the city of owatonna

THE CITY OF

Greg Kruschke Community Development Manager

DATE: July 16, 2020

TO: City Council

OWATONNA

540 West Hills Circle Owatonna, MN 55060-4794

Phone.(507)774-7317 Fax: (507) 444-4394

Email:[email protected]

FROM: Community Development Dept. - Greg Kruschke

SUBJECT: Extend Purchase Agreement with United Properties

Purpose:

Extend the purchase agreement with United Propetties on land located at the end of Lemond Road.

Background:

In 2014 the City entered into a Letter oflntent witb United Properties and their Real Estate Team of Cushman & Wakefield/ Northmarq to allow them exclusive rights to market the property for a suitable industrial user. In August of 2015, the City and United Properties entered into a purchase agreement for 365 days. The agreement has since been extended a couple times and is set to expire on August 19, 2020.

The agreement is set to expire and the City and United Properties view this as a mutually beneficial relationship and both have a desire to extend. Both parties feel that one year is appropriate as large industrial projects take time to develop.

Since the last extension the property has been certified as Shovel Ready by the State of Minnesota. United Properties and Cushman Wakefield have actively participated in OPED's Micropolitan Summits and local FAM tours. We have also help one joint event a summer for the past few years in the metro, which OPED widely considers the best event we do every year. These events have been very beneficial in the overall development of Owatonna, even though the success has not been realized on this property yet.

The City, United Properties, and both entities attorneys have all agreed on the following purchase agreement. The following are the major bullet points of the Purchase Agreement:

1) The sale is for 32.857 acres at a total price of $1,004,680.50. Per the letter of intent,the wetland areas and ROW areas have been subtracted to arrive at this total.

2) The applicant will be responsible to extend Lemond Road to the western property lineas shown on Exhibit B.

We are an Equal Opportunity Employer The City of Friendliness and Beautifit! Parks

3.4.1

3) The purchase agreement extension is for I year.

Budget Impact:

The money for the land being sold will first reimburse Owatonna Public Utilities their $500,000 they used to purchase the land. The remaining dollars will be placed in the EDA's land account to reimburse them for the utility extension and use for future projects or land purchases.

Staff Recommendation:

Staff is recommending approval of the extension of the purchase agreement with United Properties.

12647249v1

AMENDMENT NO. 3 TO PURCHASE AGREEMENT

THIS AMENDMENT NO. 3 TO PURCHASE AGREEMENT (“Amendment”) is made

and entered into as of June 1, 2020 (“Effective Date”) by and between UNITED PROPERTIES INVESTMENT LLC, a Minnesota limited liability company (“Purchaser”), and CITY OF OWATONNA, a Minnesota municipal corporation (“Seller”).

RECITALS

A. Seller and Purchaser entered into a purchase agreement dated August 20, 2015, as

amended by amendment no. 1 to purchase agreement dated August 12, 2016, and an amendment no. 2 to purchase agreement dated June 8, 2018 (“Purchase Agreement”) for the purchase of approximately 32 acres of land located along Lemond Road, in the City of Owatonna, County of Steele, State of Minnesota, all as further described in the Purchase Agreement (“Property”).

B. Seller and Purchaser desire to amend the Purchase Agreement to extend the Due Diligence Period and otherwise amend the Purchase Agreement, all as set forth in this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Amendment, Seller and Purchaser agree that the Purchase Agreement is amended as follows:

1. Definitions. Except as otherwise provided in this Amendment, the terms defined in the Purchase Agreement shall have the same meaning when used in this Amendment.

2. Amendment and Ratification of Purchase Agreement. This Amendment is intended to supplement and amend the provisions of the Purchase Agreement. The Purchase Agreement is ratified and shall remain in full force and effect subject to the terms and conditions of this Amendment. To the extent that any provisions of this Amendment are inconsistent with or contrary to the provisions of the Purchase Agreement, the provisions of this Amendment shall control. This Amendment is incorporated into the Purchase Agreement and the rights and obligations hereunder are not separate from the Purchase Agreement and the two documents are one and the same.

3. Extension of Due Diligence Period. The Due Diligence Period as defined in Section 3.2 of the Purchase Agreement is extended through August 19, 2021. All references in the Purchase Agreement to the Due Diligence Period shall mean the period through this extended date. Purchaser shall continue to have the ability to terminate the Purchase Agreement within the time period set forth in Section 3.4 of the Purchase Agreement calculated using this extended Due Diligence Period, and upon termination by Purchaser all Earnest Money deposited with the Title Company shall continue to be refundable to Purchaser, all as set forth in the Purchase Agreement.

12647249v1

Amendment No. 3 to Purchase Agreement Page 2 of 4

4. Counterparts. This Amendment may be executed separately and independently in

any number of counterparts and each and all of which together shall be deemed to have been executed simultaneously and regarded as one agreement dated the Effective Date.

