HomeMy WebLinkAbout#05 - Drake Motor Partners Land Exchange1
STAFF REPORT
DATE: 06/20/23
CONSENT
MOTION
TO: City Council
FROM: Jenni Faulkner, Planning Consultant
AGENDA ITEM: Consider Land Exchange Agreement with Drake Motor Partners LE LLC REVIEWED BY: Sophia Jensen, City Planner
BACKGROUND:
On May 16, 2023 the City Council approved a final plat, PUD, and Development Agreement for Drake Motor Partners LE LLC. A condition of approval was that the developer enter into a land exchange agreement to facilitate their request to exchange a small portion of city right-of-way with and equal portion of land on Lot 1 Block 1 (DQ site) adjacent to Hudson Blvd. to accommodate their proposed sign along the interstate.
ISSUE BEFORE THE CITY COUNCIL:
The City Council is being requested to approve the Land Exchange Agreement.
PROPOSAL DETAILS/ANALYSIS:
The city owned parcel to be conveyed to Drake is currently zoned and guided as right-of-way. The Drake parcel to be conveyed to the city is currently zoned and guided as Commercial. In addition, the MnDOT highway easement (dedicated as right-of-way on the final plat) along the southerly lot line of the plat is zoned and guided as Commercial.
MN statutes require that the Planning Commission review the transaction and reported its findings to the City Council as to the compliance with the Comprehensive Plan (Minnesota Statutes Section 462.356,
subdivision 2). No public hearing is required. Alternatively, the City Council may, by resolution (with a 2/3 vote) dispense with the requirements of the statute when in its judgment, it finds that the proposed exchange has no relationship with the Comprehensive Plan. The remnant parcel to be conveyed to the
developer is not intended for future public purposes (road, park, open space, etc.). The City would not be getting rid of land otherwise contemplated for a specific public purpose.
The developer will have to rezone the parcels and re-guide the parcels so the areas dedicated and to be conveyed as right-of-way are zoned and guided as such and then the parcel where the future sign will be located will be rezoned and guided to Commercial consistent with the adjacent Lot 1 Block 1 (DQ site). This will clean-up the maps and guided land uses going forward to be consistent with the PUD approval.
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Another factor to be reviewed when disposing of public lands is if there is a business subsidy. The
transaction is not considered a business subsidy under the Business Subsidy Act because the parties are
exchanging land that is supposedly of equal value and the City is not giving Drake land for free or a
reduced price.
The City Attorney has reviewed the land exchange and prepared the Land Exchange Agreement, and the developer has reviewed it. There are no outstanding issues. The developer intends to execute the land exchange prior to closing on Lot 1 Block 1 with Dairy Queen to facilitate a clean real estate transaction. FISCAL IMPACT
As this request is from the developer, the Land Exchange Agreement calls for the developer to cover all
costs related to the transaction. OPTIONS
The City Council should consider the following options:
1) To approve the request and adopt the resolution.
2) To reject the request.
RECOMMENDATION:
Staff is recommending that the City Council approve the land exchange agreement as part of the consent
agenda.
If removed from the consent agenda, then Staff recommends the City Council approve the request with
the following motion:
“Move to adopt Resolution No. 2023-064, Approving A Land Exchange Agreement With Drake Motor
Partners LE LLC”.
