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CR 91-33 2nd Amendment To Lexington Parking Agreement ., 1 y 0 ~ \ G '" . m .y <0 January 29, 1991 o P K \ .;.. CR:91-33 SECOND AMENDMENT TO LEXINGTON PARKING AGREEMENT Proposed Action. staff recommends the adoption of the following motion: Approval of the second amendment to the Lexington Parking Aqreement between the City of HOPkins and Lexington Properties. Also authorize the City Manaqer to execute the aqreement. Approval of this motion will allow Lexington Properties to complete a refinancing on the Norwest Bank Building. Overview. At the time that the decision was made to redevelop the surface parking lot between 11th & 10th Avenues, the City entered into an agreement with Lexington Companies to help facilitate the construction of the parking ramp. The purpose of this agreement was to have the owner of the bank building share in the cost of the ramp if we provided them with 120 spaces. They also provided some of the land needed to construct the facility. . In April of 1988 the City Council approved the agreement between the city of Hopkins and the land owner. The owner has now approached the City to renegotiate the original agreement. Primary Issues to Consider. 0 Why is Lexington looking to amend the agreement? 0 What are the major changes to the agreement? 0 What is the impact of the new agreement? supportinq Information. 0 Proposed Agreement 0 Anal 1S / --- " . Specialist . " . CR: 91-33 Page 2 Analysis Based on the above information the city council has the following issues to consider: 0 Why is Lexington looking to amend the agreement? Lexington has been working with a prospective lender on the refinancing of its mortgage on the Norwest Bank building. The lender has expressed concern over the lack of easements allowing access to the surface parking and the ramp. They have also expressed additional concern over a potential parking shortfall should the ramp be demolished. 0 What are the major changes to the agreement? Three changes occur to the agreement in the area of new easements. 1- An easement to Lexington for a period of 15 years for 120 spaces in the ramp or surface lot. 2. An easement to Lexington to allow access across the property . from 11th Avenue. 3. An easement to the city for traffic to pass through the surface area to an exit on 10th Avenue. The final area of change is that the city guarantee the rebuilding of the ramp if it is partially or totally destroyed. 0 What is the impact of the new agreement? The impacts of these changes to the city vary. The easements do not provide any additional risk to the city or the owners of the Bank building. They will only provide a better method of establishing the rights both parties have under the current contract. The changes to the agreement for the rebuilding the ramp, however, have a bit more risk associated with them. The current agreement only requires the City to repair the ramp if up to $100,000 ln damages occur. The proposed agreement would require the City to repair or reconstruct the ramp for 100% of all damages, throughout the term of the agreement. Both the city attorney and stephanie Galey of Holmes & Graven, who helped prepare the original draft, have advised staff that these changes are common to most agreements of this type. . Should the city be required to reconstruct the ramp because of damage or demolition, it is anticipated that it would use insurance proceeds to complete the work. The City currently has the ramp insured for its full value so reconstruction should not create additional costs to the city. . Cr: 91-33 Page 3 The City has worked language into the agreement that should the City receive less than what is determined to be replacement value, it is not obligated to pay any more than these proceeds received. The original agreement requires the city to carry full replacement coverage for the length of the agreement. Alternatives Based on the above information, the city council has the following alternatives to consider. l. Approval of the second amendment to the Lexington parking Agreement between the city of Hopkins and Lexington Properties. Also authorize the city Manager to execute the agreement. 