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10-24-83 agendaHOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 34 Agenda October 24,1983 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Lease Purchase Agreement Between the Housing and Redevelopment Authority and Thomas DuFresne and James Lupient A special meeting of the Housing and Redevelopment Author- ity has been called for Monday, October 24, 1983 at 6:45 p.m. for the purpose of approving a lease purchase agreement between the HRA and Richfield Shoppes Developers (DuFresen and Lupient) This agreement calls for the leasing and subsequent sale of the property located at the northeast corner of 66th Street and Nicollet Avenue. This property is presently occupied by the Richf field Automotive business. According to this agreement, the developer will pay the HRA $2,500 annually for rent of the premises. As additional rent, the developer will pay real estate taxes, special assess- ments, insurance premiums, water, sewer, electricity, gas and other utility charges and other expenses incurred by the HRA, and described. in paragraph 6 of•the attached agreement. At the expiration of the lease-hold created by this agreement, Richfield Shoppes will pay a purchase price of $50,000 for the property. The lease will last for a maximum period of 15 years. However, it can be terminated earlier and the $50,000 paid at an earlier date if the developer chooses to do so. The staff will be available to discuss this item at the special HRA meeting and answer questions at that time. Also, infromation concerning dates left blank in the attached agree- ment will be presented Monday evening. Re ec fully u fitted, /~ J n G. Cartwright ecutive Director JGC/eja CL-a.s~~ /o/2//c~3 Ci7~' ~~~A.4~//.~ 10/20/83(1) LEASE-PURCHASE AGREEMENT HOUSING AND REDEVELOPMENT AUTHORITY. IN AND FOR THE CITY OF RICHFIELD, MINNESOTA and THOiSAS DuFRESNE and JAMES LUPIENT THIS AGREEMENT, made and entered into as of this day of 1983, by and between the HOUSING AND REDEVELOPMENT AUTHOR- ITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic hereinafter called the "HRA" and RICHFIELD SHOPPES DEVELOPERS, a partnership consisting of THOMAS DUFRESNE and JAMES LUPIENT, general partners, .individually and collectively the "DEVELOPER". WHEREAS, the parties hereto did on October 25, 1983 execute an agreement entitled "CONTRACT FOR PRIVATE DEVELOPMENT", and WHEREAS, pursuant to such Agreement the HRA is obligated to lease and sell to the Developer and the Developer is obligated to lease and purchase from the HRA that tract and parcel of land located in Hennepin County, Minnesota and situated upon land legally described as follows: Lot Seven (7), except the North forty-nine (49) feet thereof; and Lot Eight (8), except the North forty-nine (49) feet and except the East sixteen and 06/100 (16.06) feet thereof; Block Nine (9) in "Town's Edge" Village of Richfield, Hennepin County, Minnesota, according to the map or plat thereof on file record in the office of the Registrar of Titles in and for said Hennepin County. Subject to an easement for public street and landscape purposes over, under, across and through the West 10 feet of that portion of Lot Seven (7); Block Nine (9) above described, running of favor as the City of Richfield. NOW, THEREFORE, it is agreed as follows: 1. Leasing Clause: The HRA hereby leases to the Developer the leased premises subject to and in accordance with the provisions of this agreement. 2. Term of Lease. This lease shall commence on the date hereof and continue in effect for fifteen years hereafter unless first termi- nated in accordance with the provisions hereafter contained. 3. Rent. The Developer shall pay to the HRA, in advance, on the date of this agreement and each anniversary date thereafter the sum of $2,500.00 as rent for the leased premises. 4. Additional Rent. As additional rent, the Developer shall pay the following as they become due: (a) All real estate taxes and special assessments assessed against the premises and which are due and payable in the calendar year 1984 and thereafter, with payments thereof to be made before'such taxes and special assessments become delinquent. (b) Premiums on insurance required by this agreement. (c) All charges for water, sewer, electricity, gas and other utilities. (d) Any expense incurred by the HRA as described in Paragraph b of this Agreement. 