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MEMORANDUM To: St. Anthony Village City Council From: Jay Lindgren, City Attorney Date: City Council Regular Meeting for November 22, 2016 Request: Request for approval of real estate documents related to St. Anthony Village Center BACKGROUND John Trautz of Trautz Properties, Inc (Trautz) has entered into a purchase agreement with Daniel Shattuck of Shattuck Properties to purchase the multi-tenant strip mall located at 2702-2714 County Road 88, which includes the city-owned liquor store. Shattuck is also selling the Village Pub to the current operator. As described in the separate request for preliminary plat, final plat and variances, Trautz has requested that the operation of the St. Anthony Village Center no longer be conducted through the use of a “common interest community” (also known as a condominium). Rather, Trautz proposes that a reciprocal easement agreement be used to accomplish the same functions as the existing condominium association. The City currently is an owner of a condominium unit in which the City- owned liquor store is located. Therefore, any changes to the current structure require agreement from the City. Trautz has stated that there are three primary reasons to eliminate the condominium and have the property governed by a reciprocal easement agreement: 1. The condominium documents are not currently followed in the regular operation of the Center. To the City’s knowledge, this has caused no issue for the City, but it is not a good practice to act outside of governing documents. 2. The condominium association does not current govern the restaurant parcel. Therefore, the maintenance obligations of the condo association do not currently apply to the restaurant. Again, we have no knowledge that this has caused a concern, but the restaurant property owner is willing to join the easement agreement, so uniform maintenance requirements will apply to all properties within the shopping center. 3. The City would essentially see no change in how the shopping center is managed and costs would remain consistent. As staff negotiated the items before the Council, it was done with the understanding that the City would be made whole for any costs related to the transaction. Trautz has agreed to cover the City’s costs related to this transaction. An additional cost-related consideration for the City is that the replatting process will make the City’s physical ownership somewhat larger than the current liquor store condo unit. This is because the City will now own part of the parking area (as well as continuing to have additional parking rights). In other words, currently the City owns the liquor store as a condo, plus has a shared right to use common areas. If adopted, the City would in the 33