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HomeMy WebLinkAboutEC14-226 - Other - Trammell Crow Company - Summary of Purchase and Sale Terms for Riverbend Par 3 Golf Course - 09/19/2014 i Records Man� �E4T Document W A9 HIN 6TON p•' CONTRACT COVER SHEET This is to be completed by the Contract Manager prior to submission to City Clerks Office. All portions are to be completed. If you have questions, please contact City Clerk's Office. I I Vendor Name: Trammell Crow Company I NIL Vendor Number: Ubl"® l/► JD Edwards Number Contract Number: This is assigned by City Clerk's Office Project Name: Riverbend Par 3 Golf Course Description: ❑ Interlocal Agreement ❑ Change Order ❑ Amendment ® Contract ❑ Other: Contract Effective Date: 9/19/14 Termination Date: 30 Days after Feasibility Contract Renewal Notice (Days): N/A Number of days required notice for termination or renewal or amendment Contract Manager: Ben Wolters Department: ECD Contract Amount: Letter of Intent Approval Authority: (CIRCLE ONE) Department Director Mayor City Council Detail: (i.e. address, location, parcel number, tax id, etc.): " i I As of: 08/27/14 f i 600 University Street Suite 902 Mark Netherland Seattle,WA 98101 Principal, 206-708-6539 Direct 206,972-5348 Fax Trammell Crow Company ' Development and Investment mnetherland@trammellcrow.com www,trammelicrow.com September 19,2014 lien Wolters City of Kent 220 Fourth Avenue South Kent, WA 98032 LETTER OF INTENT RE: Summary of Purchase and Sale Terms for Land Area, commonly known as Riverhead Par 3 Golf Course located in Kent,WA Dear Mr. Wolters' We are pleased to present this revised Letter of Intent for the proposed purchase of the City of Kent's above referenced land parcel located in Kent., Washington. The following summary is intended to provide an overview of the major terms and provisions which we will incorporate into a purchase and sale agreement. If these terms are acceptable,we would like to engage our attorney, Keith Elkins with Elkins, Kalt, Weintraub, Rebben, Gartside, LLP, to prepare a formal Purchase and Sale Agreement which will incorporate these basic business points along with other mutually agreeable terms and provisions, Purchase and Sale Agreement Summary of Terms • Purchaser—FAA SEA Associates,LLC("Purchaser"). • Seller—City of Kent("Seller ) - i • Pro et — The existing 21.5 acre Property commonly known as Riverhead Par 3 Golf Course located at 2019 West Meeker, Kent, Washington ("Property") as outlined on Exhibit A. The Property shall consist of all of Seller's right,title,and interest in the same. • Purchase Price—The Purchase Price will be$10,073,250 in U,S funds,due at closing. Seller shall deliver property free and clear of all debt, liens and encumbrances on the property subject to adjustments described below. "Net Land Area" shall mean the square footage of the Property, as determined pursuant to a current ALTA survey prepared by a licensed surveyor selected by Buyer and approved by Seller (the "AL TA Survey"), less the portions of the Property, estimated to be approximately 3 acres, which shall be required to be dedicated or otherwise conveyed to the City for public park and public access purposes( Riverbend Public Park), I September 19,2014 i ' Purchaser will dead to Seller the Riverbend Public Park, outlined on Exhibit A;upon eompleti¢n of Purchaser's project but no later than 36 months from closing. Purchaser agrees to improve the Riverbend Public Park up to $500,000("Park Allowance"). $500,000 of the Purchase Price will be held in Escrow ow at closing to fund the Park Allowance. If the total cost for the Riverbend Public Park improvements is less than the Park Allowance, the Escrow Agent will convey the difference to the Seller as part of the remaining Purchase Price. The Purchaser and Seller will mutually agree on the scope of work as part of hie Purchase and Sale Agreement not to exceed the Park Allowance. The purchase price shall be adjusted to reflect the actual Net Land Area to be sold/purchased multiplied by$12,50lsquare foot of Net Usable Land Area. Earnest Money Donosit - Within five (5) business days of executing a mutually-satisfactory purchase and sale agreement, Purchaser will deliver into escrow a refundable, $400,000 deposit in cash. Upon the expiration or waiver of the feasibility period, the earnest money shall be converted to cash and shall become non-refundable to the Purchaser and applicable to the Purchase Price. If Purchaser elects to waive its right to terminate the transaction as provided below and then later fails to close on the property, the Earnest Money shall be non-refundable and would be retained by Seller as its liquidated damages, except iii the event of default by Seller, If at any time prior to the expiration of the feasibility period, the Purchaser provides written notice of termination to the Seller,then the agreement shall terminate and the Earnest Money shall be released to the Purchaser. = Existin¢ LIDS — To the best of the Seller's knowledge, there are no existing or pending LiD's assessed against the property. a Due Diligence Feasibilii Pam-The Due Diligence Feasibility Period shall expire the later of(i) 90 days after full execution of the Purchase and Sale Agreement(ii) 30 days after Seller receives approval of SEPA and