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HomeMy WebLinkAboutBurke Park Lots Purchase Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Ron Dingman, Park and Recreation Director Chris Kukulski, City Manager SUBJECT: Burke Park Lots Purchase MEETING DATE: March 3, 2008 BACKGROUND: In 1993 the City of Bozeman purchased approximately 40 acres from the Burke family – for the amount of $235,000 - to be preserved and used as public park land. A stipulation in the buy/sell agreement stated that the Burke family “will retain a parcel comprising approximately 2 acres described in exhibit ‘B’…………” It further states that “Seller contemplates subdividing the current platted lots into two lots, hereinafter referred to as ‘retained lots’, and building a one-story single-family home on each retained lot.” The Burke family has allowed the public to use these retained lots as part of the park for the past 15 years. The agreement states that this arrangement will terminate when building permits are issued for the single-family homes. The Burke’s want to build a house in Bozeman and have offered to sell the lots to the City to preserve the park. The Gallatin Valley Land Trust (GVLT) has been negotiating with the Burke’s in an effort to reach a buy/sell agreement on the 2 retained lots. There have been several meetings with City staff and GVLT to determine the cost of the property and how they would be purchased. The Recreation and Parks Advisory Board (RPAB) has motioned and voted to recommend using up to $250,000 of park land cash-in-lieu funds toward the purchase of the Burke lots. 342 Two appraisals were completed on the property. The first was done by a company representing the Burke family and came in at $1,100,000 for both lots. The City felt that this appraisal did not take into consider the restriction that only 2 homes can be built on the property. GVLT- at the request of the City- had another appraisal conducted which came in at $480,000 for both lots. The Burke family is willing to sell the lots to the City for $500,000 regardless of the appraisals provided that the City acknowledges that 3 lots may be built on the property via the attached settlement agreement. This will allow the Burkes to take a charitable deduction for a portion of the disputed differences between appraisals. Attached are the draft settlement agreement and Buy-Sell agreements. GVLT has incurred $20,000 in expenses during the negotiation process. It is unclear at this time if GVLT will want reimbursement for the amount they have spent. RECOMMENDATION: Staff recommends that the Commission approve the purchase of the Burke lots for $500,000 using $250,000 from park land cash-in-lieu funds and $250,000 from General funds, and authorize the City Manager to execute the Buy-Sell agreement and settlement agreement. FISCAL EFFECTS: Spending $250,000 from cash-in-lieu funds will leave a balance of approximately $250,000. $250,000 will need to be taken out of the General fund. There will be no foreseeable increase in maintenance cost since the City currently maintains the 2 lots along with Burke Park. ALTERNATIVES: As suggested by the City Commission. Respectfully submitted, _________________________________ ____________________________ Ron Dingman, Parks and Recreation Director Chris A. Kukulski, City Manager Attachments: Settlement agreement Report compiled on 2/27/2004 343 Page 1 of 11 BUY-SELL AGREEMENT This contract stipulates the terms of sale of this real property. Read carefully before signing. This is a legally binding contract. If not understood, seek competent advice. THIS AGREEMENT is made at Bozeman, Montana, ______________, 2008. 1. The City of Bozeman , (hereinafter called "Buyer") agrees to purchase, and Edmund Burke, Trustee of the Edmund Burke Revocable Trust Dated march 2, 1981, Martha Benge Burke, Trustee of the Martha B. Burke Revocable Trust Dated March 2, 1981 and Thomas D. Burke, (hereinafter collectively called "Seller") agrees to sell the following described real property (hereinafter referred to as the "Property") located in the City of Bozeman, Gallatin County, Montana, generally described as: Lots 27, 28, 29, 30 and 31 of Block 20 of the Electric Heights Addition to the City of Bozeman, Gallatin County, Montana; Lots 1, 2, 3, 4, 5, 6, 34, 35, 36, 37, 38 and 39 of Block 21 of the Electric Heights Addition to the City of Bozeman, Gallatin County, Montana; Being approximately 1.75 acres. and legally described as follows: See attached Exhibit “A” All as shown on preliminary commitment for title insurance for the Property, which shall supersede the above description if different, and be appended to this Agreement as Exhibit AB@. TOGETHER with all interest of Seller in the mineral estate appurtenant thereto, vacated streets and alleys adjacent thereto, all easements and all other appurtenances thereto; and all structures, improvements, and permanent fixtures thereon. 