DEPARTMENT: Physical Development Administration
FILE TYPE: Consent Action
TITLE
title
Authorization Of Second Amendment To Conveyor Lease With Holcim - MWR, Inc.
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PURPOSE/ACTION REQUESTED
Authorize the execution of Second Amendment to a Conveyor Lease with Holcim - MWR, Inc. (Holcim) (formerly Aggregate Industries) on County property located in City of Empire (City).
SUMMARY
Dakota County (County) owns 80 acres of real property [Parcel Identification Number (PIN) 12-00500-02-010)] in the City, where the Empire Transportation Facility and Communication Center are located. Aggregate Industries, Holcim is an international corporation with four business segments: cement, ready-mix concrete, aggregates, and building solutions and products, operating on 350 sites in 43 states. Holcim acquired Aggregate Industries (A.I.) and owns the 80-acre parcel (PIN 12-00500-01-010) immediately east and a 50-acre parcel (PIN 12-00500-75-011) southwest of the County property where it is actively mining sand and aggregate under an interim use permit from the City. Holcim also owns two parcels totaling 311 acres and mineral rights on a third 152-acre parcel - all immediately adjacent to Whitetail Woods Regional Park.
In 2009, A.I. requested a Conveyor Lease from the County to install, operate, and maintain a 1,322-foot-long conveyor belt across the southern portion of the County property, legally described as “the South one hundred fifty (150) feet of the West ½ of the Northeast ¼ of Section 5, Township 114 North, Range 19 West in the City of Empire” (Lease Area) to move the mined aggregate to an A.I. processing facility to the west.
By Resolution No. 10-007 (January 5, 2010), the Dakota County Board of Commissioners approved the Conveyor Lease with A.I. with the following terms:
A.I. will pay $6,750 per year, adjusted annually using the Minneapolis-St. Paul Consumer Price Index for Urban Area (CPIU) for the previous 12 months, as calculated by the U.S. Department of Labor, to lease approximately 4.5 acres from the County for a term of 10 years, effective January 1, 2010.
A.I. will not perform any mining activities within the Lease Area or within at least 50 feet from County property; will indemnify the County for any damages incurred to person or property as a result of mining activities on or adjacent to County property; will immediately cease and desist any operations within the Lease Area that interfere with the Communication Center providing 911 service to County residents; and will operate consistent with all current and future Federal, state, and local government laws rules, regulations, and ordinances, including any and all Empire Township interim use permit requirements.
The Conveyor Lease may be extended for a one or two five-year extension, with the lease payment negotiated for the “then fair market value.” The County may terminate the Conveyor Lease for cause upon a one-year notice.
A.I. met all requirements of the Conveyor Lease and requested an extension of the Conveyor Lease
in 2019. A First Amendment to the Conveyor Lease was approved, amending Article 2 Lease Term to commence on January 1, 2020, and continue until December 31, 2024, or such earlier or later date as shortened or extended in accordance with the Conveyor Lease. Article 12 Notices was also amended to update names of County and A.I. staff for receiving or transmitting any notices required or permitted under the Conveyor Lease. All other provisions of the original Conveyor Lease remained in full force.
Holcim continues to mine the former A.I. property, satisfactorily meets the terms of the original and First Amendment to the Conveyor Lease, and has requested another extension. County and Holcim staff have agreed that it is in their collective best interests to extend the Conveyor Lease by an additional five years with an automatic five-year extension unless Holcim provides written notice not to extend. The same formula used in the original and First Amendment to the Conveyor Lease to determine the annual payment would continue to be used. The associate annual payment for 2024 was $8,065.77. Based on the CPIU rate of 1.9 percent, the annual payment for 2025 would be $8,219.02 and adjusted annually. Article 12 Notices would also be amended to reflect changes in County and Holcim staff to receive and transmit notices.
County Board approval of all leases involving County property is required.
RECOMMENDATION
recommendation
Staff recommends that the County Board authorize execution of a Second Amendment to the Conveyor Lease with Holcim on County property.
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EXPLANATION OF FISCAL/FTE IMPACTS
Revenue for this Conveyor Lease is included in the 2025 and future Facilities Management operation budgets.
