HomeMy WebLinkAboutITEM VIII-B-4
AGENDA BILL APPROVAL FORM
Agenda Subject: Date:
Resolution No. 3809 Januarv 13, 2005
Department: T Attachments: Budget Impact:
Finance Resolution No. 3809 and Exhibit A
Administrative Recommendation:
City Council to adopt Resolution No. 3809
Background Summary:
The City owns a majority of the block immediately north of City hall between 1st and 2nd streets NW where
the Police station and Courthouse resided. In anticipation of the building of the new Justice Center, the
City issued a request for development on the block. The request was looking for a development that
coincided with the current zoning per the downtown plan and would be considered the highest and best
use for the block.
There were seven parties interested in the request, however only one submitted a proposal, Universal
Health Services, Inc., the parent company of Auburn Regional Medical Center (ARM C).
Based upon the items in the proposal, the contract for the development of the block has been negotiated
to include the following items:
1) 300+ vehicular space public/private parking facility
2) 11,000 square foot medical building
Compensation to the City will be 149 vehicular spaces, owned by the City via a "Condominium Unit", and
$450,000. The spaces are valued at $14,000 each for a value of $2,086,000. Total sale value of the
property is $2,536,000.
The contract allows for ARMC to have a due diligence period of 150 days from the execution of the
agreement. The following schedule is an approximation of the design and permitting schedule.
N0118-3
A3.13A, 01.2
Reviewed by Council & Committees: Reviewed by Departments & Divisions:
o Arts Commission COUNCIL COMMITTEES: o Building o M&O
o Airport o Finance o Cemetery o Mayor
o Hearing Examiner [8J Municipal Servo [8J Finance D Parks
o Human Services o Planning & CD o Fire D Planning
o Park Board DPublic Works o Legal o Police
o Planning Comm. o Other o Public Works o Human Resources
Action:
Committee Approval: DYes ONo
Council Approval: DYes ONo Call for Public Hearing _I--.l_
Referred to Until _I--.l_
Tabled Until _1_1-
Councilmember: Cerino I Staff: Coleman
Meetina Date: January 18, 2005 I Item Number: VIII.BA
AUBURN * MORE THAN YOU IMAGINED
Agenda Subject: Resolution No. 3809
Date: January 13, 2005
Date
Februa 15,2005
March 15, 2005
Jul _15, 2005
Se tember 15, 2005
October 1, 2005
The parking facility shall be ready for City use by January 1, 2007, subject to permitting delays.
Page 2 of 2
Item VIII.BA
RESOLUTION NO. 3 8 0 9
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF AUBURN, WASHINGTON, AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE A
CONTRACT WITH AUBURN REGIONAL MEDICAL
CENTER, INC. FOR SALE OF PROPERTY AND
DEVELOPMENT OF A PARKING FACILITY
WHEREAS, the City of Auburn (City) is the owner of certain real property
which had been used as the City's Police Department and Municipal Court
facilities; and
WHEREAS, the Auburn Regional Medical Center (ARMC) owns adjacent
property; and
WHEREAS, the City and ARMC have negotiated an agreement which
would seek to provide for a joint parking facility, along with other amenities
beneficial to both parties, and at costs commensurate with the needs and
benefits of each.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, HEREBY RESOLVES as follows:
Section 1. That the Mayor and the City Clerk are authorized to execute
an agreement in substantial conformity with the Draft Agreement attached
hereto, marked as Exhibit "A" and incorporated herein by this reference.
Section 2. That the Mayor is authorized to implement such administrative
procedures as may be necessary to carry out the directives of this legislation.
-----------------
Resolution No. 3809
January 11, 2005
Page 1
Section 3. That this Resolution shall take effect and be in full force
upon passage and signatures hereon.
Dated and Signed this
day of
CITY OF AUBURN
PETER B. LEWIS
MAYOR
ATTEST:
Danielle E. Daskam,
City Clerk
-----------------
Resolution No. 3809
January 11, 2005
Page 2
,200_.
DRAFT
December 27, 2004
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as of
the _ day of January, 2004, by and between the CITY OF AUBURN, a Washington
municipal corporation ("City"), and AUBURN REGIONAL MEDICAL CENTER, INC., a
Washington corporation ("ARMC").
RECITALS
A. City is the owner of certain real property and all improvements thereon located in
the City of Auburn, County of King, Washington, which is legally described on Exhibit A
attached hereto (the "City Parcel"). The City Parcel includes a single-story building located on
the corner of 1st Street NW and North Division Street, which is currently being used as the
City's police department and municipal court facility (the "Police/Court Building"). A portion of
the City Parcel along A Street NW was formerly occupied by () single-
family residences(the "Residences").
B. ARMC is the owner of certain real property located at the corner of 2nd Street
NW and North Division Street, which is legally described on Exhibit B attached hereto (the
"ARMC Property"). The ARMC Property is currently being used as a surface parking lot. The
ARMC Property and the City Parcel are adjacent but separated in part by a public alley-way (the
"Alley"). The ARMC Property, the City Parcel and the Alley together constitute all of Block 5,
Ballard's L W Park Addition to Slaughter, Auburn, Washington ("Block 5").
C. ARMC desires to purchase the City Parcel and that portion of the Alley which the
City will own following completion of the alley vacation procedure set forth in Section 9.1
(which hereinafter shall be referred to collectively as the "City Property") from City and develop
certain improvements on Block 5, including a new joint public/private parking facility containing
three hundred (300) or more vehicular parking spaces (the "Parking Facility") and a new
comprehensive cancer center facility or comparable medical facility containing approximately
eleven thousand (11,000) square feet of space (the "Medical Building"), together with associated
surface parking and landscaping improvements (collectively, the "Project").
