HomeMy WebLinkAbout4000
RESOLUTION NO.4 0 0 0
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF AUBURN, WASHINGTON, AUTHORIZING
THE MAYOR AND CITY CLERK TO EXECUTE A
PURCHASE AND SALE AGREEMENT BETWEEN
THE CITY OF AUBURN AND AUBURN ON FIRST,
LLC
WHEREAS, the City of Auburn is the owner of certain real property
located in the City of Auburn commonly known as 115 A Street NW, Auburn,
Washington, which has been used by the City for city employee parking; and
WHEREAS, Auburn on First, LLC, is the owner of certain real property
located in the City of Auburn commonly known as 120 First Street NW, Auburn,
Washington, which is adjacent to the above-described property owned by the
City of Auburn; and
WHEREAS, Auburn on First, LLC, desires to purchase the City of
Auburn's property and the City of Auburn desires to sell the property to Auburn
on First, LLC; and
WHEREAS, the City of Auburn and Auburn on First, LLC, have
negotiated an agreement which would be beneficial to both parties at a cost that
is acceptable to the City.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
KING COUNTY, WASHINGTON, HEREBY RESOLVES as follows:
Resolution No. 4000
March 7, 2006
Page 1
Section 1. The Mayor of the City of Auburn and the Auburn City Clerk
are hereby authorized to execute a Purchase and Sale Agreement between the
City of Auburn and Auburn on First, LLC, which agreement shall be in
substantial conformity with the Agreement a copy of which is attached hereto,
marked as Exhibit "A" and incorporated herein by this reference.
Section 2. The Mayor is hereby authorized to implement such
administrative procedures as may be necessary to carry out the directives of
this legislation.
Section 3. This resolution shall be in full force and affect upon
passage and signatures hereon.
DATED and SIGNED thisWb..day of V"\'1 a V"C ~~ 2006.
t...-
-----
-"
P TER B. LEWIS
Mayor
Attest:
'~~/'~
;( I p{.b;J; " ~.
'Danlelle E. Daskam, City Clerk
D
Resolution No. 4000
March 7, 2006
Page 2
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into
as of the :zc\l,l,'-day of March, 2006, by and between the CITY OF AUBURN, a
Washington municipal corporation ("City"), and AUBURN ON 1st, LLC, a Washington
limited liability company ("AOF").
RECITALS
A. The City is the owner of certain real property and all improvements thereon
located in the City of Auburn, County of King, Washington, legally described as: Block
7 in L.W. Ballard's Park Addition to Slaughter (Auburn), King County W.T.
(Washington), as per plat recorded in Volume 3 of Plats, Page 91, records of King
County, EXCEPT the South 100 feet, and EXCEPT the West 118 feet; TOGETHER
WITH the West 10 feet of vacated Silver Street adjoining the north 96 feet of said Block
7, which attached thereto by operation of law upon vacation (the "City Parcel"). The
City Parcel is more commonly known as 115 A Street NW, Auburn, Washington 98002
and more particularly known by the King County, Washington Tax Assessor as
Assessor's Parcel No. 049200 0461. The City Parcel contains approximately 11,247
square foot of land area and is currently being used by the City for City employee parking
(the "Employee Parking Lot").
B. AOF is the owner of certain real property located at the corner of I st Street
NW and A Street NW, in the City of Auburn, King County, Washington, legally
described as: (A) the west 188 feet of Block 7, Map of 1. W. Ballard's Park Addition to
the town of Slaughter ("Auburn"), according to the plat thereof recorded in V olurne 3 of
Plats, page 91, in the official records of King County, Washington; and (B) the south 100
feet of Block 7, Map of 1. W. Ballard's Park Addition to the town of Slaughter
("Auburn"), according to the plat thereof recorded in Volume 3 of Plats, page 91, in the
official records of King County, Washington, except the west 118 feet thereof
(collectively, the "AOF Property"). The AOF Property is more commonly known as 120
First Street NW, Auburn, Washington 98002 and more particularly known by the King
County, Washington Tax Assessor as Assessor's Parcel Nos. 049200 0463 and 049200
0460. The AOF Property currently contains buildings which have been used as a part of
a retail lumber aud hardware business. The AOF Property and the City Parcel are
adjacent.
