HomeMy WebLinkAboutIX-07 Authorize Signature - Escrow Agreement – Augustine Farms LLC
City Council Memorandum
To: Mayor Fasbender & City Councilmembers
From: John Hinzman, Community Development Director
Date: August 7, 2023
Item: Authorize Signature – Escrow Agreement – Augustine Family Farms
Council Action Requested:
Authorize signature of the attached Escrow Agreement between the City and Augustine
Farms LLC for completion of a utility study to determine feasibility for potential utility
capacity for future annexation and development. Augustine farms would deposit $10,000
in escrow funds for the City to conduct the investigation. Agreement would be subject to
minor modifications of the agreement by Staff. A simple majority is necessary for action.
Background:
Augustine Family Farms owns property directly west of the City limits, north of 15th
Street (150th Street) to past Jacob Avenue. The property is designated within the exiting
Comprehensive Plan for future development. The Comprehensive sewer and water plan
had identified the property to be accessed with utilities through property that currently
has no plans for development. The developer seeks to determine if existing utilities
directly east of the development has the capacity to serve the development.
Financial Impact:
All costs for the study would be the responsibility of Augustine Farms.
Advisory Commission Discussion:
N\A
Attachments:
• Location Map
• Escrow Agreement
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LOCATION MAP
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ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the “Agreement”) made and entered into as of
____________________, 2023, (“Effective Date”) by and between the City of Hastings, a
Minnesota municipal corporation (“City” and “Escrow Agent”), and Augustine Family Farm,
LLC, a Minnesota limited liability company (“Developer”).
RECITALS
WHEREAS, Developer has requested that the City conduct an analysis of the capacity of
trunk sanitary sewer and water lines to serve certain property in the City that is within the City’s
planned growth and Metropolitan Urban Service Area, identified as Parcels A, B and C on Exhibit
A, attached hereto (“the Property”); and
WHEREAS, the Property is currently undeveloped, and the City intended to serve the area
surrounding the Property through trunk sewer and water lines to the south and east but the timeline
for development is uncertain; and
WHEREAS, the City is willing to engage and undertake a study now to determine the
capacity and costs of trunk sanitary sewer and waterlines to serve the Property by connecting into
existing trunk lines (“the Study”); and
WHEREAS, the costs of such a Study is anticipated to be up to $10,000, which Developer
is willing to pay into escrow with the City, as a not to exceed amount; and
WHEREAS, City is willing to escrow the costs for the Study in the amount of $10,000.00
(the “Escrow Funds”), acting as the Escrow Agent, and shall use the Escrow Funds to pay for the
costs of the Study; and
WHEREAS, the parties desire to evidence their agreement with respect to the holding and
disbursement of the Escrow Funds as described herein.
NOW, THEREFORE, in consideration of the covenants hereinafter set forth, and other
good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1. Escrow Fund Custody. Within four (4) days of the Effective Date, Developer shall
pay the City the Escrow Funds. Upon receipt, the City does hereby agree to hold and disburse the
same in accordance with this Agreement.
2. Obligation of City and Developer Regarding the Study. The City shall be solely
responsible for the oversight and review of the Study, entering into any contracts necessary to
complete the Study. Developer shall cooperate with the City and with any consultants engaged to
conduct the Study in order to assist with the completion of the Study. Upon completion, the Study
shall be provided to the Developer.
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3. Disbursement of Escrow Funds. City shall use the Escrow Funds to directly pay
for the costs of all consultants, experts, and contracted engineering services who expend services
directly attributable for the Study, up to the amount of the Escrow Funds.
4. Costs Exceeding Escrow Funds. If the costs of the Study will exceed the amount of
the Escrow Funds, the City and Developer shall meet and discuss how to cover the overage. Any
mutual agreement to address the overage shall be memorialized in writing. Failure to agree on the
excess fees necessary to complete the Study may result in termination of this Agreement, as well
as termination of the Study.
5. Final Release of Escrow Funds; Termination. Upon completion of the Study, if
there are excess Escrow Funds remaining, the City shall release of the remaining balance of the
Escrow Funds to Developer. This Agreement shall terminate on the date upon which the Escrow
Funds are totally depleted by disbursements (referred to as the “Termination Date”). The
responsibility of the City shall terminate on the Termination Date.
6. Escrow Agent. In order to induce the City to hold and disburse the Escrow Funds
as required by this Agreement, the City and Developer do hereby agree that:
a. The City, as the Escrow Agent, is acting as a depository only and shall not
be liable for loss or damage resulting from:
i. any good faith act or forbearance of Escrow Agent;
ii. any default, error, action or omission of any party, other than Escrow
Agent;
iii. any loss or damage which arises after the Escrow Funds have been
disbursed in accordance with the terms of this Agreement.
7. Amendments. This Agreement is irrevocable and may be amended only by a
written amendment executed by all the parties hereto.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
CITY OF HASTINGS
By _______________________________
Mary Fasbender
Its Mayor
By ________________________________
Kelly Murtaugh
Its City Clerk
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DEVELOPER:
Augustine Family Farm, LLC
By
Robert P. Sieben
Its: Chief Manager
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A-1
EXHIBIT A
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