06-969r
RESOLUTION NO. 969
APPROVING SETTLEMENT OF EMINENT DOMAIN PROCEEDING
WHEREAS, the Board of Commissioners is the official governing body of the Housing
and Redevelopment Authority in and for the City of Richfield ("HRA"); and
WHEREAS, on November 21,2005, by Resolution No. 958 the Board of Commissioners
of the HRA authorized and directed the acquisition of the real estate which is legally described in
Exhibit A attached hereto ("Subject Property")by use of eminent domain proceedings;
WHEREAS, counsel for the HRA filed a petition in the district court for Hennepin
County on December 7, 2005 to acquire the Subject Property by eminent domain proceedings
and scheduled a hearing before the judge to whom the matter had been assigned for February 6,
2006;
WHEREAS, counsel for the owners of the Subject Property (listed on Exhibit A,
hereafter "Owners") advised counsel for the HRA that the Owners objected to the taking of the
Subject Property so that the attorneys asked the court to schedule a trial in district court for
consideration of whether there is a public purpose and a necessity for the taking of the Subject
Property;
WHEREAS, the trial on the issues of public purpose and necessity is scheduled for
March 13 and 14, 2006;
WHEREAS, the Court ordered that the parties attempt to resolve the Owners' objections
by mediation before the trial date;
WHEREAS, on February 21,2006, the mediation was held with the Owners, the Owners'
attorney, Steven Devich, the Executive Director of the HRA, Bruce Palmborg and Robert
Lindall, attorney for the HRA, participating;
WHEREAS, the result of the mediation was negotiation of the proposed Mediated
Settlement Agreement which is attached hereto as Exhibit B;
WHEREAS, the HRA had previously secured an independent real estate appraisal from
Patchin, Messner & Dodd, dated May 27, 2005, in which the appraiser concluded that the land
and buildings contained within the Subject Property had a value of $430,000 as of May 4,2005;
WHEREAS, the HRA had previously secured an independent appraisal from Steve Wall,
dated May 16, 2005, in which the appraiser concluded that the immovable fixtures contained
within the Subject Property had a value of$12,820 as of that date;
WHEREAS, the Owners claimed damages in the amount of $800,000 to the real estate,
$12,800 to the immovable fixtures and $200,000 to the going concern of Air Care-Go, Inc. for
total damages of$1,012,820 due to the taking of the Subject Property;
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WHEREAS, the County Assessor determined the Assessor's Estimated Market Value of
the Subject Property as of January 2, 2004 (for taxes payable in 2005) to be $503,000 (not
including fixtures);
WHEREAS, counsel for the HRA has advised the Board of Commissioners that the
$675,000 proposed settlement amount described in Exhibit B is, in his opinion, substantially
consistent with what he would expect to be awarded by Court Appointed Commissioners if the
Court were to approve the condemnation of the Subject Property and appoint such Court
Appointed Commissioners to determine the damages caused by the taking;
WHEREAS, Ryan has advised HRA that significant additional costs will be incurred for
the Project if the Owner does not deliver possession ofthe Subject Property until after October 1,
2006;
WHEREAS, the Mediated Settlement Agreement is subject to approval by the HRA
Board of Commissioners on or before February 27,2006 or is void.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS
OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
RICHFIELD IN REGULAR MEETING ASSEMBLED, that the Mediated Settlement
Agreement attached hereto as Exhibit B is hereby approved and the Executive Director and the
Attorney for the HRA are authorized to take all steps necessary to complete acquisition of the
Subject Property in accordance with said agreement, so long as the Agreement provides: (1) for
delivery of possession of the Subject Property to the HRA by November 1,2006; (2) that the
Owner will permit entry to the Subject Property in the near future for environmental testing; and
(3) that the Owner will not sublet use of the Property.
Adopted by the Board of Commissioners of The Housing and Redevelopment Authority in and
for the City of Richfield this 2ih day of February, 2006.
ATTEST:
'(r~~~
Donna Drummond, Secretary
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EXHIBIT A
Legal Description of Subiect Property
.9~~~...'
6300 Cedar Avenue South
Richfield, MN
6320 Cedar Avenue South
Richfield, MN
Unassigned (Gap between
6300 and 6320 Cedar
Avenue)
26-028-24-11-0061
26-028-24-11-0060
Unassigned
The North 33 feet of Lot 4, Block 3; All
of Lot 5, Block 3; and the South 17 feet
of Lot 6, Block 3, all in "Iverson's Third
Addition," Hennepin County, Minnesota.
(Abstract property)
The South 67 feet of Lot 4, Block 3,
"Iverson's Third Addition," Hennepin
County, Minnesota.
