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City of Centerville <br />Council Meeting Minutes <br />November 16, 2016 <br />Staff stated that they would prepare information regarding ponds, sediment, cleaning schedule <br />and appropriate funding and present it to Council at their next meeting. <br />4. Presentation of Harold Ulvestad, Rockland Advisors & John Chirhart, Gaughan <br />Companies — Ruffridge Johnson Purchase Agreement & Timeline for 2065 <br />Commerce Drive <br />Mr. Harold Ulvestad, Rockland Advisors, introduced himself and stated that he represents Mr. & <br />Mrs. Pederson owners of Ruffridge Johnson Equipment Company who would like to submit a <br />full price offer $950,000 to purchase 2065 Commerce Drive (Lot 2, Block 1, Clearwater <br />Business Park). Mr. Ulvestad stated he would briefly recap the offer and stated that it is similar <br />to their previous offer which was approved on July 8, 2015. He also stated that the purchase <br />agreement includes a feasibility and inspection period including permits to construct a new <br />facility when the purchase agreement is fully executed no later March 1, 2017 or slightly over <br />180 days with closing on June 21, 2017. Mr. Ulverstad desired for Council to understand that <br />the offer does contain a contingency that the Pederson's first close on two (2) properties of <br />ownership in Minneapolis. He stated that the properties are currently under a letter of intent with <br />Oppidan Companies and it is anticipated that they will submit an offer shortly. Council Member <br />Fehrenbacher questioned whether the plans for the building were different from the last submittal <br />and Mr. Ulverstad stated no. <br />Mr. John Chirhart, Gaughan Companies, stated that previously the sale of Mr. & Mrs. Pederson's <br />property fell through and that is way they requested withdrawal of their previous offer. He stated <br />that Oppidan Companies was a very solid and reliable company who has developed small retail <br />buildings and a number of housing projects and completed several senior housing projects. He <br />stated that with the property being shovel ready it takes the burdens from the buyer; however, the <br />Pederson's are utilizing the 1031 Exchange Program which defers capital gains but also allows <br />them to seek out additional properties that they may exchange into. He did say that it is a <br />reasonable tool for a seller to use to allow deferral and what can happen is it is in a buyer interest <br />to control their option but Mr. Ulverstad states that is not the case. <br />Council Member Love questioned what the City can do with the property until the purchase <br />agreement is fully executed and Mr. Chirhart stated that the due diligence period does encumber <br />the property and does not allow the City to actively market the property. Mr. Chirhart stated that <br />the City has hired an alternative broker who would be involved with a backup plan if the sale fell <br />through and would then market the parcel. Council Member Love stated that with the upcoming <br />weather it is not a good time for selling, however, good for the City to not be marketing. Council <br />Member Love questioned at what time the $10,000 earnest money would not be refunded. Mr. <br />Chirhart stated that when buyer and seller sign it will be placed in escrow. Mr. Ulvestad stated <br />following the due diligence period prior to closing that money becomes nonrefundable. Engineer <br />Statz stated that he felt that this was a great opportunity. Council Member Fehrenbacher <br />questioned the part of the process Ruffridge Johnson Equipment was in previously when they <br />withdrew their offer. Administrator Ericson stated that the same day plans were submitted the <br />offer fell through. Engineer Statz stated that they would still have to complete surveys due to the <br />floodplain modifications made several years ago even though this was a part of the original <br />Page 7 of 9 <br />