parcel of real estate located in Dakota County, Minnesota and legally described as Lot 1, Block 2, Carroll Center 4'''Addition(PID: 01-16253-02-010)(the"Property"). 2. Price and Payment. The Purchase Price for the Property is Two Million One Hundred Twenty- five Million and no/100 Dollars($2,125,000.00)and is payable as follows: 2.1 Earnest Money. The sum of Twenty-five Thousand and no/100 Dollars($25,000.00)shall be deposited with the Title Company (as defined herein) within three days following the Effective Date and shall be held in escrow by the Title Company as and for earnest money (together with any interest earned thereon,the"Initial Earnest Money")in accordance with the terms of this Agreement. The Initial Earnest Money shall be applied to the Purchase Price and will remain fully refundable to the Buyer during the Due Diligence Period (as defined herein), and shall become nonrefundable to the Buyer upon the expiration of the Due Diligence Period. Within three days following the expiration of the Due Diligence Period, assuming the Buyer has not terminated this Agreement, the Buyer will deposit with the Title Company an additional Fifty Thousand and no/100 Dollars($50,000.00)as additional earnest money ("Additional Earnest Money" and together with the Initial Earnest Money, the "Earnest Money"). Following the Due Diligence Period the Earnest Money will be nonrefundable to the Buyer but applied to the Purchase Price. 2.2 Cash at Closing. The unpaid balance of the Purchase Price, subject to prorations and adjustments as provided herein, shall be paid on the Closing Date in cash, by wire transfer or other immediately available funds. 3. Due Diligence. 3.1 Inspections and Approvals. From the Effective Date until the expiration of the Due Diligence Period, Buyer may review and inspect all aspects of the Property, including, but not limited to, evaluating due diligence materials; zoning and potential rezoning to meet its intended development plan; and conducting surveying, geotechnical, archeological, environmental,well tests,delineations, and any other due diligence inspection,analysis or review deemed necessary by Buyer ("Tests"). Seller agrees to cooperate with Buyer on any Tests,other inspections, and City entitlement applications, if needed. Buyer shall pay all costs and expenses of the Tests and shall defend, indemnify and hold harmless Seller and its agents, employees and contractors and the Property from and against any and all 1 • loss, cost, damage, liability, settlement, cause of action or threat thereof or expense (including, without limitation, reasonable attorneys' fees and costs) to the extent arising from the Tests, provided,however, Buyer shall not be responsible for costs or remediation of any pre-existing environmental conditions revealed by Buyer's Tests. Buyer shall promptly repair and restore any damage to the Property caused by Buyer's Tests and return the Property to substantially the same condition as existed prior to the conduct of the Tests. No invasive Tests shall be done without Seller's approval as to the time and manner of such Tests,which approval shall not be unreasonably withheld or delayed,and,at Seller's option, any such Tests shall be performed in the presence of a representative of Seller, and shall be conducted in such a manner so as to minimize interference with the operation of the Property and the business of tenants. Buyer shall promptly deliver to Seller copies of the Tests related to the Property including, without limitation, any environmental assessment prepared with respect to the Property. Buyer shall immediately notify Seller of the discovery of any hazardous materials or other environmental condition on the Property (prior to giving any notice to any governing authority), and; (i) if, according to Buyer's consultants, such condition requires remedial action, shall cease any further Tests until Buyer receives approval from Seller that Buyer may continue; and(ii) shall dispose of the contaminated samples in Buyer's possession in accordance with law. The obligations of Buyer under this Section 3.1 shall survive Closing (or termination) of this Agreement, notwithstanding any provision to the contrary herein contained. 3.2 Due Diligence Period. The"Due Diligence Period" is the period from the Effective Date through the date that is one hundred eighty (I 80)days after the Effective Date. 3.3 Buyer's Contingencies and Termination Right. The obligations of Buyer under this Agreement are contingent upon each of the following: 3.3.1 Tests. Buyer shall have determined in its sole and absolute discretion,on or before the expiration of the Due Diligence Period, that it is satisfied with the results of and matters disclosed by the Tests. 