2. Do not approve the second amendment to the parking agreement. This action would potentially cause Lexington Company to be unable to complete their refinancing. . 3 . Continue the item for further information. This action would potentially cause Lexington to have to re-schedule their date for refinancing and delay their efforts to complete this task. . -, ' P' . C I T Y 0 F H 0 P K I N S MEMO Date: January 30, 1991 To: Jim Kerrigan From: Jerre Miller Re: Norwest Bank Parking As you know, Brian Fritsinger and I have been discussing the parking ramp agreement originally entered into between the City and Lexington concerning the Lexington property parking on the surface and in the ramp for its tenants. . In December 1990, the Council approved without debate an assignment of the parking agreement to a prospective lender of Lexington who has made application to refinance the mortgage on the building. Because of the lender's concern over the lack of easements allowing access to the surface parking and the ramp and its additional concern over a parking shortfall should the ramp be demolished, a number of meetings and discussions have been carried on in which Brian Fritsinger and I have been involved. The proposed amendment to the 1988 parking agreement accomplishes two principle items: 1. The City will grant easements to Lexington for a period of 15 years from the date the ramp was completed for the 120 spaces allocated to the building in the ramp and the surface parking abutting the building. In addition, the City will grant an easement to allow access across its property from 11th Avenue and Lexington will give the City an easement for traffic to pass through the surface area to an exit on 10th Avenue. . None of these easements were in existence prior to this. 2. The City will agree to rebuild the ramp if it is partially or totally destroyed. 1010 First Street South, Hopkins. Minnesota 55343 612/935-8474 An Equal Opportunity Employer - ~ . This is the essence of the agreement draft of January 21, 1991 which I have attached. Because the owners commitment for the loan will expire shortly, they are anxious for the City's approval of the agreement. I have no legal objection to the creation of the easements particiularly since it firmly establishes the use and access pattern of the surface area and parking ramp. Concerning the requirement to rebuild, I find no legal concerns surrounding this obligation since the obvious benefits of its existence would be a strong encouragement to rebuild if something disasterous occurred to the structure. This obligation would have a 15 year cap to it in any event. JAM . . ~ t, 12:l. "',b'7;=;2',,, ~ LilY OF HOP~IN5 ;~lb .::,t:J ',I ..t:i I ; r- =II,J,J , - l-'::!l 1: ~d--'I'l ; . JEK:13977:13:06 SECOND AMENDMENT TO AGREEMENT TO DEVELOP PARKING This Seoona Amendment to Agreement to Develop p~rkin9 ("Amendment-), made as of this day of , 19 , by and between the City of HopkinQ~municipal corporation under the laws of the state of Minnesota (WCityM), and Lexinqton Hopkins Limitad partnership, a limited partne~6hip under the laws of the state of Illinois ("company"). WITNESSETH WHEREAS, on June 2, 1988, the city and NorwQst properties, Inc. ("'Norwest") entered into that certain Agreement to Develop parking, recorded in the offica of the County R$corder of Hennepin County on July 12, 1988 Qa Document No. 5429874 (the .Original Agreement*), which agreement was amended by the city and Norwest by an Amendment to Agreement to Develop parking dated June 28, 19aa, recorded in the offioe of the County Recorder of . Hennepin county on July 12, 1988 as Document No. 5429875 (thfii "First Amendment-; the Original Agreement and the Firat Amendment collectivelY hereinafter the -Agr..ment-): and WHEREAS, Norwftst conveyed it~ interest in the ottice Property (as dafined