2. PERSONAL PROPERTY: The following items of personal property, free of liens and without warranty of condition, are included: None – the Property is unimproved. 3. WATER: Description of water, if any, to be transferred: All appurtenant water rights owned by Seller, but Seller makes representation that Seller has any water rights. Cost of transfer (DNRC fee) to be paid by Buyer. 4. RECEIPT OF EARNEST MONEY: The Seller hereby acknowledges receipt from Buyer of earnest money in the amount of ONE THOUSAND FIVE HUNDRED AND 00/100 U.S. 345 Page 2 of 11 Dollars ($1,500.00) as evidenced by ___ cash, check, ____ or _______________________________________________________________________. All parties to this transaction agree, unless otherwise provided herein, that the earnest monies will be deposited within five (5) business days of the date all parties have signed the Agreement, and such funds will be held in an interest-bearing escrow account by American Land Title Company in Bozeman, Montana, title insurance agent and closing escrow agent for this transaction. Parties agree that interest accruing on earnest money, if any, while deposited, shall be payable to Buyer. 5. PURCHASE PRICE AND TERMS: Total purchase price is FIVE HUNDRED THOUSAND AND 00/100 U.S. Dollars ($500,000.00) payable as follows: $ 1,500.00 earnest money to be applied at Closing; and $ 498,500.00 in cash, payable at Closing. 6. BUYER'S REPRESENTATION OF FUNDS: Buyer represents that it has sufficient funds for the payment of the purchase price/down payment and closing costs to close this sale in accordance with this Agreement and is not relying upon any contingent source of such funds unless otherwise expressly set forth herein. 7. APPRAISAL PROVISION: Buyer represents that Buyer has had the Property appraised and is satisfied that the Property has appraised for the stated purchase price herein. 8. CONTINGENCIES: The contingencies listed below shall be deemed to have been released, waived, or satisfied, and the transaction shall continue to closing, unless by the date specified for each contingency, the party requesting that contingency has notified the other party or other party's agent in writing that the contingency is not released, waived, or satisfied. If a party has notified the other party prior to the release date that a contingency is not released, waived, or satisfied, the transaction is terminated, and the earnest money will be returned to the Buyer, and neither party shall have any obligation to the other with regard to this Agreement or the transaction contemplated herein, unless the parties negotiate other terms or provisions. TITLE CONTINGENCY: This offer is contingent upon Buyer=s receipt and approval to Buyer=s satisfaction of the preliminary title commitment for the Property. Release Date: Ten (10) business days from Buyer or Buyer’s agent’s receipt of the preliminary commitment. PROPERTY INVESTIGATION: This offer is contingent upon Buyer=s independent investigation of and satisfaction with any or all of the following conditions relating to the Property, including but not limited to; covenants, zoning, access, easements, well depths, septic and sanitation restrictions, surveys or other means of establishing the corners and boundaries, special improvement districts, restrictions 346 Page 3 of 11 affecting use, special building requirements, future assessments, utility hook-up and installation costs, environmental hazards, or anything else that the Buyer deems appropriate. Release Date: Thirty (30) days from the date of final execution, by all parties, of this Agreement. 9. PROPERTIES INSPECTIONS: The Buyer is aware that Seller has not conducted an expert inspection or analysis of the Property or its condition and, except as otherwise expressly provided in this Agreement or in any Addendum hereto, make no representations to the Buyer as to its condition, does not assure that the Property will be satisfactory to the Buyer in all respects, or that the Property and/or improvements comply with current building and zoning codes and Buyer acknowledges that Seller IS NOT a building inspector, building contractor, structural engineer, electrician, plumber, sanitarian, septic or cesspool expert, well driller or well expert, land surveyor, civil engineer, flood plain or water drainage expert, roofing contractor or roofing expert, or experts in identifying hazardous waste and/or toxic materials. 