3.3.2 Document Review. Buyer shall have determined in its sole and absolute discretion, on or before the expiration of the Due Diligence Period, that it is satisfied with its review and analysis of the due diligence materials related to the Property. 3.3.3 Suitability. Buyer shall have determined in its sole and absolute discretion, on or before the expiration of the Due Diligence Period, that the Property is suitable to Buyer in accordance with Buyer's development plans. 3.3.4 Government Approvals. Buyer shall have obtained at its sole cost and expense,on or before the expiration of the Due Diligence Period, all entitlements, site plan approvals, building plan and design approvals and permits, environmental and wetland mitigation approvals, stormwater management and other watershed district approvals, zoning and land use approvals, any applicable platting and subdivision approvals, and any and all other governmental approvals, in each case to the extent necessary in Buyer's sole judgment for Buyer's proposed use (the "Approvals"). In the event Buyer determines in its sole discretion that any of the contingencies set forth above have not been satisfied on or before the expiration of the Due Diligence Period, 2 Buyer shall have the right to terminate this Agreement by written notice to Seller on or before the expiration of the Due Diligence Period. Upon such termination, the Initial Earnest Money shall be returned to Buyer. If Buyer acknowledges the satisfaction or waiver of a contingency by written notice to Seller, or if Buyer does not provide a written notice of termination by the date required, Buyer shall no longer have a right to terminate this Agreement under this Section because of such contingency. All the contingencies set forth in this Section 3.3 are specifically for the benefit of the Buyer and may be waived by Buyer at any time. 4. Title and Survey Examination. 4.1 Title Insurance Commitment. Within five(5) days following the Effective Date, Buyer will order a title insurance commitment from Commercial Partners Title LLC (the "Title Company"), including a copy of each instrument listed as an exception to title or referred to therein (the"Title Commitment"),covering the Property, issued by the Title Company, by which Title Commitment the Title Company shall agree to issue to Buyer, upon recording the Deed (as hereinafter defined), an extended coverage current ALTA Form owners title insurance policy (the "Title Insurance Policy") in the amount of the full Purchase Price. 4.2 Survey. Buyer, at its sole cost and expense, shall obtain an ALTA/NSPS Land Title Survey of the Property (the "Survey") prepared by a duly licensed land surveyor licensed in Minnesota and acceptable to Buyer. The Survey shall identify the Title Commitment and show all exceptions disclosed in the Title Commitment. The Survey shall be certified to Buyer, Seller and the Title Company. 4.3 Title Objections. No later than thirty (30) days following the receipt of both the Title Commitment and Survey, the Buyer shall provide written notice to Seller (the "Title Notice") of its approval or disapproval of any exception, matter or condition contained therein(each a"Title Objection"). 4.3.1 Within thirty(30)days of receiving Buyer's Title Notice,Seller will use good faith and reasonable diligence, but will not be obligated to incur any material out-of- pocket expense, to cure any Title Objections. If Seller does not cure the Title Defects within such thirty (30) day period to Buyer's and Title Company's satisfaction, then on or before the expiration of the Due Diligence Period, Buyer shall have the option to give written notice to Seller that Buyer: (i) waives such Title Objections; or (ii) terminates this Agreement. Upon such termination, the Earnest Money (excluding any Nonrefundable Earnest Money as of the date of such termination) shall be returned to Buyer; and (b) any Nonrefundable Earnest Money as of the date of such termination shall be disbursed to Seller. 4.3.2 Any Title Objection(s) Buyer waives in writing, and each exception, matter or condition which Buyer approves in writing,shall become a"Permitted Exception" to title. Permitted Exceptions are listed on Exhibit "A." 5. Buyer's Covenants. 5.1 Condition of the Property. Buyer acknowledges that there is an existing structure on the property and Buyer shall be responsible for its timely demolition and removal after Closing. 3 5.2 Development Applications. Buyer acknowledges that it shall promptly submit any and all development applications to the City of Apple Valley for its intended use of the Property. 