CR 05-036 Settlement Agreement btwn Ugorets Properties and City of Hopkins
c,\IY OF
m
March 9, 2005
I-tOPKINS
Council Report 2005-036
Approve Settlement Agreement between Ugorets Properties, LLC, and City of Hopkins
Proposed Action.
Staff recommends adoption of the following motion: Move that Council approve the
settlement aqreement between Uqorets Properties and the City of Hopkins reqardinq
the Lake Street Bridqe reconstruction proiect and the location of the Lake Street riqht of
way.
Overview.
In 2002, shortly after the completion of the Lake Street bridge replacement project a
dispute arose regarding the location of the Lake Street bridge right of way. Ugorets
Properties, LLC, the owner of the property directly west and adjacent to the new
bridge, asserted that the bridge improvements encroached on its property. After
what has been a long, drawn-out process to reach a settlement, staff is requesting
that City Council approve the proposed settlement agreement. Staff last discussed
a settlement agreement with City Council at the August 10, 2004 work session. The
terms of the settlement agreement are similar to what was presented at the work
session. The agreement is contingent upon approval by the City Council of Ugorets
application for rezoning the property to "B-1" and approval of a CUP for office
building use. The League of Minnesota Cities Insurance Trust are covering this
private action against the City and have provided legal services along with Jerry
Steiner, City Attorney. Staff recommends approval of the settlement agreement.
Primarv Issues to Consider
. Settlement Agreement terms
Supportinq information.
. Proposed Set ement Agreement
Steven J. Stadler, Public Works Director
Financial Impact: $ 5.000 Budgeted: Y/N _N_ Source: General Fund contingency
Related Documents (CIP, ERP, etc.):
Notes: $7,500 payment by League of Minnesota Cities Insurance Trust
Council Report 2005-036
Page 2
Analvsis of Issues
. Settlement Agreement Terms
Parties agree on the location of the right of way, as indicated in the agreement
Ugorets gains right to use a portion of the right of way by license agreement
Right of way is secured by Ugorets providing a permanent easement for street
purposes
City will modify curb & gutter improvements to accommodate an additional
parking stall in Ugorets LLC parking area (est cost: $5,000)
City will permit on-street parking, Exhibit 6, intended to accommodate
approximately four vehicles
City retains discretion to remove on-street parking if deemed a public safety
hazard - the process is detailed in the agreement
City Staff will support rezoning the property to "B-1" zoning classification
City staff agrees to support the issuance of a conditional use permit for purposes
of maintaining the current use of the property as an office building, without
conditions related to on-site parking requirements
The City pay Ugorets $7,500 (Paid by LMCIT)
Upon approval of the rezoning and the CUP, Ugorets provides a stipulation of
dismissal
STATE OF MINNESOTA
DISTRICT COURT
COUNTY OF HENNEPIN
FOURTH JUDICIAL DISTRICT
Ugorets Properties, LLC.,
Court File No: MC 02-016354
Case Type: Other Civil
Plaintiff,
Settlement Agreement
v.
City of Hopkins,
Defendant.
WHEREAS, Plaintiff Ugorets Properties, LLC, ("Ugorets") and
the City of Hopkins ("City") wish to settle the foregoing
litigation and all claims related thereto by entering into this
Settlement Agreement ("Agreement"); and
WHEREAS, Ugorets represents that it is the sole owner of
real property at 415 Blake Road in the City of Hopkins, legally
described as follows:
That part of Lot
239, Hennepin
Southwesterly of
portion conveyed
purposes.
70, Auditor's Subdivision No.
County, Minnesota, lying
Minnehaha Creek, except that
to Hennepin County for highway
(the "Property"); and
WHEREAS, a commercial office building ("Building") and a
parking lot for tenants of the Building are located on the
Property.
