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.-...... I..H'~. ~ ,.o..d::;U HJ...J.....L"- ~\.t:::6'-"..Ld..L ,.C~Ll.Ug, 1'" _ i, 1 ;;10) Page 5 KEM MILLING; PURCH. AGREEMENT Council was referred to the memorandum from the Clerk Administrator dated 2-24-89, regarding the proposed purchase agreement for the KEM Milling property. . Attorney Filla reviewed the document and discussed it with Attorney Rolfe Warden, representing KEM Milling. He explained that in discussions with the Clerk Administrator the following concerns were noted relative to timing of the City involvement for participation in the agreement and other items which may cause the City to expend more money in acquiring the site and are not identified in terms of dollar figures in the agreement. Filla gave the following examples: -Environmental Audit: The seller has agreed to allow the city to cancel the agreement if the audit is unfavorable, however, the actual cost of the audit is undetermined. The costs could be between $1,500 to $10,000.00, depending upon what is discovered on site after preliminary review and how much detail is necessary. -Real Estate Taxes: The seller proposes to split the costs for real estate taxes payable in 1989; this item based on date of closing could increase the cost by $8,500.00 and it is not determined if the deed of record could be obtained in sufficient time to avoid the levy of taxes payable in 1990. -Special Assessments: There are special assessments on the property and it is not determined at this time the amount of installments which remain unpaid. Filla noted some of the financial concerns would be resolved by an eventual resale of the property and development. I The Attorney also expressed concern that it has not been determined if the legal description on the purchase agreement when Darling Company purchased the property is correct and encompasses all of the site. He explained a survey would have to be completed to determine if the legal description is correct; this would also be an extra expense for Arden Hills. Filla noted that the building is in a dilapidated condition and would have to be secured when acquired; this could increase the city insurance rates until such time as the building is demolished or sold. Rolfe Warden, attorney for KEM Milling, addressed the concerns expressed by Attorney Filla: . -Legal description of the property can be resolved by a survey and Warden indicated it is the intent of the seller to include all of the site in the sale. Warden advised the costs for surveying the property would be dependent upon the extent of the survey; he commented a boundary line survey would be the least expensive route. -Warden was of the opinion the deed could be issued to Arden Hills prior to the 1990 tax levy. Warden indicated the environmental audit costs and tax issue can be discussed further between the parties and the outstanding assessments can be determined in the city records. It was generally agreed between Council and Warden that the concerns identified are not insurmountable and could be discussed further between the parties. Councilmember Malone suggested the city'could eliminate increased insurance costs by demolishing the building immediately upon closing if the agreement did not specify the seller has 60 days to remove equipment; he indicated the seller could indemnify the city from liability. Warden stated he would discuss continuation of the insurance by the seller until such time as all equipment is removed or removal of all equipment so the building can be demolished. Filla requested Warden determine from his client what is contained in the storage tanks at the site and if the material will be removed by the seller; Warden agreed to discuss the matter with his client. . Filla questioned if the March 28 deadline could be extended and discussion; Warden advised the date could be changed to next Regular Council meeting. for further review coincide with the