CR 91-33 2nd Amendment To Lexington Parking Agreement
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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
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Specialist
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. 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.
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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
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. 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
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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:
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. 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).
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. 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
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. 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
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. 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
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. (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:
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. 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.
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. 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
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. 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
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EXHIBIT A
Legal Description
Parking Ramp
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EXHrBIT B
Legal Description
Access Area
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EXHIB!'r C
ACc..s Area Parking Spaoes
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EXHIBIT 0
Legal Description
Vehicula.r Eql"Biili from Acceos Area
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