5.3 Development Obligations. Buyer acknowledges that it is solely responsible for all development requires that may be required under the Apple Valley City Code including, but not limited to park dedication, stormwater requirements, sanitary area and water area charges and such other obligations as may be required under the Apple Valley City Code. 6. Closing and Closing Procedures. The Closing shall be conducted in accordance with the following procedures: 6.1 Closing Date. The closing of the transaction contemplated herein("Closing") shall occur on the date that is one hundred eighty(180) days after the expiration of the Due Diligence Period or upon such earlier date determined by Seller with at least fifteen(15)days' notice to Buyer ("Closing Date"). The Buyer shall also have an option to further extend the Closing Date an additional one hundred eighty (180) days so long as notice has been provided to the Seller five (5) days prior to the Closing Date, and the Buyer deposits a nonrefundable extension fee of Twenty-Five Thousand and 00/100 ($25,000.00) with the Title Company. The nonrefundable extension fee described in this Section 6.1 shall be applied to the purchase price. 6.2 Place of Closing; Manner of Closing. The Closing shall be conducted at the Title Company in Minneapolis, Minnesota. 6.3 Closing Procedures. This transaction may close remotely by depositing the required money and documents in escrow with the Title Company. 6.4 Conveyance. Seller shall deliver to Buyer a standard Minnesota form limited Warranty Deed (the "Deed") in recordable form conveying fee simple title to the Property, subject only to the Permitted Exceptions. 6.5 Repurchase Agreement. Seller and Buyer shall execute the Repurchase Agreement attached hereto as Exhibit"B." 6.6 Costs of Sale; Prorations. 6.6.1 Title Insurance and Survey. Seller shall pay the costs of abstracting, name searches,preparation and issuance of the Title Commitment including any updates. Buyer shall pay the premium for the Owner's Policy issued pursuant to the Title Commitment and any special endorsements thereto. 6.6.2 State Deed Tax Stamps. Seller shall pay the state deed tax. 6.6.3 Costs of Recording. Buyer shall pay all other costs of recording the Deed. Seller shall pay any recording fees associated with removing any of Buyer's Title Objections. 6.6.4 Real Estate Taxes. Real property taxes due and payable for the Property prior to the year in which the Closing occurs shall be paid by Seller. Real property taxes 4 due and payable for the Property in the year of Closing shall be prorated between Seller and Buyer through the Closing Date. 6.6.5 Special Assessments. "Special assessments" means all assessments levied or to be levied under Minn. Stat. Chapter 429, under any other statute, regulation, charter, ordinance or under any declaration of covenants affecting the Property other than assessments related to Buyer's proposed development activities. At the Closing of the sale of the Property: 6.6.5.1 Seller shall pay all special assessments that are levied,pending or deferred as of the Effective Date, including those certified to real property taxes for the year of Closing. 6.6.5.2 Buyer shall be responsible for paying all special assessments that are levied after the Effective Date and not otherwise Seller's responsibility,or that are the result of improvements that,as of the Closing Date, have been or will be installed as a direct result of Buyer's development of the Property. Seller shall remain responsible for all previously existing deferred assessments and any interest due thereon. Buyer is responsible for all costs related to any land use approvals or contemplated costs of development, including, but not limited to, water ponding requirements and any other costs related to its contemplated development. 6.6.6 Closing Fees. Closing fees customarily charged by the Title Company shall be shared equally between the Parties. If any escrows are required pursuant to this Agreement, escrow fees charged by the Title Company shall be payable by the party creating the circumstance for which the escrow is required. 6.6.7 Attorney's Fees. Each of the parties will pay its own attorneys' fees, except that a party defaulting under this Agreement or under any closing document will pay the reasonable attorneys' fees and court costs incurred by the non-defaulting party to enforce its rights regarding such default. 6.7 Seller Closing Deliveries. At the Closing, Seller shall deliver the following: 6.7.1 The Deed. 6.7.2 A standard form owner's affidavit sufficient and acceptable to the Title Company so as to allow it to eliminate the standard owner's exceptions, including the parties in possession,mechanic's lien,and gap exceptions from the Title Commitment and the Owner's Policy issued pursuant thereto. The affidavit shall run in favor of Buyer and the Title Company. 6.7.3 A non-foreign seller affidavit, in commercially acceptable form (or if Seller is a foreign person, then Seller agrees to comply with all withholding requirements of the Internal Revenue Service related thereto). 