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HomeMy WebLinkAbout1997 05-27 EDAP Regular Session • EDA AGENDA CITY OF BROOKLYN CENTER May 27, 1997 7 p.m. 1. Call to Order 2. Roll Call 3. Approval of Agenda 4. Commission Consideration Items a. Resolution Approving Settlement Agreement for Acquisition of 620 -53rd Avenue North - Requested Commission Action: - Motion to adopt resolution. 5. Adjournment • SETTLEMENT AGREEMENT • THIS AGREEMEiV I' is made by and among HARRIET J. BERG, DWAINE NELSON, DONALD E. STEILE (collectively, "Respondents ") and ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER ( "EDA "). Recitals A. Respondents are contract for deed purchasers and occupants of certain property located at 620 - 53rd Avenue North, City of Brooklyn Center, Hennepin County, Minnesota (the "Property "), legally described as follows: The West 99.32 feet of Lot 11 B1 e la Block 2 Bellvue Acres according to the ton file in g P the office of the County Recorder, Hennepin County, Minnesota. B. The EDA has commenced an action in eminent domain, filed in Hennepin County District Court as Case No. CD -2444 and entitled Economic Development Authority in and for the City of Brooklyn Center v. Gordon N. Olsen et al. (the "Action "). The purpose of the Action is to acquire fee simple title to certain lands, including the Property, for redevelopment purposes. C. A title commitment issued to the EDA indicates that Respondents' interest in the Property is or may be subject to the following: (i) fee ownership interest of Jack F. Fahrenholz and Elizabeth A. Fahrenholz, husband and wife; (ii) contract for deed interest of Helen L. Morales; • (iii) interests of tenants, Ken and Rosanne Turner, Jeanette Cathey, and Sandra Climer; (iv) judgment docketed October 6, 1989 in Case No. 89- 15972, in the amount of $605.00, against Duane Nelson and in favor of John R. Sexter; (v) judgment docketed April 7, 1992 in Case No. 92 -5360, in the amount of $901.61, against Duwayne Dale Nelson and in favor of Thomas Day; (vi) judgment docketed August 12, 1992 in Case No. 81 -275, in the amount of $6,754.84, against Duane Allen Nelson and in favor of Susan Marie Nelson; (vii) judgment docketed April 21, 1994 in Case No. DCTJ94005891, in the amount of $777.71, against Duane A. Nelson and in favor of Health One Services Company dba Reliance Recoveries; (viii) judgment docketed November 4, 1994 in Case No. DCTJ94017126, in the amount of $464.68, against Duane A. Nelson and in favor of North Memorial Medical Center; (ix) judgment docketed January 9, 1995 in Case No. DCTJ95000272, in the amount of $503.93, against Duane Nelson and in favor of American Family Insurance, Keith Jacobsen and Pauline Jacobsen; (x) judgment docketed January 5, 1996 in Case No. DCTJ95020250, in the amount of $983.00, against Duane Nelson and in favor of Donald Weld and Donald Weld, Jr. dba Weld & Sons Plumbing; (xi) bankruptcy involving Duane Nelson, Case No. 4 -95 -4916; (xii) bankruptcy involving Duane David Nelson, Case No. 4 -94- 1545; (xiii) bankruptcy involving Helen L. Morales, Case No. 4 -92 -4072; and (xiv) real estate taxes and special assessments, if any, payable in 1997. D. The EDA and Respondents dispute the amount of just compensation to be paid to the Respondents as a result of the EDA's acquisition of the Property. • E. As a result of the Action and the EDA's acquisition of title to the Property, the Respondents will be required to relocate to new residences. The EDA has acknowledged its responsibility to pay relocation benefits to the Respondents under Minnesota Statutes, Section 1 117.52 to 117.56. The EDA and Respondent Berg disputes the City's method of calculating her • housing replacement differential benefit. F. The EDA and Respondents desire to settle and compromise the matters in dispute, including just compensation, reimbursement of appraisal fees, and the housing replacement differential benefit to be paid to the Respondents. Agreement In consideration of the foregoing and the mutual promises made herein, the parties agree as follows: 1. Settlement Amount Subject to the terms of this Agreement, the City agrees to pay to the Respondents and the Respondents agree to accept the amount of $158,000.00, which includes all amounts due and owing to the Respondents for just compensation, interest, and attorney fees. In addition, the City agrees to pay to the Respondents and the Respondents agree to accept the additional sum of $500.00 in reimbursement of appraisal fees. 2. Real Estate Closing The parties contemplate that the settlement will be accomplished by means of a real estate closing between the parties. The closing will take place at the offices of Burnet Realty, 7100 Northland Circle, Suite 103, Brooklyn Park, Minnesota, at a date and time to be mutually agreed upon by the parties (the "Date of Closing "), but no later than June 16, 1997. • 3. Real Estate Taxes and Special Assessments a. Respondents shall pay at or prior to closing all real estate taxes due and payable in 1996 and prior years. b. Respondents shall pay at or prior to closing the balance of all special assessments levied