HomeMy WebLinkAbout2018-11-13 CC Packet Enclosure Oak Park Heights
Request for Council Action
Meeting Date November 13,2018
Time Required: 1 Minutes
Agenda Item Title: Approve Extension of Due Diligence Period for Madison Hospitality
Group to April 15,2019
Agenda Placement New Business
Originating Department/Requesto•.i-Zson,City Administrator
Requester's Signature
Action Requested Approve E ion of Due Diligence Period for Madison Hos itality
Group to. pril 15th,2019
Background/Justification(Please indicate if any previous action bas been taken or if other public
bodies have advised):
Please see the attached memo.
12,
•
of
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City of Oak Park Heights
14168 Oak Park Blvd. N•Box 2007•Oak Park Heights,MN 55082•Phone(651)439-4439•Fax(651)439-0574
11.8.18
MEMO
TO: Mayor and City Council Members
FROM: Eric Johnson,City Administrator
RE: Madison Hospitality Group—Holiday Inn Express—Timeline Extension to 4115119
Dear Mayor and Council:
Madison Hospitality Group MHG is seeking another extension to their Due Diligence Process(DDP)timelines moving
the default date from 12/30/2018 to 4/15/18
These initial dates and a prior extension 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 Brown's Creek Watershed District approvals have been secured in October 2018.
This however the BCWD approvals did delay the entire project by approximately 6 months.
The Council at this time has basically two options:
1. Provide an extension to the 4115/19 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.
NOTE: The enclosed document is consistent with the previous extensions; however, a final document will need to
incorporate a revision to paragraph 7.2 (not shown herein) that extends the City Council requirement that MHG is
responsible for the street assessments to Memorial Ave.This will be in the final version
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.
THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT("Third
Amendment")is effective as of this day of ,2018,by and among the City
of Oak Park Heights, a municipal political subdivision 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,parties executed a First Amendment to Purchase and Sale Agreement dated
April 12, 2018 (the "First Amendment") and a Second Amendment to Purchase and Sale
Agreement dated August 30, 2018 (the"Second Amendment"), and the parties desire to further
extend the Due Diligence Period as provided for herein;and
NOW,THEREFORE,for good and valuable consideration, the receipt of sufficiency of
which is hereby agreed and acknowledged by Seller and Buyer,the parties hereto agree to amend
and modify the Agreement as follows:
1. Section 4.2 of the Agreement is amended and modified to provide as follows:
4.2. Due Diligence. Buyer will be allowed until April 15, 2019 (the "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 all 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
previously paid the sum of $20,000 ("Additional Earnest Money") to the Title
Company to extend the Due Diligence Period to September 15, 2018, that Seller
did not require Buyer to make further payment of additional Earnest Money in
consideration for Seller's agreement to further extend the Due Diligence Period to
December 15,2018,as provided for in the Second Amendment,and that Seller will
not require Buyer to make further payment of additional Earnest Money in
consideration for Seller's agreement to further extend the Due Diligence Period to
April 15, 2019, as provided for in this Third Amendment. All Earnest Money and
additional Earnest Money shall remain refundable to Buyer during the Due
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 Third Amendment
as of the day and year first written above.
SELLER: CITY OF OAK PARK HEIGHTS
By
Name
Title
Date signed: ,2018
BUYER: MADISON HOSPITALITY GROUP,LLC,
a Minnesota limited liability company
By
Name
Title
Date signed: ,2018
P:ULOICLIENTS117-290517 Madison Hospitality Group,LLC--Stillwater--Oak Pads Heights\Purch&Sale Agr--Third Amendmentdocx
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