6.7.4 A statutory well disclosure certificate, if applicable. 6.7.5 Information necessary for the Title Company to complete an ECRV. 5 6.7.6 A certificate of Seller certifying that Seller's representations and warranties in this Agreement are true and correct as of the Closing Date. 6.7.7 A Designation Agreement designating the "reporting person" for purposes of completing Internal Revenue Form 1099 and,if applicable,Internal Revenue Form 8594. 6.7.8 Seller shall deliver possession of the Property at Closing, free and clear of all tenancies, occupancies and rights,titles or interests of third parties. 6.8 Buyer Closing Deliveries. At the Closing, Buyer shall deliver the following: 6.8.1 The balance of the Purchase Price determined in accordance with the terms of this Agreement. 6.8.2 Such customary affidavits as may reasonably be required by the Title Company to insure the title to the Property, in accordance with the terms of this Agreement. 7. Buyer's Default. In the event Buyer defaults in the performance of its obligation to Close hereunder,Seller shall have the right to terminate this Agreement by giving written notice to Buyer in accordance with Minnesota Statute 559.21, if Buyer fails to cure such default within any applicable period provided by Minnesota Statute 559.21, and upon such termination Buyer shall forfeit the Earnest Money already paid. The termination of this Agreement and retention of the Earnest Money will be the sole and exclusive remedy available to Seller for Buyer's failure to Close. 8. Seller's Default. Seller shall be in default hereunder("Seller's Default") if any representation or warranty made by Seller herein is false in any material respect or Seller otherwise defaults in the performance of any covenant or obligation contained in this Agreement. 8.1 If, prior to Closing, Seller fails to cure any Seller's Default within ten (10) business days after Seller's receipt of notice of the breach from Buyer, Buyer shall have the following sole and exclusive remedies: 8.1.1 (i) Terminate this Agreement and thereupon all of the Earnest Money shall be returned in accordance with this Agreement. 8.1.2 Waive any such default and proceed with the purchase of the Property pursuant to the remaining terms of this Agreement. 9. Indemnities; Defaults after Closing or Termination. The limitations on the Parties' remedies set forth in Sections 7 and 8 will not be deemed to prohibit the Seller from (i) specifically seeking indemnification from the Buyer for any matter with respect to which the Buyer has agreed hereunder to provide indemnification or from seeking damages from the Buyer in the event it fails or refuses to provide such indemnification; and(ii) subject to the terms, conditions and limitations of this Agreement, seeking damages incurred during the period of time after Closing that a representation or warranty given as of the Closing Date by the other party hereunder survives Closing, for the Buyer's breach of such representation or warranty discovered after such Closing. 10. Representations and Warranties of Seller with Respect to the Property. Each of the warranties and representations contained in this Section 10 and other paragraphs of this Agreement shall be 6 deemed made as of the Effective Date and again as of the Closing Date. Seller hereby represents and warrants to,and covenants with, Buyer that: 10.1 Legal Capacity. Seller has the requisite power and authority to enter into and perform this Agreement and those Seller's closing documents signed by it. 10.2 Title. To Seller's actual knowledge, Seller has good and marketable fee simple title to the Property; and there are no outstanding contracts to sell the Property or any part of the Property except this Agreement. 10.3 Property Interests. There are no parties with any right, title or interest to the Property (marital, homestead, leasehold, lien, option, right of first refusal, contractor, vendee or otherwise),and no other signatures are required to make this Agreement fully enforceable by Buyer. 10.4 Storage Tanks. To Seller's actual knowledge, there are no underground or aboveground storage tanks currently or formerly located on the Property. Seller has no actual knowledge of any reports,documents or other records pertaining to the Property which would disclose the existence of a Storage Tank currently on the Property or at any time in the past. 10.5 Wells; Septic. Seller does not know of any wells located on or serving the Property. Seller does not know of any individual sewer treatment systems located on or serving the Property. 