Adopt Resolution #21-096 Approving Donation Agreement and Acquisition of Outlots C and D, Sweetbay Ridge

Consider Adoption of Resolution #21-096 Approving Donation Agreement and Acquisition of Outlots C and D, Sweetbay Ridge.  First Bank Elk River (Donor) has offered to donate Outlots C and D, Sweetbay Ridge (the "Property") to the City.  The property has value to the city as a likely road and/or trail connection between 161st Avenue NW and 161st Lane NW.  The parcel is not buildable and was 'set aside' by the original Developer for future connection. Allowing the parcel to be sold to a private party would create a number of complications. The City is responsible to pay for the costs associated with the Phase 1 Environmental, and other costs associated with the closing identified in the Agreement.  Costs to be incurred by the City to acquire the Property are estimated to be $5,000 or less. Anoka County has assigned a tax valuation of $200.00. 

This connection, in some form, has been contemplated as part of the City's long-range transportation plan. By accepting this parcel, it does not obligate the City to move forward with the project, but it does preserve right-of-way for development. Allowing this parcel to be developed would create much higher acquisition costs in the future and create other disruptions. 

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Staff is generally supportive of the accepting the donation fo the Property and paying for the acquisition costs associated with the environmental, and closing costs as presented in the Donation Agreement. The Seller has indicated that they are only willing to donate this to the City "as-is" and will not incur additional costs associated with title defects. The City will order a Title Commitment as part of this process to determine if there are issues with the title that would cause the City to pause in its acquisition. Below are some key terms of the the Donation Agreement:

Legal Description: Outlots C and D, Sweetbay Ridge
Tax ID Numbers: 16-32-25-13-0059 and 16-32-25-14-0026
Acreage: =/- .63  acres
Property Taxes: $2.32 (Annual)
Sales Price: $0.00 Property to be donated
Closing Date: On or before July 31, 2021
Closing Costs: (Estimated to be $5,000 or less and are highlighted below)

1. Donor’s Obligations at Closing.  At Closing, Donor must deliver to the City the following:
   1. Seller’s Affidavit, well disclosure certificate (if required), settlement statement approved by the Donor, and any other documents necessary to effectuate the closing.
   2. A quit claim deed, duly executed and acknowledged on behalf of the Donor conveying title to the Property, subject to (A) the lien of real estate taxes, if any, not yet due and payable; (B) Matters that would be disclosed by an accurate survey of the Property; and (C) matters that constitute Permitted Exceptions.
   3. City’s Obligations at Closing.  At Closing, the City must:
      1. Provide funds to cover those costs for which the City is responsible under this Agreement;
      2. File an e-CRV as necessary.
   4. Closing costs.
      1. At Closing, the following Donor closing costs and expenses must be paid by the Donor:
         1. Donor’s portion of the property taxes prorated to the date of Closing.
         2. Donor’s own attorney’s fees.
         3. State deed tax.
         4. Cost of title commitment.
      2. At Closing, the City must pay the following costs and expenses:
         1. City’s portion of the property taxes prorated to the date of Closing.
         2. City’s own attorney’s fees.
         3. Closing fees.
         4. Documentary and recording fees for the deed.
         5. The cost of the environmental reports requested by the City and the survey, if any.

Alternatives:

1. Adoption of Resolution #21-096 Approving Donation Agreement and Acquisition of Outlots C and D, Sweetbay Ridge (As presented); subject to City Attorney review
2. Adoption of Resolution #21-096 Approving Donation Agreement and Acquisition of Outlots C and D, Sweetbay Ridge (with changes); subject to City Attorney review
3. Something else

Cost not to exceed $5,000 and could come from the City's Public Improvement Revolving (PIR) Fund, Trail Development Fee Account, a combination of multiple sources or other.
 

Staff recommends adoption of Resolution #21-096 Approving Donation Agreement and Acquisition of Outlots C and D, Sweetbay Ridge(as presented); subject to City Attorney review.

Motion to adopt Resolution #21-096 approving Donation Agreement and acquisition of Outlots C and D, Sweetbay Ridge; subject to City Attorney review.