HomeMy WebLinkAbout08262019 City Council Laydown - Purchase and Sale Agreement 7/28/2014
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is made as of July 28, 2014, between
Friends of the Jesse Lee Home, an Alaska nonprofit corporation, recognized by the Internal
Revenue Service under 26 U.S.C. § 501(c)(3) ("Buyer"), whose address is P.O. Box 737,
Seward, Alaska 99604, and the City of Seward, an Alaska home rule municipal corporation,
whose address is P.O. Box 167, Seward, Alaska 99604 ("Seller").
RECITALS
WHEREAS, the Seller owns the Jesse Lee Home property ("Property," defined below)
that is the subject of this Agreement; and
WHEREAS, since 2005 the Buyer has been working pursuant to City of Seward
Resolution 2005-01 and City of Seward Resolution 2005-83 to obtain funding for the
rehabilitation and development of the Property as an educational and residential/ boarding
facility; and
WHEREAS, Buyer has already coordinated valuable improvements to the Property; and
WHEREAS, the property was appraised by MacSwain Associates LLC. in 2011 and the
two parcels were valued at$470,000 for the raw land; and
WHEREAS, since repossessing the property in 2001 the City has paid $264,958 in back
taxes and utility assessments, plus untallied administrative, maintenance and risk control costs;
and
WHEREAS, Buyer has agreed to coordinate additional improvements which will
increase the long-term value of the site; and
WHEREAS, the Buyer wishes to acquire, rehabilitate and develop the Property for use as
a public educational and residential/boarding school; and
WHEREAS, the Buyer intends to submit an application to the Kenai Peninsula Borough
School District for a charter school; and
WHEREAS, the Property requires significant physical improvements to be used for such
purposes, and such uses also require that governmental permits and approvals be granted; and
WHEREAS, development of the Property by the Buyer as a public educational and
residential boarding school will be a public benefit; and
WHEREAS, the educational and residential/ boarding school will have a net positive
economic development impact for the community including short and long-term employment;
and
WHEREAS, Buyer is uniquely situated and able to redevelop the Property; and
{11065-000-00107892;1}
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Seller Initial Buyer Initial
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7/28/2014
WHEREAS, it is in the city's best interest to dispose of these properties at less than fair
market value in the manner described herein, transfer the risk and liability of the abandoned
properties and the necessary site hazardous material cleanup and abatement to the Buyer.
Now, therefore, Buyer and Seller agree as follows:
1. Purchase and Sale:
Subject to the terms and conditions of this Agreement, Seller agrees to sell and Buyer
agrees to purchase good and marketable title in fee simple, subject to reversion, of the following
real property, including all improvements, fixtures, and appurtenances, described as follows (the
"Property"):
Lots 15A and 15B, Jesse Lee Heights Subdivision Addition No. 4
according to Plat 89-18, Seward Recording District, Third Judicial
District, State of Alaska.
2. Consideration:
The title of the property shall be transferred on August 29, 2014. There shall be a
reversionary clause to transfer the property back to the City of Seward if the following
improvements are not completed within a five (5) year term. The consideration for the transfer
of the Property shall consist of previous studies necessary to evaluate the site plus site
improvements (the "Work") to be performed by Buyer to the satisfaction of the seller, on, or
before, the final date of the Due Diligence Period of August 30, 2019. The Work shall consist of
the following:
a. Hazmat Abatement(estimated at $216,000)
b. 50% of Water Utilities: 270+/- feet 8" main @ $200 per foot and 2 hydrants
(estimated at $74,000 X .5 = $37,000)
c. 50% of Sewer Utilities: 220+/- feet 6" main @ $150 per foot, 100+/- feet 4"
main @ $125 per foot, 3SSMHs@ $10,000 each (estimated at $75,500 X .5 =
$37,750)
Total estimated required future improvements: $290,750.00.
In addition, Buyer has coordinated$33,125.51 for the Environmental Study, Hazmat Study, and
survey work listed in Appendix A, for total consideration of$323,875.51.
Upon substantial completion of all Work, the reversionary clause shall remain in effect so that
the properties shall revert to the City of Seward if the above work is not completed finally or the
properties are used for any other purpose than as a public education and residential boarding
{11065-000-00107892;1}
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Seller Initial Buyer Initial
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facility, unless the City and Buyer mutually and in writing agree to allow other uses and not
initiate reversion.
3. Closing:
Consummation of the sale (the "Closing") shall take place at the offices of the Seller, or
such other place as Seller and Buyer agree in writing. The Closing shall be completed on
August , 2014, unless otherwise agreed by both parties. In the event this transaction is
not closed within the above-described closing period, this Agreement shall terminate unless
extended in writing by mutual agreement of the parties. Seller and Buyer shall cause the
following to occur at Closing:
a. A Quitclaim Deed with reversionary clause as described above, conveying the
Property to Buyer, duly executed and acknowledged by Seller, shall be recorded
in the Records of the Seward Recording District, Third Judicial District, State of
Al aska.
b. Buyer shall deliver to Seller a certification that the work will be completed no
later than August 30, 2019.
4. Closing Costs:
All Closing costs of the transaction, unless otherwise provided in this Agreement, shall
be paid by Buyer.