5. Electronic Signatures and Copies. Each party agrees that any electronic signatures by a party of this Amendment, whether digital or encrypted, is intended to authenticate this Amendment and to have the same force and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile, PDF or email electronic signatures. A signature on a scanned, PDF or other copy of this Amendment shall have the same force and effect as an original and shall bind a party to the terms and conditions hereof. All parties shall execute manual originals of the Amendment upon request.

6. Survival. All of the terms of this Amendment, including, without limitation, the representations and warranties contained herein, shall survive and be enforceable after the Closing and delivery of the deed.

7. Entire Agreement/Amendment. The Purchase Agreement, as amended by this Amendment, constitutes the entire agreement between the parties with respect to the subject matter therein and fully supersedes all prior written or oral agreements between the parties with respect to such matters. No other agreement, statement or promise made by any party and no amendment, modification or other change of any provision of the Purchase Agreement shall be effective unless in writing signed by the parties.

signature pages follow

12647249v1


IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment No. 3 to Purchase Agreement as of the Effective Date.

PURCHASER: UNITED PROPERTIES INVESTMENT LLC, a Minnesota limited liability company By: _________________________________ Name: ________________________________ Title: ________________________________

By: _________________________________ Name: _________________________________ Title: _________________________________

651 Nicollet Mall, Ste 450 Minneapolis, MN 55402 952-835-5300

1331 17th Street, Ste 604 Denver, Colorado 80202 720-898-8866

1717 West Sixth Street, Ste 400 Austin, TX 78703 512-866-6500

About United Properties

United Properties has been creating deep roots in the commercial real estate industry for more

than 100 years. Founded in 1916, the company imagines new possibilities in real estate to help

enrich communities and create lasting legacies. United Properties provides market expertise for

ground-up development, redevelopment, and acquisitions of value-add and stable investments.

The company invests in and develops office, industrial, retail, mixed-use and senior housing

properties. In the last 30 years, United Properties has developed nearly 200 projects totaling

more than ten million square feet, with costs exceeding $1 billion. United Properties owns more

than seven million square feet of assets in Minnesota, Wisconsin and Colorado. United

Properties is owned by the Pohlad family’s Marquette Companies holding company and is

headquartered in Minneapolis, with remote offices in Denver, CO and Austin, TX. In 2019, for

the sixth year in a row, United Properties has been ranked #1 on the list of largest real estate

developers by Minneapolis – Saint Paul Business Journal.

Build-to-Suit Experience

Throughout its history, United Properties has developed multiple headquarters and single-

tenant build-to-suit projects. In the last 5 years, build-to-suit projects were completed for the

following office and industrial clients, ranging from 20,000 to 660,000 square feet:

RBC Wealth Management

Be The Match

Prime Therapeutics

CH Robinson

Wurth Group North America

Perbix Machines/Tesla

Nilfisk – Advance

FedEx

651 Nicollet Mall, Ste 450 Minneapolis, MN 55402 952-835-5300

1331 17th Street, Ste 604 Denver, Colorado 80202 720-898-8866

1717 West Sixth Street, Ste 400 Austin, TX 78703 512-866-6500

Swire Coca-Cola

Federal Package

CenterPoint Energy

Site & Timing

United Properties controls 32.45 acres of land at the NWQ of 35W & Highway 14 in Owatonna,

Minnesota and stands prepared to move quickly through lease negotiation, design, and

building permit approval processes. United Properties and its world-class team of consultants

have vast experience in developing industrial (manufacturing, warehousing, distribution),

medical, and office real estate. In alliance with the city of Owatonna, this site and project will

be of utmost importance and its processes streamlined whenever possible. We appreciate the

opportunity and look forward to working together. See attached for more information on

United Properties experience.

Sincerely,

Brandon Champeau Connor McCarthy Senior Vice President, Commercial Development Development Manager Market Leader | Minneapolis [email protected] [email protected] 952.457.7581 612.432.5774

mailto:[email protected]

mailto:[email protected]

Ford Center | Minneapolis, Minnesota

INOVA at Dry Creek | Centennial, Colorado

Penn & American | Bloomington, Minnesota

Loose-Wiles | Minneapolis, Minnesota

Enterprise Business Center Stapleton, Colorado

8200 Normandale Office Park Bloomington, Minnesota

Centennial Lakes Office Park Edina, Minnesota

For more than 100 years, we have imagined new possibilities in real estate, helping to enrich and strengthen communities and create lasting legacies.

We create deep roots.

United Properties Lobby | Minneapolis, Minnesota

Imagining new possibilities, leaving lasting legacies

What should the future look like? When we look at an empty

block, an aging building or a growing company, it’s the first

question we ask. As a developer, we choose projects where we

can have the greatest impact, where we can create lasting

legacies, leaving sites or buildings better than we found them.

Be the Match Headquarters | Minneapolis, MinnesotaLoose-Wiles | Minneapolis, Minnesota

Strengthening and sustaining communities

Our portfolio investments are consistently more than 95% leased.

