HomeMy WebLinkAbout10- Former City Hall Agreement for Shared Utility ServicesAGREEMENT FOR THE SHARING AND SEVERENCE
OF UTILITIES AND SYSTEMS AT THE FORMER BOZEMAN CITY HALL
This agreement made this' � day of �jt Nl_ , 2010, between the City of
Bozeman (hereinafter referred to as the "City "), a self - governing Montana local government,
with an address of 121 N. Rouse Ave., Bozeman, MT 59715 and Sleepy Eye, LLC (hereinafter
referred to as "Sleepy Eye "), with an address of 425 E. Main, Apt. 5, Bozeman, MT 59715,
WHEREAS, The City and Sleepy Eye entered into a Commercial Buy -Sell Agreement,
dated March 3, 2010, wherein Sleepy Eye agreed, under certain conditions, to purchase the
former Bozeman City Hall, located at 411 East Main St., Bozeman, MT (hereinafter referred to
as "Former City Hall "); and
WHEREAS, as required by law, the City adopted Ordinance 1779 authorizing the sale of
the Former City Hall under a specific condition requiring that "prior to release of contingencies,
an agreement, acceptable to the Bozeman City Commission, shall be signed by the purchaser and
the City regarding ownership, and maintenance of all infrastructure within the building including
the tunnel and that infrastructure related to heating and other utilities shared with Fire Station
No. 1 and for payment of related utility services;" and
WHEREAS, this Agreement shall constitute the agreement required by Ordinance 1779;
and
WHEREAS, the consideration for this Agreement is expressly understood by the Parties
to be the transfer of fee title to Sleepy Eye from the City in exchange for the purchase price as
stated in the Commercial Buy -Sell Agreement; and
WHEREAS, when the Former City Hall was constructed several utilities and certain
infrastructure were designed and constructed to be shared with the property known as Fire
Station #I (hereinafter referred to as FS 1) which is located to the north of the Former City Hall at
34 N. Rouse Ave., Bozeman, MT; and
WHEREAS, the sharing and severance of utilities and infrastructure that is to be
addressed in this Agreement includes the following: domestic water and hot water supply; well
water for cooling; electricity; emergency back -up electricity; and stream for heat; and
NOW THEREFORE, upon all the mutual, good and valuable consideration agreed to
and together with all the terms, conditions, covenants, representations, requirements, recitals,
obligations, promises, and performance stated herein and in furtherance of the Commercial Buy -
Sell Agreement between the Parties and Ordinance 1779, the Parties specifically agree as
follows:
Agreement for the Sharing and Severance of Utilities and Systems
GSC Family Limited Partnership and the City of Bozeman, MT
Page I of 10
1. Ownership of Utility Lines and Infrastructure Upon Closing All utility lines and any
other physical infrastructure located within the perimeter walls of the Former City
Hall building, as described herein, shall immediately upon execution of the sale of the
Former City Hall and transference of a grant deed (the "Closing "), become the
property and responsibility of Sleepy Eye. Any utility line or physical infrastructure
that serves the Former City Hall not located on the Former City Hall properties
including those located in the tunnel shall remain under the ownership of the City.
The following utilities and/or infrastructure are located solely within the perimeter
walls of the Former City Hall and have no connection of any kind to FS 1:
a. Sewer service;
b. Air exchanger located within the Former City Hall;
c. The air conditioning unit (except for cooling water);
d. All phone, internet, and cable/broadband lines of any kind; and
e. The landscape irrigation system.
2. Utilities to be Shared After CIosing/Separation The costs to sever all utilities or to
install appropriate metering devices as described herein for utilities which are to be
shared after Closing shall be the sole responsibility of Sleepy Eye. The following
requirements and timelines apply to the sharing and ultimate separation of utilities:
a. Boiler and Steam Supply The City shall complete severing of the steam
supply lines to the Former City Hall, at the City's sole cost and expense,
within thirty (30) days after Closing. The severing should be at the perimeter
of the Former City Hall building and the City shall provide Sleepy Eye with
written certification that the severing work has been completed within the
required time frame. Sleepy Eye will be solely responsible for removal of the
pipes and other equipment associated with the stream supply which is located
within the confines of the basement of the Former City Hall.
b. Domestic Water Supply The Parties recognize the water supply for both
domestic uses and for fire suppression in the Former City Hall are supplied
through FS 1. Within six (6) months of Closing Sleepy Eye shall install within
the Former City Hall property a water meter on the water line(s) that runs
from FS 1 to the Former City Hall. At the same time Sleepy Eye installs the
water meter the City shall install a backflow preventer. Within 36 months
after Closing, Sleepy Eye shall have connected the Former City Hall water
supply directly to the City's municipal water main located under North Rouse
Ave. thus completely severing the water supply for both domestic and fire
suppression uses. The City shall provide Sleepy Eye with documentation
showing the location of the municipal water main located under North Rouse
Avenue prior to Closing. The costs of maintaining the water supply line
within the Former City Hall shall be borne entirely by Sleepy Eye. The above
is specifically subject to the limitations and requirements in Section 3, below.
