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10/29/01 Sandry/Offer to Purchase Lot 1LAW OFFICES OF JOHNSON, BERG, MCEVOY & BOSTOCK, PLLP JAMES W.JOHNSON STEPHEN C.BERG BRUCEMCEVOY THOMAS R. BOSTOCK KENT P. SAXBY PAUL A. SANDRY ERIKA L. JOHNSON KATHERINE P. MAXWELL GARY R. CHRISTIANSEN, PC Of Counsel Community Development Department ATTN: Susan Moyer City of Kalispell PO Box 1997 Kalispell, MT 59903-1997 221 First Avenue East PO Box 3038 Kalispell, Montana 59903-3038 ESTABLISHED 1891 October 29, 2001 Re: Request for Proposal Lot 1, Daley Field Subdivision Dear Susan: MERRITT N. WARDEN 1914 - 1996 TELEPHONE (406) 755-5535 TELEFAX (406) 756-9436 EMAIL ADDRESS Johnson, Berg, McEvoy & Bostock, PLLP@centurytel.net E:n['11-05 The purpose of this correspondence is to submit a proposal for the purchase and development of Lot 1 of Daley Field Subdivision pursuant to the request for proposal issued by the City of Kalispell dated October 2001. The undersigned is counsel for Northwest Investments Partnership, LLP d/b/a Peak Development & Property Management. On or about September 10, 2001, Peak's counsel delivered to the City a proposal Agreement to Sell & Purchase Lot 1 of Daley Field Subdivision pursuant to the terms of said proposed Agreement. The proposed Agreement was rejected by the City by and through Charles Harball, acting City Attorney, who indicated that the City was interested in proposals for the acquisition from the City of the subject real property. Peak understands that the City does not encourage proposals or offers to purchase from developers. Peak is a real property developer, with several recent Kalispell real property developments, including, but not limited to Southfield Park, Brookstone (Evergreen), Westbrook (Idaho Street), and South Center Square. Peak is currently constructing an 81-unit Hampton Inn in Helena. Peak has a proven track record and is able to develop the subject real property in a manner consistent with the quality evidenced at Southfield Park. While Peak is not able to provide a proposed layout of structures on the subject property, Peak proposes to construct structures totaling approximately 25,000 to 30,000 square feet. Peak's goal is to construct buildings comprising the maximum square footage possible given lot size, parking considerations and applicable codes. One of the structures proposed to be built on the "airport" side of the site will be an office building with a commercial/retail structure on the "Highway 93" side of the site. The precise nature of the structures will be dictated in part by prospective lessees of the real property. Peak will employ its design - build team, which consists of Peak, Jackola Engineering, and Hammerquist & Caselegno Builders. Community Development Department October 29, 2001 Page 2 In the event the City indicates a willingness to entertain Peak's proposal, Peak will provide a proposed "footprint" and architectural renderings of the proposed structures. Attached hereto as Exhibit 1 and by this reference incorporated herein is a proposed Agreement to Sell and Purchase which Agreement is fairly consistent with that forwarded to the City by Peak's counsel on or about September 10, 2001. Should the City request additional information for purposes of considering Peak's Proposal, please do not hesitate to contact the undersigned. PEAK DEVELOPMENT & PRORERTY MANAGEMENT Paul A. ndry, Couns AGREEMENT TO SELL AND PURCHASE THIS AGREEMENT made and entered into this day of November, 2001, by and between NORTHWEST INVESTMENTS PARTNERSHIP, LLP of Kalispell, Montana hereinafter referred to as "Purchaser" and THE CITY OF KALISPELL hereinafter referred to as "Seller." WHEREAS Seller owns the following described real property situated in Flathead County, Montana: Lot 1 of the Daley Field Subdivision located in Section 20, Township 28 North, Range 21 West. The above -described property herein referred to as the "subject property." WHEREAS Purchaser wishes to make an offer to purchase the subject real property and Seller wishes to sell the subject property, all as hereinafter set forth; and NOW, THEREFORE, in consideration of the foregoing recitals and in further consideration of the mutual covenants and conditions hereinafter set forth, the parties agree as follows: Sale and Purchase: Seller agrees to sell and Purchaser agrees to purchase, in accordance with the terms and conditions of this Agreement, and specifically subject to the contingencies contained herein, the subject property. 2. Earnest Money: Upon execution hereof, Purchaser shall pay the sum of FIVE THOUSAND AND NO/100 DOLLARS ($5,000.00) as earnest money, which sum shall, at the discretion of Seller, be held either by Johnson, Berg, McEvoy & Bostock, PLLP in its trust account or by Citizen's Title Company, who shall be the closing agent. At closing, the earnest money shall be paid to the closing agent (if the closing agent is not holding such earnest money), and Purchaser shall receive credit against the purchase price for the amount of earnest money paid herewith. All such earnest money shall be fully refunded to Purchaser if this Agreement is terminated because one or more of the contingencies (as set forth in T4) cannot be timely satisfied (despite the best efforts of the parties), or where Purchaser determines that Seller will not be able to convey to Purchaser merchantable title (as set forth in ¶5 hereof) to the subject property. 