Why? We don’t settle for ordinary. We constantly think of ways

to improve and elevate the experience of our tenants and their

employees. The same is true of the surrounding community,

because strong communities are good for everybody – our

tenants and us included.

Planting with The Nature Conservancy Denver, Colorado

Building with Habitat for HumanityMinneapolis, Minnesota

Minneapolis, Minnesota

Denver, Colorado

Our expertise

Office

Beyond a common workspace, an office can be so much more:

a recruiting tool, a reflection of your brand, a space to grow

with you, a positive influence on your bottom line. It’s no

surprise our first development was an office building and that

our rapid growth began in the office sector. We create great

places, whether you need a single office, a new HQ or an entire

corporate campus. We have the proven expertise to help you.

INOVA I | Centennial, Colorado

INOVA I | Centennial, Colorado

Industrial

With nearly five million square feet open or under

development in the past five years, industrial property

development continues to be one of our primary business

lines, with significant projects coming out of both our

Minneapolis and Denver offices. By creating meaningful

spaces, we are a catalyst for community growth. On

the former site of the Stapleton Airport, we were the first

developer to build a speculative project after the recession.

Seven buildings later, the Enterprise Business Center has

been recognized as the NAIOP Colorado Chapter’s Industrial

Development of the Year in multiple years.

Distribution Alternatives | Lino Lakes, Minnesota

Enterprise Business Center | Denver, Colorado


Retail / Mixed Use

There’s a revolution in retail and we’re at the forefront. A growing

segment of our business is made up of mixed-use developments

that are more imaginatively integrated into the communities

around them. Several national chains have chosen us to partner

with them in developing their most forward-looking prototypes.

56th & Holly | Commerce City, Colorado

Senior Living

Each stage of life deserves its own special joys. For America’s

growing population of seniors, we aim to be one of them. Since

2004 we have set a new standard in quality senior housing, offering

attractive options for those who can live independently or need

additional care. We now have more than 20 communities open or

under development in Minnesota, Colorado and Florida.

Applewood Pointe of Champlin | Champlin, Minnesota

Cherrywood Pointe of Minnetonka | Minnetonka, Minnesota

Centennial Lakes Office Park | Edina, Minnesota

Our 100-year history

It all began with a beer. Hamm’s Beer, to be exact, and as the

family brewery grew, a company was formed to manage its

many properties. That company was the Hamm Realty Company,

founded in 1916 in St. Paul, Minnesota, and still going strong

today as United Properties. Through boom and bust, United

Properties has survived by sticking to its core values of integrity,

stability and adaptability.

We have experienced methodical, managed growth throughout

our history. Beginning as an owner and investor, we learned how

to preserve and enhance assets. When we added development

to our skills, we focused on a single category – suburban office

buildings – before adding other specialties to our portfolio.

We have now extended our reach to multiple cities and devel-

opment categories, with multiple, high-profile projects currently

underway in Minneapolis, Denver and multiple Florida markets.

finance and banking expertise to the

business. Under their ownership, the

company has grown beyond its Twin

Cities roots into a leading developer

with operations in several states.

In 1998, the Pohlad family acquired

United Properties from the Hamm

family, adding a healthy dose of

The Pohlads

United Properties Headquarters | Minneapolis, Minnesota


Our communities

We have deep roots in our communities. As a family-owned

business, with a reputation for active corporate citizenship, we

look at each project with an eye to the future. Through volunteer

hours, support of charitable causes, and in every project we’re

part of, our legacy is in the contributions we make to the overall

health and well-being of the community.

Developing the future, respecting the past

An abandoned gravel pit. A historic Model T factory. A former

airport. We’ve transformed all into developments that respect

and enhance the communities they serve. We are serious about

the environment and sustainability, earning LEED certification for

many of our projects. But we think of sustainability in its broader

sense, too. We envision how developments can sustain our

tenants, investors and communities for years to come.

Our culture

When you partner with United Properties, you can expect truth,

accountability, fairness and open minds. Inclusivity, honesty,

integrity, compassion and respect characterize all of our

relationships.

Signing our culture declaration | Minneapolis, Minnesota

We are one team accountable for the whole and we have each other’s backs.

We grant each other good intention.

We say what we mean and are accountable for our promises.

We have the courage to start, stay present in and complete all important conversations.

Inclusivity, honesty, integrity, compassion and respect characterize all of our relationships.

We recognize and value everyone’s diverse backgrounds and contributions.

Everyone has the opportunity to find fulfillment.

We have fun!


INOVA at Dry Creek | Centennial, Colorado

Loose-Wiles | Minneapolis, Minnesota

Enterprise Business Center Stapleton, Colorado

8200 Normandale Office Park Bloomington, Minnesota

Centennial Lakes Office Park Edina, Minnesota


12647249v1


IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment No. 3 to Purchase Agreement as of the Effective Date.

SELLER:

CITY OF OWATONNA, a Minnesota municipal corporation

By: _________________________________

Name: _________________________________

Title: _______________________________

the city of owatonna

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