C. AOF desires to purchase the City Parcel from the City and develop certain
improvements on the City Parcel and the AOF Property (the "Combined Parcels"),
including a new joint public/private parking lot containing approximately seventy (70) or
more vehicular parking spaces (the "Parking Lot") and a new office building for medical-
dental or comparable professional offices containing approximately five thousand (5,000)
square feet or more of space (the "Office Building"), together with associated surface
parking and landscaping improvements (collectively, the "Project").
D. The City desires to sell the City Parcel to AOF, on the terms and conditions
set forth herein, as more fully described in Section 14 below. ~
03/20/06
E. In addition to setting forth the terms of the purchase and sale of the City
Parcel and the possible conveyance of the Parking Lot Lease, 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, the City and AOF 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 the City's receipt ofthe Purchase Price.
1.2 "Closing Date" means any business day selected by AOF that is no earlier
than three (3) business days following the end of the Due Diligence Period and no later
than ninety (90) days following the end of the Due Diligence Period.
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 Pacific Northwest Title Company of Washington,
Inc., 215 Columbia Street, Seattle, Washington 98104 Attn: Jane Jeppe, Senior Escrow
Officer (Telephone: 206-622-1040 and 206-343-1336).
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 "Parking Lot" has the meaning as set forth in Section 14 below.
1.9 "Parking Lot Lease" has the meaning as set forth in Section 14.4 below.
1.10 "Permits" has the meaning as set forth in Section 9.1.1 below.
1.11 "Purchase Price" has the meaning as set forth in Section 3.
1.12 "Title Company" means Pacific Northwest Title Company of Washington,
Inc., 215 Columbia Street, Seattle, Washington 98104 Attn: Marilyn Sanden, Chief Title
Officer.
(!))
2
03/20/06
1.13 "Title Policy" means an ALTA (1970 Form B) extended coverage owner's
policy of title insurance issued by the Title Company to AOF with coverage in the
amount of One Hundred Twenty Five Thousand and xx/100 Dollars ($125,000.00),
showing title to the City Parcel vested in AOF subject only to the Permitted Exceptions.
2. Purchase and Sale. The City agrees to sell to AOF, and AOF agrees to purchase
from the City, the City Parcel upon the terms and conditions set forth in this Agreement.
3. Purchase Price; Cash Payment. The total cash purchase price for the City
Parcel (the "Purchase Price") shall be One Hundred Twenty Five Thousand and xxii 00
Dollars ($125,000.00), provided, however, if AOF offers (which AOF may choose to do
or not do in its discretion) and the City accepts (which the City may choose to do or not
do in its discretion) the Parking Lot Lease, the Purchase Price shall instead be Fifty
Thousand and xx/IOO Dollars ($50,000.00). The Purchase Price, including the Deposit,
shall be paid to the City in cash at Closing.
4. Earnest Money Deposit. On execution of this Agreement, AOF shall deposit
with Escrow Agent the sum of Ten Thousand and xxl1 00 Dollars ($10,000.00) 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 AOF and the City and all interest earned thereon shall be added to
and become a part ofthe Deposit.
