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HomeMy WebLinkAboutRes2014-025Sponsored by: Hunt CITY OF SEWARD, ALASKA RESOLUTION 2014-025 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO PURCHASE TRACT C-6, GATEWAY SUBDIVISION ADDITION NO.2, DOCUMENT NUMBER 001554-0 IN THE RECORDS OF THE SEWARD RECORDING DISTRICT, THIRD JUDICIAL DISTRICT, STATE OF ALASKA FOR $98,010, AND APPROPRIATING FUNDS WHEREAS, in 2013 Seward City Council passed Resolution 2013-034 recommending the Kenai Peninsula Borough approve a replat of Tract C-IGateway Subdivision; and WHEREAS, in December 2013, the Kenai Peninsula Borough completed the replat of Tract C-1, Gateway Subdivision into four tracts known as C-4, C-5, C-6 and C-7; and WHEREAS, Douglas J. Lechner and Kurt R. Lindsey, dba Adventure Investments, the owners of the land described above (the "Tract C-6"), desire to sell this land to the City according to the terms of the purchase and sale agreement presented at this meeting; and 4 WHEREAS, a fair market value appraisal was conducted on this property in 2011 for the purpose of assessing the value of the property, and the City agrees to pay more than fair market value of the property based on the proximity of this property to the newly installed water line distribution system, recent replat of the property by the owners, the owners provision of needed easements and dedicated right-of-way on their adjacent undeveloped property, and the elevation of this property which is estimated to save more than $60,000 per year in operating costs for the Water Utility; and WHEREAS, funding for this property acquisition is available in the Commercial Passenger Vessel Tax Fund, since the need for this water storage tank is necessitated in large part, by excess demands placed on the local water system by the cruise ships and other industrial users; and WHEREAS, notice of a public hearing was published in accordance with SCC 7.05.125; and WHEREAS, Seward City Code Section 7.05.120 permits the acquisition of real property by negotiation; and WHEREAS, the essential terms and conditions contained in the form of a purchase and sale agreement have been made available for public inspection for 10 days in the office of the City Clerk. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The City Council finds it is in the best interest of the City of Seward to purchase CITY OF SEWARD, ALASKA RESOLUTION 2014-025 the Property at an amount higher than fair market value as determined through negotiation, based on the recitals contained above, for the North Seward Water Storage Tank project subject to the terms contained in the agreement presented at this meeting. Section 2. The City Manager is hereby authorized to proceed with the acquisition of the Property for a purchase price not to exceed $98,010.00, and to execute the purchase and sale agreement in substantial form as presented at this meeting, and to complete any other necessary legal documents to acquire fee simple title to the Property and to take all such action necessary under the agreement to complete the purchase and record the purchase of the property. Section 3. Funding in the amount of $98,010 is hereby appropriated from the Commercial Passenger Fee reserves account no. 807-0000-3071-0709 to the North Seward Water Storage Tank land account no. 709-7091-5910 to be paid at closing in accordance with the Purchase and Sale Agreement — North Seward Water Storage Tank as executed by the City Manager. Section 4. This resolution shall take effect (30) days following passage and posting. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 24`" day of March 2014. THE CITY OF SEWARD, ALASKA 2CZ�2�� Jitran Bardarson, Mayor AYES: Keil, Casagranda, Terry, Squires, Butts, Darling, Bardarson NOES: None ABSENT: None ABSTAIN: None ATTEST: J hann in y; CMC ity Cler '0 `Ak..0000 �+ (City Seal) C too+C, _* SEAL IN ft 10 ,�j • +`"+•� ♦♦i♦ •• •• • � ice, Agenda Statement Meeting Date: March 24, 2014 To: City Council Through: City Manager Jim Hunt From: William Casey Agenda Item: Authorizing the City Manager to purchase real property described as Tract C-6, Gateway Subdivision Addition No. 2, Document Number 001554-0 in the Records of the Seward Recording District, Third Judicial District, State of Alaska, consisting of approximately 1.44 Acres for $98,010 and appropriating funds. BACKGROUND & JUSTIFICATION: The purchase of the property by the City of Seward in the Gateway Subdivision is necessary to obtain site control for our North Seward Water Storage Tank project. On May 281", 2013, the Seward City Council approved Resolution 2013-034 recommending the Kenai Peninsula Borough approve the replat of the Gateway Subdivision, which created Tract C-6, the City's desired location for our new 600,000 gallon water storage tank. The replat has been completed and the property is now available for purchase. The purchase price of $98,010 is based on several factors. Those include: Sale of adjacent parcels of property, topographical location, funding from ARRA