Phased Site Development Permit by the City of Kent or(iii) 30 days after General Service Administration (GSA)awards Solicitation No. 3WA0932 for the Federal Aviation Administration's Northwest Regional Headquarters to the Riverbend site and team, as said time period may be extended for purposes of resolving any pretests which may be filed on such award. The Purchaser shall perform any and all reports, studies or review as deemed necessary by the Purchaser to determine the suitability of the property for the Purchaser's intended use in its sole and absolute discretion. The Due Diligence Feasibility Period will begin on the date the Purchase and Sale agreement is fully executed. Purchaser may terminate the transaction at any time prior to the expiration of the Feasibility period by providing written notice to Seller. Purchaser may extend the due diligence period for one(1)30 day period by paying a$50,000 non-refundable, but applicable deposit. in the event, that Purchaser and the Riverbend site are not awarded Solicitation No. 3WA0932 for the Federal Aviation Administration's Northwest Regional Headquarters, then the agreement shall terminate and the Earnest Money shall be released to the Purchaser. i • Escrow and Closine Date— Immediately upon execution of the Purchase and Sale Agreement, an escrow account shall be opened at First American Title Insurance Company. Subject to Purchaser's right to not proceed to closing and to terminate the Agreement as contemplated herein, the closing date of the acquisition of the Property shall occur thirty (30) days after the Due Diligence i ICI i September 19,2014 I Feasibility Period has expired or been waived pursuant to the terms hercinabove. At the close of escrow, Seller shall terminate all insurance coverage which shall thereupon become the responsibility of the Purchaser. All previously paid properly taxes shall be prorated our an accrual basis as of the date of closing, All applicable income, expenses, taxes and other customarily prorated items shall be prorated as of the date of closing. o Real Estate Taxes- Upon acquisition of the Property by Purchaser, Purchaser shall assume all real estate taxes to the Property, ® State of Title -Title of the Property will be conveyed to Purchaser free of all liens, restrictions, easements; enemnbranees and contracturd obligations except for permitted title exceptions to be defined in the executed Purchase and Sale Agreement,First American Title insurance Company shall be the provider of title insurance. Seller shall provide Purchaser and the Title Company with copies of any surveys in Seller's possession or tinder Seller's control. Purchaser shall also cause any existing surveys to be updated in a manner that is acceptable to the Title Company in order that it may issue its standard form of tide insurance policies. Seller shall pay the cost of any survey updates or new surveys, At Closing,the Seller will pay: (a)excise taxes,(b)those amounts to be prorated through Closing and paid by Seller pursuant to the Agreement, (c) one-balf escrow fees, and (d) an amount equal to the premium(and taxes thereon)charged by the Title Company for the standard form policy of title insurance. At Closing,the Purchaser will pay: (a)those amounts to be protated through Closing and paid by Purchaser pursuant to the Agreement, (b) one-half escrow fees, and (c) the extended portion of title insurance including any endorsements ordered by Purchaser. Each party shall pay its own costs and expenses for legal counsel, accountants, engineers and other agents and consultants engaged by them. e Real Estate Brokerage Commission Purchaser and Seller shall directly pay its respective real estate broker,if any;pursuant to separate agreements e Purchase and Sale Agreement - Within forty-five (45) days from the mutual execution of this Letter of Intent,the Purchaser and Seller wilt promptly negotiate in good faith a Purchase and Sale Agreement prepared by Purchaser, containing mutually agreeable terms, provisions, conditions, warranties,and representations. If a mutually agreeable Agreement cannot be reached, then,unless an extension is agreed to by the parties,this agreement shall terminate and neither party shall have any further obligations under this'ageeernout. o Property information-Simultaneously with the full execution of a Purchase and Sale Agreement, Seller shall deliver to Purchaser arid its authorized agents all property specific information in Seller's possession--"Property Information Deyelouer Autligrizatio3i A reg_emvnl-Upon full execution of a Purchase and Sale Agreement, Seller will provide authorization to move forward with Purchaser's pursuit of any and all necessary permits and government approvals including but not limited to SEPA submittal and Design Review approval for development of the Property. i I September 19,2014 o Admiaistrative_Design Review—The current zoning for the property does not require any design review from the City of Kent for proposed uses. As a condition of this Letter of Intent, Purchaser agrees that any proposed development of the property will be subject to an Administrative Design Review to be further defined in the Purchase and Sale.Agreement. Purchaser and Seller agree that � this Administrative Design Review will not be subject