5. Due Diligence; Due Diligence Period. AOF 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 AOF's due diligence review, examination and inspection of all
matters pertaining to its acquisition of the City Parcel, including such inspections, tests,
and surveys as AOF deems appropriate to determine the suitability of the City Parcel for
AOF's intended use. The City shall provide AOF and AOF's agents and consultants with
reasonable access to the City Parcel and, to the extent such information is in the
possession or control of the City, shall provide reasonable access to appropriate
information respecting the City Parcel, subject to the terms and conditions of this
Agreement. AOF's obligation to purchase the City Parcel shall be contingent upon its
approval of the City Parcel after conducting its due diligence review. If, based upon
AOF's review, examination and inspection, AOF shall determine in its sole discretion
that it intends to acquire the City Parcel, then AOF shall promptly notify the City of such
determination in writing prior to the expiration of the Due Diligence Period, whereupon
AOF's due diligence contingency shall be deemed satisfied and waived, the Deposit shall
become nonrefundable (except as otherwise provided herein), and AOF shall proceed to
Closing. In the event that AOF shall fail to have delivered such notice to the City on or
before the expiration of the Due Diligence Period, then this Agreement shall
automatically terminate, the Deposit shall be returned to AOF, and AOF's rights under
this Agreement shall be of no further force or effect.
/"
/1
3
03/20/06
5.1 Delivery of Due Diligence Items. Within three (3) business days after the
date of this Agreement, the City shall make available to AOF for its review, the
following items:
5.1.1 Tax Statements. Copies of the real estate tax statements for the
City Parcel for the past two (2) years, if any;
5.1.2 Other Documents. All other documents in the City's possession
or control relating to the City's ownership of the City Parcel 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.
5.2 Title Commitment. Promptly after mutual execution of this Agreement,
AOF shall obtain an extended preliminary title insurance commitment covering
the City Parcel from the Title Company (the "Commitment"), together with
copies of all recorded documents listed as special exceptions therein. Approval
by AOF of the exceptions to title set forth in the Commitment (other than as
hereinafter set forth) shall be a condition precedent to AOF's obligation to
purchase the City Parcel. Unless AOF gives written notice that it disapproves the
exceptions to title shown on the Commitment (other than the exceptions to title
approved by AOF and described in Section 5.4 below), stating the exceptions so
disapproved, within thirty (30) days after the receipt of the Commitment, AOF
shall be deemed to have approved such exceptions. If AOF disapproves any title
exceptions, the City shall have a ten (10) day period after its receipt of AOF's
written notice of disapproval of the same within which to provide written notice
to AOF as to which of such disapproved title exceptions the City will remove (or
cause to be removed) from title; provided, however, that the City shall not be
required to actually remove such exceptiones) until Closing. If, for any reason,
the City's notice given pursuant to the immediately preceding sentence does not
covenant to remove all of AOF's disapproved title exceptions at or prior to
Closing, AOF shall have the right to terminate this Agreement by written notice to
the City and Escrow Agent given within ten (10) days after the earlier of the
expiration of such ten (10) day period or the date the City informs AOF that it
does not intend to remove the disapproved items (the "Termination Notice").
AOF's failure to deliver the Termination Notice within such ten (10) day period
shall be deemed AOF's approval of any such previously disapproved title
exception. If AOF delivers the Termination Notice within such ten (10) day
period, the obligation of the City to sell, and AOF to buy, the City Parcel as
herein provided shall terminate and the Deposit shall be returned to AOF. AOF
shall have the option to waive the condition precedent set forth in this Section 5.2
by written notice to the City. In the event of such waiver, such condition
precedent shall be deemed satisfied.
.jJ
4
03/20/06
5.3 Permitted Exceptions. In addition to such other exceptions to title as
may be approved by AOF pursuant to the provisions of Section 5.2 above, AOF
shall accept title to the City Parcel subject to the following (collectively, the
"Permitted Exceptions"):
5.3.1 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
5.3.2 Items created by, or on behalf of, AOF.
5.4 No New Leases or Contracts. Prior to Closing, the City shall not enter
into any new leases, contracts or agreements affecting the City Parcel without the
prior written consent of AOF, except the City may enter into interim contracts or
agreements in connection with the management, maintenance, repair or
preservation of the City Parcel in the normal course of business if each such
contract or agreement expires or is terminated at or prior to Closing.