10. ADDITIONAL PROVISIONS: A. The parties acknowledge and agree that during the Buyer=s due diligence period under Section 8 above, the Buyer and the Buyer=s agents shall have full access at all reasonable times to all parts of the subject Property for the purpose of conducting such inspections as the Buyer deems necessary or desirable, provided that (1) all such inspections are conducted at the Buyer=s sole expense, that (2) where disturbed, the Property shall be returned to its original condition, and (3) that Buyer shall not permit any liens to attach to the Property as a result of its activities thereon. Further, the Buyer, and for the Buyer=s agents, contractors, and employees, agrees to indemnify and hold harmless the Seller from and against any and all liability, loss, or damage which may result from or arise out of Buyer=s such activities on the Property, however, the mere findings or results of Buyer=s inspections, should such findings be adverse, shall not be deemed to create any loss or damage to Seller. This indemnification covenant herein contained shall survive Closing and not be merged into or extinguished by any documents of conveyance delivered at Closing. Such indemnification obligation shall survive either the Closing or termination of this Agreement, as applicable, for a period of three (3) years, then shall be of no further force or effect. B. The parties acknowledge that currently there is a dispute between Buyer and Seller regarding restrictions on the use of the Property. Notwithstanding anything in this Agreement to the contrary, if resolution is not reached on the use restrictions governing the Property within sixty (60) days from the date of final execution, by all parties, of this Agreement, Seller may unilaterally terminate this Agreement, in which case the transaction contemplated herein is cancelled, all earnest money will be returned to the Buyer and neither party shall have any obligation to the other with regard to this Agreement or the transaction contemplated herein. 11. SELLER=S REPRESENTATIONS AND WARRANTIES: Seller represents and 347 Page 4 of 11 warrants to Buyer that: A. Seller is the fee simple owner of all of the Property; and that Seller has the right and authority to execute documents of conveyance for the Property to Buyer. B. Seller has not caused or consented to any work on the Property which could result in the filing of construction liens against the Property, and Seller shall not permit such liens to arise prior to Closing. C. No person, firm, or entity other than Buyer has any right to acquire any of the Property, and there is no outstanding agreement to sell the Property to any third party. Seller has not granted and will not grant any third party any right of use of the Property after the Closing Date. No leases, licenses, agreements, or other use rights of any type or nature, with or in favor of any third party, whether written or oral, whether of record or not of record, exist as to the Property, other than as have been disclosed by Seller herein below: _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ _____________________. D. All information and disclosures made by Seller and its agents and representatives are true and correct to the best of Seller=s knowledge and belief as of date and time of Closing. Seller agrees to hold Buyer harmless and indemnify Buyer from and against any and all liability, claims, actions, suits, damages, and costs arising out of the untruth or out of Seller=s breach of any of the foregoing representations and or warranties. These representations and warranties, and the indemnification covenant herein contained, shall survive Closing and not be merged into or extinguished by any documents of conveyance delivered at Closing. 12. CONVEYANCE: The Seller shall convey the Property by Warranty Deed, free of all liens and encumbrances except those described in the title insurance commitment as approved by Buyer. 13. TITLE INSURANCE: Seller, at Seller's expense, shall furnish Buyer Title Insurance evidenced by a standard form American Land Title Association title insurance commitment in an amount equal to the purchase price, committing to insure merchantable title to the Property in Buyer's name, free and clear of all liens and encumbrances except: zoning ordinances; building and use restrictions; reservations in federal patents; beneficial easements, apparent or of record; Special Improvement Districts; real estate taxes for the year in which closing occurs; and the standard pre-printed exclusions. Buyer may purchase additional title coverage for an additional cost. It is recommended that Buyer obtain details from a title company. 