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In the midst of a restaurant plot debate and a reset of their grocery store project, the Anoka City Council has passed a purchase agreement that will add the for Miller manufacturing building into their real estate mix.
The property, located at 2939 Sixth Ave. in Anoka, will be sold for $9 million by Lakeland Tool and Engineering on behalf of their parent company, Frandsen Corporation. Lakeland were the previous tenants of the building, and were bought by Frandsen in April 2019.
The purchase agreement was unanimously approved during a June 29 special meeting, but only after a discussion was held by the Council on June 26.
“Where I’m kind of at on this, I know we’ve had discussions about what the use is in the future, and we can debate that,” Council Member Erik Skogquist said on June 26. “Based on our financing package, we’d have a few years before payments are due for us to figure out what we necessarily want to do with this as an organization. But the opportunity is available, (the timeline is) kind of tight here and we’re trying to make it work and I think most of it is reasonable.”
The current timeline sits with the city owing $180,000 in earnest money at the execution of the agreement, along with $500,000 on the deal’s closing date, which currently sits at Aug. 10. Anoka will then have 90 days to pay off the rest of the $9 million balance. A significant part of the balance will come from abatement bonds, Anoka Finance Director Brenda Springer said. All dates are subject to change if all parties agree to modify the timeline.
During the June 29 meeting, Anoka City Attorney Scott Baumgartner also walked the council through several changes he made to the purchase agreement according to Council direction on June 26.
“Following the last meeting, I was directed to go back and work with the seller’s attorney to make some changes to that purchase agreement, which has been done,” Baumgartner said. Some of the changes I’ll highlight. …”
Baumgartner clarified in the document that the earnest money and $500,000 payment would go directly toward the purchase price, which would have been standard practice but is now in writing to back that up.
Language was also added to provide inspections, soil borings and environmental assessments “as are deemed necessary by the buyer at buyer’s expense” during the due diligence period, so that Anoka may inspect the property prior to purchase. Soil borings were specifically requested by Council Member Jeff Weaver at the June 26 meeting.
“I would be very curious about doing some soil borings,” Weaver said. “There’s a lot of history around there. A lot of ‘who-knows.’ We always find surprises in Anoka, we always do, because there’s so much history and it’s easy to bury things.”
Baumgartner also included a full termination option for the city for the full duration of the due diligence period, whether there was a specific reason to call off the deal or none at all.
“If there’s something that comes about during the due diligence period, whether it’s a title issue, a property issue, or no issue, the city has the right to terminate that agreement,” Baumgartner said.
One point of contention came from an additional $100,000 being asked by Lakeland on the original price of $8.9 million. Lakeland asked that the additional funds be provided for attorney fees for “ the city’s attempts to thwart and delay seller’s sale to other parties which attorneys fees and costs will be for the period beginning April 5, 2023.” Baumgartner clarified that the number came from interest that accumulated while organizing a purchase agreement. The council agreed to the cost, but not to the language used.
“(When reading, I) objected to the language, if not the fee,” Anoka Mayor Phil Rice said. “We’ve been pretty careful to make sure this type of item is done within our own purview and rights as a city to try to help to manage development. Of course that area is and has been developing, so the words in particular that I object to in ‘thwarting their sale,’ which was not at all the intention.”
The language was removed from the agreement and the $100,000 was added to the total cost, leading to the final cost of $9 million.
SOURCE: Hometown Source