5.5 AOF's Right of Entry. AOF, and its agents and consultants, at AOF's
sole expense and risk, may enter the City Parcel during the term of this
Agreement at reasonable times scheduled in advance with the City for the purpose
of AOF's due diligence study of the City Parcel. AOF shall (a) exercise care at
all times on or about the City Parcel, and (b) take precautions for the prevention
of injury to persons or damage to property on or about the City Parcel. AOF shall
keep the City Parcel 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 AOF's actions in the exercise
of its right of entry on the City Parcel, and AOF shall indemnify and defend the
City against and hold the City harmless from all such liens and claims. If this
transaction fails to close for any reason other than a default by the City hereunder,
AOF shall furnish the City with a copy of all such inspections, studies and
surveys and shall assign or quitclaim all of AOF's right, title and interest in and to
any permits, approvals, or permit or approval applications.
6. Closing.
6.1 Time for Closing. This purchase and sale shall be closed in the office of
Escrow Agent on the Closing Date. AOF and the 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 the City.
6.2 Closing Costs.
6.2.1 City's Costs. The City shall pay (a) the premiums for the standard
coverage portion of the Title Policy, including applicable sales tax, (b) one-half
(Yz) of all escrow fees and costs, (c) the City's share of prorations, if any, (d) t~)
5 /I
03/20/06
real estate excise taxes due as a result of this transaction, and (e) all assessments
for local improvement or special benefit districts.
6.2.2 AOF's Costs. AOF shall pay (a) one-half (Yz) of all escrow fees
and costs, (b) the recording fees for the Deed, (c) AOF'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 AOF may require, including
applicable sales tax.
6.2.3 Other Costs. AOF and the City shall each pay its own legal fees
and fees of its own consultants. All other costs and expenses shall be allocated
between AOF and the City in accordance with the customary practice of King
County, Washington.
6.3 Real Property Taxation. The parties acknowledge that, as public
property, the City Parcel has not been subject to real property taxation.
Accordingly, AOF shall be responsible for all real property taxes due and owing
from and after the Closing.
6.4 Closing Documents.
6.4.1 City's Documents. At Closing, the City shall deliver to Escrow
Agent the following instruments and documents:
6.4.1.1 The executed and acknowledged Deed conveying
the City Parcel to AOF;
6.4.1.2 The executed real estate excise tax affidavit to
accompany the Deed; and
6.4.1.3 An executed nonforeign person affidavit in the form
required under Section 1445 of the Internal Revenue Code.
6.4.2 AOF's Documents. At Closing, AOF shall deliver to Escrow
Agent the following funds, instruments and documents:
6.4.2.1 The balance of the Purchase Price in accordance
with Section 3;
6.4.2.2 AOF's share of costs and expenses as determined in
accordance with Section 6.2; and
6.4.2.3 The executed real estate excise tax affidavit
referenced in Section 6.4.1.2 above.
7. Possession. AOF shall be entitled to possession of the City Parcel upon Closing,
free and clear of all tenancies, licenses and occupants.
/f
6
03/20/06
8. Title Insurance. As soon as available after Closing, the City shall cause the
Title Company to issue to AOF the Title Policy, dated as of the Closing Date, subject
only to the Permitted Exceptions.
9. Conditions to Closing.
9.1 AOF's Conditions to Closing. Notwithstanding anything to the contrary
set forth herein, AOF's obligation to close hereunder is expressly subject to
satisfaction or waiver by AOF in writing of each of the following conditions:
9.1.1 Permits. AOF shall be responsible for applying for and obtaining
all governmental permits, approvals and consents necessary for
development and construction ofthe Office Building and, if AOF elects to
construct it, then, in addition the Parking Lot (the "Permits").
9.1.2 Lease Documents. If applicable, AOF and the City shall have
approved the Parking Lot Lease, as described in Section 14.4 below.
9.2 City's Conditions to Closing. Notwithstanding anything to the contrary
set forth herein, the City's obligation to close hereunder is expressly subject to
satisfaction or waiver by the City in writing of each of the following conditions:
9.2.1 Lease Documents. If applicable, the City and AOF shall have
approved the Parking Lot Lease 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 the City elsewhere in this Agreement, the City
represents and warrants to AOF now, and as ofthe Date of Closing, that:
10.1.1 Authority. The City, and the person signing on behalf of the City,
has full power and authority to execute this Agreement and perform the
City's obligations hereunder, and all necessary action to authorize this
transaction has been taken.