”
ATTACHMENTS:
1. Resolution 2023-64
2. Land Exchange Agreement
3. Land Exchange Exhibit (from the Development Agreement)
LA515-115-882170.v1
CITY OF LAKE ELMO WASHINGTON COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2023-064 A RESOLUTION APPROVING A LAND EXCHANGE AGREEMENT WITH DRAKE
MOTOR PARTNERS LE LLC
WHEREAS, the City owns certain property located in the City of Lake Elmo, Minnesota, which is legally described on Exhibit A attached hereto (the “City Parcel”); and
WHEREAS, Drake Motor Partners LE LLC (“Drake”) owns certain property located in
the City of Lake Elmo, Minnesota, which is legally described on Exhibit B attached hereto (the
“Drake Parcel”); and
WHEREAS, the parties wish to exchange the parcels by conveying them to one another; and
WHEREAS, the transaction does not constitute a business subsidy under the Business Subsidy Act; and
WHEREAS, pursuant to Minnesota Statutes Section 462.356, subdivision 2, the City
Council finds that the proposed exchange has no direct relationship with the Comprehensive Plan;
and
NOW, THEREFORE, BE IT RESOLVED,
1. That the City Council hereby approves the Land Exchange Agreement in substantially
the form presented to the City Council, subject to modifications that do not alter thesubstance of the transaction and that are approved by the Mayor and City Clerk,provided that execution of the Land Exchange Agreement by those officials shall beconclusive evidence of their approval.
2.City officials, staff, and consultants are authorized to take all actions necessary toperform the City’s obligations under the Land Exchange Agreement as a whole,including without limitation, execution of any documents to which the City is a partyreferenced in or attached to the Land Exchange Agreement, and of any deed or other
documents necessary for the City Parcel to be conveyed by the City to Drake, as
described in the Land Exchange Agreement.
3.No sign permits, or other permits, shall be issued on the parcel to be conveyed to Drakeuntil a Comprehensive Plan Amendment and related Rezoning of the parcels is
complete.
ADOPTED BY THE LAKE ELMO CITY COUNCIL ON THE 20TH DAY OF JUNE, 2023.
LA515-115-882170.v1
CITY OF LAKE ELMO
By: __________________________
Charles Cadenhead (Seal) Mayor ATTEST:
________________________________
Julie Johnson City Clerk
LA515-115-882170.v1
EXHIBIT A
Legal Description of the City Parcel
That part of Parcel 33B, Minnesota Department of Transportation Right of Way Plat No. 82-43, Washington County, Minnesota, described as follows:
Commencing at the most westerly corner of Lot 1, Block 1, EBERTZ ADDITION, said Washington
County; thence South 46 degrees 03 minutes 26 seconds East, plat bearing, along the southwesterly line of said Lot 1; a distance of 46.59 feet to the Point of Beginning; thence continuing South 46 degrees 03 minutes 26 seconds East, along said line, a distance of 61.42 feet to the south line of said Parcel 33B; thence South 89 degrees 54 minutes 66 seconds West, along last said line, a distance of
44.15 feet to a line bearing South 00 degrees 05 minutes 44 seconds East from the Point of Beginning;
thence North 00 degrees 05 minutes 44 seconds West, a distance of 42.69 feet to the Point of Beginning.
LA515-115-882170.v1
EXHIBIT B
Legal Description of the Drake Parcel
Lot 1, Block 1, EBERTZ Addition, Washington County, Minnesota, except that part lying west of the following described line: Commencing at the most westerly corner of said Lot 1, thence South 46 degrees 03 minutes 26 seconds East, plat bearing, along the southwesterly line of said Lot 1, a distance
of 46.59 feet to the Point of Beginning of the line to be described; thence North 00 degrees 05 minutes
44 seconds West, a distance of 56.76 feet to the northwesterly line of said Lot 1 and there terminating.
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LAND EXCHANGE AGREEMENT
This Land Exchange Agreement (“Agreement”) is made this ____ day of _____________,
2023, by and between the City of Lake Elmo, a Minnesota municipal corporation (the “City”) and Drake Motor Partners LE LLC, a Colorado limited liability company (“Drake”). RECITALS
WHEREAS, the City owns certain property located in the City of Lake Elmo, Minnesota, which is legally described on Exhibit A attached hereto (the “City Parcel”); and WHEREAS, Drake owns certain property located in the City of Lake Elmo, Minnesota,
which is legally described on Exhibit B attached hereto (the “Drake Parcel”); and
WHEREAS, the City wishes to convey the City Parcel to Drake; and WHEREAS, Drake wishes to convey the Drake Parcel to the City.