☒ None ☐ Current budget ☐ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
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WHEREAS, Dakota County (County) owns 80 acres of real property [Parcel Identification Number (PIN) 12-00500-02-010)] in the City of Empire (City) where the Empire Transportation Facility and Communication Center are located; and
WHEREAS, Aggregate Industries (A.I.), formerly a Minnesota corporation, owned the 80-acre parcel (PIN 12-00500-01-010) immediately east and a 50-acre parcel (PIN 12-00500-75-011) southwest of the County parcel where the Empire Transportation Facility and Communication Center are located to actively mine sand and aggregate under an interim use permit from the City; and
WHEREAS, in 2009 A.I. requested a Conveyor Lease from the County to install, operate and maintain a 1,322-foot-long conveyor belt across the southern portion of the County property, legally described as “the South one hundred fifty (150) feet of the West ½ of the Northeast ¼ of Section 5, Township 114 North, Range 19 West” in the City of Empire (Lease Area) to move the mined aggregate to an A.I. processing facility to the west; and
WHEREAS, by Resolution No. 10-007 (January 5, 2010), the Dakota County Board of Commissioners approved the Conveyor Lease with A.I. with the following terms:
A.I. will pay $6,750 per year, adjusted annually using the Minneapolis-St. Paul Consumer Price Index for Urban Area (CPIU) for the previous 12 months, as calculated by the U.S. Department of Labor, to lease approximately 4.5 acres from the County for a term of ten years, effective January 1, 2010.
A.I. will not perform any mining activities within the Lease Area or within at least 50 feet from County property; will indemnify the County for any damages incurred to person or property as a result of mining activities on or adjacent to County property; will immediately cease and desist any operations within the Lease Area that interfere with the Communication Center providing 911 service to County residents; and will operate consistent with all current future Federal, state, and local government laws rules, regulations, ordinances, including any and all Empire Township interim use permit requirements.
The Conveyor Lease may be extended for a one or two five-year extension, with the lease payment negotiated for the “then fair market value.” The County may terminate the Conveyor Lease for cause upon a one-year notice.
; and
WHEREAS, A.I. met all requirements of the Conveyor Lease and requested an extension of the Conveyor Lease in 2019; and
WHEREAS, a First Amendment to the Conveyor Lease was approved, amending the original Article 2 Lease Term to commence on January 1, 2020, and continue until December 31, 2024, or such earlier or later date as shortened or extended in accordance with the Conveyor Lease; and
WHEREAS, Article 12 Notices of the original Conveyor Lease was also amended to update names of County and A.I. staff for receiving or transmitting any notices required or permitted under the Conveyor Lease; and
WHEREAS, all other provisions of the original Conveyor Lease remained in full force; and
WHEREAS, Holcim - MWR, Inc. (Holcim) acquired A.I., continues to mine the former A.I property, has satisfactorily met the terms of the Conveyor Lease, and has requested an extension of the Conveyor Lease; and
WHEREAS, County and Holcim staff have agreed that it is in their collective best interests to extend the Conveyor Lease by an additional five years with an automatic five year-extension unless Holcim provides written notice not to extend; and
WHEREAS, the same formula used in the original and First Amendment to the Conveyor Lease would continue to be used to determine the annual payment; and
WHEREAS, the annual Conveyor Lease payment for 2024 was $8,065.77, and based on the 2023 CPIU rate of 1.9 percent, the annual payment for 2025 would be $8,219.02 and adjusted annually thereafter; and
WHEREAS, the Recitals will reflect the change and change of ownership and Article 12 Notices would also be amended to reflect changes in the names of County and Holcim staff to receive and transmit notices; and
WHEREAS, County Board approval of all leases involving County property is required.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes a Second Amendment to the Conveyor Lease with Holcim - MWR, Inc. for the use of County property to convey sand and aggregate from Aggregate Industry property across County property to process at an Aggregate Industries facility west of County property; and
BE IT FURTHER RESOLVED, That the Dakota County Board of Commissioner hereby approves the terms of the Second Amendment to the Conveyor Lease, including a five-year extension and automatic five-year renewal with payment based on Consumer Price Index for Urban Area for the previous 12 months, as calculated by the U.S. Department of Labor, approved as to form by the County Attorney’s Office.
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PREVIOUS BOARD ACTION
10-007; 1/5/10
ATTACHMENTS
None.
BOARD GOALS
☐ A Great Place to Live ☐ A Healthy Environment
☒ A Successful Place for Business and Jobs ☐ Excellence in Public Service
CONTACT
Department Head: Erin Stwora
Author: Al Singer