The Property is currently zoned for residential uses
and the building is a legal, non-conforming use; and
1
WHEREAS, the City engaged in the reconstruction of Lake
Street
N.E.
and
associated
improvements,
including
reconstruction of a 1905 bridge crossing Minnehaha Creek,
adjacent to the Property (the "Reconstruction projectH); and
WHEREAS, during the Reconstruction Project,
a dispute
between the City and Ugorets arose as to the proper location of
the Lake Street Right of Way. The City asserted that the
improvements resulting from the reconstruction project were
located within the Right of Way for Lake Street; Ugorets
asserted that the improvements encroached on its Property; and
WHEREAS,
Ugorets sued the City,
asserting claims of
trespass
and
inverse
condemnation
resulting
from
the
reconstruction project (the "litigationH); and
WHEREAS, the parties completed discovery and Court-ordered
arbitration; and
WHEREAS,
the
parties
acknowledge
no
liability,
but
understand the risks and costs associated with litigation;
1.
TERMS AND CONDITIONS.
The parties intend to fully settle
this matter on the terms and conditions stated below:
A. The parties agree that the location of the Lake Street
Right of Way ("Right of WayH) is as indicated by this
Agreement and Exhibit "2H and as depicted in Exhibit
"3", which are attached hereto.
Ugorets' right to use
2
a portion of the Right of Way for parking purposes is
set forth in the License Agreement attached hereto as
Exhibit "1."
The License Agreement shall be executed
simultaneously with this Agreement.
Exhibits "2" and
"3" shall be deemed conclusive as to the location of
the Right of Way. Ugorets will convey to the City by
quit claim deed (Minnesota Uniform Conveyancing Blank
Form 28-M), attached hereto as Exhibit "4", a
permanent easement for street right of way purposes
over that part of the Property falling within the
Right of Way as established by this Agreement. At
such time as the contingency described in Paragraph
1.F has been satisfied, Ugorets shall execute and
deliver such quit claim deed to the City.
B. The City, at its expense, will remove a portion of the
Reconstruction
southeast of
Project
in
the
area immediately
replace it with
"5" hereto. The
improvements as
the Property and
shown on Exhibit
parties have conferred at the property and mutually
agree regarding the placement of the improvements so
that they may be built in accordance with sound
engineering principles, preserving in totality the
intended utility of the bridge and roadway, and
observing all necessary setbacks.
Construction of the
3
improvements depicted on Exhibit "5" shall not be
commenced until the contingency described in Paragraph
l.F
has
been
satisfied,
Ugorets
has
met
the
requirements of Paragraph 1.E, and weather permits.
Ugorets will permit the City to access the property
and provide a reasonable space in which to complete
the work contemplated by this paragraph at no cost to
the City;
C. The City' will permit on-street parking in the areas
shown on Exhibit "6" ("on-street parking"). The on-
street
parking will
be
intended
to
accommodate
approximately four vehicles. The on-street parking
will be for public use and will not be reserved for
the use of Plaintiff (Ugorets), tenants, and invi tees
of the Property;
D. The City retains the discretion to remove the on-
street parking or any portion of it in the event the
on-street parking or any portion of it is determined
to be a traffic hazard or threat to public safety by
the City's Director of Public Works. If the on-street
parking or any portion of it is removed, the City will
notify Ugorets (or the then current owner of the
property) at its address (or the address of the then
current owner of the property) as listed in the
4
records of the Hennepin County Property Taxation
Department by certified mail, with return receipt, of
the removal (ftnotification").
All notifications to
Ugorets pursuant to this Agreement shall be deemed
duly delivered two business days after mailing. If
within 10 days after delivery of the notification,
Ugorets (or the then current owner of the Property)
notifies the City in writing of its intent to
challenge the removal, the City will contact Ugorets
(or the then current owner of the Property) and the
parties will agree upon and select an independent
traffic engineer (ftneutral"), the cost of which will
be shared equally by the parties. All notices to the
City shall be sent by certified mail, with return
receipt, and addressed to the Director of Public
Works, City of Hopkins, 1010 1st Street South, Hopkins,
MN 55343, and shall be deemed delivered two business
days after mailing.
Within 30 days of the selection,
the neutral will issue an opinion to the City Council
regarding the potential for traffic hazard and threat
to public safety caused by the on-street parking. The
Ci ty Council will consider the neutral's opinion and
act on the on-street parking at the next regularly
scheduled meeting.
The City Council's decision shall
5
be final and binding on the parties provided the City
Council's
decision
has
a
rational
basis
under
Minnesota law.