AGREEMENT 1. OFFER/ACCEPTANCE. In consideration of the mutual agreements herein contained, the City offers and agrees to convey the City Parcel to Drake. Drake offers and agrees to convey the
Drake Parcel to the City. The City and Drake accepts the parcels so offered.
2. VALUE FOR STATE DEED TAX PURPOSES. For purposes of determining values for State Deed Tax, the parties agree that the value of the City Parcel is $2,500.00 and the value of the Drake Parcel is $2,500.00.
3. DEED/MARKETABLE TITLE: Subject to performance by Drake, the City agrees to execute and deliver a quit claim deed conveying marketable title to the City Parcel, to Drake, subject only to the following exceptions:
A. Building and zoning laws, ordinances, state, and federal regulations.
B. Reservation of minerals or mineral rights to the State of Minnesota, if any. C. Right-of-way, utility, and drainage easements that do not interfere with Drake’s
intended use of the property.
Subject to performance by the City, Drake agrees to execute and deliver a limited warranty deed conveying marketable title to the Drake Parcel, to the City, subject only to the following exceptions:
A Building and zoning laws, ordinances, state, and federal regulations.
B. Reservation of minerals or mineral rights to the State of Minnesota, if any.
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C.Right-of-way, utility, and drainage easements that do not interfere with the City’sintended use of the property.
4.DOCUMENTS TO BE DELIVERED AT CLOSING. In addition to the quit claim deedrequired by paragraph 3 above, the City shall deliver to Drake:
A.Standard form Affidavit of Seller.
B.Well disclosure certificate.
C.Such other documents as may be reasonably required by Drake’s title examiner or titleinsurance company.
D.A certified copy of the City Council resolution approving this Agreement.
In addition to the limited warranty deed required by paragraph 3 above, Drake shall deliver to the City:
A.Standard form Affidavit of Seller.
B.Well disclosure certificate.
C.Such other documents as may be reasonably required by the City’s title examiner or
title insurance company.
5.MARKETABILITY OF TITLE. Within a reasonable time after approval and execution ofthis Agreement by both parties, the City and Drake may order a title insurance commitment for their
respective new parcels at their expense. Each party shall have 10 business days after receipt of its
title commitment to examine the same and to deliver written objections to title, if any, to the otherparty. Each party shall have 20 days after receipt of written objections to cure title defects, at thetransferor’s cost. In the event, that title to either parcel cannot be made marketable by the transferorby the Closing Date, then, at the option of the transferee, this Agreement shall be null and void.
6.ENVIRONMENTAL MATTERS. Each Party and its agents shall have the right to enterupon the other’s property after the date of this Agreement for the purpose of inspecting the propertyit will acquire and conducting such environmental examination and tests as it deems necessary.Each Party agrees to indemnify the other, to the extent such indemnification is legally authorized,
against any liens, claims, losses, or damage occasioned by the other Party’s exercise of its right to
enter and work on the property. Each Party agrees to provide the other Party with a copy of anyreport as a result of such examination and tests. If such environmental examination results in afinding that there are or may be pollutants or contaminants on the property, either Party mayterminate this Agreement, at any time prior to the Closing Date.
7.CLOSING DATE. The closing of the exchange of the properties shall take place on a dateto be mutually agreed upon by the Parties, but no later than _____________, 2023. The closing shalltake place at City’s offices, 3880 Laverne Avenue N., Lake Elmo, Minnesota, or such other location
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as mutually agreed upon by the parties.
8. CLOSING COSTS AND RELATED ITEMS. Drake will be responsible for:
A. Recording fees of instruments required to establish marketable title in the Drake Parcel and the City Parcel; B. The cost of a title commitment and any associated title search and examination fees
with respect to the City Parcel, if Drake elects to review title;
C. The premium for title insurance on the City Parcel if Drake elects to purchase such insurance; D. Recording fee for the deeds for the City Parcel and the Drake Parcel; and E. State Deed Tax and conservation fee attributable to the Drake Parcel and the City
Parcel;
F. Any closing fees charged by the title company to close this transaction; G. Its own attorneys’ fees and the City’s attorneys’ fees associated with closing this transaction, including, but not limited to the cost to draft this Agreement, the resolution approving this Agreement, and the deeds.