in the Original Aqreement) to Company by warranty deed dated June 29, 1988, recorded in the offioe of the County Recorder of Hennepin County on July 12, 1988 as Document No. 5429876: and WHEREAS, Norwest a..igned its interest and company aaaumed said interest in the Agreement to Company by Assiqnment and Assumption of Aqr.ement to Develop Parking dated June 29, 1988, which Assignment and Assumption of Agreement to Develop Parkinq was consent.d to by the city 1 and WHEREAS, the City has completed conetruction of the Parking Ramp, as parking Ramp is defined in the Agr.ament, and WHEREAS, city and company desire to further amend the Agraement to reflect new agreements between them, NOW, THEREFORE , in consideration of the pre:ises and for good and valuable consideration, the reoeipt and SUfficiency ot which are hereby acknowledged, City and company aqrae as Bet forth below: . ; :;c-- 1 .,~ 1 1 : 1 ~'J-'I'l ; t=, j ~'~:::;:/~"C.::'.~..j_~ ,= I T',' DF HDF'I, Ili=, ; leU ~c ='UII J.:,,: r-=,I'.1 . 1. o@'fin.d rarms. All capitalized teL~a U~Qd in this Amendment shall, exc~pt where th~ cont.xt oth~rwi8a rQqui~8e, have th~ meahings Qat forth in th~ Agreement. 2. Ame.ndments . (a) section 8 at the Original Agreem8nt is hereby dQleted in its entirety and the following ~ubstituted therefor: "s.ction 8. Grant of Eaeements "'a. The city hereby grants the Company a non-excluuive .asement for vehioular parking over the upper two lev81~ of ths Parking Ramp located on real property legally ~escribed on Exhibit A attached h.r.to and mad. a part hereof. It ie understood and agreed by the partiae that the city reserves th~ right to dQsiqnata .paoes on said upper levels for use by the Comp~ny and other parti&B holding parking and/or easement right~ on said upper two lev&ls; ~rovidQd, howQver, ~~t the parties further aqre. that if, at any time, the company notifies the city that persons or entities claiming throuqh Company have b..n unable to park . in the parking Ramp due to unavailability of parking apmQes, the city will t8Ke euch actions as may bQ neo.asary ~Q ~n.ure the availability of 120 spaces tor the use of Company in the Parking Ramp inoluding, but not limit$d to, d.ciqnation of spaces by installation of ~ppropriat& ~ignage. The parties hereto recognize that changes in circumstsnces may neoQsmitate the relocation of the area within th. Parkinq Ramp in which the Company'~ parking rights may be a~ercised. Tho city therefore reserve8 the right to terminate tha eagemQnt deolared hereby upon th. granting to the Company of a replacement easement granting rights to parking within tha Parkin; Ramp, which repl~cem.nt easement shall provid. parking in that portion of the parking Ramp closeat to the building located on the office Property. Any ~uch new parkinq easement ahall contain at l~ast 120 parking SpaC8& baaed upon a standard parkinq space size which compli.s with all applicable laws and r.qulations. jlfb. The City hereby grants to the Company a non-exolu&ivG e8SAment for ped..trian and vehicular ingress ana egress to th. parkinq Ramp over the parxinq Ramp and that portion of the . Parking Property described on E~!pit B attached hereto and made a p~rt h@reof (the HAcceas Ar.aW). -2- ; .:en, 1 'C'l 1 : 1, i I 1_,':" ~'.,::'~ =,:::/. \ ~>..:_ '~~-.... ,= [r',' _11- :-iUH liE; 141:::- ~{::I iT [';',; f--'::;I,I . Me;. ~h. City hereby grants to th6 Company an ~xclusiv5 aasement ovar the parkinq spaee. in the Aooesa Area a. depicted on Exhibit C attach.d horeto &hd made a part h.reof, whioh spacQs shall be used solely for ahort-term parking for custom.rs of tanantG of thG oftice Property. -d. The CompAny h.reby qrants to the City a non-excluGiva .asemant over that portion of ~h~ Of rice property legally described on Exhi~it D attached hareto and madQ a part hereof for the purpose of v.hicular .qreB6 from th. ^ccess Area onto 10th Avenue South. wTho easement. created in Bubparagraphs 8(a) and 6(C) abovQ shall be easements appurtQnant to thQ Office Property and shall run with the land