10.1.2 Zoning. Redevelopment of the Combined Parcels for
purposes of construction and operation of the Office Building, a Parking
Lot (if desired by AOF) and the related improvements is in compliance
with the City's current applicable zoning and land use laws and
regnlations.
10.1.3 Hazardous Substances. The City has not received
notification of any kind from any governmental agency suggesting that the
City Parcel is or may be targeted for a Hazardous Substances cleanup; to
the best of the City's knowledge the City Parcel has not 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 SUb~
7
03/20/06
(collectively, "Hazardous Substances"), or (b) as a landfill or waste
disposal site; to the best of the City's knowledge the City Parcel has not
been contaminated with any Hazardous Substances; and to the best of the
City's knowledge, there are no underground storage tanks on the City
Parcel.
10.1.4 Other Rights. No person or entity has any right to lease, license,
occupy andlor purchase any interest in the City Parcel or any part thereof.
10.2 AOF's Representations and Warranties. In addition to any other
representations and warranties of AOF elsewhere in this Agreement, AOF
represents and warrants to the City now, and as of the Date of Closing, that
(a) AOF has full power to execute, deliver and carry out the terms and provisions
of this Agreement, and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement; and (b) the individual executing this
Agreement on behalf of AOF has the authority to bind AOF to the terms and
conditions of this Agreement.
10.3 "AS IS" CONDITION OF PROPERTY. THE PURCHASE PRICE
REFLECTS THAT THE CITY PARCEL IS BEING PURCHASED BY AOF ON
AN "AS IS" "WHERE IS" AND "WITH ALL FAULTS" BASIS, EXCEPT TO
THE EXTENT OF REPRESENTATIONS AND WARRANTIES
SPECIFICALLY MADE BY THE CITY HEREIN OR IN THE WARRANTY
DEED OR OTHER DOCUMENTS TO BE DELIVERED TO AOF AT
CLOSING. AOF 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 MAY HAVE BEEN MADE OR GIVEN, OR
WHICH MAY BE DEEMED TO HAVE BEEN MADE OR GIVEN, BY THE
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 THE
CITY AT CLOSING.
EXCEPT TO THE EXTENT OF ANY REPRESENTATIONS OR
WARRANTIES SET FORTH ELSEWHERE IN THIS AGREEMENT OR IN
ANY DOCUMENTS TO BE EXECUTED AND DELIVERED BY THE CITY
AT CLOSING, AOF HAS NOT RELIED UPON AND WILL NOT RELY
UPON, AND THE CITY EXPRESSLY DISCLAIMS, ANY
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO, AND SHALL
HAVE NO LIABILITY FOR: (I) THE CONDITION OF THE CITY PARCEL
OR ANY BUILDINGS, STRUCTURES OR IMPROVEMENTS LOCATED
THEREON OR THE SUITABILITY THEREOF FOR HABITATION,
OCCUPANCY OR FOR AOF'S INTENDED USE OR FOR ANY USE
WHATSOEVER; (II) COMPLIANCE WITH ANY APPLICABLE BUILDING,
ZONING OR FIRE LAWS OR REGULATIONS; (III) EXCEPT if
8
03/20/06
SPECIFICALLY SET FORTH ABOVE, THE PRESENCE OF ANY
HAZARDOUS SUBSTANCES IN ANY IMPROVEMENTS ON THE CITY
PARCEL, INCLUDING WITHOUT LIMITATION ASBESTOS OR
FORMALDEHYDE, OR THE PRESENCE OF ANY ENVIRONMENTALLY
HAZARDOUS WASTES OR MATERIALS ON OR UNDER THE CITY
PARCEL. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
EXCEPT TO THE EXTENT OF ANY REPRESENTATIONS OR
WARRANTIES SET FORTH ELSEWHERE IN THIS AGREEMENT OR IN
ANY DOCUMENTS TO BE EXECUTED AND DELIVERED BY THE CITY
AT CLOSING, THE CITY SHALL HAVE NO LIABILITY TO AOF WITH
RESPECT TO THE CONDITION OF THE CITY PARCEL 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. AOF HEREBY RELEASES AND WAIVES ANY AND ALL
CLAIMS WHICH AOF HAS OR MAY HAVE AGAINST THE CITY UNDER
ANY OF THE FOREGOING LAWS OR WITH RESPECT TO THE
CONDITION OF THE CITY PARCEL, EXCEPT TO THE EXTENT OF ANY