D. City desires to sell the City Property to ARMC, on the terms and condit~ons set
forth herein, including the conveyance to City, following completion of the Parking Facility and
formation of a commercial condominium, of a condominium unit containing one hundred
forty-nine (149) vehicular parking spaces in the Parking Facility, through a long term lease or
condominium (the "Condominium Unit"), all as more fully described in Section 14 below.
E. The compensation for the purchase and sale hereof was determined by a per
square foot valuation of between $45 and $50 per square foot, comprising of one $450,000
payment and 149 parking stalls valued at $14,000 per stall, for a combined total of $2,536,000,
which valuation is consistent with going rates for like property, and the consideration further
includes ARMC's completion of the Parking Facility and ARMC's conveyance to the City of the
Condominium Unit.
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F. City has moved its police department and municipal court to new facilities (the
"Justice Center") from the building that is located on the property subject of this Agreement.
G. In addition to setting forth the terms of the purchase and sale of the City Property
and the conveyance of the Condominium Unit, the parties desire to set forth their respective
duties and obligations with respect to, and the process for development and construction of, the
Project.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby mutually acknowledged, City and ARMC hereby agree as follows:
1. Certain Defined Terms. For purposes of this Agreement, the terms set forth
below shall have the meaning assigned to them:
1.1 "Closing" or "Close of Escrow" means the recordation of the Deed in the
Official Records and City's receipt of the Purchase Price.
1.2 "Closing Date" means the date which is three (3) business days following
the completion of ARMC's due diligence period, or such other date as in agreed upon by the
parties.
1.3 "Deed" means a statutory warranty deed.
1.4 "Escrow" means the escrow opened with Escrow Agent for the
consummation of the transaction described in this Agreement.
1.5 "Escrow Agent" means Scott Smouse at Chicago Title Insurance
Company, 3400 Columbia Center, 701 Fifth Avenue, Seattle, Washington 98104 (phone:
(206) 628-5693).
1.6 "Official Records" means the official real property records of King
County, Washington.
1. 7 "Opening of Escrow" means the date a fully executed copy of this
Agreement is deposited with Escrow Agent.
1.8 "Permits" has the meaning as set forth in Section 9.1 below.
1.9 "Purchase Price" has the meaning as set forth in Section 3.
1.10 "Schematic Plans" means the preliminary plans and layout for
development of the Parking Facility, Medical Building and associated surface parking and
landscaped areas which is attached hereto as Exhibit C.
1.11 Title Company" means Chicago Title Insurance Company.
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1.12 "Title Policy" means an AL T A (1970 Form B) extended coverage owner's
policy of title insurance issued by the Title Company to ARMC with coverage in the amount of
Two Million Five Hundred Thirty-six Thousand Dollars ($2,536,000) , showing title to the City
Property and Alley vested in ARMC subject only to the Permitted Exceptions.
2 Purchase and Sale. The City agrees to sell to ARMC, and ARMC agrees to
purchase from City, the City Property and Alley upon the terms and conditions set forth in this
Agreement.
3 Purchase Price; Cash Payment. The total purchase price for the City Property
and the Alley (the "Purchase Price") shall be Four Hundred Fifty Thousand Dollars ($450,000).
The Purchase Price, including the Deposit, shall be paid to City in cash at Closing.
4 Earnest Money Deposit. On execution of this Agreement, ARMC shall deposit
with Escrow Agent Fifty Thousand Dollars ($50,000) in cash (the "Deposit"), which shall be
held by Escrow Agent as an earnest money deposit hereunder. The Deposit shall be held in
Escrow and applied or disposed of by Escrow Agent as provided herein. Escrow Agent shall
place the Deposit in an interest-bearing account approved by ARMC and City and all interest
earned thereon shall be added to and become a part of the Deposit.
5 Due Diligence.
5.1 Due Diligence Period. ARMC shall have the right for a period of one
hundred fifty (150) days from the date of this Agreement (the "Due Diligence Period") to
conduct ARMC's due diligence review, examination and inspection of all matters pertaining to
its acquisition of the City Property and Alley, including such inspections, tests, and surveys as
ARMC deems appropriate to determine the suitability of the City Property and Alley for
ARMC's intended use. City shall provide ARMC and ARMC's agents and consultants with
reasonable access to the City Property and Alley and, to the extent such information is in the
possession or control of City, shall provide reasonable access to appropriate information
respecting the City Property and Alley, subject to the terms and conditions of this Agreement.
ARMC's obligation to purchase the City Property and Alley shall be contingent upon its
approval of such property after conducting its due diligence review. If, based upon ARMC's
review, examination and inspection, ARMC shall determine in its sole discretion that it intends
to acquire the City Property and Alley, then ARMC shall promptly notify City of such
determination in writing prior to the expiration of the Due Diligence Period, whereupon
ARMC's due diligence contingency shall be deemed satisfied and waived, the Deposit shall
become nonrefurtdable (except as otherwise provided herein), and ARMC shall proceed to
Closing. In the event that ARMC shall fail to have delivered such notice to City on or before the
expiration of the Due Diligence Period, then this Agreement shall automatically terminate, the
Deposit shall be returned to ARMC, and ARMC's rights under this Agreement shall be of no
further force or effect.
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5.2 Delivery of Due Diligence Items. Within three (3) business days after the
date of this Agreement, City shall make available to ARMC for its review, the following items:
5.2.1 Tax Statements. Copies of the real estate tax statements for the
City Property for the past two (2) years;
5.2.2 As-Built Plans. Copies of any as-built plans for the Police/Court
Building to the extent in City's possession or control; and
5.2.3 Other Documents. All other documents in City's possession or
control relating to the City's ownership of the City Property and Alley and any improvements
thereon, including surveys, planning and zoning documents and approvals, environmental and
water and soils reports and tests and evidence confirming the location and capacity of all utilities
and utility easements.