and bA of full force and effect from and after the dAte hereof until NQVQmb.r ~O, 2003, which date 1s fifteen (Hi) year. after oompletion of oonstruotion of th~ Parking Ramp. The ~a&ement creatad by subpar~qr~ph 8(b) above shall run with the land, shall be an Q~8em.nt appurtenant to the Office Property, and be perpetual in duration. The easement created by subparagraph 8(d) above . shall run with the Land, be an .a.Qament appurtQnant to the City Property and the company property, ana ~Q perpQtual in duration. .In addition to the easement. granted by sectionll Sea) and S(c), the Company m~y purcha80 additional parking permits on the sam. basis as members ot the general public. Upon expiration of this Agr..ment, the Company ~hall have a first right to puroha.. 120 parking permitll in thQ parking Ramp and permits tor p~rkinq apaoQs in the Access Area at the permit cost in eftect at such time.- (b) Section 11(b) of the oriqinal Agreement is heraby deleted and the following substitut~d the~efort "(b) It, from and after th. datQ of this Amendment through November 30, 2003, the Parking Ramp or any portion thcr80f is damaged or daatroy.d, the City shall be obligated to promptly commenc. and complete th. repair, restoration and reoonstruction o~ th$ Parking Ramp 1 provided however that, so long as the city maintains insuranoe in compliance with Section 11(a) of the Original Agreem.ntf the City shall . not be obligated to incur any expense in the repair, restoration or reconstruction of the Parking Ramp in excesg of inQuranc~ proceeds -)- ~,E[ rr E;'I': f"::,I,[ , _ l~.'=q 1; l...Jfl'l ; t:,1~':':~:;c.;",';::;2'=h I,,! T',' i 1,- HI]f'[ [I r:, ; +11'~ I I . payabl. to th. City on account of any such da~age or d~atruction. Th. City shall causa any repairt restorGtion or reconetruction of the Parking Ramp to be completgd within 250 days after the damage or dQstruotion, providad that such time tor completion .h.ll he extended tor .vent8 outside of the control ot the City, includinq, without limitation, the following: acta of God, strikeSt lockouts or oth.r industrial diQturbancee: aots of public enemiGB; order. or restraints of any kind of the govQrnment of tho united statoR of America or of the state or any of their dQpartments, agencies or official&, or ahy civil or military authority, insurrGotionB1 riots~ landslideS1 adverse weather conditions; earthquakes, tires: storms; droughts; floods; explosions, and breakeq_ or accident to transmission wires, machinery, ~r8nsmigg1on pipes, canals or other event outside the control of the city. (c) The following ia added to the Ori9in~1 A9r..mQnt as a new Seotion 11(e) z Wee) The ci~y Aqrees that if all or a portion of . the Parking Ramp is taken in conde~aticn or by the power of eminent domain, the City sh511 us. all condemnation proceeds to retire the Bonds up to the full amount of the condemnation proceeds and, as a result of ~uch retirement or partial retirement, reaUce or eliminate the payment~ to be made ~y Company required by Sections 9 and 10 of this Agree~Qnt which payments are to be mado from and after the data of the takin9. It is understood and a9reed that such reduction or elimination may involve a request for refund or reduction of special assessments alrQady paid tor the year in which the takinq occurs, or for special a5588sment. levi8~ or pending against the Office Property for years su~sequent to the year in which the toking ocours, and thQ City agrees to cooperat~ with the Company if the company seeks a reduetion or refund of sueh special aesessments.w (d) Section 12(a) of the Original A9reement is hereby deleted in its entirety and the following substituted therefor: W(a) In thQ ovent the Parking Ramp or any portion thereof is destroyed or damaged during the term of this Agreement, and if the repair, restoration or . reconstruction of the Parking Ramp prevents the provi.sion of parking- on the Parking Proparty, the City shall use its best .fforts to provide 120 parking -4- ~,. __../:;\:~_'i-._. ." .....