14. MERCHANTABLE TITLE: If the Seller's title is not merchantable and cannot be made merchantable before the stated closing date, TEN (10) ADDITIONAL DAYS SHALL BE ALLOWED FOR THE SELLER TO MAKE SUCH TITLE MERCHANTABLE. If title is not 348 Page 5 of 11 merchantable after additional specified time, this Agreement is terminated, unless Buyer elects to waive such defects and proceed to Closing. The parties may agree to negotiate alternative terms or provisions. All mortgages, judgments, and liens shall be discharged by the Seller and shall be satisfied at or prior to Closing or from Seller's proceeds at the time of Closing, unless otherwise provided herein. Seller agrees that no additional encumbrances, restrictions, easements or other adverse title conditions will attach or be placed against the title to the Property subsequent to the effective date of the preliminary title commitment approved by Buyer. 15. SPECIAL IMPROVEMENT DISTRICTS: Special Improvement Districts (including rural SIDs), including those that have been noticed to Seller by City/County, but not yet spread or currently assessed, if any, will be: paid off by Seller at Closing; XX assumed by Buyer at Closing; OR ___ (Other)_____________________________________________________ All perpetual SIDs shall be assumed by Buyer. 16. PRORATION OF TAXES AND ASSESSMENTS: Seller and Buyer agree to prorate taxes, Special Improvement District assessments for the current tax year, as well as pre- paid rents as of the date of Closing, unless otherwise agreed and: Closing Agent's fee to be split equally. Seller to pay for cost of document preparation (Warranty Deed, etc.). Buyer to pay cost of recording Deed . 17. CLOSING DATE: The date of Closing shall be May 9, 2008. The parties may, by mutual agreement, agree to close the transaction at any time prior to the date specified. The Buyer and Seller will deposit with the closing agent all instruments and monies necessary to complete the purchase in accordance with this Agreement by such date. 18. POSSESSION: Seller shall deliver to Buyer possession of the Property and allow occupancy: ____ on the date of Closing; OR ____ on the date of recording the Deed, Notice of Purchaser's Interest, OR XXX (Other) Buyer is currently in possession under Buyer’s lease with Seller, said lease shall terminate as of the date of Closing. Property shall be vacant unless otherwise agreed in writing. 19. CONDITION OF PROPERTY: Seller agrees that the Property shall be in the same condition, normal wear and tear excepted, from the date of the execution of this Agreement up to the time Buyer takes possession of the Property. 349 Page 6 of 11 20. NOXIOUS WEEDS DISCLOSURE: Buyers of property in the state of Montana should be aware that some properties contain noxious weeds. The laws of the state of Montana require owners of property within this state to control, and to the extent possible, eradicate noxious weeds. For information concerning noxious weeds and your obligation as an owner of property, contact either your local County extension agent or Weed Control Board. 21. MEGAN=S LAW DISCLOSURE: Pursuant to the provisions of Title 46, Chapter 23, Part 5 of the Montana Code Annotated, certain individuals are required to register their address with the local law enforcement agencies as part of Montana=s Sexual and Violent Offender Registration Act. In some communities, law enforcement offices will make the information concerning registered offenders available to the public. If you desire further information please contact the local County Sheriff=s office, the Department of Justice in Helena, Montana, and the probation officers assigned to the area. 22. RADON DISCLOSURE STATEMENT: The following disclosure is given pursuant to the Montana Radon Control Act, Montana Code Annotated '75-3-606. RADON GAS: RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS THAT, WHEN IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT HEALTH RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED FEDERAL GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN MONTANA. ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY BE OBTAINED FROM YOUR COUNTY OR STATE PUBLIC HEALTH UNIT. If the Property has been tested for Radon, the Seller will provide a copy of the test results concurrent with an executed copy of this Agreement. If the Property has received radon mitigation treatment, the Seller will provide the evidence of the mitigation treatment concurrent with an executed copy of this Agreement. 