prior to closing. C. Real estate taxes due and payable in 1997 shall be prorated as of the date of clos- ing between the EDA and Respondents. d. EDA shall assume special assessments that are levied or become pending after the date of this Agreement, except that Respondents shall at all times be responsible to pay special assessments, if any, for delinquent sewer or water bills, removal of diseased trees, snow removal, or other current services provided to the Property by the assessing authority while the Respondents are in possession of the Property. e. Respondents shall pay on or prior to the Date of Closing any deferred real estate taxes or special assessments payment of which is required as. a result of the closing of this sale. • 2 4. Rents The right to receive all rents and the duty to pay expenses shall be adjusted as of • the Date of Closing. The Respondents also agree to transfer to the EDA at closing all security deposits retained by the Respondents. 5. Items to be Delivered at Closing by Respondents Respondents shall deliver to the EDA at closing the following items: a. A duly executed warranty or quit claim deed, conveying title to the Property from Elizabeth A. Fahrenholz and spouse, if any, to the Respondents. b. An executed affidavit of survivorship by Elizabeth A. Fahrenholz and certified copy of death certificate of Jack F. Fahrenholz, deceased, in recordable form. C. A duly executed quit claim deed or other instrument(s) acceptable to EDA's title company, evidencing the termination of any interest of Helen L. Morales in the Property. d. A duly executed general warranty deed, conveying marketable title to the Property from the Respondents to the EDA. e. A duly executed affidavit of seller. f. A receipt evidencing payment of real estate taxes for which payment was due prior • to the Date of Closing. g. Affidavit of non - identity as to judgments and bankruptcies referenced in Recital C above or other instruments acceptable to EDA's title company relative to the judgments and bankruptcies. h. Well disclosure certificate, if required. i. Stipulations executed by tenants, in a form substantially similar to the attached Exhibit A, disclaiming any compensable interest in the Property. j. Letter from Respondents' appraiser, Robert Lunieski, attesting that his preliminary estimate of damages to the Property as a result of the taking is at least $200,000.00. k. All documents reasonably required by EDA's title company as necessary to establish marketable title in the EDA. 1. Keys to the Property, individually labelled to identify the apartments and/or other rooms within. the Property to which they relate. • M. A duly executed instrument, assigning all leases, rents and security deposits, if any, to the EDA. 3 n. A duly executed Stipulation of Dismissal, executed by each of the Respondents, stipulating to the dismissal of the Action as to the Property, in a form substantially similar to the attached Exhibit B. 6. Payment to be Delivered by EDA On the Date of Closing, the EDA will pay to Respondents the settlement amount, by a check payable jointly to: Harriet J. Berg; Dwaine Nelson; Donald E. Steile; and Leland J. Frankman, Esq. The check shall be in the amount of $158,500.00, less such amounts as necessary to satisfy encumbrances of record, Respondents' closing costs under this Agreement, or adjustments pursuant to paragraph 4 of this Agreement. 7. Closiny, Costs The EDA shall pay all expenses of examination of title and recording of the Respondents' warranty deed to the EDA. The EDA shall also pay state deed tax. Respondents shall pay all recording fees and charges relating to the obtaining of and filing of instruments required to make title marketable. 8. Possession Respondents shall deliver possession of the Property to EDA on the Date of Closing. On the date that possession is transferred to the EDA, Respondents shall have removed from the Property any and all personal property belong to each of them,, including, without limitation, refrigerators, clothes washers and clothes dryers located on the premises. Respondents shall also remove all substances which, under state or federal law, must be disposed of at an approved disposal facility, including, but not limited to, used oil, paints, solvents, fertilizers, and poisons. • 9. Utilities Respondents shall be responsible for payment of all utilities and insurance premiums through the Date of Closing or delivery of possession, whichever is later. 10. Relocation payments The EDA acknowledges that any responsibility to pay relocation costs and benefits in accordance with Minnesota Statutes, Sections 117.52 to 117.56, is a separate obligation, no part of which is reflected in the settlement amount contained in paragraph 1 above. The EDA agrees that the payment of the settlement amount will not be used to reduce the housing replacement differential benefit due to Harriet J. Berg, which benefit shall be in the amount of $27,900.00. 