Agreement for the Sharing and Severance of Utilities and Systems
GSC Family Limited Partnership and the City of Bozeman, MT
Page 2 of 10
e. Electrical Sleepy Eye shall, at its sole cost and within six (6) months of
Closing, install electrical meters in appropriate locations to ensure its
electrical supply is no Ionger connected in any way to FS 1. The above is
specifically subject to the limitations and requirements in Section 3, below.
3. Proration of Costs of Utilities to Be Shared, After Closing For each utility shared
after Closing, the following provisions shall control the proration of the costs of the
utilities and their shared maintenance. All payments shall be paid by Sleepy Eye
within 30 days after invoice by the City.
a. Potable Water Until the time Sleepy Eye installs a water meter on the water
line ruining from FS 1 to the Former City Hall (six months) Sleepy Eye - -shall
pay the City one -third (1/3) of the City's total water charges as calculated for
both FS 1 and the Former City Hall. After installation of a water meter as
required in Section 2.b, above, Sleepy Eye shall pay to the City the actual
costs of water supplied to the Former City Hall until such time as Sleepy Eye
installs its own water supply feed from the water main in North Rouse Ave,
which time frame shall not exceed 36 months from the date of Closing.
b. Electrica Until such time as Sleepy Eye installs an electrical meter on the
electrical supply line running from FS 1 to the Former City Hall Sleepy Eye
shall pay the City one -third (1/3) of the City's total electrical charges
calculated for both FS 1 and the Former City Hall. After installation of an
electrical meter as required in 2.c, above, Sleepy Eye shall pay to the City the
actual costs of electricity supplied to the Former City Hall supply until such
time as Sleepy Eye completely severs electrical supply and obtains service
directly from NorthWestern Energy, which shall occur no later than three (3)
years after Closing.
c. Maintenance on Shared Utilities: Unless otherwise provided for herein, the
City shall be responsible for maintaining any system that supplies utilities to
the Former City Hall and which is located within FS 1. The City shall keep
detailed records regarding maintenance costs and Sleepy Eye agrees it shall be
obligated to pay the City one -third (1/3) of all maintenance costs as billed by
the City within 30 days of the date of invoice.
4. Maintenance and Securi RE: Tunnel between Former CiIY Hall and FS1: The
Parties acknowledge the existence of a tunnel located beneath the public right -of -way
that is the alley to the north of the Former City Hall. This section shall control the
ownership, use, and maintenance of said tunnel.
a. The City of Bozeman shall own the tunnel including its walls and interior
space as well as all infrastructure and utilities located within the tunnel but in
no case shall the City's ownership of any utilities or infrastructure cross the
Agreement for the Sharing and Severance of Utilities and Systems
GSC Family Limited Partnership and the City of Bozeman, MT
Page 3 of 10
perimeter of the Former City Hall building.
b. Sleepy Eye shall have unrestricted access to the tunnel solely for the purpose
of maintenance of any utility lines or infrastructure located within the tunnel.
Upon severance of all shared utilities located within the tunnel this access
shall be terminated and Sleepy Eye has the right to permanently block off the
entryway into the Former City Hall.
c. Neither Parry shall store any materials of any kind in the tunnel.
d. The City shall be responsible for maintaining the interior of the tunnel in a
safe condition.
e. Each Party shall maintain a door on its side of the tunnel locked from the
interior of each Party's respective building but readily accessible to the other
Party from the interior of the tunnel for emergency access only.
f. Upon severance of all utilities described in this Agreement or 36 months after
Closing, whichever is sooner, Sleepy Eye specifically agrees it shall no longer
have any right, title, or interest to the use of the tunnel or the infrastructure
located within the tunnel. The City may, at its sole discretion and cost,
abandoned and fill in or remove the tunnel; in such a case, Sleepy Eye agrees
to cooperate fully with the City's efforts to abandon and/or fill in said tunnel
If any work or activity by the City results in any adverse impact or damage to
the parking at the Former City Hall, the City shall, at its sole cost and expense,
and in a timely manner, return the parking to the same condition as it existed
immediately prior to the City's activities.
5. Miscellaneous
a. Parking Sleepy Eye shall obtain ownership of all surface parking spaces
physically located on the tracts or record being transferred and twelve and
forty five one hundredths (12.45) of the twenty -four and 9110 (24.9) "air"
spaces associated with the Former City Hall property at Closing. Any other
"air" parking spaces having been paid for by the City shall remain property of
the City. Subject to the requirements of the City of Bozeman's Unified
Development Ordinance, if the designated use of the Former City Hall does
not change to something other than "office" the City agrees it will not require
any additional parking spaces to be added and/or purchased by Sleepy Eye
until such time as the designated use changes for all or a portion of the Former
City Hall. Sleepy Eye specifically agrees that should the designated use of all
or a portion of the Former City Hall change to a use other than "office," or if
the building is remodeled to increase the square footage of usable space, as
determined by the City, additional parking spaces may be required prior to
commencement of the new use pursuant to the City of Bozeman's Unified
Development Ordinance.