23. MOLD DISCLOSURE STATEMENT: The following disclosure is given pursuant to the Montana Mold Disclosure Act, Montana Code Annotated '70-16-701 et seq. MOLD: There are many types of mold. Inhabitable properties are not, and cannot be, constructed to exclude mold. Moisture is one of the most significant factors contributing to mold growth. Information about controlling mold growth may be available from your county extension agent or health department. Certain strains of mold may cause damage to property and may adversely affect the health of susceptible persons, including allergic reactions that may include skin, eye, nose, and throat irritation. Certain strains of mold may cause infections, particularly in individuals with suppressed immune systems. Some experts contend that certain strains of mold may cause serious and even life-threatening diseases. However, experts do not agree about the nature and extent of the health problems caused by mold or about the level of mold exposure that may cause health problems. The Center of Disease Control and Prevention is studying the link between mold and serious health conditions. The seller, landlord, seller=s agent, buyer=s agent, or property manager cannot and does not represent or warrant the absence of mold. It is the buyer=s or tenant=s obligation to determine whether a mold problem is present. To do so, the buyer or tenant should hire a qualified inspector and make any contract to purchase, rent, or lease contingent upon the results of that inspection. A seller, landlord, seller=s agent, buyer=s agent, or property 350 Page 7 of 11 manager who provides this mold disclosure statement, provides for the disclosure of any prior testing and any subsequent mitigation or treatment for mold, and discloses any knowledge of mold is not liable in any action based on the presence of or propensity for mold in a building that is subject to any contract to purchase, rent, or lease. 24. BUYER'S REMEDIES: (A) If the Seller fails to accept the offer contained in this Agreement within the time period provided in the BUYER'S COMMITMENT section, all earnest monies shall be returned to the Buyer. (B) If the Seller accepts the offer contained in this Agreement, but refuses or neglects to consummate the transaction within the time period provided in this Agreement, the Buyer may: (1) Demand immediate repayment of all monies that Buyer has paid as earnest money, and upon the return of such money, the rights and duties of Buyer and Seller under this Agreement shall be terminated; OR (2) Demand that Seller specifically perform Seller's obligation under this Agreement; OR (3) Demand monetary damages from Seller for Seller's failure to perform the terms of this Agreement. 25. SELLER'S REMEDIES: If the Seller accepts the offer contained in this Agreement and Buyer refuses or neglects to consummate the transaction within the time period provided in this Agreement, the Seller may: (1) Declare the earnest money paid by Buyer be forfeited; OR (2) Demand that Buyer specifically perform Buyer's duties and obligations under this Agreement; OR (3) Demand that Buyer pay monetary damages for Buyer's failure to perform the terms of this Agreement. 26. BUYER'S AND SELLER=S CERTIFICATION: By entering into this Agreement, each person or persons executing this Agreement, as Buyer or Seller, represents that he/she is eighteen (18) years of age or older, of sound mind, and legally competent to own real property in the State of Montana; and, if acting on behalf of a corporation, partnership, or other non-human entity, that he/she is duly authorized to enter into this Agreement on behalf of such entity. 27. CONSENT TO DISCLOSE INFORMATION: Buyer and Seller hereby consent to the procurement and disclosure by Buyer, Seller, and their attorneys, agents, and other parties having interests essential to this Agreement, of any and all information reasonably necessary to consummate the transaction described in this Agreement, specifically including access to escrows for review of contracts, deeds, trust indentures, or similar documents concerning this Property or underlying obligations pertaining thereto. 28. RISK OF LOSS: All loss or damage to the Property to any cause is assumed by Seller through the time of closing unless otherwise specified. 29. TIME IS OF THE ESSENCE: Time is of the essence in this Agreement and all clauses herein. 351 Page 8 of 11 30. BINDING EFFECT AND ASSIGNABILITY: The Agreement is binding upon the heirs, successors, and assigns of each of the parties hereto. Buyer may only assign this Agreement with the prior written consent of Seller, which consent may be withheld by Seller in its sole and absolute discretion. Any assignment or attempted assignment by Buyer without Seller’s written consent shall be void ab intio. 31. '1031 EXCHANGE: Buyer/Seller herein acknowledges that it is or may be the intention of either Buyer and\or Seller to enter into an IRC ' 1031 tax-deferred exchange in connection with this transaction. Each party agrees that it=s rights and obligations under this Agreement may be assigned for the limited purpose of facilitating such exchange and that this Agreement may be made part of an integrated, interdependent exchange agreement. Each party agrees to cooperate with the other in any manner necessary to enable the exchanging party to qualify for such exchange provided there is no additional cost or liability to non-exchanging party. This Agreement shall not be contingent upon either party=s ability to transact an IRC § 1031 exchange. 