11. Alternative Acquisition Procedure, Condemnation If Respondents are unable to provide the documents required at paragraph 5 of this Agreement prior to June 17, 1997, the Respondents agree that the EDA may proceed to condemn the Property through the Action. The Respondents will not contest the Action and will not object to the entry of orders approving the petition, appointing commissioners, and approving the transfer of title and possession of the Property to the EDA as of June 17, 1997. In addition, the Respondents agree to execute a stipulation to be submitted to the court- appointed commissioners, which stipulation will include the following minimum provisions: (a) the fair market value of the Property as of the date of taking is $158,000; (b) the commissioners may enter an award in gross in the amount of $158,000, plus an additional award to Respondents of appraisal fees in the amount of $500; and (c) the Respondents will be responsible for the payment of all real estate taxes and special assessments against the Property due and payable in 1997. • 4 12. Settlement of All Claims The parties agree that this Agreement constitutes a full and • final compromise of the Action with respect to the Property. This Agreement represents the complete and final agreement of the parties and supersedes any prior or contemporaneous oral or written understanding between the parties. This Agreement may be amended only in writing, signed by all parties. 13. Legal Counsel The EDA and Respondents each acknowledge that they have been represented by legal counsel in the Action and in the negotiation and execution of this Agreement. 14. Notice Any notice, demand, request or other communication which may or shall be given or served to or on EDA by Respondents or to or on Respondents by EDA shall be deemed to have been given or served on the date the same is deposited in the United States mail, registered or certified, postage prepaid and addressed as follows: a. If to Respondents: Harriet J. Berg with copies to: Dwaine Nelson • Donald E. Steile Leland J. Frankman 1000 Northstar East 608 Second Avenue South Minneapolis, MN 55402 b. If to EDA: Thomas R. Bublitz Brooklyn Center EDA 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 with copy to: Corrine H. Thomson Kennedy & Graven, Chartered 470 Pillsbury Center Minneapolis, MN 55402 5 IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed . on the date written above. ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director Harriet J. Berg Dwaine Nelson • Donald E. Steile I 6 EXHIBIT A • Case Type: Condemnation STATE OF MINNESOTA DISTRICT COURT COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT Economic Development Authority in and for the City of Brooklyn Center, a public body corporate and politic under the laws of the State of Minnesota, STIPULATION OF DISMISSAL Petitioner, (PARCEL 8) vs. Court File No. CD -2444 Gorden N. Olsen, et al., Respondents. THIS STIPULATION is made by and between the Petitioner Economic Development Authority in and for the City of Brooklyn Center and Respondents Ken Turner, Rosanne Turner, Jeanette Cathey and Sandra Climer (the "Respondents "). WHEREAS, the Respondents are tenants of the premises located at 620 - 53rd Avenue North in the City of Brooklyn Center, which is more particularly described in the attached Exhibit A (the "Property "); and WHEREAS, the Petitioner has commenced this action for the purpose of acquiring fee simple absolute title to the Property. NOW, THEREFORE, the parties stipulate as follows: 1. The Respondents stipulate that they are tenants of the Property; that their rental payments under their respective leases are at or above market rates for rentals of similar • properties; and that they have no compensable interest in the Property. A -1 2. The Respondents stipulate that the Petitioner may dismiss Respondents as parties • to this action. 3. Nothing in this stipulation shall alter or impair Respondents' rights to relocation benefits to which Respondents may otherwise be eligible under applicable law. Ken Turner Rosanne Turner Jeanette Cathey • Sandra Climer • A -2 Exhibit A Parcel 8 (Abstract) (PID No. 01 118 21 43 0073) Property Address: 620 - 53rd Avenue North, Brooklyn Center Description of Property to be Taken The West 99.32 feet of Lot 11, Block 2, Bellvue Acres according to the plat on file in the office of the County Recorder, Hennepin County, Minnesota. Name Nature of Interest Jack F. Fahrenholz Fee Owner Elizabeth A. Fahrenholz Fee Owner Harriet J. Berg Contract for Deed vendee Dwaine Nelson Contract for Deed vendee Helen L. Morales Contract for Deed vendee Donald E. Steile Contract for Deed vendee • John R. Sexter Possible holder of an interest Thomas Day Possible holder of an interest Susan Marie Nelson Possible holder of an interest HealthSpan Services, Company, dba Reli- Possible holder of an interest ance Recoveries, fka Health One Services Company North Memorial Health Care, a Minnesota Possible holder of an interest corporation, flea North Memorial Medical Center, a Minne- sota corporation American Family Insurance Group Possible holder of an interest Keith Jacobsen Possible holder of an interest Pauline Jacobsen Possible holder of an interest Ken Turner Tenant Rosanne Turner Tenant Jeanette Cathey Tenant