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34-00 CITY CENTER <br />33 SOUTH SIXTH STREET <br />MINNEAPOLIS, MN 55402-3796 <br /> <br />612 343-2800 <br />FAX: 612 333-0066 <br />WEB SITE: www. gpmlaw, com <br /> <br />CONSULTING OFFICE, BEUING CHINA <br /> <br />MEMORANDUM <br /> <br />TO: <br /> <br />FROM: <br /> <br />RE: <br /> <br />DATE: <br /> <br />COPY: <br /> <br />Elk River City Council <br /> <br />Charles D. Wilson <br /> <br />Purchase of 1217 5th Street <br /> <br />September 10, 2001 <br /> <br />Peter Beck <br />Douglas J. Dehn (Counsel for Seller) <br /> <br /> The proposed purchase of 1217 5th Street would allow the Seller (a trust) <br />to retain a life estate in the property. <br /> <br /> A life estate means that the Seller retains ownership of the property for the <br />remainder of Ms. Bailey's life. Ms. Bailey is the resident of 1217 5th Street and <br />the beneficiary of the trust. The City would own a remainder interest. <br /> <br /> Under the proposed transaction, the City could become the owner in two <br />ways. If Gloria Bailey were to die the title would pass automatically to the City. <br />Title would be perfected by filing a death certificate with the Sherburne County <br />Recorder. In addition, the deed contains a stipulation that Ms. Bailey must use <br />the property as a residence. If she does not the Seller must offer the life estate to <br />the City for $1.00. This provision would allow Ms. Bailey to end the life estate <br />early if she chose to move out of the residence. The City would receive a Quit <br />Claim Deed. <br /> <br /> The life estate was chosen because the Seller would remain the owner of <br />the property. The Seller would continue to pay all taxes and be responsible to <br />insure, maintain and repair the property. The City would have no obligation until <br />title passed to the City under one of the two mechanisms described above. <br /> <br />GP:823724 vl <br /> <br />GRAY, PLANT, MOOTY, MOOTY & BENNETT, P.A. ATTORNEYS AT LAW <br /> <br /> <br />