E. City staff will support rezoning the Property to "8-1"
zoning classification pursuant to the City of Hopkins
Zoning Ordinance Section 535 upon an application by
Ugorets pursuant to City ordinances (the "rezoning").
City staff further agrees to support the issuance of a
conditional
use permit
("CUP")
for purposes
of
maintaining the current use of the Property as an
office building provided that Ugorets' proposed use
meets the requirements of the zoning ordinance. The
Ci ty further agrees that staff will not recommend to
the City Council that conditions be imposed in the CUP
related to the Property meeting the City's on-site
parking requirements for the use.
F. This Settlement Agreement and the obligations of both
the parties are contingent upon approval by the City
Council of Ugorets application for rezoning the
property to B-1 and the CUP for use of the property as
an office building. Ugorets acknowledges that the
City by entering this Agreement is not obligated by
this Agreement to approve the rezoning or the CUP and
6
the City does not waive any procedural or substantive
requirements regarding the rezoning or the CUP.
2.
RELEASE.
Ugorets and the City hereby mutually release each
other,
their
officers,
employees,
agents,
elected
officials, successors, assigns and insurers from any and
all possible claims or causes of action related to the
Property, claims involved in this lawsuit or claims that
could have been brought in this lawsuit other than claims
related to the enforcement of this Agreement.
This release
shall be effective upon the filing of the Dismissal with
Prejudice provided for herein.
3.
DISMISSAL AND PAYMENT.
Upon approval of the rezoning of
the Property to B-1 and the CUP contemplated herein, the
parties shall execute a Stipulation of Dismissal with
Prejudice in the form attached hereto as Exhibit
the time of the execution of the Stipulation of
"7." At
Dismissal
with Prejudice, the
counsel
of
record
City will pay to Ugorets and his
the sum of $7,500.00. The City
acknowledges no liability on any claim in the litigation.
4 .
COUNTERPARTS.
This
Agreement
may
be
executed
in
counterparts.
7
5.
ENTIRE AGREEMENT.
This Agreement fully incorporates all
prior discussions and agreements between the parties.
6.
AGREEMENT EFFECTIVE.
This Agreement is effective upon
execution by all parties, subject to the contingencies
stated herein.
7.
AGREEMENT RUNS WITH THE PROPERTY.
This Agreement is
binding on Ugorets and all successors and assigns to any of
Ugorets' rights to the Property and runs with the Property.
8. ENFORCEMENT. Any action to enforce this Agreement shall be
brought before the Hennepin County District Court.
8
IN WITNESS WHEREOF, each party to this Settlement Agreement has
caused it to be executed on the date indicated below:
UGORETS PROPERTIES, LLC
Dated:
200S,'
By:
Its:
State of Minnesota
) ss
County of Hennepin
day
the
CITY OF HOPKINS
, 2004.
By:
Its: Mayor
Dated:
, 2004.
By:
Its: City Clerk
Dated:
State of Minnesota
ss
County of Hennepin
This instrument was acknowledged before me this
of 2004 by
, the Mayor and City Clerk of
of Hopkins, a municipal corporation under the
Minnesota on behalf of such municipal corporation.
day
and
the City
laws of
Notary Public
9
LICENSE AGREEMENT
tillS AGREEMENT is made effective as of the execution date indicated below by and
between the City of Hopkins, a municipal corporation under the laws of the State of Minnesota
("City") and Ugorets Properties, LLC (hereinafter referred to as "Licensee").
WHEREAS, Licensee is the fee owner and occupant of real property located at 415 Blake
Road in the City, legally described in the attached as Exhibit 1 (hereinafter referred to as the
"Property"); ..
WHEREAS, the Property adjoins the Right of Way of Lake Street, which is a public
street owned and maintained by the City;
WHEREAS, the City and Licensee have agreed that the northwesterly line of the Right of
Way of Lake Street as it adjoins the southeasterly line of the Property is in the location legally
described in the attached Exhibit 2 (hereinafter referenced as the "Right of Way");
WHEREAS, the Property currently has a parking lot that is situated adjaccnt to the Right
of Way and City improvements, including curb and gutter, within the Right of Way. Those
improvements will be in part removed by the City and replaced with new improvements to be
situated within the area of the Right of Way ("New Improvements");
WHEREAS, the City will by this License permit the Licensee to locate a portion of its
parking lot at the Property within License Area as defined in Paragraph 1;
NOW, THEREFORE in consideration of the above recitals which are incorporated in this
agreement and the mutual promises contained in this Agreement, the parties agrce as follows:
1. City hereby grants to Licensee a license to occupy and use, subject to all the terms
and conditions of the Agreement, the portion of the Right of Way described on Exhibit 3
attached hereto (hereinafter referred to as the "License Area").