10.6 Refuse and Hazardous Materials. To Seller's actual knowledge, except for past storage of gasoline and past storage and ongoing application of fertilizer, pesticides,herbicides and other substances applied and stored in accordance with applicable laws in connection with the prior residential and agricultural use of the Property,there are no"Hazardous Materials" (as hereinafter defined) on the Property that would subject Buyer to any liability under either federal or state laws, including,but not limited to,the disposal of any foreign objects or materials upon or in the Property, lawful or otherwise. The term "Hazardous Materials" as used herein includes, without limitation, gasoline, diesel fuel, oil and other petroleum products, explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, polychlorinated biphenyls or related or similar materials, asbestos or any material containing asbestos, or any other substance or material as may be defined as a hazardous or toxic substance by any federal, state or local environmental law, ordinance, rule, or regulation including, without limitation,the Comprehensive Environmental Response, Compensation,and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous Materials Transportation Act, as amended (42 U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act, as amended(42 U.S. C. Section 1251, et seq.),the Clean Air Act,as amended(42 U.S.C.Section 7401,et seq.),Minnesota Environmental Response and Liability Act, Minn. Stat. 115B ("MERLA"), and the Minnesota Petroleum Tank Release Cleanup Act, Minn. Stat. 115C, and in the regulations adopted and publications promulgated pursuant thereto. 10.7 Methamphetamine Disclosure. For the purposes of satisfying any applicable requirements of Minn. Stat. § 152.0275, Seller is not aware that any methamphetamine production has previously occurred on the Property. 7 10.8 Due Diligence Deliveries. Seller has delivered(or will deliver pursuant to this Agreement) to Buyer true and complete copies of all due diligence materials relating to or affecting the Property that are in Seller's possession. Subject to Seller's representations and warranties set forth above, Buyer is purchasing, and Seller shall sell and convey to Buyer, the Property in its existing condition on the Closing Date AS-IS, WHERE-IS, and WITH-ALL-FAULTS, with respect to all facts, circumstance, conditions and defects. Except for Seller's express representations and warranties contained in this Agreement, Seller disclaims,and Buyer acknowledges that Seller has not made,any warranty or representation, express or implied,written or oral,statutory or otherwise,of any nature whatsoever with respect to the Property, including without limitation representation, use of the Property for Buyer's intended use, the condition of the Property, past or present use, development, investment potential, tax ramifications or consequences, present or future zoning, habitability, merchantability, fitness or suitability for any purpose, or any other matter with respect to the Property. 11. Miscellaneous. 11.1 Captions. The captions contained herein are for convenience only and are not a part of this Agreement. 11.2 Entire Agreement. This Agreement, including the Exhibits attached hereto, contains the entire Agreement between Seller and Buyer. All other representations, negotiations and agreements, written and oral, including any letters of intent which pre-date the Effective Date,with respect to the Property or any portion thereof,are superseded by this Agreement and are of no force and effect. This Agreement may be amended and modified only by instrument, in writing, executed by all parties hereto. 11.3 Termination. If this Agreement is terminated by either Buyer or Seller pursuant to a right of termination expressly set forth in this Agreement, neither Party shall have any further rights or obligations under this Agreement, except for the obligations concerning the Earnest Money as set forth in this Agreement, and to the extent any rights or obligations expressly survive such termination. 11.4 Survival. All obligations of Buyer and Seller as set forth in this Agreement shall survive Closing and the execution and delivery of the Deed. 11.5 Assignment. This Agreement may be assigned by Buyer only as provided in this paragraph.Buyer may each assign this Agreement to an affiliate or an entity under common control as the assigning Party without consent. In the event consent is required for an assignment,consent may be withheld,conditioned or delayed in the Seller's sole discretion. 11.6 Parties Bound; Joint and Several. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective heirs, personal representatives, successors and assigns, subject to the provisions and limitations on assignment set forth above. If this Agreement is signed by more than one Seller,the singular includes the plural, and each Seller is jointly and severally liable for all obligations of the Seller described in this Agreement. 