6. Use and Development of the Premises. The Developer shall use the premises only in accordance with the provisions of the."Con- tract for Private Development" executed by the parties. The Developer shall, at its own expense not later than ~~ raze and remove the existing improvements located on the leased premises. The term "existing improvements" shall not be construed to include the outdoor advertising display device currently located on the leased premises which shall be removed at the direction of the HRA and with- 2 out cost to the Developer within 30 days after the Developer certifies to the HRA that it is ready to proceed with construction on or effecting the leased premises and with demolition. In the event that the Developer has not razed and removed the existing improvements as required in this Paragraph by January 1, 1985, the HRA may; at its option, enter upon the leased premises, raze and remove the structures and charge the entire cost of such work against the Developer as additional rent due and payable within 30 days. Construction of the improvements described in the "Contract for Private Development" shall be completed not later than.;, 7. Indemnification of HRA. (a) The Developer shall protect and save harmless the HRA from damage by reason of death of or injuries sustained by or property damage suffered by any ' person on the demised premises in any manner whatsoever. (b) If any claim, demand, action or cause of action is made or brought against HRA in respect to which HRA may seek indemnification from the Developer as provided for in Paragraph 7(a), the HRA shall .notify the Developer in writing of such claim, demand, action or cause of action within fifteen (15) days of its receipt of same. .Developer may, at its option, elect to assume the defense thereof, including the employment of counsel and payment of all fees and expenses associated therewith. Such counsel shall be approved in writing by the HRA, which approval shall not be unreasonably withheld. If Developer assumes such defense, Developer shall not compromise, settle, or terminate the matter in controversy without the prior written consent of the HRA, which consent shall not be unreasonably withheld. The HRA shall cooperate fully in such defense and .shall have the right, at their expense, to employ separate counsel and participate in such defense. Within ten (10) days of Developer's receipt of the aforesaid notice from the HRH, the Developer shall notify the HRA as to whether 3 or not Developer has elected to assume such defense. If the Developer fails to so notify HRA within said ten (10) day period, the Developer shall be deemed not to have elected to assume such defense. If the Developer does not elect or is deemed not to have elected to assume such defense, the Developer shall be obligated to pay upon demand all reasonable fees and expenses of counsel to the HRA in such defense and all. reasonable expenses associated. therewith which have been incurred by the HRA. The Developer shall pay or reimburse the HRA for such fees and expenses within fifteen (15) days of the Developer's receipt of such demand for payment or reimbursement from the HRA, together with appropriate documentation evidencing such fees. and expenses. 8. Insurance. The Developer shall carry, at its expense, comprehensive general liability insurance with a limit of at least $1,OOQ,000 as a combined single limit for bodily injury and property damage. Such policies shall name the HRA as an additional insured. 9. Purchase at End of Term. On the expiration date of the leasehold herein created, the Developer shall purchase from the HRA the leased premises for the total purchase price of $50,000. The HRA shall obtain a commitment for the issuance of an owner's title insur- ance policy with respect to Parcel 2. The commitment shall commit the insurer for the issuance of an owner's title insurance policy (ALTA FORM "B"), shall name the HRA the proposed insured party, shall be certified to date, including searches and bankruptcies and state and federal judgments, tax and other liens and for all special assessments levied or pending. The HRA shall furnish the Developer a copy of the commitment not later than 60 days prior to the date of closing on the sale of Parcel 2. The Developer shall be allowed 10'days from receipt of the commitment for examination of the commitment and delivery to the HRA of a list of all encumbrances or other interests which are unacceptable to the Developer. Objections may be raised only as to encumbrances or other interests which, when taken as a whole, would materially detract from the value of the property or restrict or prohibit its intended use. Objections not made within such period will be deemed waived. The HRA shall have 180 days from the date of 4 timely objection to correct any such defect and supply the Developer with an updated commitment. In the event that the defect is not removed during that period and is not waived by the Developer, the