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HomeMy WebLinkAboutRes1988-075 . . . Sponsored by: Schaefermeyer CITY OF SEWARD, ALASKA RESOLUTION NO. 88-075 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE SALE OF CERTAIN GATEWAY SUBDIVISION LOTS TO METCO/TREND, JV 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, 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 an 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 METCO/TREND, JV, to purchase and develop up to twenty- two (22) 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 sian property; it is in the best interest of the city to development and sale of the Gateway Subdivi- 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 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; -1- . . . CITY OF SEWARD, ALASKA RESOLUTION NO. 88-075 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The public interest would best be served by the negotiated disposition of certain lots located wi thin the Gateway Subdivision, Section 1. The city manager is authorized to execute an option and purchase agreement with METCO/TREND, JV, for the sale of up to twenty-two (22) lots located in the Gateway Subdivision. A copy of the agreement is attached and incorporated herein by reference. Section 2. It is in the public interest to waive appraisal of the property in accordance with the provisions of Section 2-85 of the Seward City Code. 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, thi s 13 day of June , 19..lU!..- THE CITY OF SEWARD, ALASKA AYES: NOES: ABSENT: ABSTAIN: DUNHAM, GIESELER, HILTON, MEEHAN, NOLL & SIMUTIS NONE O'BRIEN NONE -2- . . . CITY OF SEWARD, ALASKA RESOLUTION NO. 88-075 ATTEST: APPROVED AS TO FORM: HUGHES, THORSNESS, GANTZ, POWELL & BRUNDIN, Attorneys for the City of Seward, AK (City Seal) U 1lI~ Fred B. Arvidson City Attorney -3- RESOLUTION NO. 88-075 Attachment . 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 MetcofTrend, JV, a partnership of Metco Inc., an Alaska corporation, and Trend Construction, a sole proprietorship business, ("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 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 Four (4) through Thirteen (13) and Lots Fifteen (15) through Twenty Six (26) of Block One, all located in the 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/IOO'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 at first draw of construction financing or upon closing of the sale of a residence constructed thereon by Builder; and in any event the entire purchase price for each lot on which substantial construction has occurred shall be payable immediately upon termination of this agreement. 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 1 . . RESOLUTION NO. 88-075 Attachment be responsible for the cost thereof. Builder shall pay all closing costs including recordmg fees. The Lots shall be sold subject to all restrictions, reservations and encumbrances of record and those 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 Al:reement. 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 Oblil:ation by Builder. Builder agrees to have at least five ~5) single-family homes under substantial construction by August 15, 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. First Extension to this Al:reement. 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 2 RESOLUTION NO. 88-075 Attachment . c. Builder has an additional five (5) 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. Second Extension of this Ai:reement. Upon occurence of all of the following events this Agreement may be extended for a time beyond April 1, 1989: a. Builder has complied with all the terms and conditions of this Agreement, including, but not limited to, Builders' obligations to have completed the construction of homes in accordance with Paragraph 7 of this Agreement; and b. My March 1, 1989, Builder has given City written notice of Builder's desire to extend this Agreement; and c. Builder has an additional twelve (12) single family residences under substantial construction prior to September 30, 1989; and d. The City Council of the City of Seward has determined by Resolution adopted prior to March 31, 1989, that it is in the public interest to continue this Agreement. 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 constratints or objectives, and other factors as the Council may determine relevant to the public interest; and e. City and Builder have obtained the written consent of Alliance Bank to an amendment of the Extension Agreement upon terms and conditions satisfactory to both City and Builder. In the event this Agreement is extended beyond April 1, 1989, City will not be responsible for any monthly payments or increase in principal amount payable to Alliance Bank required under the extension. 3 . . . II RESOLUTION NO. 88-075 Attachment 10. Acknowledgments of Builder. Builder has: j :i " i :! i ,I d i i :i il :1 :i I ! 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. 11. 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. 12. 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. 13. Ril:ht to Entry 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 expenses incurred by Builder in proceeding with this Agreement prior to or during the pendancy of such a petition. 14. 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. 15. 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 4 RESOLUTION NO. 88-075 Attachment . . 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 ..l2.. 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. 16. 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. 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 writin~ signed by the party sought to be charged with the waiver and no WaIver of any right ansing 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: . 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: 5 RESOLUTION NO. 88~075 Attachment . Metcoffrend JV HCR 64 Box 300 Seward, Alaska 99664 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. Dated this day of June, 1988. CITY: CITY OF SEWARD, ALASKA . BY: City Manager ATTEST: City Clerk BUILDER: Metcoffrend, JV BY: Metco, Inc. BY: Trend Construction . APPROVED AS TO FORM: HUGHES, THORSNESS, GANTZ, POWELL & BRUNDIN Attorneys for the City of Seward 6 RESOLUTION NO. 88-075 Attachment . BY: Fred B. Arvidson STATE OF ALASKA THIRD JUDICIAL DISTRICT ~ss. 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. BENNETT 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. WITNESS my hand and notarial seal the day and year first hereinabove written. . Notary Public in and for Alaska My Commission Expires: STATE OF ALASKA THIRD JUDICIAL DISTRICT ~ss. 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 , and known to me and to me known to be the individuals named in and who executed the foregoing document, and they acknowledged to me that they signed and sealed the same as their free and voluntary act for the uses and purposes therein set forth. WITNESS my hand and notarial seal the day and year first hereinabove written. . Notary Public in and for Alaska My Commission Expires: 7