11.7 Applicable Law. This Agreement shall be construed by and controlled under the laws of the State of Minnesota without regard to conflict of law provisions. 8 11.8 Partial Invalidity. In the event that any paragraph or portion of this Agreement is determined to be unconstitutional, unenforceable or invalid, such paragraph or portion of this Agreement shall be stricken from and construed for all purposes not to constitute a part of this Agreement, and the remaining portion of this Agreement shall remain in full force and effect and shall, for all purposes,constitute this entire Agreement. 11.9 Construction of Agreement. All parties hereto acknowledge that they have had the benefit of independent counsel with regard to this Agreement and that this Agreement has been prepared as a result of the joint efforts of all parties and their respective counsel. Accordingly, all parties agree that the provisions of this Agreement shall not be construed or interpreted for or against any party hereto based upon authorship. 11.10 Counterparts. This Agreement may be executed in any number of counterparts, and by email and facsimile signatures, each of which when executed and delivered shall be deemed an original,and all of which when taken together shall constitute one and the same original Agreement. 11.11 Gender. The use of any gender shall be deemed to refer to the appropriate gender,whether masculine,feminine or neuter,and the singular shall be deemed to refer to the plural where appropriate, and vice versa. 11.12 Time. Time is of the essence for the performance of this Agreement. Should the date for the giving of any notice,the performance of any act,or the end of any period provided for herein fall on a Saturday, Sunday or other legal holiday,such date shall be extended to the next day which is not a Saturday, Sunday or legal holiday. 11.13 Waiver of Breach. The failure of any party hereto to enforce any provision of this Agreement shall not be construed to be a waiver of such or any other provision, nor in any way to affect the validity of all or any part of this Agreement or the right of such party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach. 11.14 Broker's Commissions. Each party represents to the other that it has not engaged a broker to list and/or sell the Property. 11.15 Like-Kind Exchange. In the event Buyer desires to exchange their interest in the Property for other real property in a like-kind exchange under Internal Revenue Code Section 1031, Buyer agrees to cooperate with Seller to facilitate a like-kind exchange provided: (1) any costs and expenses(including costs associated with the designation of any escrow agent or intermediary) occasioned thereby are borne by Buyer; (2) cooperation by the Seller will not delay the closing of the transaction between Buyer and Seller contemplated in the Purchase Agreement; (3) the Buyer agrees to defend, indemnify and hold harmless the Seller for any claims arising out of said like-kind exchange and Buyer shall not be required to hold title (as a conduit or otherwise); (4) Buyer shall not be released of its obligations under this Agreement as a result of the Exchange and (5) Buyer shall provide Seller with copies of all exchange documents that require Seller's signature at least three (3) days in advance of closing for Seller's review and comment. The indemnification in this Section shall survive Closing and delivery of the Deed. 12. Notices. All notices and other documents of similar legal effect from either party to the other shall be in writing and considered to have been duly given or served if sent by first class certified mail, 9 return address as set forth below,or to such other address as such party may hereafter designate by written notice to the other party; or emailed with delivery receipt. To Seller: Apple Valley Economic Development Authority Attn: Tim Benetti, Community Development Director 7100 147'1' Street West Apple Valley, MN 55124 Email: Tirn.Beneti.i(c applevallevmn.gov With a copy to: Dougherty, Molenda, Solfest, Hills & Bauer P.A. Attn: Robert B. Bauer 14985 Glazier Avenue, Suite 525 Apple Valley, MN 55124 Email: rbauer(h+)dmshb.com To Buyer: Real Estate Equities, LLC Attn: Alex Bisanz 579 Selby Avenue St. Paul, MN 55 1 02-55 1 0 Email: abisanzOreeapartments.com With a copy to: Winthrop& Weinstine, P.A. Attn: Jeffrey S. Drennan 225 South Sixth Street, Suite 3500 Minneapolis, MN 55402 Email: jdrennan(a)winthrop.com [Signature page to follow.] 