32. ATTORNEY FEES: In any action brought by the Buyer or the Seller to enforce any of the terms of this Agreement, the prevailing party in such action shall be entitled to such reasonable attorney fees as the court or arbitrator shall determine just, including attorney fees on appeal. 33. COMMISSION: Not Applicable. 34. FACSIMILE: The parties agree that a facsimile copy of this Agreement to Sell and Purchase which contains the parties' signature may be used as the original. 35. ENTIRE AGREEMENT: This Agreement, together with any attached exhibits and any addenda or amendments signed by the parties, shall constitute the entire agreement between Seller and Buyer, and supersedes any other written or oral agreements between Seller and Buyer. This Agreement can be modified only in writing, signed by the Seller and Buyer. 36. COUNTERPARTS: A copy of this document may be executed by each individual/entity separately, and when each has executed a copy thereof, such copies, taken together, shall be deemed to be a full and complete contract between the parties. 37. EARNEST MONEY DISPUTES: Buyer and Seller agree that, in the event of any controversy regarding the earnest money and things of value held by the Closing Agent, unless mutual written instructions are received by the holder of the earnest money and things of value, the Closing Agent shall not be required to take any action, but may await any proceedings, or, at the Closing Agent's option and sole discretion, may interplead all parties and deposit any monies or things of value with a court of competent jurisdiction and may utilize as much of the earnest money deposit as may be necessary to advance the 352 Page 9 of 11 cost and fees required for filing such action. 38. ALTERNATIVE DISPUTE RESOLUTION: At any time, the parties may agree to submit any dispute arising out of this transaction to mediation or arbitration. Parties, by agreement, shall specify mediation OR binding arbitration. The cost of such mediation/arbitration shall be paid equally by the parties. 39. ADDENDA ATTACHED: (Check all that apply) ____ Lead Based Paint Disclosure (HUD Form) ____ Sale of Buyer's Property Addendum for Additional Provisions ____ Back-up Offer 40. REAL ESTATE BROKERS: The parties to this Agreement confirm that no real estate licensees have been involved in this transaction. 41. CONTACT PERSONS: CONTACT PERSON FOR THE BUYER: _______________________________ _______________________________ _______________________________ _______________________________ CONTACT PERSON FOR THE SELLER: Edmund Burke Burke McPheeters Bordner & Estes 737 Bishop Street, Ste. 3100 Honolulu, HI 96813 Ph. 808.523.9833 Fx. 808.528.1656 eburke@bmbe-law.com WITH COPY TO: Stephen T. Johnson Gallatin Valley Land Trust 25 N Willson, Ste E PO Box 7021 Bozeman, MT 59771-7021 Ph. 406.587.8404 x105 Fx 406.582.1136 Stephen@gvlt.org Jeremy J. leFeber Berg, Lilly & Tollefsen, P.C. One West Main Bozeman, MT 59715 353 Page 10 of 11 Ph. 406.587.3181 Fx. 406.587.3240 jlefeber@berglawfirm.com 42. BUYER'S ACKNOWLEDGMENT: Buyer acknowledges that it has examined the Property, that Buyer enters into this Agreement in full reliance upon its independent investigation and judgment, that prior verbal representations by Seller does not modify or affect this Agreement, and that by signing this Agreement Buyer acknowledges having read and understood this entire Agreement. 43. BUYER'S COMMITMENT: Buyer agrees to purchase the Property on the terms and conditions set forth in the above offer and grants to Seller until February 13, 2008, at 5:00pm Mountain Standard Time to accept, in writing, this offer. Buyer may withdraw this offer at any time prior to being notified of Seller=s written acceptance. If Seller has not accepted in writing by the time specified, this offer is automatically withdrawn. I/WE HEREBY ACKNOWLEDGE receipt of a copy of this Agreement bearing my/our signature(s). Buyer's Signature: ____________________________ Buyer's Printed Name: _______________________________________________ Buyer's Address: _______________________________________________ 44. SELLER'S COMMITMENT: We agree to sell and convey to Buyer the Property on the terms and conditions hereinabove stated. We acknowledge a receipt of a copy of this Agreement bearing our signatures and that of the Buyer named above. Dated this _____ day of , 2008, at ________ a.m., p.m. (__________ Time). \\ \\ SELLER: _____________________________________ Edmund Burke Trustee of the Edmund Burke Revocable Trust Dated March 