9. POSSESSION/CONDITION OF PROPERTY. A. Possession. The Parties agree to deliver possession not later than date of Closing (“Date of Possession”).
B. Condition of Property/No Personal Property. Each Party shall deliver possession of its respective Parcel to the other Party on the Date of Possession in the same condition as the Parcel existed on the date of this Agreement. Each Party acknowledges the parcels are vacant land and there is no personal property
included in this exchange.
C. “AS IS, WHERE IS.” Each Party acknowledges that it has inspected or will have had the opportunity to inspect the parcel and agrees to accept the parcel “AS IS.” Such conveyance shall be without representation of warranties, express or implied,
either oral or written, made by the Party or any official, employee or agent of the
Party with respect to the physical condition of the parcel, including but not limited to, the existence or absence of petroleum, hazardous substances, pollutants or contaminants in, on, or under, or affecting the parcel or with respect to the compliance of the parcel or its operation with any laws, ordinances, or regulations
of any government or other body, except as stated above. Each Party acknowledges
and agrees that the other Party has not made and does not make any representations, warranties, or covenants of any kind or character whatsoever, whether expressed or implied, with respect to warranty of income potential, operating expenses, uses, habitability, tenant ability, or suitability for any purpose,
merchantability, or fitness of the parcel for a particular purpose, all of which
warranties the Party hereby expressly disclaims, except as stated above. Each Party is relying entirely upon information and knowledge obtained from its own investigation, experience and knowledge obtained from its own investigation,
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experience, or personal inspection of the Parcel. Each Party expressly assumes,
at closing, all environmental and other liabilities with respect to the parcel and
releases and indemnifies the other Party from same, whether such liability is imposed by statute or derived from common law including, but not limited to, liabilities arising under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the Hazardous and Solid Waste Amendments Act, the Resource Conservation and Recovery Act (“ RCRA” ), the
federal Water Pollution Control Act, the Safe Drinking Water Act, the Toxic Substances Act, the Superfund Amendments and Reauthorization Act, the Toxic Substances Control Act, and the Hazardous Materials Transportation Act, all as amended, and all other comparable federal, state or local environmental conservation or protection laws, rules or regulations. The foregoing assumption
and release shall survive Closing. All statements of fact or disclosures, if any, made in this Agreement or in connection with this Agreement, do not constitute warranties or representations of any nature. The foregoing provision shall survive Closing and shall not be deemed merged into any instrument of conveyance delivered at Closing.
10.DISCLOSURE; INDIVIDUAL SEWAGE TREATMENT SYSTEM. Each Partycertifies to the other that it does not know of any individual sewage treatment systems on the parcelit will transfer.
11.WELL DISCLOSURE. Each Party certifies to the other Party that it does not know of anywells on the parcel it will transfer.
12.SELLER'S WARRANTIES. Each Party warrants that there have been no labor or materialsfurnished to the parcel it will transfer for which payment has not been made. Each Party warrants
that there are no present violations of any restrictions relating to the use or improvement of itsrespective parcel. These warranties shall survive the closing of this transaction.
13.RELOCATION BENEFITS. Each Party represents and asserts to the other that thetransactions set forth in this Agreement will not cause the Party to be a displaced person within the
meaning of Minnesota Statutes, Section 117.50, Subd. 3, and that it is therefore not entitled to anyrelocation assistance, services, payments or benefits under Minnesota Statutes, Section 117.52.
14.BROKER COMMISSIONS. Each Party represents and warrants to other that there is nobroker involved in this transaction with whom the Party has negotiated or to whom the Party has
agreed to pay a broker commission.
15.NO MERGER OF REPRESENTATIONS, WARRANTIES. All representations andwarranties contained in this Agreement shall not be merged into any instruments or conveyancedelivered at Closing, and the parties shall be bound accordingly.