CLAIMS AOF MAY HAVE ARISING FROM ANY EXPRESS
REPRESENTATIONS, WARRANTIES OR COVENANTS OF THE CITY
UNDER THIS AGREEMENT OR ANY DOCUMENTS TO BE EXECUTED
AND DELIVERED BY THE CITY AT CLOSING. AOF ACKNOWLEDGES
TO THE CITY THAT AOF IS GIVEN THE OPPORTUNITY UNDER THIS
AGREEMENT TO FULLY INSPECT THE CITY PARCEL AND AOF
ASSUMES THE RESPONSIBILITY AND RISKS OF ALL DEFECTS AND
CONDITIONS, INCLUDING SUCH DEFECTS AND CONDITIONS, IF ANY,
THAT CANNOT BE OBSERVED BY CASUAL INSPECTION, SUBJECT TO
THE EXCEPTION OF RIGHTS E ESSL Y SET FOR TIjABOVE.
CITY: AOF: ;$/
11. Maintenance of Property; Risk of Loss, Condemnation.
11.1 Maintenance of Property. From the date of this Agreement until the
Closing Date (or any earlier termination of this Agreement), the City agrees to
maintain the City Parcel 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 Parcel shall be borne by AOF at all times and no event
of casualty or damage shall affect the parties' obligations hereunder or the
Purchase Price, however, AOF shall have the right to receive any insurance
proceeds due the City in connection with any casualty or damage and the City
hereby covenants to maintain commercially reasonable casualty insurance in
p]= Mfu "''I,co' '" fuc City P=] 9" ,II tim prim to C]"". The City 'h~
03/20/06
promptly notify AOF of any condemnation or eminent domain proceeding which
affects the City Parcel, and the 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 than the City, or a deed in lieu or under threat
thereof, which affects a material portion of the City Parcel, AOF may elect either
to terminate this Agreement, or to purchase the City Parcel in the condition
existing on the Closing Date without adjustment of the Purchase Price. If AOF
elects to terminate this Agreement, the Deposit shall be returned to AOF. If AOF
elects to purchase the City Parcel, the City shall not be liable to restore same, and
AOF shall be entitled to any condemnation award or payment in lieu thereof
payable to the 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 AOF's Default and Failure to Close. If AOF fails,
without legal excuse, to complete the purchase of the City Parcel in accordance
with this Agreement, the City's sole and exclusive remedy shall be to retain the
Deposit as liquidated damages. AOF expressly agrees that the retention of the
Deposit by the City represents a reasonable estimation of the damages in the event
of AOF'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, AOF and the City acknowledge that these damages have been specifically
negotiated between AOF and the City and are, inter alia, to compensate the City
for delaying the eventual sale of the City Parcel and to compensate the City for its
costs and expenses associated with this Agreement. AOF hereby waives the
rights and benefits of any law, rule, regulation or order now or hereafter existing
that would allow AOF to claim a refund of the Deposit as unearned earnest
money, a penalty or for any other reason except default by the City.
12.3 City's Remedies for AOF's Default. Except as provided in Section 12.2
above and except as to any breach by AOF of its covenants under Section 14.1
hereof, should AOF breach any of its obligations under this Purchase and Sale
Agreement, and such failure shall not be cured by AOF within thirty (30) days
after AOF's receipt of written notice thereof, the City shall have the right to
pursue any remedies available to it at law or equity, but excluding rescission. If
AOF shall breach its covenants under Section 14.1 hereof, the City shall have, as
its exclnsive remedy, the right of repurchase as set forth in Section 14.1 hereof.