2. Licensee agrees that the past or future existence, occupancy, and use of the
parking area within the Right of Way is the result of the City's permission and is not open,
G:\WPDA T A\3200.165\1icense agreementS.doc
continuous, notorious or in any other manner supportive of a claim of adverse possession Of
other entitlement to the Right of Way.
3. The License Area may be occupied and used by Licensee solely for parking for
tenants and invitees of the Property during the period beginning upon execution of this
Agreement and continuing until this Agreement is tenninated. Any repair and maintenance
needed to the parking area, in the discretion of the Licensee, shall be the sole responsibility of
the Licensee. The Licensee shall bear the sole cost and responsibility for repair, maintenance
and damages as a result of ordinary wear and tear, accidents, the elements, any activities
conducted by or on behalf of the Licensee or the parking by tenants and invitees of the Property.
4. The Licensee agrees to indemnify and hold harmless the City, its employees,
officers and agents against any and aU claims related to the Licensee's use and possession of the
License Area. Licensee shall, within 30 days of execution of the Agreement, make the City and
its officers, agents and employees as additional insureds on Licensee's liability and casualty
insurance policy for the Property covering the License Area and thereafter continuously maintain
such coverage and provide the City, upon written request, with a Certificate of Insurance
evidencing such coverage.
5. Licensee may tenninate this Agreement at any time with or without cause by
giving written notice to the City,.specifying the date of tennination, such notice to be given not
less than 30 days prior to the date specified in such notice for the date of tennination. The City
may tenninate this Agreement, effective immediately upon written notice to Licensee, only upon
just cause. For purposes of this paragraph, "just cause" shall be defined as (a) violation of the
terms this License or of the Settlement Agreement reached between the parties to which this
License is attached as Exhibit A; (b) violation of required setback distances as established by
federal, state, or local laws or regulations; or (c) threat to public health, safety, or welfare as a
result of the actions of Licensee in connection with the License Area. In the event this
Agreement is terminated, the City shall have the option to remove the New Improvements and
parking area within the Right of Way. The cost of removal of the New Improvements and
parking area within the Right of Way as contemplated herein shall be borne by the party at
whose option the agreement is tenninated and this obligation shall survive termination of this
License Agreement by either party.
6. It is agreed that this Agreement shall be governed by, construed, and enforced in
accordance with the laws of the State of Minnesota.
7. This Agreement shall constitute the entire agreement between the parties and any
prior understanding or representation of any kind preceding the date of this Agreement shaH not
be binding upon either party except to the extent incorporated in the Agreement.
8. Any modification of this Agreement or additional obligation assumed by either
party in connection with this Agreement shall be binding only if evidenced in writing signed by
each party or an authorized representative of each party.
2
9. Any notice provided for or concerning the Agreement shall be in writing and shall
be deemed sufficiently given when sent by first class U.S. Mail, properly addressed and postage
paid, to the other party as follows:
LICENSEE: At the address of the current owner of the property as listed in the records
of the Hennepin County Property Taxation Department
CITY: Director of Public Works, City of Hopkins, 1010 1st Street South,
Hopkins, MN 55343-9475
10. Time is of the essence in the performance of the terms and obligations of this
Agreement.
~ 1. In the event that any action is filed in relation to this Agreement, the unsuccessful
party in the action shall pay to the successful party, in addition to all the sums that either party
may be called on to pay, a reasonable sum for the. successful party's attorney's fees.
12. The parties acknowledge that this Agreement is a license to use the License Area
for the purpose described herein and does not confer any estate or interest in the Right of Way to
Licensee. This Agreement and all of its terms, covenants, and conditions herein shall be binding
on the City and Licensee and their respective successors and assigns.
