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CITY OF SEWARD, ALASKA
RESOLUTION NO. 88-061
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SEWARD, ALASKA, AUTHORIZING THE SALE OF CERTAIN
GATEWAY SUBDIVISION LOTS TO CLINT D. HALL
WHEREAS, the City Council
that development of the City of
is in the public interest; and
has repeatedly determined
Seward in an orderly manner
WHEREAS, capital projects including the construction of
the Spring Creek Correctional Center in Seward have resulted
in an anticipated critical shortage of available single
family residences within the city limits of Seward; and
WHEREAS, a previous development agreement with Gateway
Ventures to provide single family residential lots wi thin
the city has been unsuccessful and the city has reached
agreement with Alliance Bank to forestall foreclosure of a
First Deed of Trust on the Gateway Subdivision and thereby
allow interested developers to propose to construct homes
within the subdivision; and
WHEREAS, the city of Seward has received a proposal
from Clint D. Hall to purchase and develop up to 17 lots in
the Gateway Subdivision; and
WHEREAS, the proposed agreement is conditioned upon the
construction of single family residences through a phased
development plan, with the first five residences to be under
substantial construction by August 1, 1988; and
WHEREAS, there is a need in the community for the
development of quality single family homes; and
WHEREAS,
encourage the
sion property;
it is in the best interest of the city to
development and sale of the Gateway Subdivi-
and
WHEREAS, full compliance with the bid procedures in
Section 10-8 of the Seward City Code would not be in the
public interest in that an auction sale of the lots would
not assure construction of homes and it is in the public
interest to encourage actual construction; and
WHEREAS, an appraisal of the property prior to disposal
would not be in the public interest in that the existing
encumbrance of the Deed of Trust would unduly deflate the
current market value; and
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CITY OF SEWARD, ALASKA
RESOLUTION NO. 88-061
WHEREAS, a negotiated option and sale agreement will
best advance the City's interests and provide for develop-
ment without causing an immediate foreclosure of the exist-
ing Deed of Trust;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF SEWARD, ALASKA, that:
Section 1. The city manager is authorized to execute
an option and purchase agreement with Clint D. Hall for the
sale of up to 17 lots located in the Gateway Subdivision. A
copy of the agreement is attached and incorporated herein by
reference.
Section 2. It is not in the public interest to follow
the full procedures of Section 10-8 of the Seward City Code
or to require an appraisal of the project.
Section 3. This resolution shall take effect thirty
(30) days following its adoption.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
SEWARD, ALASKA, this 26thday of May , 19 88 .
THE CITY OF SEWARD, ALASKA
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HAR . GIESELER, MAYOR
AYES: DUNHAM, GIESELER, MEEHAN, NOLL, SIMUTIS
NOES: HILTON, O'BRIEN
ABSENT: NONE
ABSTAIN: NONE
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CITY OF SEWARD, ALASKA
RESOLUTION NO. 88-061
ATTEST:
(City Seal)
APPROVED AS TO FORM:
HUGHES, THORSNESS, GANTZ,
POWELL & BRUNDIN, Attorneys
for the City of Seward, AK
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Fred B. Arvidson
City Attorney
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RESOLUTION 88-061
ATT ACm'fENT
OPTION AND PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this day of June, 1988, by
and between the City of Seward, Alaska, ("City") and Clint D. Hall, individually, of Hall
Quality Builders, ("Builder").
WHEREAS, the City Council has repeatedly determined that development of
the City of Seward in an orderly manner is in the public interest; and
WHEREAS, capital projects including the construction of the Spring Creek
Correctional Center in Seward have resulted in an anticipated critical shortage of
available single family residences within the City limits of Seward; and
WHEREAS, by Resolution 88-061 the City Council of the City of Seward has
found that this Agreement is in the public interest;
NOW, THEREFORE, City and Builder agree as follows:
1. Description of Property. This Agreement covers the following lots
("Lots") in the Gateway Subdivision, located in Seward, Alaska:
Lots One (I) through Four (4), Lots Seven (7) through Sixteen (16) and Lot
Eighteen (18) of Block Two (2); and LOts Five (5) and Six (6) of Block Six (6) all located
in Gateway Subdivision according to Plat 84-18 in the records of the Seward Recording
District, Seward, Alaska.
