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CR 05-144 Amendments to Indemnity Agreement - Justus Corner October 18, 2005 ~ Council Report 2005-144 Approving Amendments to Indemnity Agreements..Justus Corner, Inc. and Royal Lumber LLC (Justus Lumber) Proposed Action Staff recommends adoption of the following motion: Move to aoorove Resolution 2005-100: A Resolution aoorovina amendments to current indemnitv aareements between Justus Corner. lnc (formerlv Justus Lumber) and Roval Lumber. LLC and the Citv of Hookins for the orooertv at the corner of Excelsior Boulevard and 11th Avenue. known as Justus Lumber orooertv. Adoption of this resolution will extend current agreements that were originally put in place in 2001 that will continue to commit the City of Hopkins to indemnify Justus Lumber Company for certain environmental issues and will provide for specific protections for the City relative to the investigation of the site. Overview The Justus Lumber Company was at one time owned by the City of Hopkins. The site was utilized as a manufactured gas plant and a burn and fill municipal solid waste refuse site. In the 1970's, the property was purchased by Justus Lumber and has operated as a lumber yard since that time. Justus Lumber sold the business to Scherer Brothers Lumber in 2001 to operate in a similar capacity. The owners of Justus Lumber (now known as Justus Corner), retained ownership of the land and have been leasing the land to Scherer Brothers for more than four years. In 2001, the City entered into identical indemnity agreements with both Justus and Scherer that provided them with protection against potential negative impacts of contamination issues. This keeps this site viable and marketable within the City as a commercial use. Both parties are now requesting an amendment to the agreements with the City by extending them to coincide with an extended lease between Justus and Scherer. The City Attorney has drafted the amended agreements, which have been approved by all parties. He will provide the background on this issue at the meeting. Primarv Issues to Consider . /s the City exposing itself to any additiona/liabilities by extending this agreement? Legal representatives have stated that these agreements, as drafted originally and as extended, simply clarify existing relationships between the parties and do not alter liability issues. Supportina Information . Resolution Number 2005-100 . Amended Indemnity Agreement, Justus Corner, Inc. . mended Indemnity Agreement, Royal Lumber, LLC Rick Getschow City Manager Financiallmpact: N/A Budgeted: Y/N Related Documents (CIP, ERP, etc.): Notes: N/A Source: City of Hopkins Hennepin County, Minnesota RESOLUTION NO. 2005-100 Resolution Approving Amendments to the Indemnity Agreements between the City of Hopkins and Justus Corner, Inc. and Royal Lumber, LLC. WHEREAS; City, as indemnitor, and Justus and Royal Lumber, as indemnitees, are parties to certain indemnity agreements relating to that certain real property located in the City of Hopkins, Hennepin County, Minnesota; and WHEREAS; in order to facilitate the sale to Royal by Justus of its business operated on the Property, the City entered into the Justus Indemnity and the Royal Indemnity agreements; and WHEREAS; City's indemnity obligations under both the Justus Indemnity and the Royal Indemnity are to expire upon termination of the Lease; and WHEREAS; Justus and Royal wish to amend the Lease to extend the term of the Lease to July 31, 2011 and to provide Royal with an option to further extend the term of the Lease until July 31, 2016; and WHEREAS; in order to facilitate the extension of the term of the Lease, City has agreed to extend the term of the Justus Indemnity as provided herein and to extend the term of the Royal Indemnity as provided in that certain Amendment of Indemnity Agreement (Royal Lumber LLC) of even date herewith (the "Royal Amendment"). NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of Hopkins, Minnesota that the City of Hopkins does hereby extend the term of the Justus Indemnity through July 31, 2016; provided, however, in the event of any termination, voluntary or involuntary, of the Royal Indemnity prior to July 31,2016, the Justus Indemnity shall simultaneously terminate automatically and without notice on such earlier date. Notwithstanding anything to the contrary contained in the Justus Indemnity, any claim under the Justus Indemnity must be brought either within the term of the Justus Indemnity (as extended hereby) or not later than the fifth (5th) anniversary of the date on which the Royal Indemnity, is terminated, but in no event later than July 31, 2021. Adopted by the City Council of the City of Hopkins this 18th day of October, 2005. By Eugene J. Maxwell, Mayor ATTEST: Terry Obermaier, City Clerk AMENDMENT OF INDEMNITY AGREEMENT (Justus Comer, Inc.) THIS AMENDMENT, made this day of ,2005, by and between THE CITY OF HOPKINS, a Minnesota municipal corporation ("City"), and JUSTUS CORNER, INC., a Minnesota corporation ("Justus"). RECITALS A. City, as indemnitor, and Justus, as indemnitee, are parties to that certain Indemnity Agreement (Justus Comer, Inc.) dated October 24,2001 (the "Justus Indemnity") relating to that certain real property located in the City of Hopkins, Hennepin County, Minnesota legally described