that was used for completion of phase 1 of the project that included routing water distribution lines from the Fort Raymond water production wells to Hemlock Avenue to connect with the new water tank, receipt of two extensive utility easements and a dedicated right of way on the sellers unsubdivided tract, and the elevation of the property which, according to the Engineers will save the City $60K-80K per year in operating costs. An appraisal of the property in 2011 determined the fair market value to be $20,000. However, the City negotiated with the property owners, and are agreeing to pay more for the property based on the factors listed above. Given that the specific location of this property at a higher elevation is expected to save the City more than $60,000 per year in operating costs, purchase of this property at higher than fair market value, is still a good business decision for the City. INTENT: This purpose of this resolution is to purchase undeveloped land for the purpose of siting the North Seward Water Storage Tank. CONSISTENCY CHECKLIST: Yes No N/A Plan (document source here): Pg 27, 3.7.3.1 "Continue F1.Comprehensive to upgrade and expand utilities to meet existing needs and encourage X future develo ment" 2 Strategic Plan (document source here): Pg 5 "Attract New X Industry.... Develop infrastructure expansion plans..... " 3. Other (list): Water and Sewer System Analysis (2000) X FISCAL NOTE: The City of Seward has two grants available for constructing the North Water Storage Tank. Neither grant can be used for the purchase of this property. Therefore, the administration recommends utilization of Commercial Passenger Vessel Tax proceeds for this purchase. This purchase is consistent with the required use of those proceeds, as determined by the State of Alaska when it authorized utilization of CPV Tax proceeds to fund construction of the Water Storage Tank. The consistency is based on the fact that the cruise ships use significant quantities of water during the busy summer months, when there are competing uses of the City's limited water supply needed for local fisheries operations, the Alaska Sealife Center, and other high use purposes. The City requires additional water storage to meet these demands, and still be able to have sufficient water reserves to fight local fires. Approved by Finance Department: Yugzz�, ATTORNEY REVIEW: Yes No X RECOMMENDATION: OZ 5 Approve Resolution 2014- authorizing a purchase and sale agreement for the City to acquire land for the North Seward Water Storage Tank project for $98,010, and appropriating funds. HAQ9W==1 1"Mill 1W71410PU10 wnpj gg wa (11 This Purchase and Sale Agreement ("Agreement") is made as of March 24, 2014, between Douglas J. Lechner, an individual and Kurt R. Lindsey, an individual dba Adventure Investments, ("Seller") and The City of Seward, a home -rule municipality under the laws of the State of Alaska ("Purchaser"). Purchaser and Seller agree as follows: Purchase and Sale: Subject to the terms and conditions of this Agreement, Seller agrees to sell and Purchaser agrees to purchase good and marketable title in fee simple the real property described as follows (the "Property"): Tract C-6, Gateway Subdivision Addition No. 2, according to the official plat thereof, filed under Plat Number 2013-16, Document Number 001554-0 in the Records of the Seward Recording District, Third Judicial District, State of Alaska, consisting of 1.435 acres, more or less. 2. Purchase Price and Payment Terms: The purchase price for the Property shall be $98,010.00 based on property negotiations with the Seller. After all other terms and conditions of this Agreement have been satisfied, including completion of all contingencies in Section 8, the purchase price shall be due to Seller at Closing. Under the municipal charter and code of ordinances of Purchaser, a resolution approving this Agreement is not effective until 30 days following approval by the Seward City Council. 3. Closin : The parties shall cause an escrow (the "Escrow") to be established with First American Title Company of Alaska - Seward Office ("Escrow Agent"), Consummation of the sale (the "Closing") shall take place through the Escrow at the offices of the Escrow Agent, or such other place as Seller and Purchaser agree in writing. Closing of the transaction shall occur within thirty (30), days from the completion of all contingencies of purchase in this Agreement to Purchaser's sole satisfaction. Notwithstanding the foregoing, this Agreement shall be automatically extended by either party for ninety (90) additional days. In the event this transaction is not closed within one hundred twenty (120) days of the effective date of the resolution approving this transaction, this Agreement shall terminate unless extended in writing -Purchase and Sale Agreement- -Page I of 7- by mutual agreement of the parties. Seller and Purchaser shall cause the following to occur at Closing: (A) Completion of all contingencies listed in Section 8 to Purchaser's sole satisfaction unless waived in writing by Purchaser; (B) The Deed described in Section 5 shall be recorded in the records of the Seward Recording District, Third Judicial District, State of Alaska; (C) Purchaser shall pay to Seller the amount set forth in Section 2 of this Agreement; and (D) The underwriter for the Escrow Agent shall issue to Purchaser the title insurance policy described in Section 4. 