2. Option Purchase Price. Promptly upon execution of this Agreement,
Builder will pay to City a non-refundable deposit of Five Thousand and No/lOO Dollars
($5,000).
3. Initial Option to Purchase Lots. Builder shall have the option to
purchase for the purpose of constructing thereon single family residences during the
1988 and 1989 construction seasons any, or all, of the Lots upon written notification to
City prior to August 1, 1988.
4. Purchase Price of Lots. The purchase price of each of the Lots shall be
Two and No/lOO's Dollars ($2.00) per square foot as shown on the existing plat of the
Gateway Subdivision. The entire purchase price for each Lot shall be due and payable
upon closing of the sale of a residence constructed thereon by Builder. Upon closing
City shall issue a quit claim deed to the Lot(s) purchased. If Builder desires title
insurance on any Lots purchased Builder shall be responsible for the cost thereof.
Builder shall pay all closing costs including recording fees. The Lots shall be sold
subject to all restrictions, reservations and encumbrances of record and those
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ascertainable by physical inspection of the property. Taxes and assessments shall be
apportioned upon the basis of the fiscal period for which assessed.
5. No Subordination of City's Interest. Builder agrees to keep all of the
Lots free and clear from all encumbrances of whatever nature and agrees not to finance
Builder's construction or in any way to encumber the fee interest of City in the Lots.
Builder agrees not to secure construction financing with any Deed of Trust or other
Security interest in the Lots or by assignment of this Agreement. The parties agree that
Builder is to construct homes on Lots selected by Builder for purchase on an "out-of-
pocket" basis, that is, without using the Lots or this Agreement as security for any
financing for the construction. City shall have the right to post any, or all, of the Lots
with Notices of Non-Responsibility to ensure the prevention of the creation of any
labor or materialmen's line on any of the Lots by Builder's suppliers of labor or
materials.
6. Compliance with Extension Agreement. Builder is aware of and agrees
to abide by all the terms and conditions of that certain Extension Agreement between
City and Alliance Bank effective January 1, 1988, a copy of which is attached hereto
and incorporated herein by reference. Builder and City agree that a sufficient portion
of the purchase price of each of the Lots shall be allocated at closing to obtain a Partial
Deed of Reconveyance from Alliance Bank on the Lot( s) purchased.
7. Construction Obligation by Builder. Builder agrees to have at least five
(5) single-family homes under substantial construction by August 1, 1988, and at least
five (5) additional single-family homes under substantial construction by October 30,
1988. The term "substantial construction" means the building site cleared, foundations
excavated and poured and materials and workmen for construction on the building site
with the work being actively pursued in an uninterrupted fashion. By October 30, 1988,
Builder agrees to have completed at least five (5) single family residences. The term
"completed" means having received a certificate of occupancy from City. If Builder fails
to comply with this provision, then Builder shall forfeit any and all rights to purchase
the Lots, including those Lots for which Builder has given notice to City of Builder's
exercise of Builder's option to purchase. The parties recognize that a principal reason
for the approval by the City Council of the City of Seward of this Agreement is the
obligation of Builder to construct and make available single-family residences within
the City of Seward during the 1988 and 1989 construction seasons, and that there is a
shortage of new single-family residences for sale within the City limits.
8. Extension to this Agreement. Upon the occurrence of all of the following
events this Agreement may be extended for a period through March 31, 1989:
a. Builder has complied with all the terms and conditions of
this Agreement, including, but not limited to, Builder's obligations to
have completed the construction of homes in accordance with Paragraph
7 of this Agreement; and
b. By September 1, 1988, Builder has given City written
notice of Builder's desire to extend this Agreement until March 31, 1989;
and
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RESOLUTION RR-0~1
AT'T'Af;H1!ENT
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c. Builder has an additional thirteen (13) single family
residences under substantial construction prior to March 31,1989; and
d. The City Council of the City of Seward has determined by
Resolution adopted prior to October 30, 1988, that it is in the public
interest to continue this Agreement for a period through March 31, 1989.