-......... --- '=,1::11 I t;,' : I ' ,Ld , ~ 1--'~1 l:lc,fll; r::,l ~.:: .:-::=:"-,';=;~'~'~-} ,= I I]F HCF'III E:, ; j:QCJ . spaces to Company in a proxi~ate looaeion throu9hout the period of any such rep~ir, r8iitoration or reconstl'tlction, (8) Seotion 13 of the Original Agreement is h~rBby ~eleted in its entirety and the followinq .Ub8titute~ therefor: WSection 13, Default. Upon default by either party to this Agreement in the performance of its ohliqations hereunder, after notic8 tram the non- defaulting party and a reasonable opportunity to cure, the non~detaulting party may take whatever action, leqal or equitable, which may appear neces$ary or d.5irabl~ to entorc. performance and observance of any obligation, agreem.nt or covenant of the defaultinq party of this Agreement,. ( f) Section 15 ot the Original Agreement is hereby deleted in its entirety and thQ following substituted therefor: .Seotion 15. Assiqnman~, The easem&nt rights and oth~r rights of the Ccmp~ny under the A9r~ament, as amencled (the 'Appurtenant R1ghts') are intended to . benefit the Offic. Property, and ar. horaby declared to be appurtenant to thB Office Property. ~ll future owners (includinq fee ownors and contract tor deed purohaser8) of the Office property shall Automatically succeed to all of the Appurtenant Rights, whether or not the dead, contract tor ~eed, mortgaq8 or other instrument of conveyanoe by whioh such futurQ own9r takes an interest in ~h. Office Property so provides. Any attempt at aSBignm.nt ot the Appurtenant Rights to any person not an owner of tho Office Property ahall be void and of no force or effect. Nothing in this Section shall prohibit the owner of the Office Property trom Makinq the Appurtenant Riqhts available to tonants of the Office Property and their customers and invitees. Any future owner of th. Office Property shall acquire thQ Offioe Prop~rty subject to the obligations of the Company hereun~.r, as provided in Section 21 hereof.w (q) The followinq is added to the Original Aqreement as Section 20: "section 20. No Dedication. The parties aqree that the USQ of the easement granted by section B(d) does not and shall not be deemed to constitute a gift, grant or dedication of any . portion of the Office property to the city or the general public for any public purpose whatsoever, except as specified in $$ction Sed).M -0- -- SEf'H E;"',': F'=,I.,I ; 2- 1-',,"1 1: 16f'c'I'1 ; 6'1 ~::::3:::>~~' I-:';=I~l~----< ': 1'1",' OF HOfl: III::. ; tEl . (h) ~h. following ia added to the Oriqinal Agreement a9 Section 21: "'section 21. Successors Bound. All QUeOeBBor owners of the Parking Property and the Office Property shall ba subject to the terms ot this Agreement to the full extent permitted by law. II (i) The number "'6'" in the eighth line of Section 2 of the First Amendment is hereby deletQd and the word "'all'" substituted therefor. e j ) From and after the date set forth on paqe 1 of this Amendment, the leg~l description of Exhibit A to the Original Aqrcement is deleted in its entirety and the followinq substituted th.refor: Exhibit A City Property ThQ followinq desoribed property located in Block 6, West MinnQapolis, according to the plat on file and of record in Hennepin County, to-wit: . Lots 7 throuqh 10 inclusive; the north 6.50 teet of LOt 11, the North 35.00 feGt ot Lot 23, Lots 24 through 21 inolusive and includinq vacated alley adjacent to the above property. LOt 22, the South l~.OO teet of Lot 23, the North 44.00 teet of LOt 21 and that part of the vacated North-South allay lying b.tween the Easterly extension ot the South lino ot the North 14.00 teet of Lot 21 and the Easterly extension of the South line of the North 44.00 feet of Lot 21, all in Block 6, West Minneapolis, Hennepin county, accordinq to the recordea plat thereof. The North 44 feet of the West 37 teet of Lot 14, Block 6, Weet Minneapolis. (k) From ftnd after the date B~t forth on paqe 1 ot this ~endm.nt, Exhibit B to the Oriqinal AqrQQment is hereby deleted in its ~ntirety. (1) From and after the date set forth on page 1 or this Amendment, Exhibit c to the original Agr~ement is hereby deleted in its entirety, and the fcllowinq . substituted therefor: -6- ~,~ ' '" .,. ',';"" ~~- <-.tJ-11 [..,1 :t-"'--;Id .I _ l-'~l 1:1,1;1; '.l~ ..',,;_;~"_;_, 1_111 Ur !iUr-'f IIV-, ;R_~,_ . Exhibit C Of :HoQ Property Lots 14, 15, 16, 17, 18, 19, 20 and that part of Lot 21 lyinq South ot North 44 feet, BloCk 6, West Minneapolis, including the vacated 14 foot alley adjacent to Lots 18, 19, 20 and that part of LOt 21 lyinq South of the North 44 feet, Block 6, West Minneapolis. 