HomeMy WebLinkAbout2018-08-28 CC Packet Enclosure - Due Diligence Period 4,01
Oak Park Heights
Request for Council Action
Meeting Date August 28th,2018
Time Required: 5 Minutes
Agenda Item Title: Approve Extension of Due Diligence Period for Madison Hospitality
Group to Nov.15th,2018.
Agenda Placement New Business ,�/
Originating Department/Requesto .,�t'1;?� Ci Administrator
Requester's Signature ,//�
Action Requested A..rove Ext- t.of Due Dili_ence Period for Madison Hos.itali
Grou.to N./15th 2018.
Background/Justification(Ple• indicate if any previous action has been taken or if other public
bodies have advised):
Please see the attached memo.
Page 209 of 216
,1
City of Oak Park Heights
14168 Oak Park Blvd. N• Box 2007•Oak Park Heights,MN 55082•Phone(651)439-4439•Fax(65I)439-0574
8/28/18
MEMO
TO: Mayor and City Council Members
FROM: Eric Johnson, City Administrator
RE: Madison Hospitality Group—Holiday Inn Express—Timeline Extension to 11/15/18
Dear Mayor and Council:
Madison Hospitality Group MHG is seeking another extension to their Due Diligence Process(DDP)timelines moving
the default date from 9/15118 to a date of 11/15/2018.
These initial dates and a prior extension to 9/15/18 stem from the Purchase agreement completed in August 2017 and
which outlines the conveyance of the Property to MHG at a price of$875,000 with requirements that a hotel facility is
constructed. We know that at this time, MHG has secured their City planning approvals, Variances/Conditional Use
Permits and is working through the Brown's Creek Watershed District.
MHG has submitted extensive engineering and application data to the Brown's Creek Watershed District and at this
time is expected to be before such board in Mid-September 2018. Similar to other developments in the City, MHG is
moving through the complicated BCWD rules and sort out drainage flow between a pond area on the NE section of the
property versus, what will flow to the large Kern Center Pond.We can understand this can take some time.
The enclosed document is the 181 Extension approved in April 2018;and an extension to Nov 15th,would be structured
similarly between the City Attorney and MHG Counsel.
The Council at this time has basically two options:
1. Provide an extension to the 11/15/18 and continue to work with the Buyer to complete the transaction as
outlined in the Purchase Agreement.
2. Inform the Buyer that the City will not grant an extension,the Buyer will likely withdraw from the proposal.
The Council would need to take a formal action to extend any dates. I would of course defer to Mark Vierling
or Kevin Sandstrom if I have mis-stated any elements herein.
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FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT ("First
Amendment")is effective as of this tz. day ofts\ ,2018,by and among the City
of Oak Park Heights, a municipal political subdivb ion in the State of Minnesota ("Seller")
and Madison Hospitality Group, LLC, a Minnesota limited liability company("Buyer").
RECITALS
WHEREAS, the parties executed a Purchase and Sale Agreement dated August 29, 2017
(the "Agreement"); and
WHEREAS, the parties desire to amend and modify the Agreement as provided for
hereinafter. Ex re-ND
NOW,THEREFORE,for good and valuable consideration, the receipt of sufficient f ov. 15.
which is hereby agreed and acknowledge by Seller and Buyer, the parties hereto agree to end oV
and modify the Agreement as follows: 208
l. Section 4.2 of the Agreement is amended and modified to provide ollows:
4.2. Due Diligence. Buyer will be allowed untilleptember 15, 2018 kthe "Due
Diligence Period"),to review the Due Diligence Documents,inspect the Property,
perform such surveys, observations, soil borings, archeological and historical
surveys, appraisals, tests and investigations as Buyer may reasonably deem
appropriate, apply for ail permits, conditional use permits, variances, building
permits, licenses, assurances, and approvals as Buyer may reasonably deem
appropriate for Buyer's intended use of the Property, determine whether Buyer's
proposed construction on the Property can occur without the use of piling,
extraordinary filling or other extraordinary land preparation steps, and otherwise
satisfy itself regarding the condition, suitability and desirability of the Property for
Buyer's intended purpose(collectively "Due Diligence"). If Buyer in its absolute
and sole discretion is not satisfied with the Property or the results of its Due
Diligence, Buyer may on or before the expiration of the Due Diligence Period
terminate this Agreement by giving written notice to Seller. Upon such termination
prior to the end of the Due Diligence Period, the Earnest Money and Additional
Earnest Money will be returned to Buyer and neither party will have any further
obligations under this Agreement, except those obligations that expressly survive
such termination. In the event that Buyer terminates this Purchase Agreement for
any reason, Buyer shall promptly return the Due Diligence Documents to Seller.
2. Section 4.3 of the Agreement is amended and modified to provide as follows:
4.3 Extension of Due Diligence Period. The parties acknowledge that Buyer has
paid the sum of$20,000 ("Additional Earnest Money")to the Title Company to
extend the Due Diligence Period to September 15,2018. All Earnest Money and
Additional Earnest Money shall remain refundable to Buyer during the Due
Page 211 of 216
Diligence Period, as extended, or as otherwise provided for in this Agreement,
except as provided for in Section 11.1.
3. Except as amended and modified above, the parties ratify and confirm all other terms
and provisions of the Agreement.
IN WITNESS WHEREOF, Seller and Buyer have duly executed this First Amendment
as of the day and year first written above.
SELLER: CITY i Oka. ' H IGHTS
By / .d/ ,v
Name lit l McGw• r
Title • „¢.
Date signed: q LV 2018
BUYER: MADISON HOSPITALITY GROUP, LLC,
a Minnesota limited liabili corn'any
By
Name �►L -'A'� 4} _
Title \?
Date signed: V- tZ.y ,2018
OUR FILE NO. 17.290/F:ULOICLIENTS117-290STi Madison Hospitality Group,LLC—Stillwater—Oak Park Heights\Purch&Sale Agr--First
Amendment.docx
2
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