In determining the public interest the City Council shall have absolute,
uncontrolled discretIOn and may refuse to extend this Agreement for any
reason whatever, including, but not limited to, termination of the
Extension Agreement with Alliance Bank, performance of Builder under
this Agreement, market conditions in Seward, budget constraints or
objectives, and other factors as the Council may determine relevant to
the public interest.
If this Agreement is extended through March 31, 1989, then, in that event only,
City will continue to make monthly payments to Alliance Bank required under the
terms of the Extension Agreement.
9. Acknowledgments of Builder. Builder has:
a. Inspected each of the Lots, is fully familiar with the
physical conditions of each, and shall accept the Lots "as is" and in their
present condition.
b. City has no obligation whatever to construct any further
improvements to the Lots beyond those already constructed.
c. Builder has not relied upon any representations,
warranties or statements, whether express or implied, made by City or
any agent, employee or other representative of City, or by any broker or
any other person representing or purporting to represent City which are
not expressly set forth in this Contract, whether or not any such
representations, warranties or statements were made in writing or orally.
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10. Failure of Builder to Perform. If Builder shall default in the performance
of its obligations under this Agreement City shall have the right to institute an action for
specific performance to enforce Builder's obligation under this Agreement.
11. Representations of City and Builder. City and Builder each represent to
the other that neither is represented by any broker, agent or finder in connection with
this transaction. Builder agrees to hold City harmless from and against any and all
liability, costs, damages, causes of action or other proceedings instituted by any broker,
agent or finder, licensed or otherwise, claiming through, under or by reason of the
conduct of Builder in the purchase and sale of the Lots or in any manner whatsoever in
connection with this Agreement.
12. Right to Entl)' by Builder. Builder shall have the right to enter upon any
of the Lots for which Builder has exercised its option to purchase. Builder recognizes
that this agreement is subject to the provisions of the City of Seward Ordinances and
Charter and may be rescinded by action of the voters of Seward by referendum
petition. Builder agrees to assume all risks attendant to such action, including any
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R~SOLUTION NO. R8-Q61
ATTACIDIENT
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expenses incurred by Builder in proceeding with this Agreement prior to or during the
pendancy of such a petition.
13. Indemnification by Builder. Builder agrees to defend, indemnify and
hold City harmless from any and all claims for damages, including personal injuries and
property damage arising out of or resulting from Builder's use or construction upon any
of the Lots or the use or construction on any of the Lots by Builder's agents,
contractors, sub-contractors or the public, except for damages arising from the sole
negligence or willful acts or omissions of CITY, its agent, employees, or contractors.
14. Insurance by Builder. Prior to commencement of construction on any of
the Lots Builder shall procure and maintain, at Builder's sole cost and expense,
comprehensive general commercial liability insurance and Builder's all-risk insurance,
with limits of liability of $500.000 for all injuries and/or deaths resulting to anyone
person and $500.000 from anyone occurrence. The limit of $500.000 liability for
property damage shall be for each occurrence and aggregate. Coverage under such
insurance shall also include explosion, collapse and underground property damage
hazards. Such insurance shall include a broadform contractual endorsement. Builder
shall also provide fire and extended coverage insurance for any buildings, equipment,
machinery, or any other property stored or being worked on by Builder upon the Lots
at replacement value rather than original cost. Builder shall provide Workmen's
Compensation Insurance and motor vehicle insurance at a level of protection
consonant with good business practice and accepted standards in the industry. All
insurance policies shall provide for thirty (30) days' notice of cancellation and/or
material change to be sent to City at the address designated in Paragraph -1Q... of this
lease. Builder shall furnish City, on forms supplied by City, certificates evidencing that
it has procured the insurance required herein prior to the occupancy of any of the Lots
or commencement of construction by Builder. Nothing herein contained shall prevent
City from placing and maintaining, at City's own individual cost and expense, additional
or other insurance as may be desired.