5.3 Title Commitment. Promptly after mutual execution of this Agreement,
ARMC shall obtain an extended preliminary title insurance commitment covering the City
Property and Alley from the Title Company (the "Commitment"), together with copies of all
recorded documents listed as special exceptions therein. Approval by ARMC of the exceptions
to title set forth in the Commitment (other than as hereinafter set forth) shall be a condition
precedent to ARMC's obligation to purchase the City Property and Alley. Unless ARMC gives
written notice that it disapproves the exceptions to title shown on the Commitment (other than
the exceptions to title approved by ARMC and described in Section 5.4 below), stating the
exceptions so disapproved, within thirty (30) days after the date of this Agreement, ARMC shall
be deemed to have approved such exceptions. If ARMC disapproves any title exceptions, City
shall have a ten- (10-) day period after its receipt of ARMC's written notice of disapproval of the
same within which to provide written notice to ARMC as to which of such disapproved title
exceptions the City will remove (or cause to be removed) from title; provided, however, that City
shall not be required to actually remove such exceptiones) until Closing. If, for any reason,
City's notice given pursuant to the immediately preceding sentence does not covenant to remove
all of ARMC's disapproved title exceptions at or prior to Closing, ARMC shall have the right to
terminate this Agreement by written noticeto City and Escrow Agent given within ten (10) days
after the earlier of the expiration of such ten- (10-) day period or the date City informs ARMC
that it does not intend to remove the disapproved items (the "Termination Notice"). ARMC's
failure to deliver the Termination Notice within such ten- (10-) day period shall be deemed
ARMC's approval of any such previously disapproved title exception. If ARMC delivers the
Termination Notice within such ten- (10-) day period, the obligation of City to sell, and ARMC
to buy, the City Property and Alley as herein provided shall terminate and the Deposit shall be
returned to ARMC. ARMC shall have the option to waive the condition precedent set forth in
this Section 5.3 by written notice to City. In the event of such waiver, such condition precedent
shall be deemed satisfied.
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5.4 Permitted Exceptions. In addition to such other exceptions to title as
may be approved by ARMC pursuant to the provisions of Section 5.3 above,ARMC shall accept
title to the City Property and Alley subject to the following (collectively, the "Permitted
Exceptions"):
5.4.1 The printed exceptions which appear in the ALTA (Form 1970B)
form extended coverage owner's policy of title insurance issued by Title Company in the State of
Washington; and
5.4.2 Items created by, or on behalf of, ARMC.
5.5 No New Leases or Contracts. Prior to Closing, City shall not enter into
any new leases, contracts or agreements affecting the City Property or Alley without the prior
written consent of ARMC, except the City may enter into interim contracts or agreements in
connection with the management, maintenance, repair or preservation of the City Property and
Alley in the normal course of business if each such contract or agreement expires or is
terminated at or prior to Closing.
6 ARMC's Right of Entry. . ARMC, and its agents and consultants, at ARMC's
sole expense and risk, may enter the City Property and the Police/Court Building during the term
of this Agreement at reasonable times scheduled in advance with City for the purpose of
ARMC's due diligence study of the City Property. ARMC shall (a) exercise care at all times on
or about the City Property, and (b) take precautions for the prevention of injury to persons or
damage to property on or about the City Property. ARMC shall keep the City Property free from
all mechanics', materialmen's and other liens, and all claims thereof, arising from any work or
labor done, services performed, or materials and supplies furnished in connection with ARMC's
actions in the exercise of its right of entry on the City Property, and ARMC shall indemnify and
defend City against and hold City harmless from all such liens and claims. If this transaction
fails to close for any reason other than a default by City hereunder, ARMC shall furnish City
with a copy of all such inspections, studies and surveys and shall assign or quitclaim all of
ARMC's right, title and interest in and to any permits, approvals, or permit or approval
applications.
7 Closing.
7.1 Time for Closing. This purchase and sale shall be closed in the office of
Escrow Agent on the Closing Date. ARMC and City shall deposit in Escrow with Escrow Agent
all instruments, documents and monies necessary to complete the sale in accordance with this
Agreement. Funds held in reserve accounts pursuant to escrow instructions shall be deemed, for
purposes of this definition, as available for disbursement to City.
7.2 Closing Costs.
7.2.1 City's Costs. City shall pay (a) the premiums for the standard
coverage portion of the Title Policy, including applicable sales tax, (b) one-half (~) of all escrow
fees and costs, (c) City's share of prorations, if any , (d) all real estate excise taxes due as a result
of this transaction, and (e) all assessments for local improvement or special benefit districts.
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7.2.2 ARMC's Costs. ARMC shall pay (a) one-half ('li) of all escrow
fees and costs, (b) the recording fees for the Deed, (c) ARMC's share of prorations, if any, and
(d) any additional premium charged for extended coverage for the Title Policy and any additional
endorsements or coverage ARMC may require, including applicable sales tax.
7.2.3 Other Costs. ARMC and City shall each pay its own legal fees
and fees of its own consultants. All other costs and expenses shall be allocated between ARMC
and City in accordance with the customary practice of King County, Washington.
7.3 Prorations; Credits.
7.3.1 Prorations. The following utility charges shall be apportioned
with respect to the Property, based on the number of days City or ARMC each owns the City
Property and Alley in the month in which the Closing occurs and based on a three hundred sixty-
five (365) day year, as of 12:01 a.m. on the Closing Date, as if ARMC were vested with title to
the City Property and Alley during the entire day of the Closing Date:
7.3.1.1 Gas, electricity and other utility charges for which
City is liable, if any; such charges to be apportioned at Closing on the basis of the most recent
meter reading occurring prior to Closing (which City shall cause to be read not more than two (2)
days prior to Closing, if practicable) or, if unmetered, on the basis of a current bill for each such
utility.