3
IN WITNESS WHEREOF, each party to this Settlement Agreement has caused it to be
executed on the date indicated below:
UGORETS PROPERTIES, LLC
Dated: ~, 200r
State of Minnesota
County of Hennepin
)
) ss
)
day of 4z/JIMJu-;
of U gorets
This)nstrupj.ynt w!lfi acknowledged befor~e this q
20~ by /1/tX t1.~(U5 , the I V~ciEtiI
Properties, LLC.
~~1'r;;'11::' .wwWV\~ ~J,^ /...,----
:;:,r<~"~""'\~1 ,;):;::\ ,A LUST ~ (}/~. IV'''V/
.' \~~1:<nl~./I! f\l ,~, t.",. i.
.;; V:"~? ..t~y:t I .I;~9:Y I ~':ilJKH'kr:n8Ii'~"'~ .t!'otary Publl'C
'~ " l~~" }- r," ,. , -. _Ju. .f:
fJ\o~j$J~~ "'Jo:~;llr..)"TIi,,%"'m F.:~:r':~t. ...\,!:\O ~;1 "o,,),f'
:.(\~""rv>v'~"N'\,.""'/'J\I'VV~',~
CITY OF HOPKINS
Dated:
, 2003.
By:
Its: Mayor
Dated:
, 2003.
By:
Its: City Clerk
State of Minnesota )
ss
County of Hennepin )
This instrument was acknowledged before me this day of
2003 by and , the Mayor and City
Clerk of the City of Hopkins, a municipal corporation under the laws of Minnesota on
behalf of such municipal corporation.
Notary Public
4
oJ
n\\\\\U
2
.
.
CITY OF HOPKINS
RIGHT OF WAY DESCRlPTION
SRF No. 0993425
JULY 20, 2004
A 66-foot right of way in the Northeast Quarter of the Northeast Quarter of Section 19,
Township 117, Range 21, Hennepin County, Minnesota as depicted on AUDITOR'S
SUBDIVISION NUMBER 239, according to the recorded plat thereof. The centerline of said
right of way is described as beginning at a point on the south line of said Northeast Quarter of
Northeast Quarter distant 182.08 feet easterly of the southwest comer thereof; thence
northeasterly to a point on the east line of said Northeast Quarter of Northeast Quarter distant
775.84 feet southerly of the northeast comer thereof and there terminating.
.
.
.
~
~
..
J!l
.!ji
..
. EXHIBIT
3
66'
I).~E S1RE<I
q,
~
of-
---I
- ----~
,~-~--~~~~~-~~~----
~---- ~~
, ------------
, \
\ .
, \
\ .
. \
\ .
. \
\ .
. \
\ .
. \
~._,-,-,-,_._'-'-~
" _---\..---.-<-r-
~""-~"'''''''~----<::::--''
"<- ~---..:.
----~ --
<;.
%
?'",
"'",
'7
r--~-~------_._---- -------.
._________._________------l
----------- - - - --------- - - - ----------- - - -
1000
KNO\...\..~ BLDG.
O~
4' to
O.
aUlD
jp of
- -
nepin CO.
co
is
'"
!:t
iJ
"
q,
~
of-
<;.
%
?'",
'"
'7
\J3I\~\l
3.
F'RO-S'l'S'\t.~
K
#
1.()'O~C
~-fe(l~
.
"",,,,,wl'l
9111j(11O~
t
,
,
"\
\
,
,
.
"
,
.
-
~
~
II
-
.'
UH181l
-
1
4
QUIT CLAIM DEED
Individual(s) to Corporation, Partnership
or Limited Liability Company
DEED TAX DUE: $
Date:
FOR VALUABLE CONSIDERATION.
Form No. 28.M
Minnesota Uniform
Conveyancing Blanks (1115/97)
(fop 3 IQches Reserved for Re<:ording Data)
. Grantor(S),
(maril<llstatus)
hereby convey(s) and quitclaim(s) to
, Grantee,
under the laws of
County, Minnesota, described as follows:
a
real property in
together with all hereditaments and appurtenances.