therein (the "Property"). B. City, as indemnitor, and Royal Lumber, LLC ("Royal") and Scherer Bros. Lumber Co., as indemnitees, are parties to that certain Indemnity Agreement (Royal Lumber LLC) dated July 17, 2001 (the "Royal Indemnity") also relating to the Property. C. In order to facilitate the sale to Royal by Justus of its business operated on the Property, City entered into the Justus Indemnity and the Royal Indemnity. D. In connection with said sale, Justus, as landlord, and Royal, as tenant, entered into that certain Lease covering the Property dated July 27,2001 (the "Lease"). E. City's indemnity obligations under both the Justus Indemnity and the Royal Indemnity are to expire upon termination of the Lease. F. Justus and Royal wish to amend the Lease to extend the term of the Lease to July 31, 2011 and to provide Royal with an option to further extend the term of the Lease until July 31, 2016. G. In order to facilitate the extension of the term of the Lease, City has agreed to extend the term of the Justus Indemnity as provided herein and to extend the term of the Royal Indemnity as provided in that certain Amendment ofIndemnity Agreement (Royal Lumber LLC)of even date herewith (the "Royal Amendment"). NOW, THEREFORE, the parties hereto hereby agree as follows: 1. The term of the Justus Indemnity is hereby extended through July 31, 2016; provided, however, in the event of any termination, voluntary or involuntary, of the c:Hopciv\AmendIndemnityAgt.Justus Royal Indemnity prior to July 31, 2016, the Justus Indemnity shall simultaneously terminate automatically and without notice on such earlier date. Notwithstanding anything to the contrary contained in the Justus Indemnity, any claim under the Justus Indenmity must be brought either within the term of the Justus Indemnity (as extended hereby) or not later than the fifth (5th) anniversary of the date on which the Royal Indemnity, is terminated, but in no event later than July 31,2021. 2. Any references in the Justus Indemnity to the Royal Indemnity shall be to the Royal Indemnity as amended by the Royal Amendment. 3. Except as hereby amended, the Justus Indemnity and all of the terms and provisions thereof shall remain in full force and effect. 4. City and Justus hereby ratify and confirm the Justus Indemnity and all of its terms and provisions and confiI1llS that it is in full force and effect and unamended (except as amended hereby). In particular, the limitations of the City's liability contained in Paragraphs I and 2 of the Justus Indemnity shall remain in full force and effect in addition to all of the other terms and provisions ofthe Justus Indemnity. 5. This Amendment may be signed in separate counterparts which, taken together, shall constitute a single agreement. In the event of a conflict between the terms of the Justus Indemnity and the terms of this Amendment, the terms of this Amendment shall control. IN WITNESS WHEREOF, the parties hereto have caused these presents to be made as of the day and year first above stated. CITY OF HOPKINS By: Its: -2- JUSTUS CORNER, INC. By: Its: -3- AMENDMENT OF INDEMNITY AGREEMENT (Royal Lumber LLC) THIS AMENDMENT, made this day of ,2005, by and among THE CITY OF HOPKINS, a Minnesota municipal corporation ("City"), ROYAL LUMBER, LLC, a Minnesota limited liability company ("Royal"), and SCHERER BROS. LUMBER CO., a Minnesota corporation ("Scherer"). RECITALS A. City, as indemnitor, and Royal and Scherer, as indemnitees, are parties to that certain Indemnity Agreement (Royal Lumber LLC) dated July 17, 2001 (the "Royal Indenmity") relating to that certain real property located in the City of Hopkins, Hennepin County, Minnesota legally described therein (the "Property"). B. City, as indemnitor, and Justus Comer, Inc. ("Justus"), as indenmitee, are parties to that certain Indenmity Agreement (Justus Comer, Inc.) dated July 17, 2001 (the "Justus Indenmity") also relating to the Property. C. In order to facilitate the sale to Royal by Justus of its business operated on the Property, City entered into the Royal Indenmity and the Justus Indenmity. D. In connection with said sale, Justus, as landlord, and Royal, as tenant, entered into that certain Lease covering the Property dated July 27, 2001 (the "Lease"). E. City's indemnity obligations under both the Royal Indenmity and the Justus Indenmity are to expire upon the termination of the Lease. F. Justus and Royal wish to amend the Lease to extend the term of the Lease to July 31, 2011 and to provide Royal with an option to further extend the term ofthe Lease until July 31,2016. G. In order to facilitate the extension of the term of the Lease, City has agreed to extend the term of the Royal Indenmity as provided herein and to extend the term of the Justus Indenmity as provided in that certain Amendment of Indenmity Agreement (Justus Comer, Inc.) of even date herewith (the "Justus Amendment"). NOW, THEREFORE, the parties hereto hereby agree as follows: 1. The term of the Royal Indemnity is hereby extended through July 31, 2016; provided, however, in the event that the term of the Lease expires or is terminated prior c:Hopciv\AmendIndemnityAgt.Royal - 1 - to July 31, 2016, the Royal Indemnity shall simultaneously terminate automatically and without notice on such earlier date. Further, the Royal Indemnity shall terminate