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HomeMy WebLinkAbout2001 - Contract for joint ownership CONTRACT FOR JOINT OWNERSHIP THIS CONTRACT FOR JOINT OWNERSHIP entered into as of this day of August, 2001, by and between the City of Long Lake (Long Lake), a municipal corporation, and the City of Orono (Orono), a municipal corporation. RECITALS WHEREAS, Long Lake and Orono are municipal corporations having certain statutory authority which includes, inter alia, the right to acquire, own, manage, sell, convey, lease, or otherwise dispose of real and personal property as required by the City's interests in accordance with the provisions of Minn. Stat. § 412.211, et seq.; and WHEREAS, Long Lake has the authority to operate the Long Lake Fire Department for the mutual benefit of Long Lake, Orono, Medina, as well as other cities in accordance with Minn. Stat. § 438.01, et seq., as well as other applicable statutes; and WHEREAS, Long Lake and Orono have on this date entered into a Settlement Agreement which requires the execution of this agreement; and WHEREAS, Long Lake and Orono wish to provide for the joint ownership of the land and building upon which the New Long Lake Fire Station will be relocated and will form a Joint Fire Station Construction Committee to review and oversee the design and construction of the Replacement Fire Station. NOW, THEREFORE, for and in consideration of the mutual covenants contained herein and other good and valuable consideration, Long Lake and Orono agree as follows: 1. Purpose. The purpose of this Agreement is to provide for the joint ownership of the land and building upon which the New Long Lake Fire Station will be relocated at 340 Willow Drive, Orono, Minnesota; and to establish a Joint Fire Station Construction Committee to oversee the design and construction of the New Long Lake Fire Station. 2. Definitions. The following terms shall have the following meaning for purposes of this Agreement: a. "Replacement Land" shall mean approximately three acres of land located at 340 Willow Drive, Orono, Minnesota, upon which the Replacement Fire Station Building for the Long Lake Fire Department will be located. b. "Replacement Fire Station" shall mean the New Replacement Fire Station Building to be constructed at 340 Willow Drive, Orono, Minnesota. A new building will be constructed to which the Long Lake Fire Department will be relocated as soon as the building is completed. c. "New Fire Service Agreement and Contract for Services" (New Fire Service Agreement) shall mean an amendment of the Agreement and Contract for Fire Services as contemplated by this Agreement. d. "Good Cause" for termination of this agreement shall mean, but is not limited to, a pattern of inadequate service quality, including inadequate response to calls, inadequate training, and inadequate handling of calls; and/or a pattern of budget overruns. 2 3. Replacement Fire Station Land. The Replacement Fire Station Land shall be located at 340 Willow Drive, Orono, Minnesota. It is estimated that the Replacement Fire Station will require approximately three acres. The property shall be surveyed and a separate legal description prepared for the three acres upon which the replacement fire station shall be situated. The costs of surveying and obtaining the new legal description shall be paid out of the MnDOT settlement. The land will remain in Orono and Long Lake agrees to execute a covenant in recordable form to be prepared by Orono in which Long Lake agrees that it will not seek annexation of the land into the City of Long Lake. Orono shall take whatever reasonable action is necessary to apply for and obtain a property tax exemption for the replacement fire station land. The Replacement Land shall be owned jointly by Long Lake and Orono. A deed shall be prepared identifying Long Lake and Orono as joint owners which shall be executed and recorded at the sole expense of Orono. Initially, the ownership interests shall be 60 percent to Orono, and 40 percent to Long Lake. The ownership interests shall change on a yearly basis, effective December 31, over the course of 20 years; so that at the end of 20 years the ownership interests shall be 50 percent Long Lake and 50 percent Orono. The interests of each shall change each year at the end of each year, commencing with December 31, 2001, at the rate of one-half of one percent to a total of 10 percent at the end of 20 years (December 31, 2020). 4. Replacement Fire Station. The Replacement Fire Station shall be located at 340 Willow Drive, Orono, Minnesota. It shall be identified as the Long Lake Fire Station 3 and shall consist of six bays and shall be between 19,100 and 20,100 square feet. The Fire Protection Agreements shall be amended to provide that Long Lake shall be responsible for the ongoing needs to operate and maintain the Replacement Fire Station. The costs associated with the operation and maintenance of the building, including utilities and insurance, shall be provided for in a new Agreement and Contract for Fire Protection, under the same cost-sharing formula as is currently in place. Orono agrees that upon receipt of evidence that the MnDOT settlement check has been deposited in the Long Lake/Orono escrow account that it shall forthwith deposit an additional $680,000.00 into the same escrow account. In lieu thereof, Orono may defer depositing its $680,000.00 to a subsequent date which is on or before February 1, 2002, so long as it also deposits the additional interest that would have accrued on that amount had it been deposited on the same date as the MnDOT check. The $680,000.00, plus the $200,000 reimbursement for the cost of the replacement land, is intended to cover the shortfall between the MnDOT award and the current estimated costs of the replacement fire station building. The escrow account balance shall be used in its entirety to provide for the costs of the design and construction of the Replacement Fire Station for the Long Lake Fire Department. In the event that the entire amount of the escrow account balance is not used for the Replacement Fire Station, by reason of reduction in size of the proposed building, or for any other reason, the balance shall be owned 50 percent by Long Lake and 50 percent by Orono. Similarly, in the event that the cost of the Replacement Fire Station should exceed the MnDOT settlement, and the Orono contribution of$680,000.00 plus the $200,000.00 4 reimbursement for the cost of the Replacement Land, and all accrued interest, then Long Lake and Orono shall share equally in the cost of any additional shortfall for the cost to design and construct the Replacement Fire Station. The Replacement Fire Station shall be owned jointly by Long Lake and Orono. Initially, the ownership interests shall be 60 percent to Long Lake, and 40 percent to Orono. The ownership interests shall change on a yearly basis, over the course of 20 years; so that at the end of 20 years the ownership interests shall be 50 percent Long Lake and 50 percent Orono. The interest shall change each year at the end of each calendar year, commencing with December 31, 2001 at the rate of one-half of one percent to a total of 10 percent at the end of 20 years (December 31, 2020). 