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• U of BRKMON the city that works for you 01 Report Number Agenda Section Report Date Council Meeting Date REQUEST FOR COUNCIL CONSIDERATION 08-156 VI -5 May 23, 2008 May 27, 2008 ITEM DESCRIPTION: Consideration of Purchase and Land Exchange Agreement with MT Properties, Inc. for Sale ofInc. for Sale of Exchange Parcel Estes Express Sit-) Purchase of Butcher's Spur(fonner. Estes�ress Site) and Purchase of Butcher's Spur. DEPARTMENT HEAD'S APPROVAL: Grant Fernelius, Community Development Director CITY MANAGER'S APPROVAL: No comments to Recommendation: attached To approve the attached Purchase and Land Exchange Agreement with MT Properties, Inc. forthe sale of the Exchange Parcel (former Estes Express Site) and purchase of the Butcher's Spur. Legislative History: October 9, 2007: City Council approved Letter of Understanding with MT Properties, Inc. and Minnesota Commercial Railway concerning various railroad -related projects. Financial Impact: • See below. Explanation: The City, MT Properties, Inc. and Minnesota Commercial Railway have been working for a number of years on several railroad -related projects. These projects include 1) the abandonment of the Butcher's Spur in the Northwest Quadrant; 2) construction of a functional replacement for the Butcher's Spur (also referred to as the Team Track); and 3) construction of a new southeast wye track to alleviate coal train traffic. For several years the parties talked about working cooperatively on these efforts and last October a Letter of Understanding (LOU) was signed to formalize the various elements. A copy of the LOU is attached for reference purposes. While the document described structure of the deal, the LOU contemplated that a separate agreement would be required for the real estate transactions. The attached Purchase Agreement was prepared by Corrine Heine at Kennedy & Graven and covers the land swap that is referenced in the LOU. Under the terms of the agreement, there will be two separate closings: 1) City will convey the Exchange Parcel to MT Properties and grant the railroad access to begin construction of the Team Track. The Team Track work is scheduled to begin in June and be completed in 30 days. The Wye Track work is tied to completion of • funding agreements with the State of Minnesota and use agreements with Minnesota Commercial Railway and Canadian Pacific Railroad. The price for the land is $3.35 per square foot or approximately $290,393.