to any public comment or approval o Rieht of ELrtry-Purchaser and its agents will be granted g reasonable right of entry onto the subject Property to perform such soil,structural,electrical,environmental,mechanical,engineering and geological tests and inspections and to make such reports as Purchaser deems suitable. Upon completion of such tests and inspections,Purchaser will be required to restore the subject Property to the condition that it was in prior to Purchaser's and its agents entry, Purchaser hereby agrees to indemnify,defend,and hold Seller harmless from and against any and all claims, losses,costs, damages; injury and expenses arising out of or in any way related to Purchaser's activities on the subject property pursuant to this right of entry;including but not limited to:claims for work or labor perfumed,materials or supplies furnished and injury to persons or property. For the purposes of this indemnification/hold harmless provision,the term"Purchaser"shall include, without limitation,Purchaser's agents,employees,contractors,potential purchasers and the like as well as employees or representatives of any local j urisdiction or other regulatory authority invited to the Property by Purchaser for the aforesaid purposes. This indemnificetion/hold harmless provision shall take effect upon execution of the Purchase and Sale Agreement. o Hazardous Material-Sol ler has not deposited or caused to be deposited any hazardous materials on or about the Property. Purchaser agrees that Purchaser's purchase of the Property will be based on Purchaser's review and analysis of the condition of the Property, including any and all regulatory restrictions imposed on the Property. p Notices - All notices, demands or other communications which are required or permitted to be given under this Letter shall be in writing and shall be deemed to have been sufficiently given upon delivery by messenger or by overnight mail courier,or upon the second business day following due deposit in the United States Mail, with certification and postage charges prepaid, addressed to the parties at the following addresses,or at such other addresses as either party may give to the other by notice in writing pursuant to the terms of this paragraph: If to Purchaser: FAA SEA Associates, LLC 1025 Thomas Jefferson Street, NW Suite 600 Washington,DC 20007 Attn: Thomas E.Finan And to: Trammell Crow Company 600 University Street,Suite 2912 Seattle,WA 98101 Attn: Mark Netherland i September 19,2014 With a copy to: Elkins,Kalt,Weintraub,Reuben,Ganside LLP 2049 Century Park East, Suite 2700 Los Angeles,CA 90067 Attu: Keith Elkins If to Seller: City of Kent 220 Fourth Avenue South Kent,WA 98032 Attn: Ben Wolters • Confidentiality —To the extent allowed by law, Purchaser and Seller mutually agree that all negotiations will remain confidential and that no press or publicity release or communication concerning the details of the proposed transaction contemplated herein will be issued without the other party's prior approval., Both Purchaser and Seller agree not to share any terms or provisions of this contract in part or in whole with any individual or organization who is not a parry to this transaction without the prior written consent of the other party. Notwithstanding the foregoing, Purchaser and Seller acknowledge that Purchaser will need to pursue project entitlements, prospective tenants, and financing and that tire pursuit of the same shall require Purchaser's development plans for the property to be discussed openly in the public domain. • Lxclusive-Upon execution of this Letter of intent, Seller agrees not to enter into any other binding agreements with another patty for the Riverhead site and to negotiate exclusively with one another in good faith of the Purchase and Sale Agreement for a period of 45 days or until such time as negotiations are otherwise terminated. If the foregoing letter reflects acceptable business terms,please so indicate by executing the enclosed counterpart ofthis letter and deliver itto the undersigned upon execution by September 19, 2014. This letter is not intended to constitute a legally binding contract between Seller and Purchaser,accordingly, except for the Exclusive and Confidentiality provisions provided above,neither party shall be legally bound by this proposal, it being understood that any legal obligation shall be set forth in the purchase and sale agreement, In closing, we thank you for the opportunity to present this business proposal and look forward to working with you to achieve an optimal structure that meets our mutual business objectives. i i Sincerely, I i September 19,2014 I I i Mark Netherland Principal. Trammell Crow Company Acknowledged and agreed upon this /t day of 2014. By signing below we hereby agree to the terms and conditions set forth above. City of Kent FAA SEA Associates,LLC a Delaware limited liability company By: TC FAA SEA Member,LLC By: _ a Delaware limited liability company Ay0 its Managing Member Its: By: TC Northwest Development,Inc. a Delaware corporation its sole Managing Member I 1 i Thomas E. Finan Vice President September 19,2014 I EXHIBIT A I I Propel I To Be Determined dwo'a;ew;xwdde d aje seaiv, 5 axis 12301 .. •easy�uawdo�anaq�"V3 �' Ile N ea ypunj t asudla!u3}109 jr r= asud�a�u3 qo