(Abstract property)
Lot 4, Block 3, Iverson's Third Addition,
except the North 33 feet thereof and
except the South 67 feet thereof
Exhibit B
This is a mediated settlement agreement ("Agreement") as of February 21, 2006 between the City of
Richfield Housing and Redevelopment Authority ("HRA") and Marvin and Deborah Johnson and
AIR-CARE-GO (collectively "Johnson").
Recitals:
The HRA has commenced a condemnation action, Court File 27 -CV -05-18463 ("Action").
In the Action, the HRA is seeking to acquire the real property owned by the Johnsons identified in
the Petition as Parcels 1, 2 and 3 ("Property"). The Johnsons are challenging the Petition and the
HRA's right to condemn the Property.
The HRA and the Johnsons ("Parties") desire to settle the Action in accordance with the terms of
this Agreement.
Now, therefore, for good valuable and sufficient consideration, the Parties agree as follows:
1. The HRA will pay to the Johnsons the total sum of $675,000 ("Settlement Sum") as the
fair market value and just compensation due and owing for the land, building and
fixtures that comprise the Property upon providing marketable title to the Property
subject to easements of record as of the date hereof.
2. The HRA will pay the Settlement Sum no later than April 1, 2006 (less the sum set forth
in paragraph 3 below).
3. From the Settlement Sum, the HRA shall deposit $30,000 with the Court (the "Deposit")
to be paid out upon the vacation of the Property by the Johnsons in accordance with
paragraph 8 below.
4. Provided that payment ofthe Settlement Sum is made the following shall occur:
a. The Parties will stipulate that the Court may enter an order authorizing title to the
Property to transfer to the HRA upon the payment of the Settlement Sum and the
Deposit. Thereafter title shall transfer as provided for in Chapter 117 of the
Minnesota Statutes. The HRA an~ the Johnsons will work on a mutually acceptable
Court Order granting the HRA's Petition.
b. The Johnsons shall vacate from the Property no later than November 1,2006,
provided that, in their sole discretion, the Johnsons may vacate earlier upon 48
hours written notice to the HRA ("Vacation Date"). Nothing contained herein shall
be construed as requiring the Johnsons to vacate prior to November 1,2006. The
HRA will make a diligent effort to obtain the necessary approvals to permit the
Johnsons to remain until November 15,2006. If the HRA is able to obtain such
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approvals, the Vacation Date shall be November 15,2006 or such earlier date as the
Johnsons may vacate in their sole discretion ("Extended Vacation Date").
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5. From March 1,2006 through the Vacation Date, the Johnsons shall pay to the HRA rent
in the sum of $200.00 per month ("Rent"). The Rent shall be paid by the fifth business
day of each month. If the Johnsons elect to vacate earlier than November 1, 2006 (or
November 15,2006) as set forth above in paragraph 4, Rent shall abate.
6. For as long as they are occupants ofthe Property, the Johnsons shall maintain any
existing insurance in place and shall pay all utilities necessary for the Property.
7. The Johnsons shall have no responsibility for any special assessments levied against the
Property from and after the date of this Agreement.
8. Provided that the Johnsons vacate the Property by the Vacation Date (or the Extended
Vacation Date), and pay all rent and utilities due through the date of vacation, the HRA
shall stipulate that the Deposit plus interest if any shall be paid to the Johnsons.
9. In recognition that the buildings on the Property will be demolished, the Johnsons shall
not be obligated to perform any repair or maintenance ofthe Property from and after the
date of this Agreement, except as required by law to protect health and safety.
10. Provided that the Settlement Sum is paid by the HRA as set forth above, the Johnsons
waive any and all claims for compensation due and owing as a result of the HRA's
condemnation of the Property. Nothing contained herein, however, shall be construed as
a release or waiver of any claim that the Johnsons may have for relocation expenses
under Minnesota Statutes Chapter 117 and the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970, United States Code, title 42, sections 4601 to
4655, as amended by the Surface Transportation and Uniform Relocation Assistance
Act of 1987.
11. The HRA waives any and all claims it may have against the Johnsons arising from or
relating to the Property.
12. This agreement is subj ect to approval of by the Board of Commissioners of the HRA on
or before February 27,2006 or it shall be void. In the event the Agreement is not
approved on or before February 27,2006 the parties shall jointly request the Court to
continue the March 13, 2006 trial date to a mutually agreeable date.
13. Each of the parties shall pay their own attorneys fees and costs.
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"lland Martin LLP
. Roston (260460)
The Housing and Redevelop ent
Auth~rity in and f<R" the City o~Richfiel~
by Stc:VE~ L ..oc "/~ , lts Executive
Dircctorand
The HOllsing and Redevelopnient
Authority 111 and for the City of Rich:fidd
by ., its Chair
. (Approved by HRA Re.solution
No- )
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