4. Title: A standard owner's title insurance policy shall be paid for by Seller and delivered to Purchaser at Closing. If Purchaser elects to obtain an extended coverage ALTA Owner's Title Insurance Policy or any title endorsements, Purchaser shall pay the additional title insurance charges to obtain the endorsements or extended coverage. Purchaser shall be responsible for obtaining and paying the cost of any ALTA survey required to obtain extended coverage. Within ten (10) days of the date of this Agreement, Seller shall provide to Purchaser a preliminary commitment for title insurance. Purchaser shall be entitled to review the preliminary commitment and shall have twenty (20) days to specify to Seller in writing any matters to which Purchaser objects. If Purchaser objects to any matters, Seller shall have thirty (30) days after written notice from Purchaser to attempt to eliminate the matters to which Purchaser has objected or to cause the underwriter for the Escrow Agent to insure over such matters. Seller shall notify Purchaser in writing, within the thirty (30) day period, if Seller is unable or unwilling to eliminate, or cause Escrow Agent to insure over, said matters. Purchaser may then elect, by written notice to Seller, either to waive the objectionable matters and proceed to Closing or to terminate this Agreement. 5. Deed: Marketable fee simple title to the Property, subject to those exceptions and reservations acceptable to Purchaser, shall be conveyed to Purchaser by a statutory warranty deed (the "Deed") duly executed by Seller and recorded at Closing. -Purchase and Sale Agreement- -Page 2 of 7- 6. Closing Costs: At Closing, Purchaser and Seller shall each pay half of the closing costs of the transaction, unless otherwise provided in this Agreement. Such closing costs shall include but not necessarily be limited to: Recording fees Document preparation fees Escrow closing fees Purchaser shall pay appraisal costs, and shall pay at Closing the Purchase Price described in Section 2. Seller shall pay for standard owner's policy of title insurance and any outstanding assessments or liens. Each party shall pay its own attorney fees and costs. Real property taxes and utilities will be prorated to date of Closing and, if applicable, paid through Escrow. Any special assessments owed on the Property shall be paid in full by Seller at Closing. 7, Seller's Representations and Warranties: The representations and warranties of Seller herein are a material inducement for Purchaser to enter into this Agreement and shall survive Closing. Seller represents and warrants that: (A) Seller has not assigned or transferred, or agreed to assign or transfer, any right, title or interest in Or to the Property to any person other than Purchaser; (B) Seller is, not a "foreign person" as defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder; (C) Seller has not received any presently effective notices of any investigations, actions, suits, proceedings or claims pending against Seller in relation to the Property; (D) No legal claims are pending or, to the best of Seller's actual knowledge, threatened, concerning or affecting title to the Property or any condition existing on, in or under the Property, and that all approvals required by any federal, state, or local governmental authority or court that are necessary to consummate the transactions contemplated by this Agreement have been obtained; (E) To the best of Seller's actual knowledge, no above -ground or underground fuel storage tanks are or have been located on the Property; and -Purchase and Sale Agreement- -Page 3 of 7- (F) To the best of Seller's actual knowledge, Seller has not caused or allowed the placement of any hazardous substance on the Property, and to the best of Seller's actual knowledge, Seller has not caused or allowed the violation of any environmental law, regulation, or ordinance with respect to the Property. To the best of Seller's actual knowledge, Seller has not released, compromised, or waived any claim as to the liability of any party who may be potentially responsible for the presence of hazardous substances on or affecting the Property in violation of any environmental law, regulation or ordinance. Seller has not made any promises of indemnification regarding hazardous substances to any other person or persons relating to the Property. 