Check box if applicable:
o The Seller certifies that the Seller does not know of any wells on the described real property.
o A well disclosure certificate accompanies this document.
o I am familiar with the property described in this instrUment and I certify that the status and number of wells on the described real
property have not changed since the last previously filed well disclosure certificate.
Affix Deed Tax Stamp Here
STATE OF MINNESOTA
COUNTY OF
}"
This instrument was acknowledged before me on
(Date)
. by
, Grantor(s).
NOTARIAL STAMP OR SEAL (OR OTHER TITLE OR RANK)
SIGNATURE OF NOTARY PUBLIC OR OTHER OFFIClAL
Check here if part or all of the land is Registered (forrens) 0
THIS INSTRUMENT WAS DRAFrED BY (NAME & ADDRESS):
Tax Statements for the real property described in this instnunent
should be sent to (include name and address of Grantee):
.
.
.
~-
~
g
I
I ...
EXHIBIT.. 1
5 ,
""
~
=
.<"0
~
~
=
=
'"
.,..,
>-
::>
'"
or.>
2:
~
'"'"
"-
:::>
:x::
I
~
:::>1
>-
:...>
'"""
"'"
'D
o
"'"
""
eo..:
;j
m
-1
.....
/ p
.
....-.
!Ii'
i~~
Imits -1" -
I
I
\
I
\
~
.
\
..~
Proposed Bridgfl
No. 27A57
-----
RfJmov,e ExistIng
Br. No. L9334
~
\
~
~
.
'.
.
EXHIBIT
~
.i.
f 6
~
=
f
"1.'
,.
~
\
-.;,
.,.
\
~
KNOLL WOOD
OFFICE BLDG.
~
0.4' fo lip O'F curb
fo IlpafOl.Jl"'b
---
fFOLInd HennepIn Co.
Monument
Found Hennspln Co.
IoIanumsnt'
,
,
........ 0.2'
Q
is
'"
f:t
~
GG'
---
~'J:=:::;.~=:=======:!::rd-l::=====
\ \ -----------.--..
. \
\ .
. \
\ .
\ \
. \
\ \
\ ------. \
=-r ---.-.-.--
(F~~=======~'==t:!---
---- -"-:
'- ---
SRF o.termln.d R/iI
_ _ rSRF O'fvmln':..d_R~J(
LAKE STREEr
~
1;,
~
\
l?"'V'~"'~
p """ Ic..l::-!___~__._.
c.~====::.__._.___._/
.'
Ij,
i?,
'fo
PRO-SYSTEMS
l'
...
K
I
20 10 0
~
.."01.
FIgUfliA:
. LAKE STREET IMPROVEMENTS
CITY OF HOPKINS
PROJECT AS.BUILT
~
C<:o<",,,,fC GIOI>~'-11lC.
S11Ir.lOO3
.
..
. ~ ~ j.nHIBIT
.11
7
)
\,
.....
I
.
STATE OF MINNESOTA
DISTRICT COURT
COUNTY OF HENNEPIN
FOURTH JUDICIAL DISTRICT
Ugorets Properties, LLC.,
Court File No: MC 02-016354
Case Type: Other Civil
Plaintiff,
v.
Stipulation of Dismissal
With Prejudice
City of Hopkins,
Defendant.
Pursuant to the Settlement Agreement reached between them and upon the terms stated
therein, the parties hereby stipulate and agree to dismiss, with prejudice, all claims in the
captioned lawsuit without costs or expenses to any party.
Dated:
Boris Parker
SALITERMAN & SIEFFERMAN, P.C.
Pillsbury Center, Suite 2000
220 South Sixth Street
Minneapolis,MN 55402
Attorneys Plaintiff Ugorets Properties, LLC
Dated:
George C. Hoff (1.D. No. 45846)
Justin L. Templin (1.D. No. 305807)
HOFF, BARRY & KUDERER, P.A.
775 Prairie Center Drive, Suite 160
Eden Prairie, Minnesota 55344
tel 952.941.9220
Attorneys for Defendant City of Hopkins
1
~
,
,
ORDER
Pursuant to the Settlement Agreement and Stipulation of Dismissal With Prejudice, all
claims in this matter are hereby DISMISSED WITH PREJUDICE, each party bearing its own
costs and expenses.
Dated:
Judge Robert A. Blaeser
2