DEPARTMENT: Parks, Facilities, and Fleet Management
FILE TYPE: Consent Action
TITLE
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Authorization To Acquire Fiduciary Services Of Minnesota Inc. Trust Property In Lebanon Hills Regional Park And Amend 2024 Parks Capital Improvement Program Budget
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RESOLUTION
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WHEREAS, Scott Grohoski (Grohoski) has lived in a 1 1/4 story, 900-square foot house built in 1915 on a three-acre property located within Lebanon Hills Regional Park (LHRP) in the City of Apple Valley for many years; and
WHEREAS, County staff has been working with Grohoski for more than ten years to help him achieve his goal of continuing to live on the property as long as he is able while ensuring that the property would be added to LHRP; and
WHEREAS, in 2022, the Fiduciary Services of Minnesota, Inc., Trust (Trust) became the property owner to protect Grohoski’s financial security and facilitate his wishes to add the property to LHRP; and
WHEREAS, an independent appraisal of the Trust property, including a life estate analysis, was completed, reviewed, and approved by County staff valuing the property at $380,000 and valuing a 20-year life estate at $260,000; and
WHEREAS, the existing house on the property has virtually no market value due to age and condition and requires an estimated $55,000 to make necessary repairs and upgrades; and
WHEREAS, Grohoski desires to continue residing on the property after sale of the property to the County under an indeterminant-term lease agreement with the County; and
WHEREAS, the Metropolitan Council determined that any lease longer than ten years would make the project ineligible for Acquisition Opportunity Fund (AOF) funding; and
WHEREAS, Grohoski, the Trust, and the County are agreeable to lease-back arrangement with an $800 per month lease rate as established by methodology quantified in the appraisal with no pre-determined termination date; and
WHEREAS, the lease payments would be deposited in a dedicated property stewardship fund in the 2024 Parks operating budget to pay for future house repairs, property maintenance, future building demolition, and natural resource management; and
WHEREAS, based on the above circumstances, Grohoski and the Trust have agreed to sell the property for $80,000 less than the appraised value or $300,000; and
WHEREAS, the purchase price reduction includes $25,000 in consideration of the County’s inability to use AOF funding as a result of Grohoski’s preferred lease-back terms, and an additional $55,000, for estimated repair and upgrade costs to the house; and
WHEREAS, $55,000 of County funds will be deposited in a County-controlled escrow account to make required house repairs and upgrades to ensure safe living conditions for Grohoski, with any unused funds disbursed to the Trust; and
WHEREAS, the estimated closing costs are $2,500; and
WHEREAS, there is adequate Environmental Legacy Fund balance in the 2024 Parks Capital Improvement Program budget for the proposed acquisition and escrow account; and
WHEREAS, the Physical Development Division Director is required to sign the purchase agreement to acquire the Trust property and the residential lease; and
WHEREAS, the final acquisition costs of the property will be determined after the settlement statement is finalized and all associated acquisition expenses have been invoiced.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the expenditure of up to $357,500 to acquire the Fiduciary Services of Minnesota, Inc. Trust property, including $300,000 for acquisition, $2,500 in estimated closing costs, and use of County funds to establish a $55,000 County escrow account for needed property repairs and upgrades; and
BE IT FURTHER RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Physical Development Director to execute the purchase agreement with the Fiduciary Services of Minnesota, Inc. Trust to acquire the property, subject to approval by the County Attorney’s Office as to form; and
BE IT FURTHER RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Physical Development Director to execute a residential lease agreement with the Fiduciary Services of Minnesota, Inc. Trust, with future lease payments deposited into a dedicated property stewardship fund to pay for future property-related expenses, subject to approval by the County Attorney’s Office as to form; and
BE IT FURTHER RESOLVED, That the 2024 Parks Capital Improvement Program budget is hereby amended as follows:
Expense
Purchase of Fiduciary Services of Minnesota Trust property $302,500
Escrow Account for Trust Property Upgrades and Repairs $ 55,000
Total Expense $357,500
Revenue
Environmental Legacy Fund $357,500
Total Revenue $357,500
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