7.3.1.2 If any errors or omISSIons are made regarding
adjustments or prorations, the parties shall make the appropriate corrections promptly upon the
discovery thereof. Any corrected adjustment or proration shall be paid in cash outside of Escrow
to the party entitled thereto. The obligations of the parties hereunder to correct adjustments or
prorations shall survive the Closing and the execution, delivery and recording of the Deed and
shall not be merged into the Deed upon its recording.
7.3.1.3 In addition, the parties acknowledge that, as public
property, the City Property and the Alley have not been subject to real property taxation.
Accordingly, ARMC shall be responsible for all real property taxes due and owing from and
after the Closing.
7.4 Closing Documents.
7.4.1 City's Documents. At Closing, City shall deliver to Escrow
Agent the following instruments and documents:
7.4.1.1
the City Property and Alley to ARMC;
The executed and acknowledged Deed conveying
7.4.1.2
The executed real estate eXCIse tax affidavit to
accompany the Deed; and
7.4.1.3 An executed nonforèign person affidavit in the form
required under Section 1445 of the Internal Revenue Code.
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7.4.2 ARMC's Documents. At Closing, ARMC shall deliver to
Escrow Agent the following funds, instruments and documents:
7.4.2.1
The balance of the Purchase Price in accordance
with Section 3;
7.4.2.2
in accordance with Section 7.3; and
ARMC's share of costs and expenses as determined
7.4.2.3
referenced in Section 7.4.1.2 above.
The executed real estate eXCIse tax affidavit
7.5 Possession. ARMC shall be entitled to possession of the City Property
and Alley upon Closing. The Police/Court Building shall be delivered to ARMC in its current,
as-is condition at Closing, in broom clean condition with no occupants and all personal property
removed. ARMC shall bear the cost of demolition and clearing of the Police/Court Building.
8 Title Insurance. As soon as available after Closing, City shall provide to ARMC
the Title Policy, dated as of the Closing Date, subject only to the Permitted Exceptions.
9. Conditions to Closing.
9.1 ARMC's Conditions to Closing. Notwithstanding anything to the
contrary set forth herein, ARMC's obligation to close hereunder is expressly subject to
satisfaction or waiver by ARMC in writing of each of the following conditions:
9.1.1 Permits. ARMC shall be responsible for applying for and
obtaining all governmental permits, approvals and consents necessary for development and
construction of the Parking Facility (the "Permits").
9.1.2 Alley Vacation. City shall have completed, at its sole cost, all
steps necessary for the complete vacation of the Alley, including adoption and enactment of any
required City resolutions and ordinances in connection therewith. ARMC, as owner of the
ARMC Property, agrees to cooperate with City in all applications and petitions needed in
connection with the Alley vacation, with the compensation to the City for such vacation being
ARMC's entry into this Agreement.
9.1.3 No Tanks, Pipes on City Parcel. ARMC shall have received
evidence satisfactory to it that all underground storage tanks, associated lines and foundations
relating to the Residences on the City Parcel have been removed and properly disposed of.
9.1.4 Condominium Documents. ARMC and City shall have approved
the Condominium Documents as described in Section 14.4 below.
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9.1.5 Relocation to Justice Center. City shall have relocated all
personnel and personal property from the Police/Court Building to the new Justice Center and
fully vacated the former.
9.2 City's Conditions to Closing. Notwithstanding anything to the contrary
set forth herein, City's obligation to close hereunder is expressly subject to satisfaction or waiver
by City in writing of each of the following conditions:
9.2.1 Condominium Documents. and ARMC shall have approved the
Condominium Documents as described in Section 14.4 below.
10. Representations and Warranties.
10.1 City's Representations and Warranties. In addition to any other
representations or warranties of City elsewhere in this Agreement, City represents and warrants
to ARMC now, and as of the Date of Closing, that:
10.1.1 Authority. City, and the person signing on behalf of City, has
full power and authority to execute this Agreement and perform City's obligations hereunder,
and all necessary action to authorize this transaction has been taken.
10.1.2 Zoning. Redevelopment of Block 5 for purposes of construction
and operation of the Parking Facility, the Medical Center and the related improvements reflected
on the Schematic Plans is in compliance with the City's current applicable zoning and land use
laws and regulations.
10.1.3 Hazardous Substances. City has not received notification of
any kind from any governmental agency suggesting that the City Property or the Alley is or may
be targeted for a Hazardous Substances cleanup; to the best of City's knowledge, neither the City
Property, the Alley nor any portion thereof is or has been used (a) for the storage, disposal or
discharge of oil, solvents, fuel, chemicals or any type of toxic, dangerous, hazardous or
biological waste or substance (collectively, "Hazardous Substances"), or (b) as a landfill or waste
disposal site; to the best of City's knowledge, neither the City Property nor the Alley has been
contaminated with any Hazardous Substances, and the Police/Court Building does not contain
any Hazardous Substances, including, without limitation, asbestos or PCBs; and to the best of
City's knowledge, there are no underground storage tanks on the City Property or in the Alley.
10.1.4 Other Rights. No person or entity has any right to lease,
purchase or condominiumize any interest in the City Property, the Alley or any part thereof.
10.1.5 Demolition of Residences. The City has completed the
demolition of the Residences and the removal and proper disposal of any underground storage
tanks, associated lines and foundations relating to the Residences.
10.2 ARMC's Representations and Warranties. In addition to any other
representations and warranties of ARMC elsewhere in this Agreement, ARMC represents and
warrants to City now, and as of the Date of Closing, that (a) ARMC has full power to execute,
deliver and carry out the terms and provisions of this Agreement, and has taken all necessary
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action to authorize the execution, delivery and performance of this Agreement; and (b) the
individual executing this Agreement on behalf of ARMC has the authority to bind ARMC to the
terms and conditions of this Agreement.