automatically and without notice in the event of any disposition by Royal, whether by lease, sublease, sale, transfer or assignment, whether voluntarily or by operation of law, of all or substantially all of the interest of Royal as the Lessee of the Property, or of any building or improvement thereon. As used herein, "Disposition" shall include in addition to a direct transaction involving leasehold interest itself, any reorganization, sale, transfer or disposition of a controlling interest in Royal, whether voluntarily or by operation of law; provided, however, that a corporate reorganization or transfer of interest in Royal to an affiliated entity or corporation, including but not limited to Scherer, shall not be deemed a "Disposition" hereunder. Notwithstanding anything to the contrary contained in the Royal Indemnity, any claim under the Royal Indemnity must be brought either within the term of the Royal Indemnity (as extended hereby) or not later than the fifth (5th) anniversary of the date on which the Lease, as may be extended from time to time, is terminated, but in no event later than July 31, 2021. 2. Any references in the Royal Indemnity to the Justus Indemnity shall be to the Justus Indemnity as amended by the Justus Amendment. 3. Except as hereby amended, the Royal Indemnity and all ofthe terms and provisions thereof shall remain in full force and effect. 4. City, Royal and Scherer hereby ratify and confirm the Royal Indemnity and all of its terms and provisions and confirms that it is in full force and effect and unamended (except as amended hereby). In particular, the limitations of the City's liability contained in Paragraphs 1,3 and 7 of the Royal Indemnity shall remain in full force and effect in addition to all of the other terms and provisions of the Royal Indemnity. 5. This Amendment may be signed in separate counterparts which, taken together, shall constitute a single agreement. In the event of a conflict between the terms of the Royal Indemnity and the terms of this Amendment, the terms of this Amendment shall control. IN WITNESS WHEREOF, the parties hereto have caused these presents to be made as of the day and year first above stated. c:Hopciv\AmendIndemnityAgt.Royal - 2 - c:Hopciv\AmendIndernnityAgt.Royal - 3 . CITY OF HOPKINS By: Its: ROYAL LUMBER, LLC By: Its: SCHERER BROS. LUMBER CO. By: Its: Public Works Department Memorandum To: Honorable Mayor and Members of the City Council Copy: Rick Getschow, City Manager ~ From: Steven J. Stadler, Public Works Director Date: October 14,2005 Subject: Adopt Resolutions - Hopkins School District Bus Facility Staff received the draft resolutions from the School District's environmental consultant late Friday and did not have time to review, format and number them prior to Council Meeting packet delivery. The draft resolutions are included with the report at this time. The actual resolutions will be made available at the City Council meeting. CIT Y Of' m HOPKINS October 14, 2005 Council Report 2005-143 Adopt Resolutions Supporting Grant Applications - Hopkins School District Bus Depot Project Prooosed Action. Staff recommends adoption of the following motion: Move that Council adoot Resolutions 2005-XXX suooortina Hookins School District's aoolications for State. Metrooolitan Council and Henneoin County Grant Funds oertainina to the orooosed bus deoot oroiect. Overview. The Hopkins School District is continuing to work towards the construction of a bus maintenance and storage facility in 2006 or 2007 at the old Hopkins landfill site. Two public informational meetings have been held .to present the project and discuss project details and impacts. City Council has discussed the project at two work sessions. The Minnesota Pollution Control Agency supports the project and has begun engineering design to determine the work scope and costs of the landfill modifications that must precede the bus depot construction. The next step for the school district is to submit applications to the various agencies with grant programs geared towards assisting this type of environmentally sensitive project. The school district intends to work with two of the three governmental agencies offering grant programs. The decision as to which two agencies they proceed with will be based on the overall likelihood of funding. Only the Hennepin County grant can be awarded directly to the School District, the others must be awarded to the City with funds transferred to the School District as qualifying costs are incurred. The school district has provided the resolutions for all three agencies and seeks City Council support. The State of Minnesota grant application submittal deadline is November 1, 2005. Primarv Issues to Consider. . Do these resolutions commit the City to approving the project for construction? No. Future City Council review and approval will be necessary before this project can be constructed. Additionally, a public meeting must be held by the MPCA before any landfill modifications can be done. These resolutions only secure City support, as the local government agency and property owner, for school district submittal of the grant applications. lie Works Director DRAfT ~~\ Cleanup Grant Resolution - Tax Base Revitalization Account RESOLUTION NO. CITY OF HOPKINS, MINNESOTA AUTHORIZING APPLICATION FOR THE TAX