15. Miscellaneous.
a, This Agreement sets forth the entire agreement of the
parties as to the subject matter hereof and supersedes all prior
discussions and understandings between them. This Agreement may not
be amended or rescinded in any manner except by an instrument in
writing signed by a duly authorized officer or representative of each party
hereto.
b. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Alaska.
c. Should any of the provisions of this Agreement be found to
be invalid, illegal or unenforceable by any court of competent
jurisdiction, such provision shall be stricken and the remainder of this
Agreement shall nonetheless remain in full force and effect unless
striking such provision shall materially alter the intent of the parties.
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~SOLUTION NO. 8R-061
ATTACmmNT
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d. In the event any action is brought to enforce this
Agreement, the parties agree to be subject to exclusive in person
jurisdiction in the Superior Court for the State of Alaska.
e. No waiver of any right under this Agreement shall be
effective unless contained in a writing signed by the party sought to be
charged with the waiver and no waiver of any right arising from any
breach or failure to perform shall be deemed to be a waiver of any future
right or of any other right arising under this Contract. All notices,
demands and requests from Builder to City shall be given to City at the
following address:
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City Manager
City of Seward
P.O. Box 167
Seward, Alaska 99664
All notices, demands or requests from City to Builder shall be given to Seller at
the following address:
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Clint D. Hall
P. O. Box 2829
Kenai, AK 99611
f. This Agreement shall be binding upon, and inure to the
benefit of the parties hereto and their respective successors and assigns.
Builder shall not assign this Agreement or its rights hereunder without
the prior written consent of City which consent may be withheld for any
reason deemed sufficient by City in its sole and uncontrolled discretion.
No permitted assignment of this Agreement or Builder's rights hereunder
shall be effective against City unless and until an executed counterpart of
the instrument of assignment shall have been delivered to City and City
shall have been furnished with the name and address of the assignee.
g. This Agreement shall not be binding or effective until
properly executed and delivered by City and Builder.
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Dated this
day of June, 1988.
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CITY:
CITY OF SEWARD, ALASKA
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BY:
City Manager
ATTEST:
City Clerk
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APPROVED AS TO FORM:
HUGHES, THORSNESS, GANTZ,
POWEU. & BRUNDIN
Attorneys for the
City of Seward
BY: ~~~
Fred. "dson
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STATE OF ALASKA
THIRD JUDICIAL DISTRICT
BUILDER:
RESOLUTION NO. RR-061
ATTACHMENT I
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CLINT HALL, ~ba Ha~Builders
BY: CJ::d.::t::; ./
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THIS IS TO CERTIFY that on this day of , 1988,
before me, the undersigned, a Notary Public in and for the State of Alaska, personally
appeared RODGER L. BENNETI and LINDA MURPHY, known to me and to me
known to be the City Manager and City Clerk of the City of Seward, and known to be
the individuals named in and who executed the foregoing document, and they
acknowledged to me that they were authorized to execute the foregoing document by
authority granted them in the Municipal Code of Ordinances for said City and for the
uses and purposes therein set forth.
written.
WITNESS my hand and notarial seal the day and year first hereinabove
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Notary Public in and for Alaska
My Commission Expires:
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RF.<;Ol.H'fION NO. RR-nf;t
ATTACHtffiNT I
STATE OF ALASKA
THIRD JUDICIAL DISTRICT
~ss.
THIS IS TO CERTIFY that on this ~ day of ?-o! U /lJE , 1988,
before me, the undersigned, a Notary Public in and for the State of Alaska, personally
appeared CLINT HALL, known to me and to me known to be the individual named in
and who executed the foregoing document, and he acknowledged to me that he signed
and sealed the same as his free and voluntary act for the uses and purposes therein set
forth.
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written.
WITNESS my hand and notarial seal the day and year first hereinabove
My Commission Expires:
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