10.3 "AS IS" CONDITION OF PROPERTY. THE PURCHASE PRICE
REFLECTS THAT THE CITY PROPERTY AND ALLEY ARE BEING PURCHASED BY
ARMC ON AN "AS IS" "WHERE IS" AND "WITH ALL F AUL TS" BASIS, EXCEPT TO
THE EXTENT OF REPRESENTATIONS AND WARRANTIES SPECIFICALLY MADE BY
CITY HEREIN OR IN THE WARRANTY DEED OR OTHER DOCUMENTS TO BE
DELIVERED TO ARMC AT CLOSING. ARMC HEREBY WAIVES AND RELINQUISHES
ALL RIGHTS AND PRIVILEGES ARISING OUT OF, OR WITH RESPECT TO, ANY
REPRESENTATIONS, WARRANTIES OR COVENANTS, WHETHER EXPRESS OR
IMPLIED, WHICH MA Y HAVE BEEN MADE OR GIVEN, OR WHICH MAYBE DEEMED
TO HAVE BEEN MADE OR GIVEN, BY CITY OR ITS REPRESENTATIVES, INCLUDING
BUT NOT LIMITED TO ANY BROKER, EXCEPT FOR THOSE REPRESENTATIONS,
WARRANTIES AND COVENANTS SET FORTH IN THIS AGREEMENT OR IN ANY
DOCUMENTS TO BE EXECUTED AND DELIVERED BY CITY AT CLOSING.
ARMC HAS NOT RELIED UPON AND WILL NOT RELY UPON, AND CITY
EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES WITH
RESPECT TO, AND SHALL HAVE NO LIABILITY FOR: (I) THE CONDITION OF THE
CITY PROPERTY AND ALLEY OR ANY BUILDINGS, STRUCTURES OR
IMPROVEMENTS LOCATED THEREON OR THE SUITABILITY THEREOF FOR
HABITATION, OCCUPANCY OR FOR ARMC'S INTENDED USE OR FOR ANY USE
WHATSOEVER; (II) ANY APPLICABLE BUILDING, ZONING OR FIRE LAWS OR
REGULATIONS OR WITH RESPECT TO COMPLIANCE THEREWITH OR WITH
RESPECT TO THE EXISTENCE OF OR COMPLIANCE WITH ANY REQUIRED PERMITS,
IF ANY, OF ANY GOVERNMENTAL AGENCY; (III) THE AVAILABILITY OR
EXISTENCE OF ANY WATER, SEWER OR UTILITIES, ANY RIGHTS THERETO, OR
ANY WATER, SEWER OR UTILITY DISTRICTS; (IV) ACCESS TO ANY PUBLIC OR
PRIVATE SANITARY SEWER SYSTEM; (V) THE FACT THAT ALL OR A PORTION OF
THE CITY PROPERTY AND ALLEY MAY BE LOCATED ON OR NEAR AN
EARTHQUAKE F AUL T LINE; OR (VI) EXCEPT AS SPECIFICALL Y SET FORTH ABOVE,
THE PRESENCE OF ANY HAZARDOUS SUBSTANCES IN ANY IMPROVEMENTS ON
THE CITY PROPERTY AND ALLEY, INCLUDING WITHOUT LIMITATION ASBESTOS
OR FORMALDEHYDE, OR THE PRESENCE OF ANY ENVIRONMENT ALL Y
HAZARDOUS WASTES OR MATERIALS ON OR UNDER THE CITY PROPERTY AND
ALLEY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, CITY SHALL
HA VE NO LIABILITY TO ARMC WITH RESPECT TO THE CONDITION OF THE CITY
PROPERTY AND ALLEY UNDER COMMON LAW, OR ANY FEDERAL, STATE, OR
LOCAL LAW OR REGULATION, INCLUDING BUT NOT LIMITED TO THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY
ACT OF 1980 AS AMENDED, 42 U.S.C.A. SECTIONS 9601 ET SEQ., AND THE
WASHINGTON MODEL TOXICS CONTROL ACT ("MTCA"), RCW 70.105D. ARMC
HEREBY RELEASES AND WAIVES ANY AND ALL CLAIMS WHICH THE ARMC HAS
OR MA Y HAVE AGAINST CITY UNDER ANY OF THE FOREGOING LAWS OR WITH
RESPECT TO THE CONDITION OF THE CITY PROPERTY AND ALLEY. ARMC
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ACKNOWLEDGES TO CITY THAT ARMC IS GIVEN THE OPPORTUNITY UNDER THIS
AGREEMENT TO FULLY INSPECT THE CITY PROPERTY AND ALLEY AND ARMC
ASSUMES THE RESPONSIBILITY AND RISKS OF ALL DEFECTS AND CONDITIONS,
INCLUDING SUCH DEFECTS AND CONDITIONS, IF ANY, THAT CANNOT BE
OBSERVED BY CASUAL INSPECTION.