Developer's obligation to purchase the parcel shall terminate. On the date for closing on the a ale of the leased premises, the HRA shall deliver to the Developer: (a) An Affidavit covering all judgments, tax liens, bankruptcy, pending actions in any court, mechanics liens and unrecorded contracts, leases, easements and other agreements relating to the property. (b) A Deed in the form of Exhibit A. 10. Alternate Closing Date. The Developer may at any time during the term of this lease give written notice to the HRA of Devel- oper's intention to terminate the leasehold and purchase the property. The notice may designate the date, not less than 60 nor more than 120 days from the date of the notice upon which the closing will occur. If no date is specified, closing will occur 60 days from the date the notice is received by the HRA. Provided, however, that nothing con- tained in this paragraph 10 shall be deemed to extend the period of the leasehold beyond the term described in paragraph 2 of this Agree- meat. 11. Default and Right of Re-entry. Should the Developer fail to keep or perform any of the covenants or obligations contained in this Agreement or in the "Contract for Private Development" then the HRA shall have the right to reenter and take possession of the leased premises. Such reentry shall not be deemed either an acceptance of or surrender of this lease, or termination thereof. 12. Waiver. The waiver by the HRA of any breach of any term, covenant or condition herein shall not be deemed to be a waiver of such term, covenant, or condition. The subsequent acceptance of rent hereunder by the HRA shall not be deemed to be a waiver of any pre- 5 ceding breach by the Developer of any term, covenant or condition other than the failure of the Developer to pay the particular rent so accepted, regardless of the HRA's knowledge of such preceding breach at the time the HRA accept such rent. 13. Limitations Upon Waiver of Breach. The waiver by the HRA of any violation or breach of any term, provision or covenant herein contained shall not be deemed to constitute a waiver of any other violation or breach of any term,. provision or covenant herein con- tained which may occur prior or subsequent thereto. Forbearance by the HRA to enforce one or more remedies herein provided upon any event of default or breach shall not be deemed to constitute a waiver of such default or breach. 14. Remedies Cumulative. The rights given to the HRA herein are in addition to any rights which may be given to the HRA by statute, in the "Contract for Private Development" or otherwise. 15. Condemnation. If at any time during the term hereof, the leased premises or any part thereof are taken or condemned by public authority, the first $50,000 of the damage award shall be payable to the HRA. In the event the award is at least $50,000, the HRA shall, upon receipt of the award, convey its interest in the property to the Developer subject to the interest of the condemning public authority. Any award of less than $50,000 shall be applied to the purchase price contained in paragraph 9; and the deed of conveyance from the HRA to the Developer at the time of closing shall be subject to the interest of the condemning authority. 16. Attorney's Fees. If action shall be brought to recover the demised premises or for the recovery of any rent due under the provi- sions of this Agreement or because of the breach of any of the Devel- oper's other covenants herein, the Developer shall pay to the HRA reasonable attorney's fees which shall be fixed by the court. If action is brought by either party under this Agreement, or by reason of any claim or in connection with this Agreement, the successful 6 party in any such action shall be entitled to reasonable attorney's fees, which shall be fixed by the court. 17. Successors. All of the covenants, agreements, terms and conditions of this Agreement shall apply to and be binding upon the HRA and the Developer and their respective successors and assigns. 18. Notices. All notices under this -Agreement shall be in writing and delivered in person or sent by registered or certified mail to the HRA at its principal office, to the Developer at its principal office, or such other place as may be designated from-time to time by either party in writing. IN WITNESS WHEREOF, the HRA has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Developer has caused this Agreement to be duly execu- ted as of'the day and year first above written. HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA By Its Chairman By Its Executive Director RICHFIELD SHOPPES DEVELOPERS, A PARTNERSHIP Thomas DuFresne, general partner James Lupient, general partner 7