12.4 AOF's Remedies for City's Default. Ifthe City fails to complete the sale
of the City Parcel in accordance with this Agreement, AOF shall have and may
enforce the following exclusive remedies: (a) seek specific performance;
(b) terminate this Agreement, receive a refund of the Deposit and recover from
the City all of AOF's damages, including but not limited to actual third-party
costs and expenses incurred by it in connection with the transaction and the
/1
10
03/20/06
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:
If to the City:
With copies to:
If to AOF:
With copies to:
City of Auburn
Finance Department
25 West Main Street
Auburn, W A 98001-4998
Attn: Finance Director
City of Auburn
City Attorney's Office
25 West Main Street
Auburn, W A 98001-4998
Attn: City Attorney
Auburn on 1st, LLC
3700 Beazer Road
Bellingham, W A 98226
Attn: Jeffrey Oliphant, President
Michael John Klein, CPA
5743 CorsaAvenue, Suite 216
Westlake Village, CA 91362
And to:
Anthony Rafel, Esq.
Rafel Manville, PLLC
999 Third Avenue, Suite 1600
Seattle, W A 98104
Notice of change of address shall be given by written notice in the manner detailed in this
Section 13.
14. Development of Project, Parking Lot. As additional consideration for the
City's willingness to sell the City Parcel to AOF, AOF hereby covenants and agrees, at
its expense, to develop and construct the upon the City Parcel andlor the AOF Property,
an office building ("Office Building") and, if AOF elects, a Parking Lot for use in whole
or in part by the City, subject to the following terms and conditions: 1//
11
03/20/06
14.1 Office Building.
14.1.1 AOF Covenants. AOF shall develop and construct the
Office Building, at its sole cost and expense. AOF initially intends to use
the Office Building for operation of a medical-dental or other professional
office building and associated uses. The Office Building shall be not less
than five thousand square feet (5,000 sf) in size; it may be one or multiple
stories in height and more than one Office Building may be constructed.
The Office Building(s) may be located anywhere on the AOF Property or
the City Parcel. The Office Building(s) shall comply with all applicable
governmental requirements and AOF shall obtain and pay for all
applicable permits and approvals therefor. AOF shall substantially
complete construction and occupancy of the Office Building on or before
the date twenty-four months after Closing, subject to Permitted Delays.
As used herein (and also as used in Section 14.3 below), 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; or (v) extreme or unusual weather conditions,
acts of God or unforeseen soil conditions.
14.1.2 City Covenants. The City shall cooperate with AOF in
connection with the approval of plans and issuance of permits for
construction of the Office Building and related improvements, including
landscaping and site improvements. This Purchase and Sale Agreement
does not constitute such approval or the issuance of any such permits,
which shall be considered, reviewed and, if appropriate, issued by the City
and other governmental agencies in the ordinary course of business.
14.1.3 Default by AOF, City's Exclusive Remedy. If AOF fails
to complete the Office Building within the time period set forth in Section
14.1.1 above, the City's sole and exclusive remedy for such default by
AOF shall be, at the City's option, to purchase back the City Parcel from
AOF within one hundred twenty (120) days after AOF's default under
Section 14.1.1, at a price equal to Ninety-Five Thousand and xxllOO
Dollars ($95,000.00). Prior to exercising such exclusive remedy, the City
shall give AOF notice of such default and a reasonable opportunity to cure
such default. To memorialize the herein remedy, the parties shall record at
the time of Closing a Memorandum reflecting the existence of the City's
aforesaid remedy, which Memorandum shall, at AOF's request, be
subsequently subordinated to the interest of AOF's construction lender
and the lien of its construction mortgage.