CITY:
ARMC:
IF A PHASE I ENVIRONMENTAL SITE ASSESSMENT REPORT OR OTHER
ENVIRONMENTAL STUDY OR REPORT (COLLECTIVELY, THE "PHASE I REPORT")
HAS BEEN DELIVERED TO ARMC, THEN, WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, BY CLOSING THE TRANSACTION AS CONTEMPLATED HEREIN,
ARMC AGREES THAT: (A) ARMC SHALL BE DEEMED TO HAVE ACCEPTED ALL
RISK ASSOCIATED WITH ADVERSE PHYSICAL CHARACTERISTICS AND EXISTING
ENVIRONMENTAL CONDITIONS THAT MAYOR MAY NOT HA VE BEEN REVEALED
BY ARMC'S INVESTIGATION OF THE PHASE I REPORT, AND (B) AS BETWEEN CITY
AND ARMC, ARMC SHALL BE DEEMED TO HAVE ACCEPTED ALL COSTS AND
LIABILITIES ASSOCIATED IN ANY WAY WITH THE PHYSICAL AND
ENVIRONMENTAL CONDITION OF THE CITY PROPERTY AND ALLEY. ARMC
ACKNOWLEDGES AND AGREES THAT CITY MAKES NO REPRESENTATIONS OR
WARRANTIES REGARDING THE TRUTH, ACCURACY OR THOROUGHNESS OF THE
INVESTIGATION, PREPARATION OR CONTENT OF THE PHASE I REPORT, OR THE
COMPETENCE OR ABILITY OF THE PERSONS OR COMPANIES PREPARING SUCH
REPORT. ARMC AGREES THAT, BY CLOSING THE TRANSACTION CONTEMPLATED
HEREIN, ARMC WILL HAVE HAD AN OPPORTUNITY TO REVIEW THE ABOVE
REPORT PRIOR TO THE CLOSING DATE IN ORDER TO MAKE AN INDEPENDENT
VERIFICATION OF THE INFORMATION CONTAINED THEREIN, AND THAT ARMC
AND ITS ENVIRONMENTAL CONSULTANTS WILL HAVE HAD AN OPPORTUNITY TO
CONDUCT TESTS ON THE CITY PROPERTY AND ALLEY.
11. Maintenance of Property; Risk of Loss, Condemnation.
11.1 Maintenance of Property. From the date of this Agreement until the
Clòsing Date (or any earlier termination of this Agreement), City agrees to maintain the
Police/Court Building in substantially the same condition existing as of the date hereof, ordinary
wear and tear, damage by casualty excepted.
11.2 Risk of Loss; Condemnation. Risk of loss of or damage to the
improvements on the City Property shall be borne by ARMC at all times and no event of
casualty or damage shall affect the parties' obligations hereunder or the Purchase Price, however,
ARMC shall have the right to receive any insurance proceeds due City in connection with any
casualty or damage and City hereby covenants to maintain commercially reasonable casualty
insurance in place with respect to the Policy/Court Building at all times prior to Closing. City
shall promptly notify ARMC of any condemnation or eminent domain proceeding which affects
the City Property or the Alley, and City covenants and agrees not to commence or pursue any
such action. In the event of any condemnation or eminent domain proceeding by any entity other
10
SEA 1566023v+~ 18516-23
12/21104
than City, or a deed in lieu or under threat thereof, which affects a material portion of the City
Property and Alley, ARMC may elect either to terminate this Agreement, or to purchase the City
Property and Alley in the condition existing on the Closing Date without adjustment of the
Purchase Price. If ARMC elects to terminate this Agreement, the Deposit shall be returned to
ARMC. If ARMC elects to purchase the City Property and Alley, City shall not be liable to
restore same, and ARMC shall be entitled to any condemnation award or payment in lieu thereof
payable to City in its capacity as the owner thereof.
12. Default.
12.1 Time of Essence. Time is of the essence of this Agreement.
12.2 City's Remedies for ARMC's Default and Failure to Close. If ARMC
fails, without legal excuse, to complete the purchase of the City Property and Alley in
accordance with this Agreement, City's sole and exclusive remedy shall be to retain the Deposit
as liquidated damages. ARMC expressly agrees that the retention of the Deposit by City
represents a reasonable estimation of the damages in the event of ARMC's default and failure to
close hereunder, that actual damages may be difficult to ascertain and that this provision does not
constitute a penalty. In this respect, ARMC and City acknowledge that these damages have been
specifically negotiated between ARMC and City and are, inter alia, to compensate City for
delaying the eventual sale of the City Property and Alley and to compensate City for its costs and
expenses associated with this Agreement. ARMC hereby waives the rights and benefits of any
law, rule, regulation or order now or hereafter existing that would allow ARMC to claim a refund
of the Deposit as unearned earnest money, a penalty or for any other reason except default by
City.
12.3 City's Remedies for ARMC's Default Under Section 14. Should
ARMC breach any of its obligations under Section 14, and such failure shall not be cured by
ARMC within thirty (30) days after ARMC's receipt of written notice thereof, City shall have
the right to pursue any remedies available to it at law or equity, including specific performance
or damages but excluding rescission.
12.4 ARMC's Remedies for City's Default. If City fails to complete the sale
of the City Property and Alley in accordance with this Agreement, ARMC shall have and may
enforce the following exclusive remedies: (a) seek specific performance (provided that ARMC
acknowledges that because the vacation of the Alley is a police power action of the City,
vacation of the Alley cannot be subject to a remedy of specific performance); (b) terminate this
Agreement, receive a refund of the Deposit and recover from City all of ARMC's actual third-
party costs and expenses incurred by it in connection with the transaction and the Project; or
(c) seek rescission of this Agreement and receive a refund of the Deposit.
13. Notices. All notices, demands and other communications required or permitted to
be given hereunder shall be in writing, and shall be sent by personal delivery (including by
means of professional messenger or courier service) or registered or certified mail, postage-
prepaid, return-receipt requested. Notice shall be deemed to have been given if personally
delivered, upon receipt, and if sent by mail, two (2) days after duly deposited in the U.S. Mail.
The parties' respective addresses for notices are as follows:
11
SEA 1566023v+~ 18516-23
12/21/04
If to City:
With copies to:
If to ARMC:
With copies to:
City of Auburn
Finance Department
25 West Main Street
Auburn, WA 98001-4998
Attn: Finance Director
City of Auburn
City Attorney's Office
25 West Main Street
Auburn, W A 98001-4998 .