3. som1liance. The parties hereby acknowledqe and ~qree that all requ rement~ of city and Com~any as set forth in Section5 4, 5, 6 and 7 of the Original Agreement have been complet~ly satisfie~ by the party obligated to perform thereunder. 4. RefQrence to and Effect on the Aqreemant. (e) Upon the ettectivenes& of this Amendment, each raferenc6 in th. Aqreem~nt ~o (1) MComp~ny-, or (ii) Wthis Agreem$nt-, whereun~er., Whereot., Mhereinw or words of like import referring to the AqrGemant, shall me~n and be a referenc& to the Aqreemont AS amAnded hereby. (b) Except as specitically sat forth above, the . AgreQmont remains in full torce and effect and 1B hereby ratified and contirm.d. ~. Governing Law. This Amendment shall b. governed by and con~trued in accordance with the laws of the State of Minn~sota. 6. Head1nq$. Section headings 1n this Amendm$nt are included hore1n for conveni~nce of r.f.rence only and shall not con~titute a part of this Amendment for any other PUrpOSA. 7. Counterparts. This Amendment may be QXBcuted in counterparts, all of which, when tAken toqGthQr, shall constitute one agreement. . -7- '=,UII b', :r-::,I,I ' ""- i- '~l 1: L'C~rl ; F, l-=---- _:,~.;=-:"'-:,;=;",-~-.c~ ~ '.:. I Ti OF HCJFl I rl'::, ; ;:123 . IN WITNESS WHEREOF, the City has caume6 this Amendmen~ to be duly executed in ita name and behalf and its seal to be hereunto duly affixed, ~nd the Company has caused this Amendment to be duly ~xecuted in its name and behalf 4& ot the data first above written. City of Hopkins By "-Its . By Its Lexington Hopkins Limited part:.nQrship By Le~ington properties, Ine./ doing business in Minnesota aa Lexinqton Proporties of Illinois, Inc. . By Its STATE OF MINNESOTA ) ) 8li1. COUNT~ OF HENNEPIN ) The foreqoinq instrument waa acknowledqad bafore me this _ c;iay of , 19_, by and , respectively the and of the City of Hopkins, A municipal corporation und&r the laws of the state of Minnesota, on behalf of the city of Hopkins. Notary Public . -8- =,I::.;,j I J:;',; i--'~,I'.I l-'~' L 1 : 1, ;i-!i ; 61':":-;:~,;:c;',';=-;"'_'::,--c ,- IT,' CF HuH Ii I:::, ; HcC...j , - . STATE OF MINNESOTA ) ) sa. COUNTY OF HENNEPIN ) ~hQ tQr~9oing in~trument was acknowledg.d before m. this ~ day of ______ , 19__1 by Joseph H. Ryan, th. Vice- PrQ9ident of Lexington Properties, Inc., doing busin~s5 in Minnesota as Lexinqton Properties of Illinois, Inc. , the sole general partner of LQxington Hopkins Li~itQd Partnership, a limited partnership und.r th~ laws of th. st~t. of Illinois, on behalf of the partnership. Notary Pul:llic Thi~ Instrument Drafted By: Fabyanskef Svoboda, Westra & Davia, P.A. 1150 International Centre II 920 Second AVGnuQ South Minneapolis, MN 55402 . . -9- '=,EIIT E:,': F'=,I,I ; -- 1--91 1: 1," I '1'1 1-, 1 L-=-'-J-~C;'-,-';~<.:":'::'~--:, '=IT,' OF HClr=~ lib ;;1..'S . . EXHIBIT A Legal Description Parking Ramp . ~ . ::' tel '~I ]:,,: r' ::' I '.1 ; - 1-'-'; 1: l'="I-i'j ; '=, 1 ~-::::::;=;c;':=;c..:'~~- '~IT',' 'C:F HCJFlI'I':, ;j:j'::,~, . . EXHrBIT B Legal Description Access Area I I I I . . ~ ," .~ ::::,EI'H E;' I ' : F ::::' 1,1 ; 2- 1-'='1 1: l'=,FI'1 ; 612331=/~":=:2'~----'I ,- II',' OF HOFl, III:::; ;j:j2";' . . EXHIB!'r C ACc..s Area Parking Spaoes . . ~ ',(!l " - 1 ~ ~UI-I I " ' ..', '-'. ' . \ I 11- r I,'~~;-'r j I ~.~. ; r~ ~ =.:' ':':,EIIT E;',: r- e,I,1 ; l' '~'J i:- ~_ _._ . . EXHIBIT 0 Legal Description Vehicula.r Eql"Biili from Acceos Area . . .-_.... .. _.-- ,-