8. Purchaser's Conditions Precedent: The parties acknowledge that Purchaser's obligation to close on the purchase of the Property shall be subject to the following, with any review, inspection, or evaluation by Purchaser subject to Purchaser's sole satisfaction, and such review completed no later than sixty (60) days after execution of this Agreement unless mutually extended by the parties: (A) Approval of this Agreement by the City Council for the City of Seward; (B) No litigation or other claim which has any probability or reasonable likelihood of success, challenges or controverts the Purchaser's action to acquire the Property; (C) Purchaser's satisfaction that Seller can provide marketable fee simple title to the Property. Final description of all real property to be conveyed is subject to Purchaser approval. Seller is to provide legal description for the Property; 9. Grant of License: Seller agrees that Purchaser may enter upon the Property during the period that this Agreement is effective to make any and all examinations, investigations, audits, reviews, inspections, tests, surveys and appraisals and to conduct and carry out any and all engineering studies and operations that Purchaser may desire, at Purchaser's sole cost and expense. 10. Waiver: No delay in exercising any right or remedy shall constitute a waiver thereof, and no waiver by Seller or Purchaser of a breach of any covenant or condition of this Agreement shall be construed as a waiver of any preceding or succeeding breach of the same or any other covenant or condition of this Agreement. -Purchase and Sale Agreement- -Page 4 of 7- 11. Assignment: This Agreement is binding on the heirs, successors, and assigns of the parties, but shall not be voluntarily assigned by either party without prior written consent of the other party. 12, Commissions: Each party represents and warrants to the other that it has not engaged the services of any broker, finder or other person who would be entitled to any commission or fee in respect to the subject matter of this Agreement and each shall indemnify the other against any loss, cost, liability or expense incurred by the other as a result of any claim asserted by any such broker, finder or other person on the basis of any brokerage or similar arrangement or agreement made or alleged to have been made. 13. Notices: No notice, consent, approval or other communication provided for herein or given in connection with this Agreement shall be validly given, made, delivered or served unless it is in writing and delivered personally, sent by overnight courier or sent by express United States mail, postage prepaid, with return receipt requested, to: Purchaser: City of Seward ATTN: City Manager P. 0. Box 167 Seward, Alaska 99664 Seller. Douglas J. Lechner & Kurt R. Lindsey dba Adventure Investments P.O. Box 229 Seward, Alaska 99664 or to such other addresses as either party may from time to time designate in writing and deliver in a like manner to the other party. Notices, consent, approvals, and communications given by mail shall be deemed delivered upon the earlier of three days after deposit in the United States mail in the manner provided above or immediately upon delivery to the respective addresses set forth above, if delivered personally or sent by overnight courier. -Purchase and Sale Agreement- -Page 5 of 7- 14. Entire Agreement: This document contains the entire Agreement between the parties. It may not be modified except by a written document signed by all parties. 15. Construction of A reement: The captions of the sections of this Agreement are for convenience only and shall not govern or influence the interpretation hereof. This Agreement is the result of negotiations between the parties and, accordingly, shall not be construed for or against either party regardless of which party drafted this Agreement or any portion thereof. 16. Surviving Covenants: The provisions of this Agreement shall survive the delivery of the Deed. 17. 'rime is of the Essence: Time is of the essence of this Agreement. 18, Controlling Law and Venue:. This agreement shall be governed by, construed under and enforced in accordance with the laws of the State of Alaska, and venue for actions between the parties arising out of or related to this Agreement shall be in the Alaska Superior Court, Third Judicial District, Alaska. 19. Further Assurances: Whenever requested to do so by the other party, Seller or Purchaser promptly and expeditiously shall execute, acknowledge and deliver any and all such conveyances, assignments, confirmations, satisfactions, releases, instruments of further assurance, approvals, consents and any and all further instruments and documents as may be reasonably necessary, expedient, or proper in order to complete any and all conveyances, transfers, sales, and assignments herein provided, and to do any and all other reasonable acts and to execute, acknowledge and deliver any and all documents reasonably requested in order to carry out the intent and purpose of this Agreement. 20. Possession: Purchaser shall receive possession of the Property at the Closing. -Purchase and Sale Agreement- -Page 6 of 7- Exccutcd this Purcha4er: The C;ly of' sc%vurdAlaska James Hunt, City Manager Johianna Kinney, CNIC, Chy .-Flurchnse and Sale 7 cat' 7-