5. Joint Fire Station Construction Committee. The cities of Long Lake and Orono shall appoint three representatives from each community to serve as representatives for the Joint Fire Station Construction Committee (Joint Committee). The Fire Chief of the Long Lake Fire Department will serve as a non-voting advisory member. a. A Joint Fire Station Construction Committee (Joint Committee) shall be established which shall consist of three representatives of Long Lake and three representatives of Orono who shall be appointed by the City Councils of the respective cities. The City administrators from each City shall serve as representatives on the Joint Committee. The Fire Chief of the Long Lake Fire Department shall serve as a non-voting advisory member of the Joint Fire Station Construction Committee, unless appointed as one of the 3 voting members by either City. A City of Medina representative shall serve as a non-voting member of the Joint Committee. The City Administrators of Orono and Long Lake shall jointly chair the Joint Committee. Meetings of the committee shall be called by the chair or by a member of the committee making a request 5 for a meeting to the chairs. The chairs shall schedule the meetings upon reasonable notice. b. The Joint Committee will operate by a majority vote of the six representatives. A majority shall require four affirmative votes. c. The Joint Committee will be responsible to review and oversee the design and construction of the Replacement Fire Station. The Joint Committee shall utilize as technical advisors for the design and construction of the replacement fire station, an architect and owner's agent or construction manager. The Joint Committee shall determine the design and construction process to be used. The selection of the design and construction consultants by the Joint Committee shall require solicitation of requests for proposals from consultants. The Joint Committee shall make its selection from the competitive proposals. 6. Operation and Maintenance of Land and Building. Long Lake shall have the overall responsibility to oversee the operation and maintenance of the land and building upon which the Long Lake Fire Station is to be relocated. However, expenditures will require approval through the budgeting process set forth in the Amended Fire Protection Agreements. Liability and fire and casualty insurance shall be carried on the Replacement Land and Replacement Fire Station, naming both Orono and Long Lake as insureds, in an amount determined to be sufficient by both cities based on the recommendations of the insurance agents of both cities; the costs of which insurance are to be shared in the same way as other operating costs under the Fire Service Agreement. 7. Term. This Agreement shall be effective upon the date of execution, and shall extend through December 31, 2020. It shall automatically extend for successive five 6 (5) year extensions unless one of the cities covered by this agreement serves notice of termination not less than three (3) years before the original termination date or the termination date of any subsequent extension. This Agreement may not otherwise be terminated except for any of the following reasons: a. The express agreement of both cities to terminate the Agreement; or b. The expiration of the term of the Agreement provided that the three-year notice of termination preceding the expiration of the term is given; or c. An event that makes it unlawful for all or substantially all of the purpose of the Agreement, i.e. joint ownership of the land and building to be continued; or d. For good cause as defined above; or e. For material breach of this Agreement provided that the city seeking termination first provides the other city written notice and thirty (30) days to cure. 8. Restriction Upon Sale or Encumbrance of the Property or Interest. No city may sell, assign, transfer or encumber its interest in the Replacement Land or Replacement Fire Station or seek to condemn the interest of the other city by eminent domain without the express consent of the other city. Further, no sale, transfer, or encumbrance may occur except as expressly provided in this Agreement. 9. Rent and Depreciation. Because the Cities of Long Lake and Orono will jointly fund and own the Replacement Land and Replacement Fire Station, the Cities of Long Lake and Orono will not be responsible for paying rent or depreciation on the land or 7 building. Prior to initiating a rental or depreciation charge to the City of Medina, a twenty-four month notice will be provided. 10. Administration Fee. The Administration Fee shall be $17,200 in 2002, as set forth in the proposed operating budget under the Agreement and Contract for Fire Protection. The Administration Fee includes Long Lake's administrative overhead expenses. The Administration Fee may be adjusted from year to year through the Annual Fire Services Operating Budget review and approval process. The cost-sharing formula for the payment of the Administration Fee shall remain unchanged. 11. Notices. Any notice, request, demand, or other communication permitted or required shall be delivered or mailed to the following: a. Long Lake: City Administrator, with a copy to City Attorney b. . Orono: City Administrator, with a copy to City Attorney 12. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns. 13. The parties agree to execute and deliver any and all instruments that may be necessary to carry out the intent and purpose of this Agreement, including without limitation, a recording of the major terms of this agreement on the deed for the Replacement Land. 8 14. This Agreement may only be amended upon a writing executed by each of the parties hereto. CITY OF LONG L• . Dated: By La o It, t •s••. _ ."‘ Dated: By -"- Its Its City Administrator CITY OF ORONO Altai Dated: By I /, __._ Its M.yor Dated: By / Its City Administrator 9