3. Purchase Price: The total purchase price for the subject properties shall be THREE HUNDRED FIFTY-SIX THOUSAND NINE HUNDRED SEVENTY-FOUR AND N0/100 DOLLARS ($356,974.00), which sum is payable as follows: a. The earnest money of FIVE THOUSAND AND NO/100 DOLLARS ($5,000.00) shall be paid at the time of closing. b. The balance of the purchase price shall be payable upon Purchaser's completion of the improvements proposed to be constructed on the premises by Purchaser. In this regard, prior to closing, Purchaser shall submit to Seller Purchaser's site plan depicting Purchaser's proposed layout of all structures and other improvements to be constructed upon the premises. Purchaser shall also provide to Seller architectural drawings indicating preliminary structural plans, depicting setbacks, lot coverage, off-street parking, and building height. C. Purchaser shall have an obligation to commence construction of the improvements at such time as Purchaser contracts with Lessees who, in the aggregate, enter into binding agreements with Purchaser for the lease of no less than 60% of the total square footage of the improvements to be constructed on the subject property by Purchaser. Subsequent to Purchaser's entering into binding contracts with Lessees relative to the referenced 60% of the total square feet of the improvements to be constructed on the real property, Purchaser shall have an obligation to complete the improvements proposed by Purchaser within twelve (12) months. Upon completion of the improvements on the subject premises by Purchaser, Purchaser shall pay to Seller the total outstanding balance of the purchase price referenced herein. 4. Contingencies: cies: This Agreement is expressly contingent upon the following matters, and in the event such contingencies are not fully satisfied within the time frames hereinafter set forth, this Agreement, at the option of Seller, may be terminated. If this Agreement is terminated because of the following contingency is not satisfied, neither party shall have any liability hereunder: a. Purchaser's approval subject to Purchaser's sole discretion of the status of title, including any zoning restrictions. b. Purchaser's obtaining satisfactory financing for purposes of constructing improvements on the subject property. C. Purchaser's approval of a Phase 1 and 2 Environmental Assessment, the costs of which shall be the responsibility of Purchaser. Contingency 4(a) shall be satisfied on or before the last day for Purchaser to obj ect to the status of title pursuant to ¶5 hereof, unless such date is mutually extended by the parties in a written document executed by all parties hereto. Seller agrees to use its best efforts to timely resolve the contingency. Contingencies 4(b) and (c) shall be satisfied prior to closing. 5. Status of Title/Conveyance: Title shall be evidenced by a title commitment from Citizen's Title Company, which title commitment shall be provided by Seller to Purchaser on or before November 30, 2001. Such title commitment shall also contain copies of all documents which give rise to any Schedule B exceptions in such title commitment. Following Purchaser's receipt of such title commitment and related documents, Purchaser shall have fourteen (14) days within which to review same and to advise Seller of any objections to the status of the title which Purchaser, in its sole and absolute discretion, may have. If Purchaser objects to the status of the title as reflected on such title commitment, Seller shall release or remove any items reasonably objected to. For purposes hereof, the parties agree and understand that Purchaser objects to any liens, mortgages, encumbrances, SIDS or other taxes. Purchaser agrees that any such liens, encumbrances, mortgages, SIDS or other taxes may be discharged or released by Seller at closing. Seller hereby instructs the closing agent to discharge any such items at closing, using so much of the sale proceeds (net of selling expenses) necessary to discharge same. Prior to closing such title commitment shall be updated. At closing the subject property shall be conveyed to Purchaser by Warranty Deed, which Warranty Deed shall warrant that the property is not subject to any liens, encumbrances, undisclosed leases, claims or interests and shall also include all other statutory warranties of title. The subject property shall also be conveyed free and clear of any and all easements, restrictions (other than zoning restrictions), reservations, or covenants, except such items which appeared on the initial title commitment and to which Purchaser did not timely object. Title insurance insuring good marketable title (as herein set forth), with Purchaser named as Page 2 of 4 the insured, which policy of title insurance shall be for the purchase price of the subject property, shall be obtained at Seller's cost. 6. Taxes and Assessments: Seller shall be responsible for all property taxes and assessments for 2001 and earlier and Purchaser shall be responsible for all 2002 and subsequent property taxes. Seller shall also be responsible for all SIDs or other assessments due and payable after closing. 