16.ENTIRE AGREEMENT; AMENDMENTS. This Agreement executed herewithconstitutes the entire agreement between the Parties and no other agreement prior to this Agreementshall be effective except as expressly set forth or incorporated herein. Any purported amendment
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shall not be effective unless it shall be set forth in writing and executed by both Parties or their respective successors or assigns.
17.BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure tothe benefit of the parties and their respective successors and assigns. The Parties shall not assign theirrights and interest hereunder without notice to the other Party.
18.NOTICE. Any notice, demand, request, or other communication which may or shall be given
or served by the parties shall be deemed to have been given or served on the date the same is depositedin the United States Mail, registered or certified, postage prepaid and addressed as follows:
a.If to the City: City of Lake Elmo
3880 Laverne Avenue N
Lake Elmo, MN 55042 Attn: Kristina Handt, City Administrator
with a copy to: Sarah J. Sonsalla
Kennedy & Graven, Chartered
Fifth Street Towers 150 South Fifth Street, Suite 700 Minneapolis, MN 55402
b.If to Drake: Drake Motor Partners LE, LLC
496 S. Broadway Denver, CO 80209 Attn: Jon Hauser
19.SPECIFIC PERFORMANCE. This Agreement may be specifically enforced by the
parties, provided that any action for specific enforcement is brought within six months after the dateof the alleged breach. This paragraph is not intended to create an exclusive remedy for breach of thisagreement; the parties reserve all other remedies available at law or in equity.
20.COUNTERPARTS. This Agreement may be executed in any number of counterparts, each
of which shall constitute one and the same instrument.
21.RECITALS. The Recitals set forth in the preamble to this Agreement and the Exhibitsattached to this Agreement are incorporated into this Agreement as if fully set forth herein.
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IN WITNESS WHEREOF, the parties have executed this agreement as of the above date.
CITY OF LAKE ELMO
By: __________________________________ Charles Cadenhead
Its: Mayor
By: ___________________________________ Julie Johnson Its: City Clerk
DRAKE MOTOR PARTNERS LE, LLC
By: Drake Developments LLC, Manager
By: Drake Real Estate Services, Inc., Manager
By: Jon Hauser Its: General Manager
A-1LA515-115-881184.v2
EXHIBIT A
LEGAL DESCRIPTION OF THE “CITY PARCEL”
That part of Parcel 33B, Minnesota Department of Transportation Right of Way Plat No. 82-43, Washington County, Minnesota, described as follows:
Commencing at the most westerly corner of Lot 1, Block 1, EBERTZ ADDITION, said Washington County; thence South 46 degrees 03 minutes 26 seconds East, plat bearing, along the southwesterly line of said Lot 1; a distance of 46.59 feet to the Point of Beginning; thence continuing South 46 degrees 03 minutes 26 seconds East, along said line, a distance of 61.42 feet to the south line of said
Parcel 33B; thence South 89 degrees 54 minutes 66 seconds West, along last said line, a distance of
44.15 feet to a line bearing South 00 degrees 05 minutes 44 seconds East from the Point of Beginning; thence North 00 degrees 05 minutes 44 seconds West, a distance of 42.69 feet to the Point of Beginning.
LA515-115-881184.v2
EXHIBIT B
LEGAL DESCRIPTION OF THE “DRAKE PARCEL”
Lot 1, Block 1, EBERTZ Addition, Washington County, Minnesota, except that part lying west of the following described line: Commencing at the most westerly corner of said Lot 1, thence South 46 degrees 03 minutes 26 seconds East, plat bearing, along the southwesterly line of said Lot 1, a distance
of 46.59 feet to the Point of Beginning of the line to be described; thence North 00 degrees 05 minutes
44 seconds West, a distance of 56.76 feet to the northwesterly line of said Lot 1 and there terminating.
D-1
LA515-115-865354.v5
EXHIBIT D TO DEVELOPMENT AGREEMENT
Land to be Exchanged Between the City and the Developer