2, 1981 Address: __________________________ __________________________ __________________________ 354 Page 11 of 11 _____________________________________ Martha Benge Burke Trustee of the Martha B. Burke Revocable Trust Dated March 2, 1981 Address: __________________________ __________________________ __________________________ _____________________________________ Thomas D. Burke Address: __________________________ __________________________ __________________________ 45. ACTION TAKEN, IF OTHER THAN ACCEPTANCE: _____ Offer Rejected by Seller Seller's Initials ________/_______/_______ _____ Offer Modified per Attached Seller' s Initials _______/_______/_______ Counter offer 355 SETTLEMENT AGREEMENT Page 1 of 6 SETTLEMENT AGREEMENT THIS SETTLEMENT AGREEMENT (“Agreement”) is made this ____ day of February, 2008, by and between, Edmund Burke, Trustee of the Edmund Burke Revocable Trust Dated march 2, 1981, Martha Benge Burke, Trustee of the Martha B. Burke Revocable Trust Dated March 2, 1981 and Thomas D. Burke (collectively ABurke@) and the City of Bozeman. WHEREAS, the City of Bozeman and Burke entered into a Bargain Sale Agreement dated August 6, 1993, a copy of said agreement is attached hereto as Exhibit “A” and incorporated herein by reference (“1993 Agreement”); WHEREAS, on or about August 27, 1993, Burke transferred certain real property to the City of Bozeman (the “Burke Park Property”), all as more specifically described in that certain Warranty Deed, recorded at Film 135, Page 1594 in the records of the County Clerk and Recorder, Gallatin County, Montana, a copy of said deed is attached hereto as Exhibit “B”, and incorporated herein by reference (“Burke Park Deed”); WHEREAS, pursuant to the terms of the 1993 Agreement and the Burke Park Deed, Burke retained certain real property adjacent to the Burke Park Property, which real property is more specifically described on the attached Exhibit “C”, and incorporated herein by reference (“Burke Property”); 356 SETTLEMENT AGREEMENT Page 2 of 6 WHEREAS, subsequent to the conveyance of the Burke Park Property, a dispute has arisen between Burke and the City of Bozeman as to the number of building rights associated with the Burke Property; WHEREAS, the City of Bozeman has argued that interprets the 1993 Agreement should be interpreted to only to allow Burke to construct only two (2), one (1) story, single family residences on the Burke Property; WHEREAS, Burke disputes the applicability of the 1993 Agreement as it relates to any future development of the Burke Property, as any restriction contained in the 1993 Agreement merged into the Burke Park Deed at closing, and the Burke Deed contains no use restriction; WHEREAS, notwithstanding the foregoing, Burke also disputes that in the event the 1993 Agreement controls the development of the Burke Property, that such sets a cap on the development rights associated with the Burke Property, and instead, Burke maintains that the terms of the 1993 Agreement represent the minimum development rights associated with such property; WHEREAS, Burke maintains that up to five (5) single family residences may be placed on the Burke Property taking into account applicable subdivision and zoning regulations, the size and orientation of the Burke Property and the highest and best use of the Burke Property; and 357 SETTLEMENT AGREEMENT Page 3 of 6 WHEREAS, in an effort to avoid the unnecessary expense and delay associated with a protracted legal dispute concerning the development rights associated with the Burke Property, and to resolve any uncertainty over the allowable future development of the Burke property, the City of Bozeman and Burke desire to clarify the number of development rights associated with the Burke Property. NOW THEREFORE, for and in consideration of the covenants and conditions expressed herein, and for $1.00 and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties to this Agreement do hereby agree as follows: 1. Development Rights. Burke shall have three (3) development rights with regard to the Burke Property. Each development right shall be defined as the right to construct one (1), single story (excluding daylight basement), single family residence and one (1) guest house or other out buildings, as may be allowed by applicable zoning and lot size restriction, and subject to all applicable codes. These rights are not personal to Burke and may be transferred to Burke’s successors and assigns. The Parties acknowledge that the property has been previously platted and that the lots first must be aggregated into three separate lots prior to obtaining a 358 SETTLEMENT AGREEMENT Page 4 of 6 building permit. 