7. Closing Date/Possession: The closing date of this transaction shall be on or before December 31, 2001. Seller shall be entitled to possession and use of the property prior to closing, subject nevertheless to reasonable access to the property by Purchaser for purposes of inspections, appraisals, feasibility studies and other studies or inspections Purchaser determine to be reasonably necessary. 8. Fees and Costs: a. Closing fees charged by the closing agent to close this transaction shall be shared equally by the parties; b. Purchaser shall be responsible to pay recording fees for recording the deed that it receives at the time of closing; C. Seller shall be responsible for any and all recording fees to release liens or other clouds affecting Seller's title; d. Each party shall be responsible for their own attomey's fees; e. Seller shall be responsible for any brokerage fees or commissions, if any, payable to Seller's agents/brokers; and f. Seller shall be responsible for the title insurance premium on the title policy in favor of Purchaser. 9. Remedies: The parties agree that this transaction shall be subject to the right to enforce specific performance. In addition, either party may exercise any other remedy available to them under the laws of the state of Montana, including a suit for damages or forfeiture of earnest money should the contingencies, as herein set forth, have been timely satisfied prior to any breach of this Agreement. In the event Seller is entitled to and elects to retain the earnest money, and Seller elects to retain same following a default by Purchaser, Seller shall not have any obligation to convey the property or any interest therein to Purchaser. In the event the contingencies set forth in ¶4 hereof are not satisfied, Purchaser shall be entitled to a refund of its earnest money and have no further obligations to Seller. 10. Survey, Paying, Curbing and Greenbelt: No later than 60 days of closing, Seller shall cause the subject property to be surveyed, specifically marking the corners of the subject property and all roadways and easements. No later than 60 days of closing, Seller shall pave the access road currently used by Strand Aviation highlighted in green on Exhibit A attached hereto. No later that 60 days of closing, Seller shall install 3 curbcuts, curbwork, street lighting and sidewalks relative to what is referred to as "New 3rd Street" per the detail highlighted in yellow on Exhibit B attached hereto. Seller shall also landscape a greenbelt in the right of way area indicated with green highlighting on Exhibit B. Seller shall pay to Purchaser on behalf of Purchaser to bring sewer, water, electric, and gas utilities to the subject property boundary. Page 3 of 4 11. Subordination: Seller hereby agrees to subordinate its security interest in the subject property secured by Purchaser's Promissory Note to the interest in the subject property granted by Purchaser to a lender who extends a loan to Purchaser for purposes of the construction of the improvements referenced herein. 12. Survival of Representations: All representations set forth herein shall survive the closing hereof. 13. Time of Essence: Time is of the essence with respect to all matters pertaining to this Agreement. 14. Entire Agreement: This Agreement represents the parties' entire Agreement. Purchaser represents that it has entered into this Agreement based upon its own independent investigation and not based upon any inducements or representations of Seller, except to the extent same are expressly herein set forth. This Agreement may not hereafter be modified or amended unless same is in writing signed by both parties hereto. 15. Attorney. 'sue: In the event of any legal or equitable action, the prevailing party shall be entitled to its attorney's fees and costs as determined by a court of competent jurisdiction. 16. Binding_ Agreement: This Agreement is binding upon the parties hereto and their respective heirs, successors and assigns. IN WITNESS WHEREOF the parties have hereunto set their hands and seals the day and year first above written. SELLER: PURCHASER: CITY OF KALISPELL NORTHWEST INVESTMENTS PARTNERSHIP, LLP its LO-A Matt Waatti, Partner Page 4 of 4 DALEY FIELD SuBDI VISION NW 1/4 of Section 20, T28N R21W, P.M.,M. IELL, FLATHEAD COUNTY, MONTANA ]in 23 9903 323 1316.05' A"i 1"W'd.d IN FEET n< - IDO It 75 F—� lbr., —d _ S- S.. 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