Attn: City Attorney
Universal Health Services, Inc.
367 South Gulph Road
PO Box 61558
King of Prussia, P A 19406
Attn: Donald Pyskacek
Auburn Regional Medical Center
Plaza One
202 North Division Street
Auburn, W A 98001-4908
Attn: Ms. Pat Bailey
and to:
Dennis E. McLean, Esq.
Davis Wright Tremaine LLP
2600 Century Square
1501 Fourth Avenue
Seattle, WA 98101-1688
Notice of change of address shall be given by written notice in the manner detailed in this
Section 13.
14. Development of Project, Parking Facility. As additional consideration for
City's willingness to sell the City Property and Alley to ARMC, ARMC hereby covenants and
agrees to develop and construct the Parking Facility, fonn the completed Parking Facility as a
commercial condominium under the Condominium Act (as hereinafter defined) and convey the
Condominium Unit to City, subject to the following tenns and conditions:
14.1 Location; Standards. The Parking Facility shall be located on the
western portion of Block 5, substantially as shown on the Schematic Plans, or as otherwise
mutually agreed to by the parties. The Parking Facility shall be designed by ARMC's architect
and constructed by ARMC's contractor in a manner complying with all applicable state and local
standards and traffic safety requirements.
SEA 1566023v'¡'~ 18516-23
12/21/04
12
14.2 Design; Permitting. ARMC shall be responsible, at its cost, for designing
the Parking Facility and for obtaining all necessary permits for the construction thereof. The
design and all plans relating thereto shall be prepared by ARMC's architect, HKS Architects, or
such other qualified architect as ARMC may select. The City, acting by and through its Building
Department, shall cooperate with ARMC throughout the design and permitting process and the
parties shall each use diligence and good faith efforts to accommodate the following schedule:
Action
Date
ARMC's Submission of Schematic Plans
February 15,2005
March 15,2005
City's Approval of Schematic Plans
ARMC's Submission of Construction Drawings
July 15, 2005
City's Approval of Construction Drawings
September 15,2005
October 1,2005
Issuance of Building Permit
The above schedule is subject to delay should ARMC fail to timely submit preliminary plans or
construction drawings by the dates specified, such delay to be on a day-for-day basis.
14.3 Completion of Parking Facility. ARMC shall complete construction of
the Parking Facility, at its sole cost and expense, and the Parking Facility shall be available for
occupancy and use by City on or before January 1, 2007, subject to Permitted Delays. The
Parking Facility shall be constructed in compliance with all applicable City codes, including the
Medical Center District Plan and Chapter 18.22 of the City's Zoning Code. As used herein, the
term "Permitted Delays" shall mean and include any delays which are the result of: (i) strikes,
lockouts, or labor disputes; (ii) failure of power or other utilities; (iii) inability to obtain labor or
materials or reasonable substitutes therefor; (iv) war, acts of terror, court order, condemnation,
civil unrest, riot, fire or other casualty; (v) extreme or unusual weather conditions, acts of God or
unforeseen soil conditions; or (vi) City's failure to timely adhere to the approval schedule set
forth in Section 14.2 above.
14.4 Parking Facility Condominium. It is the intent of the parties that
following completion of the Parking Facility, ARMC will form a commercial condominium for
the Parking Facility and ARMC shall convey to City at that time the Condominium Unit, which
shall contain one hundred forty-nine (149) vehicular parking spaces and shall be located and
configured consistent with that shown in the Schematic Plans or as otherwise agreed to in writing
by the parties pursuant to the provisions of Chapter 64.34 RCW or any successor statute then in
. effect (the "Condominium Act"). The forms of the Condominium Declaration, Articles and
Bylaws for the Condominium Owners Association and related documents necessary for
formation and operation of the Condominium (collectively, the "Condominium Documents"),
shall be prepared by ARMC in accordance with the Condominium Act and submitted to City
within one hundred twenty (120) days after the date of this Agreement. Among other provisions,
the Condominium Declaration shall grant each unit owner the right of first refusal to purchase
the other unit owner's interest in the Condominium at the then fair market value thereof, should a
unit owner ever desire to sell its interest to third parties. The Condominium Documents shall be
13
SEA 1566023v+~ 18516-23
12/21/04
subject to City's review and approval, which approval shall not be unreasonably withheld,
delayed or conditioned. If the form of Condominium Documents has not been agreed upon by
the parties by the end of ARMC's Due Diligence Period, then this Agreement shall automatically
terminate and the Deposit shall be returned to ARMC. If the Condominium Documents are
approved by City and Closing occurs, then upon formation of the Condominium ARMC shall
convey the Condominium Unit to City for no additional consideration, free and clear of all liens
and encumbrances other than the Condominium Documents and such other exceptions as City
may reasonably approve. City shall be responsible for all recording costs and excise taxes, if
any, applicable to the conveyance of the Condominium Unit, however ARMC shall obtain for
City at ARMC's cost a standard coverage owner's title insurance policy issued by Title
Company, insuring City as the owner of the Condominium Unit with coverage in the amount of
Dollars ($ ), and containing a standard condominium endorsement.
14.5 Operations. The Parking Facility shall be designed in such as-a manner
as to provide for separate access and entrances to ARMC's parking spaces and City's parking
spaces under the Condominium Documents and each party shall be responsible for the operation
and day-to-day cleaning and maintenance of their respective condominium units. The
Condominium Documents shall provide for maintenance, repair and replacement of the structural
and common elements of the Parking Facility through assessments and the Condominium
owners' association.