2. Affirmation of Existing Right. The parties hereto agree that this Agreement does not represent the grant of any new development rights to Burke or the enlargement of any pre- existing right. Rather this Agreement serves as an agreed to compromise and clarification of Burke’s historical development rights. 3. Abstract of Agreement. The parties agree that an abstract of this Agreement may be recorded by either party hereto in the office of the Clerk and Recorder for Gallatin County, Montana. 4. Miscellaneous Provisions. A. Time. Time is of the essence of this Agreement. B. Severability and Integration. It is agreed and understood by and between the parties hereto that in the event any one or more of the provisions of this Agreement as herein set forth, reserved, and contained are found and determined to be unenforceable by a court of competent jurisdiction, or through the act or actions of the Legislature of this state, the remaining provisions of this Agreement shall nevertheless continue in full force and effect and be binding on the parties hereto, their heirs, personal representatives, and assigns. It is further agreed and understood by and between the parties hereto that this Agreement constitutes the entire agreement and understanding by and between the parties hereto in connection with the real property which is the subject of this Agreement and the subject matter herein contained, and that this Agreement supersedes all prior and/or contemporaneous oral or written agreements and 359 SETTLEMENT AGREEMENT Page 5 of 6 understandings of the parties which may conflict with the expressed terms, covenants, and conditions herein set forth, reserved, and contained on the part of the parties to be kept and performed. In this connection, no assertion, allegation, representations, covenant, or condition not expressed in this Agreement shall affect or be effective to interpret the intent of the parties, modify or change this Agreement, or restrict the expressed provisions contained herein. C. Amendment. It is agreed and understood by and between the parties hereto that any modification or amendment to this Agreement must be in writing and signed by each of the parties hereto in order for such amendment to be effective. D. Non-Waiver. It is agreed and understood by and between the parties hereto that a waiver by a party hereto of any breach of any term, covenant, or condition herein set forth, reserved, and contained to be kept and performed on the part of a party hereto shall not act as a bar or a precedent to any enforcement by such party of any subsequent breach by the other party, nor shall such waiver affect any of the other terms, covenants, and conditions herein set forth, reserved, and contained. E. Venue. The parties hereto agree that any action instituted, at law or in equity to enforce the terms, covenants, and conditions of this Agreement as herein set forth, reserved, and contained, shall be brought in the Eighteenth Judicial District Court of Gallatin County, Montana. F. Binding Effect. It is agreed and understood by and between the parties hereto that all of the terms, covenants, and conditions herein set forth, reserved, and contained on the part of the parties to be kept and performed shall be binding upon and inure to the benefit of, and be enforceable by the heirs, successors, permitted assigns, and personal representatives of the parties hereto and that any party executing this Agreement in a representative capacity has the power and authority to duly and validly execute this Agreement. G. Counterparts and Facsimile Execution. This Agreement may 360 SETTLEMENT AGREEMENT Page 6 of 6 be executed in counterparts and each separate executed copy, taken together, shall constitute one and the same instrument. Signatures of the parties on this instrument, or any counterpart thereof, transmitted by facsimile shall be valid and binding as originals. H. Headings. It is agreed and understood by and between the parties hereto that the caption headings in this Agreement are for convenience only, and do not apply to or affect the construction or interpretation of any of the terms hereof. I. Attorney Fees. In any action brought by either party hereto to enforce any of the terms of this Agreement, the prevailing party in such action shall be entitled to such reasonable costs attorney fees as the court or arbitrator shall determine just, including such costs and attorney fees on appeal and any fees or salary of City Attorney or staff attorneys. BURKE: CITY OF BOZEMAN: ___________________________ ____________________________ Edmund Burke, Trustee By: ___________________ Edmund Burke Revocable Trust Its: ___________________ Dated March 2, 1981 ____________________________ Martha Benge Burke, Trustee Martha B. Burke Revocable Trust Dated March 2, 1981 ____________________________ Thomas D. Burke 361