CCP 01-13-2009 (3) - Laserfiche WebLink

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Railroad Memo January 9, 2009 Page 2 The October 2007 LOU outlined the basic terms of the deal (i.e. land prices, timing, responsibilities, etc.), but contemplated that one or more subsequent agreements might be needed to formalize the transactions. A copy of the LOU (Attachment 2) is attached for reference purposes. Over the course of the last year, the City has been working on several activities, including: 1) the abandonment of the the Surface Transportation Board (STB); 2) coordinating the construction of the team track with the railroad; 3) negotiating with the State of Minnesota on the grant funding agreements for the proposed wye track; and 4) trying to finalize a purchase agreement with MT Properties, Inc. for the real estate. This memo describes the real estate provisions of the deal. Purchase and Exchange Agreement A copy of the draft agreement is attached (Attachment 1). The City will purchase the Butcher's Spur (6.9 acres) from MT Properties for $3.35 per square foot or $1,009,808. In turn, the City will sell the Exchange Parcel (2.0 acres) to MT Properties for $3.35 per square foot or $297,679. At closing, the City will pay the differential in value between the two sites ($1,009,808 - $297,679 = $712,129). There are a few aspects of the agreement that worth highlighting. Team Track/Wye Track The Exchange Parcel is comprised of two lots (Lots 1 and 2, Block 1, Estes Express). Exhibit D of the agreement includes a copy of the site plan. Lot I is the site of the team track or functional replacement for Butcher's Spur. Lot 2 is the site of the future wye track. The property was configured in this way because of the grant funding for the railroad wye. The state is providing bond money, which can only be used for public improvements. If the wye project proceeds, the City would retain an easement for the wye track for a period of 30 years. In the event, the wye project does not proceed within 5 years from the date of closing, the railroad is obligated to sell back Lot 2 to the City for the initial acquisition cost ($3.35 PSF). This language is included Exhibit E of the Purchase and Exchange Agreement (Quit Claim Deed). Environmental Conditions Much of the negotiations over the last three months have focused on environmental issues. The parties are essentially buying the respective properties "as is" and are not making any representations or warranties with respect to environmental conditions. The City has done extensive testing of the Butcher's Spur and included the property in the Response Action Plans (RAP) for the east and west sides of the N WQ. As a result of that testing, the City requested and received a No Association Determination (NAD) from the MPCA, meaning the City is not considered a responsible party under Minnesota law. The MPCA's determination is subject to implementation of the RAP and voluntary clean-up plans that were previously prepared by the City and approved by the MPCA. •