Sandra Climer Tenant A -3 • Donald Weld and Donald Weld, Jr. dba Possible holder of an interest Weld & Sons Plumbing All other parties unknown having any right, Possible holders of an interest title or interest in the premises herein, to- gether with the unknown heirs or devisees, if any, of the parties that may be deceased, and including unknown spouses, if any City of Brooklyn Center Special assessments County of Hennepin Real estate taxes • A -4 EXHIBIT B • Case Type: Condemnation STATE OF MINNESOTA DISTRICT COURT COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT Economic Development Authority in and for the City of Brooklyn Center, a public body corporate and politic under the laws of the State of Minnesota, STIPULATION OF DISMISSAL Petitioner, (PARCEL 8) VS. Court File No. CD -2444 Gorden N. Olsen, et a1., Respondents. • THIS STIPULATION is made as of 1997 by and between the Petitioner Economic Development Authority in and for the City of Brooklyn Center and Respondents Harriet J. Berg, Dwaine Nelson, and Donald E. Steile (the "Respondents "). WHEREAS, the Respondents are the contract for deed purchasers of certain real estate located at 620 - 53rd Avenue North in the City of Brooklyn Center, legally described on the attached Exhibit A (the "Property"); and WHEREAS, the Petitioner commenced this action in order to acquire fee simple absolute title to the Property; and WHEREAS, the parties to this stipulation have negotiated a full and final settlement of the instant action as it pertains to the interests of Respondents. NOW, THEREFORE, the parties agree as follows: • B -1 1. Respondents stipulate that the Petitioner may dismiss the Respondents as parties • to this action. 2. Respondents acknowledge receipt of a settlement in the amount of $158,500.00, which includes all amounts due and owing to Respondents for just compensation, interest, appraisal and attorney fees. 3. Each of the Respondents waives any and all rights to any further notices, viewings or hearings regarding the instant condemnation action. KENNEDY & GRAVEN, CHARTERED By Corrine H. Thomson (149743) • 470 Pillsbury Center Minneapolis, Minnesota 55402 Telephone: (612) 337 -9300 Attorneys for Petitioner FRANKMAN LAW OFFICES By Leland J. Frankman ( ) 1000 Northstar East 608 Second Avenue South Minneapolis, MN 55402 Telephone: (612) 375 -1600 Attorney for Respondents Harriet J. Berg, Dwaine Nelson and Donald E. Steile • B -2 Harriet J. Berg Dwaine Nelson Donald E. Steile • B -3 Commissioner introduced the following resolution and 40 moved its adoption: EDA RESOLUTION NO. RESOLUTION APPROVING SETTLEMENT AGREEMENT FOR ACQUISITION OF 620 -53RD AVENUE NORTH WHEREAS, Economic Development Authority (EDA) Resolution No. 97 -04 accepted the appraised value of $148,000 for the real property located at 620 -53rd Avenue North and authorized the EDA Executive Director to make an offer to purchase the property at 620 -53rd Avenue North for the approved appraised value; and WHEREAS, EDA Resolution No. 97 -04 authorized the EDA Executive Director to authorize payment for relocation benefits to which the owners of 620 -53rd Avenue North are entitled, pursuant to the City's purchasing policy and the Uniform Relocation Act; and WHEREAS, the owners of the real property at 620 -53rd Avenue North have rejected the offer from the Brooklyn Center EDA to purchase the property at 620 -53rd Avenue North for the appraised value approved by the EDA in Resolution No. 97 -04; and WHEREAS, the EDA has commenced an action in eminent domain filed in • Hennepin County District Court as Case No. CD -2444 to acquire the property at 620 -53rd Avenue North by quick take; and WHEREAS, the owners of 620 -53rd Avenue North have retained legal counsel to represent their interest in the eminent domain action; and WHEREAS, the owner's legal counsel has indicated he has obtained an opinion of value from a licensed appraiser in the amount of $200,000 for the property at 620 -53rd Avenue North; and WHEREAS, a negotiated settlement agreement for the acquisition of the real property at 620 -53rd Avenue North has been prepared by the City Attorney; and WHEREAS, staff believes the cost of proceeding with the eminent domain action on the property is likely to exceed the cost of acquiring the property with the settlement agreement; and WHEREAS, the Economic Development Authority in and for the City of Brooklyn Center believes it is in the best interest of the City of Brooklyn Center to acquire the property at 620 -53rd Avenue North pursuant to the terms and conditions of the settlement agreement. • EDA RESOLUTION NO. • NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center that the settlement agreement prepared for the acquisition of 620 -53rd Avenue North is hereby approved, and the EDA President and Executive Director is hereby authorized to execute the settlement agreement and payment is authorized pursuant to the terms and conditions of the settlement agreement. Date President The motion for the adoption of the foregoing resolution was duly seconded by commissioner and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. • •