15. Development of Medical Building. ARMC shall develop and construct the
Medical Building, as and approximately where indicated on the Schematic Plans, at its sole cost
and expense. ARMC initially intends to use the Medical Building for operation of a
comprehensive cancer center or comparable medical facility and associated uses containing
approximately eleven thousand (11,000) square feet of space. City shall cooperate with ARMC
in connection with the approval of plans and issuance of permits for construction of the Medical
Building and related improvements, including landscaping and site improvements. ARMC shall
substantially complete construction and occupancy of the Medical Building on or before
January 1, 2008, subject to Permitted Delays. ARMC shall be responsible for demolition of the
Police/Court Building, if and to the extent required in connection with ARMC's development of
the Medical Building, at ARMC's sole cost and expense.
16. General. This is the entire agreement of ARMC and City with respect to the
matters covered hereby and supersedes all prior agreements between them, written or oral. This
Agreement may be modified only in writing, signed by ARMC and City. Any waivers hereunder
must be in writing. No waiver of any right or remedy in the event of default hereunder shall
constitute a waiver of such right or remedy in the event of any subsequent default. This
Agreement shall be governed by the laws of the State of Washington. This Agreement is for the
benefit only of the parties hereto and shall inure to the benefit of and bind the heirs, personal
representatives, successors and permitted assigns of the parties hereto. The invalidity or
unenforceability of any provision of this Agreement shall not affect the validity or enforceability
of any other provision hereof. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.
14
SEA 1566023v+~ 18516-23
12/21/04
17. Commissions. City represents to ARMC that City has engaged no broker, agent
or finder in connection with the negotiations leading to this Agreement. ARMC represents to
City that ARMC has not engaged or in any way dealt with any broker, agent or finder in
connection with the negotiations leading to this Agreement. Each party hereby agrees to
indemnify, defend and hold the other party harmless from and against any claims for broker's,
agent's, or finder's fees or commissions arising from or through the actions of the indemnifying
party.
18. Assignment. ARMC may, without need of City's consent but after at least five
(5) days prior written notice to City, one time only assign this Agreement and ARMC's rights
hereunder prior to Closing to an entity owned or controlled by ARMC or Universal Health
Systems, Inc. or which is under common control with ARMC or Universal Health Systems, Inc.,
but no such assignment shall release ARMC from its obligations under this Agreement.
19. Attorneys' Fees. In the event suit or action is instituted to interpret or enforce the
terms of this Agreement, the prevailing party therein shall be entitled to recover from the other
party such sum as the Court may adjudge reasonable as attorneys' fees, including fees incurred at
trial, on any appeal and in any petition for review.
20. Exclusivity. During the term of this Agreement City shall not market nor list the
City Property or Alley for sale, nor accept any offers from third parties with respect to sale of
the City Property or Alley.
21. Reservation of Police Power. Notwithstanding anything to the contrary set forth
herein, ARMC understands and acknowledges that the City's authority to exercise its police
(regulatory) powers in accordance with applicable law with respect to the vacation of the Alley
shall not be deemed limited by the provisions of this Agreement.
22.
set forth.
Exhibits. Exhibits A through C attached hereto are incorporated herein as if fully
SIGNED in duplicate original as of the date first above written.
CITY:
CITY OF AUBURN
By
Peter B. Lewis, Mayor
Attest:
City Clerk
15
SEA 1566023v+~ 18516-23
12/21104
ARMC:
EXHIBITS:
Exhibit A
Exhibit B
Exhibit C
SEA 1566023v+~ 18516-23
12/21/04
Approved as to form:
Auburn City Attorney
AUBURN REGIONAL MEDICAL CENTER, a
Washington corporation
By
Name
Title
Legal Description of City Property
Legal Description of ARMC Property
Schematic Plans
16
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Lots 5, 6, 7, 8,9, 10, 11, 12, 13, 14, 15, 16, 17 and 18, Block 5, Ballard's L W Park Addition to
Slaughter, together with the vacated 10 feet strips of right-of-way along A Street NW and along
N Division Street adjacent thereto, in Auburn, King County, Washington.
Assessor's Property Tax Parcel Numbers: 049200-0320; 049200-0325; 049200-0340; 049200-
0370; 049200-0385; 049200-0390; and 049200-0410.
A-I
SEA 1566023v-l-~ 18516-23
12/21/04
EXHIBIT B
LEGAL DESCRIPTION OF ARMC PROPERTY
[NOTE: Confirm correct legal description)
Lots 1,2,3 and 4, Block 5, Ballard's LW Park Addition to Slaughter, together with the vacated
10 feet strips of right-of-way along N Division Street adjacent thereto, in Auburn, King County,
Washington.
B-1
SEA 1566023v-l-~ 18516-23
12/21/04
EXHIBIT C
SCHEMATIC PLANS
[Four (4) page site plan showing levels 1 through 4 of Parking Garage/Cancer Center,
prepared by HKS Architects]
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125
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Area of Block to be Developed
o 25' 50'
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Note: Information shown Is for general reference
purposes only and does not necessarlJy represent
exact geographic or cartographic data as mapped.
Map data may be subject to chonge without notice.
Scale: 1"=50'
PIoIt""" March 2, 2004
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April 26, 2004
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_ _ _ _ _ _ ~e~a~ _ _ _ _ _ _ _ _ _ _ _ ~
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April 26, 2004
HI<S
Parking Garage/Cancer Center
Auburn, Washington
Surface
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Level Two
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April 26, 2004
HI<S
80
North
Parking Garage/Cancer Center
Auburn, Washington
Surface
Level One
Level Two
Level Three
Level Four
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o 5 10 20 30 40
April 26, 2004
80
HI<S
Parking Garage/Cancer Center
Auburn, Washington
Surface
Level One
Level Two
Level Three
Level Four
Total
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56 spaces
108 spaces
108 spaces
104 spaces
389 spaces
oc_