BASE REVITALIZATION ACCOUNT WHEREAS the City of Hopkins in a participant in the Livable Communities Act's Housing Incentives Program for 1996 as determined by the Metropolitan Council, and is therefore eligible to make application for funds under the Tax Base Revitalization Account; and WHEREAS the City has identified a clean-up project within the City that meets the Tax Base Revitalization account's purpose/s and criteria; and WHEREAS the City has the institutional, managerial and financial capability to ensure adequate project administration; and WHEREAS the City certifies that it will comply with all applicable laws and regulations as stated in the contract agreements; and WHEREAS the City Council of Hopkins, Minnesota agrees to act as legal sponsor for the project contained in the Tax Base Revitalization grant application submitted on November 1, 2005-[IF CITY IS APPLICANT]; BE IT FURTHER RESOLVED that School District 270 is hereby authorized to apply to the Metropolitan Council for this funding on behalf of the City of Hopkins and to execute such agreements as are necessary to implement the project on behalf of the applicant. Mayor Clerk ~~'" DRAFT RESOLUTION Whereas, Hopkins School District #270 desires to explore the possibility of constructing a School Bus Facility on the closed City of Hopkins Landfill, and Whereas, representatives of Hopkins School District #270 have had discussions with the City of Hopkins and the Minnesota Pollution Control Agency regarding this project, and Whereas, MPCA has provided a positive response to the School District about the possibility of proceeding with such a project, NOW THEREFORE BE IT RESOLVED that the City of Hopkins supports the environmental financial grant application submitted to the Hennepin County Department of Environmental Services on November I, 2005, by Hopkins School District #270 for the Hopkins Landfill site. I certify that the above resolution was adopted by the City of Hopkins on Signed: Title: Date Authorized Official Date: Witnessed by: Title: Date: VI. RESOLUTIONS DRAFT S~ 47. Resolutions are required to be adopted prior to submission of the application package. The two required elements are: 1. A resolution from the governing body of the city where the project site is located, which approves the application. 2. A resolution from the applicant committing the local match and authorizing contract signatures. Note: Pursuant to M.S. S 412.201, Statutory Cities must authorize the Mayor and Clerk to execute all contracts. An applicant may either provide a separate resolution for each of the above, or combine them into a single resolution, as long as they include the same elements. Blank resolutions are included for your convenience. You may choose to reformat or combine them, but make sure to include all of the statements that appear in our examples. RESOLUTION # 1- City Approving the Application BE IT RESOLVED that the city of Hopkins City where site is located Contamination Cleanup grant application submitted to the Department of Employment and Economic Development (DEED) on November L 2005 ,by City of Hopkins Date Applicant has approved the for the Former Hopkins Landfill Site site. Site name I certify that the above resolution was adopted by the city council on Date Signed: Authorized Official Title: Date: Witnessed by: Title: Date: DRAfT RESOLUTION # 2- Committing Local Match and Authorizing Contract Signature BE IT RESOLVED that City of Hopkins act as the legal sponsor for project(s) (Applicant) contained in the Contamination Cleanup Grant Program to be submitted on November 1. 2005 (Day/MoNr) and that is hereby authorized to apply to the Department of (Title of Authorized Official) Employment and Economic Development for funding of this project on behalf of Citv of Hopkins (Applicant) BE IT FURTHER RESOLVED that City of Hopkins has the legal authority to (Applicant) apply for financial assistance, and the institutional, managerial, and financial capability to ensure adequate project administration. BE IT FURTHER RESOLVED that the sources and amounts of the local match identified in the application are committed to the project identified. BE IT FURTHER RESOLVED that City of Hookins has not violated any (Applicant) Federal, State or local laws pertaining to fraud, bribery, graft, kickbacks, collusion, conflict of interest or other unlawful or corrupt practice. BE IT FURTHER RESOLVED that upon approval of its application by the state, City of Hopkins may enter into an agreement with the State of (Applicant) Minnesota for the above-referenced project(s), and that Citv of Hookins (Applicant) certifies that it will comply with all applicable laws and regulation as stated in all contract agreements. NOW, THEREFORE BE IT RESOLVED that is hereby (Title of Authorized Official) authorized to execute such agreements as are necessary to implement the project(s) on behalf of the applicant. Note: Do not include the proper name, only the title of the official. Pursuant to M.S. ~ 412.201, Statutory Cities must authorize both the Mayor and Clerk to execute all contracts. DR ~ ""'..""" -- . j.,,j.~J'" AI!. I I CERTIFY THAT the above resolution was adopted by the of Citv of Hopkins Applicant SIGNED: (Authorized Official) (Title) (Date) (City Council, County Board, etc.) on Date WITNESSED: (Signature) (Title) (Date)