14.2 Parking Lot. If as part of its development of the Office Building, AOF
elects to provide additional parking to replace the thirty (30) parking spaces
presently on the City Parcel, that is, provide the City with thirty parking &
12 I/"
03/20/06
for the City's exclusive use ("Parking Lot"), then the parties shall enter into a
lease ("Parking Lot Lease") upon the terms and conditions hereinafter set forth.
There shall be no obligation on the part of AOF to so provide the Parking Lot or
enter into the Parking Lot Lease. If AOF does offer to provide the Parking Lot
and the parties do enter into the Parking Lot Lease, then the Purchase Price for the
City Parcel shall be reduced as set forth in Section 3 hereof.
14.3 Completion of Parking Lot. If AOF shall elect to provide the Parking
Lot, AOF shall complete construction of the Parking Lot, at its sole cost and
expense, and the Parking Lot shall be available for occupancy and use by the City
on or before twenty-four (24) months after the Closing, subject to Permitted
Delays. The Parking Lot shall be constructed in compliance with all applicable
City codes and Chapter 18.22 of the City's Zoning Code.
14.4 Parking Lot Lease. If AOF shall elect to provide the Parking Lot, it is
the intent of the parties that following completion of the Parking Lot, AOF shall
convey to the City at that time the Parking Lot Lease, which shall contain thirty
(30) vehicular parking spaces and shall be located and configured consistent with
that shown in the plans prepared by AOF and approved by the City as part of the
permitting process. The form of the Lease documents shall be prepared by AOF
in accordance with applicable law and submitted to the City within one hundred
twenty (120) days after the date of AOF's decision to provide the Parking Lot to
the City. The term of the Parking Lot Lease shall be for a period of not more than
ten (10) years and the lease rate shall be One Dollar ($1.00) per year. The Lease
Documents shall be subject to the City's review and approval, which approval
shall not be unreasonably withheld, delayed or conditioned.
14.5 Operations. The Parking Lot shall be designed in such a manner as to
clearly designate AOF's parking spaces and the City's parking spaces under the
Lease Documents and each party shall be responsible for the operation and day-
to-day cleaning and maintenance of their respective Parking Spaces. Nothing
herein shall preclude the parties from entering into a shared parking and cost
sharing arrangement, rather than segregated parking spaces and segregated costs.
14.6 No Obligation to Provide Parking Lot. Nothing herein shall be
construed to imply, and AOF shall not be required to construct or provide the
Parking Lot or any parking spaces for use by the City.
15. General. This is the entire agreement of AOF and the 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 AOF and the 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 Provisff
13 /'
03/20/06
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.
16. Commissions. The City represents to AOF that the City has engaged no broker,
agent or finder in connection with the negotiations leading to this Agreement. AOF
represents to the City that AOF 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.
17. Assignment. AOF may, without need of the City's consent bnt after at least five
(5) days prior written notice to the City, assign this Agreement and AOF's rights
hereunder prior to Closing to an entity owned or controlled by AOF or which is under
common control with AOF or Oliphant Real Estate Services, Inc., but no such assignment
shall release AOF from its obligations under this Agreement.
18. 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.
19. Exclusivity. During the term of this Agreement the City shall not market nor list
the City Parcel for sale, nor accept any offers from third parties with respect to sale ofthe
City Parcel.
20. Reservation of Police Power. Notwithstanding anything to the contrary set forth
herein, AOF understands and acknowledges that the City's authority to exercise its police
(regulatory) powers in accordance with applicable law shall not be deemed limited by the
provisions of this Agreement.
SIGNED in duplicate original as ofthe date first above written.
AOF:
AUBURN ON 1st, LLC
a Washington limited liability company
By: Oliphant Real Estate Services, Inc.
a Washington corporation
its Manager
14
03/20/06
CITY:
CITY OF AUBURN
BQ~
Peter B. Lewis, Mayor
.~
--..
A tlest:
~--" 7
" .' p" ^ \
--< tv.. ~~L.J>'-80S=:"'-' ,.....-
~-,~vl.~ City Clerk ( -
(f
15