10 Docusign Envelope ID:8AE8B387-E1B4-444B-8D5F-18DFCF4A4EC5 SALE AND PURCHASE AGREEMENT Buyer Real Estate Equities, LLC, a Minnesota limited liability company Dated: , 2024 By: 7tSOUA/5 William R. Bisanz Its: President Seller Apple Valley Economic Development Authority, a body corporate and politic under the laws of the state of Minnesota Dated: , 2024 By: Torn Melander Its: President Dated: , 2024 By: Torn Lawell Its: Executive Director EXHIBIT A Permitted Exceptions Permitted exceptions include: (i) taxes not yet due and payable; (ii) applicable federal,state and local zoning, ordinances and governmental regulations; and (iii) and(iii)reservations of any minerals,or mineral rights to the State of Minnesota, if applicable. In the event that Buyer is able to obtain documentation that enables the Title Company to insure over any Permitted Exception listed on Exhibit"A,"then such item shall not be a Permitted Exception on the Deed. A-1 EXHIBIT B REPURCHASE AGREEMENT This Repurchase Agreement ("Agreement") is made and entered into this day of , 20 , by and between the Apple Valley Economic Development Authority, a body corporate and politic under the laws of the State of Minnesota (the "EDA"), and Real Estate Equities, LLC,a Minnesota limited liability company (hereinafter"Developer"). WHEREAS, the EDA and Developer have entered into a Purchase Agreement, dated as of , 2024 (the "Contract") relating to the sale and purchase of a certain tract or parcel of land situated in Dakota County, Minnesota, described as Lot 1, Block 2, Carroll Center 4t1' Addition (PID: 01-16253-02-010) (the "Property"); and WHEREAS, contemporaneously herewith the EDA has conveyed to Developer the Property. NOW, THEREFORE, in further consideration of this conveyance and in furtherance of the understanding between the parties, Developer hereby grants to the EDA the following option to repurchase the Property; Section 1. REPURCHASE: If within one (1) year from the date Developer purchases the Property Developer has not commenced the construction of the Improvements, as defined in that certain Development Agreement dated , ("Development Agreement"), on the Property then the EDA may at its option repurchase the Property for a purchase price of Two Million One Hundred Twenty-five Thousand and no/100 Dollars ($2,125,000.00) less the amount of any liens or claims against the Property resulting from action by the Developer. The EDA may exercise this option to repurchase by giving written notice to Developer within thirty (30) days of the expiration of the period(s) specified above. Upon receiving the repurchase price in cash from the EDA, Developer shall convey to the EDA good and marketable title to the Property by limited warranty deed free and clear of any encumbrances placed or suffered thereon by Developer. In the event that Developer fails or refuses to remove such encumbrances, the EDA shall be permitted to remove such encumbrances at Developer's sole cost and expense. Developer hereby agrees to indemnify the EDA from any and all liabilities, expenses and costs incurred (including but not limited to reasonable attorney's fees) arising out of or related to the removal of such encumbrances. Section 2. RELEASE OF REPURCHASE RIGHTS: If written notice of option exercise is not timely given to Developer by EDA or if Developer, within one (1) year from the date Developer purchases the Property, commences the construction of the Improvements on the Property within said one (1) year period, this option to repurchase shall terminate absolutely and the EDA shall upon Developer request, execute and deliver to Developer a release of the repurchase right in recordable form. Section 3. SALE OF PROPERTY: Developer hereby acknowledges and agrees that Developer shall not sell, or transfer title to all or any portion of the Property within two years B-1 from the date of Developer's purchase of the Property without the prior written consent of the EDA or the execution and delivery of a release of the repurchase right set forth herein. Any purported conveyance or transfer of title without the prior written consent of the EDA shall be considered null and void. Section 4. NOTICE: All notices, demands and requests required or permitted to be given under this Agreement must be in writing and shall be deemed to have been properly given or served either by personal delivery or by depositing the same in the United States Mail, addressed to the EDA or to Developer, as the case may be, prepaid and registered or certified mail, return receipt requested, at the following addresses: All communications shall be directed to the Developer at: To Developer: Real Estate Equities, LLC Attn: Alex Bisanz 579 Selby Avenue St. Paul, MN 55102-5510 Email: abisanz@reeapartments.com With a copy to: Winthrop & Weinstine, P.A. Attn: Jeffrey S. Drennan 225 South Sixth Street, Suite 3500 Minneapolis, MN 55402 Email: jdrennan@winthrop.com All communications shall be directed to the EDA at: To Seller: Apple Valley Economic Development Authority Attn: Tim Benetti, Community Development Director 7100 147th Street West Apple Valley, MN 55124 Email: Tim.Benetti(1)applevalleymn.gov With a copy to: Dougherty, Molenda, Solfest, Hills & Bauer P.A. Attn: Robert B. Bauer 14985 Glazier Avenue, Suite 525 Apple Valley, MN 55124 Email: rbauer(a clmshh.com B-2 Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice, demand or request. Either party shall have the right from time to time and at any time upon at least ten (10) days' written notice thereof, to change their respective addresses and each shall have the right to specify as its address any other address within the United States of America. Section 5. MISCELLANEOUS. The provisions of this Agreement are intended in each instance to be binding upon and inure to the benefit of the signatories hereto, to the successors and assigns of Developer who become owners of the Property and to the successors and assigns of the EDA to whom the right, title and interest herein is specifically assigned. Either party may record this instrument in the appropriate real estate records. IN WITNESS WHEREOF, the parties have caused this instrument to be executed as of the day and year first above written. Real Estate Equities, LLC, a Minnesota limited liability company By: William R. Bisanz Its: President STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing instrument wa acknowledged befo - me, a notary pubic, this day of , 202 .y William R. Bisanz, tht 'resident of Real Estate Equities, LLC, a Minnesota limited liab' ty company, on behalf of the lim . d liability company. Notary Public B-3 Apple Valley Economic Development Authority, • body corporate and politic under the laws oftl State of Minnesota By: Tom Melander Its: President By: Tot• awell s: Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) The foregoing ins ment was acknowledged before me, a n- ary public, this day of , 2024, by Torn Melander and Tom L. ell, the President and Executive Director the Apple Valley Economic Development Authorit , a body corporate and politic under th aws of the state of Minnesota, on behalf of the body corpora .- and politic. Notary Public THIS INSTRUMENT WAS DRAFTED BY: DOUGHERTY, MOLENDA, SOLFEST HILLS & BAUER P.A. 14985 Glazier Avenue, Suite 525 Apple Valley, MN 55124 (952) 432-3136 (RBB: 28203) B-4 12/20/2024 Gaslight Site 15584 Gaslight Drive Sale & Purchase Agreement Economic Development Authority Special Meeting October 24, 2024 "valley 1 ,." i. Gaslight Site I ,_- . , - - - �...0. M( Generally located SE corner of i$ i` "4..4.,� a .',1: , i rLAW 155th Street and Gaslight Drive; j-- °.-- .'w• 1�,,�. South of the main MVTA Transit I �' 1, Hub and parking ramp structure ,, 0 j,i ..,,+- i•k: _ 3.1 acres , - I 9 .. ;' � ,1 1 - I 1 4 .A �Ii ,Site owned by the EDA r- , ;,ll1 1,g •' 'I- 11. t ,a'' / ppValley . L. i .4 V a 11;011 I v • .. + '#.4i, 2 1 12/20/2024 * '1'yam I ry Gaslight Site ' -. ,- ,,,,, I 1/ July 25th - EDA convened in closed "'-" 4 'yam trn " session to review proposals from " e `� developer groups interested in 1; _ = ..= -, , _ . ,s4 ' -- purchasing site t _ _ " f5 August 8th - EDA interviewed three ..J....., ' j� 1 groups; selected Real Estate e ' f ` ' Equities E�" _ ' Directed staff to work with REE in completing a purchase agreement a 4li 0. Sale & Purchase Agreement g � �o" Apgaiiey prepared by City Attorney o ' `\ �k '�; i , : 1, in - ,‘t1 \\ - ‘• .ihp i3--- Sale and Purchase Agreement Sale and Purchase Agreement for full appraised value of $2,125,000 $25,000 to be deposited with Title Company within three days following Effective Date (escrow w/ Title Company); fully refundable to the Buyer during the Due Diligence Period; nonrefundable to the Buyer upon the expiration of the Due Diligence Period. Within three days following expiration of Due Diligence Period, assuming the Buyer has not terminated this Agreement, the Buyer will deposit with the Title Company an additional $50,000 ❑ "Due Diligence Period" is period from Effective Date through the date that is one hundred eighty (180) days after Effective Date APP iley 4 2 12/20/2024 Sale and Purchase Agreement Closing Date. The closing shall occur on the date that is 180 days after the expiration of the Due Diligence Period or upon such earlier date determined by Seller with at least 15 days' notice to Buyer ("Closing Date") ❑ Buyer shall also have an option to further extend the Closing Date an additional 180 days so long as notice has been provided to the Seller 5 days prior to the Closing Date, and the Buyer deposits a nonrefundable extension fee of $25,000 with the Title Company APpVallley ❑ S&P includes a REPURCHASE AGREEMENT 5 Action Requested Approve the Sale and Purchase Agreement for $2,125,000 between the City of Apple Valley's Economic Development Authority (EDA) and Real Estate Equities, LLC for The Gaslight Site - 15584 Gaslight Drive Authorize the EDA President and Executive Director to execute the S&P Agreement on behalf of the EDA Apple Questions for Staff? 6 3