5. Buyer's Representation and Warranties:
The representations and warranties of Buyer in this paragraph are a material inducement
for Seller to enter into this Agreement. Such representations and warranties shall survive the
Closing. Buyer represents and warrants to the best of its knowledge:
a. Buyer is being provided a sufficient opportunity to investigate the condition of the
Property; Closing of this transaction shall constitute a certification that Buyer releases and holds
harmless the Seller from all liability and legal claims, environmental or otherwise, whether
known or may be discovered in the future, concerning or affecting title to the Property, any
operation or activity on the Property or any condition now and hereafter existing on, in, or under
the Property.
b. Buyer is being provided a sufficient opportunity to become familiar with the
deteriorated condition of improvements on the Property. Buyer acknowledges that it shall
acquire the Property "AS IS" AND WITHOUT WARRANTY OF ANY TYPE OR NATURE
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE OR USE.
6. Conditions of Closing/Due Diligence:
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Seller Initial Buyer Initial
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a. This Agreement is subject to approval by the City Council for the City of Seward,
following notice and a public hearing as required by the Seward City Code.
b. After approval by the City Council, Buyer shall have until August 30, 2019 to
perform Due Diligence (the"Due Diligence Period'), to investigate the condition of the Property
and its suitability for Buyer's intended use, and to perform the Work that shall constitute the
consideration for the acquisition of the Property.
1. If Buyer determines for any reason in its sole discretion during the Due Diligence
Period that the Property does not meet its needs, Buyer may notify Seller in writing that it
is terminating this Agreement and shall be released from all obligations under this
Agreement except for ongoing indemnity obligations and any costs to the City associated
with terminating the Agreement.
2. During the Due Diligence Period, Buyer and its agents may enter upon the
Property and, at Buyer's expense, conduct soils tests, environmental assessments, traffic
studies, feasibility of excavation permits, physical inspections and any other analyses or
evaluations (hereafter collectively "Evaluations") that Buyer desires. Buyer also shall be
granted consent, during the Due Diligence Period, to enter the Property and initiate,
conduct, and complete the Work on the Property.
3. Buyer shall indemnify, defend and hold Seller harmless against any claims, costs,
or liabilities related to or arising out of any Evaluations, Remediation or Work that Buyer
performs during the Due Diligence Period. Buyer shall ensure that Buyer and all of its
contractors and subcontractors maintain workers compensation insurance as required by
law.
4. If, despite Buyer's reasonable efforts, Buyer has initiated the Work but not been
able to complete the Work by the end of the Due Diligence Period, Buyer and Seller may
confer to discuss and negotiate an extension to the Due Diligence Period, which may be
reasonably necessary for the Buyer, making commercially reasonable efforts, to complete
the Work.
7. Costs and Fees:
If either party breaches any term of this Agreement, the breaching party agrees to pay the
non-breaching party all actual and reasonable attorneys' fees and other costs and expenses
incurred by the non-breaching party in enforcing this Agreement or preparing for legal or
other proceedings, whether or not instituted. If any legal or other proceedings are
instituted, the party prevailing in any such proceeding shall be paid all of the
aforementioned costs, expenses, and fees by the other party, and if any judgment is
secured by such prevailing party, all such costs, expenses, and fees shall be included in
such judgment. In the case of the Seller all monetary obligations hereunder are subject to
appropriation.
{11065-000-00107892;11
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Seller Initial Buyer Initial
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8. Post-Closing Approvals:
After closing, Buyer will need to obtain certain governmental authorizations,
permissions, and permits ("Approvals") in order to use the Property for its intended use as an
educational and residential/boarding facility. The Approvals are anticipated to include but are
not limited to the following: (1) construction permit(s); (2) replatting of the Property to vacate
the lot line between the two parcels; (3) rezoning of the Property to "Institutional"; and (4)
approval of a conditional use permit. Seller agrees to cooperate reasonably with Buyer in
processing applications for such Approvals, provided, however, that such cooperation shall not
be construed as a warranty that any such Approval(s) will be granted or in any way as a waiver
of any otherwise applicable City or Borough requirements, standards, or prohibitions.
9. Waiver:
No delay in exercising any right or remedy shall constitute a waiver thereof, and no
waiver by Seller or Buyer of a breach of any covenant 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.
10. 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, which
consent shall not be unreasonably withheld. Buyer may pledge its interest in the property, subject
to the reversionary interest,for the purpose of financing improvements of the existing structures.
11. 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.
12. Notices:
No notice, consent, approval, or other communication provided for herein or given in
connection with this Agreement shall be given, made, delivered, or served unless it is in writing
and delivered personally, sent by overnight courier, or sent by registered or certified United
States mail, postage prepaid, with return receipt requested to:
Seller: City of Seward
P.O. Box 167
Seward, Alaska 99664
Buyer: Friends of the Jesse Lee Home
{1 1 06 5-000-001 078 92;1 1
Seller Initial Buyer Initial
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P.O. Box 737
Seward, Alaska 99664
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.
13. Entire Agreement:
This document and its attachments contain the entire Agreement between the parties. It
may not be modified except in writing and signed by all parties.
14. Surviving Covenants:
The indemnification provisions of this Agreement shall survive the delivery of the Deed.
15. Time is of the Essence:
Time is of the essence of this Agreement.
16. Exclusive Agreement:
This Agreement shall constitute an exclusive arrangement between the parties. Seller
shall not market, sell, negotiate for the sale of, or convey the Property to any other person,
provided that Buyer has not delivered notice that it will not close due to an unsatisfied condition.
17. 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, Anchorage,
Alaska.
SELLER: BUYER:
The City of Seward Friends of the Jesse Lee Home
James Hunt, City Manager Kirsten Vesel, Executive Director/Project
Date: Manager
Date:
ATTEST:
{11065-000-00107892;11
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Seller Initial Buyer Initial
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7/28/2014
Johanna Kinney, CMC, City Clerk
111065-000-00107892,1
Seller Initial Buyer Initial
Page 7 of 7
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