Agreement for the Sharing and Severance of Utilities and Systems
GSC Family Limited Partnership and the City of Bozeman, MT
Page 4 of 10
b. Fire Su pression System: The Parties recognize the water supply for the fire
suppression system located in the Former City Hall is located within FS 1.
SIeepy Eye recognizes certain legal requirements exist for the provision of a
fire suppression system and agrees it is solely responsible for the maintenance
of all components of the fire suppression system which are located within the
Former City Hall. The City and Sleepy Eye recognize that the fire suppression
system has been supplied by domestic water while the Former City Hall
building was under the ownership of the City. Under the terms of this
Agreement, Sleepy Eye will be severing the FSl supply line and hooking up
its own fire supply water Iine but Sleepy Eye will have thirty -six (36) months
after Closing to complete such severing and installation of a new fire supply
water line. However, if Sleepy Eye changes the historical use of the Former
City Hall building after Closing, such change to the historical use may require
Sleepy Eye to install the new fire supply water line prior to the end of the
thirty -six (36) month period. The City shall use its best efforts to maintain a
sufficient water supply to the Former City Hall for all water uses until such
time as the water supply is severed as required by Section 2.b, above.
c. Well Water from FS1 The Parties recognize the evaporator cooling bundle
on the Former City Hall air conditioner currently uses well water from a well
located in FS 1 for its cooling medium and the well water is pumped from the
basement well house located in FS 1 through the tunnel to the air conditioning
compressor unit in Former City Hall. The City shall complete severing of the
well water line to the Former City Hall, at the City's sole cost and expense,
within thirty (30) days after Closing. The City shall work with Sleepy Eye to
ensure severing of this line shall occur at a location that best serves Sleepy
Eye. The City shall provide Sleepy Eye with written certification the severing
work has been completed within the required time frame.
d. Former City Hall Door Locks: SIeepy Eye recognizes the interior and exterior
dock locks at the Former City Hall are included within the City's overall
secured Madeco key system. As such, Sleepy Eye recognizes the City shall
remove the lock cores from all interior and exterior doors. Prior to Closing,
the City will work with Sleepy Eye to ensure adequate secure locks are
provided at the City's expense.
e. Former City Hall Elevator: Sleepy Eye recognizes the elevator located in the
Former City Hall has not been maintained since the City vacated the Former
City Hall in October, 2008. As such, the Parties agree the City makes no
expressed or implied warranty of any kind regarding the elevator. All costs
associated with licensing and ensuring the elevator is in proper working order
shall be borne exclusively by Sleepy Eye.
f. Legal Non - conforming Uses of the FCH• The City recognizes the FCH was
used for several purposes including, but not limited to, offices and limited
Agreement for the Sharing and Severance of Utilities and Systems
GSC Family Limited Partnership and the City of Bozeman, MT
Page 5 of 10
public assembly. The City also recognizes these uses that existed on the
property may have been legal non - conforming uses under Title 18 of the
Bozeman Municipal Code. As such, the City agrees that uses similar to the
uses of the FCH under the City's ownership may continue in perpetuity.
Sleepy Eye would have the right to develop the FCH as mixed use of offices
and other permitted uses and such mixed use would not change the historical
right to have offices in the FCH building. Nothing in this section waives any
other matter related to building, fire, or other codes of the City or the State of
Montana regarding occupation and use of the FCH.
6. Agreement Not Final Until Closing This Agreement is not effective nor binding on
the parties until the Parties execute the Closing wherein the City issues a grant deed
to Sleepy Eye for the Former City Hall. This Agreement shall be recorded in the
records of the Gallatin County Clerk and Recorder along with the grant deed.
7. Binding Agreement[Utilities Severed Prior to Subsequent Transfer At Closing, this
Agreement shall be binding on the successors in interest of both Parties. However,
should Sleepy Eye transfer ownership of the Former City Hall to another entity all
utilities shared between FS 1 and the Former City Hall shall be severed prior to Sleepy
Eye transferring ownership and in such a case the City shall no longer be obligated to
provide any service to the entity taking ownership. Furthermore, the Parties agree the
rights under this Agreement shall not benefit or transfer to any of Sleepy Eye's
lessees, renters, or licensees but shall only be for the benefit of Sleepy Eye.
Indemnify and Hold Harmless a. Recognizing the City is providing certain utility
services to the Former City Hall for the benefit of Sleepy Eye, Sleepy Eye
specifically agrees to indemnify and hold harmless the City its employees, directors,
agents and subcontractors against any and all liability, losses or damages or any
expenses whatsoever to the City as a result of any claims, demands, damages, costs or
judgments against it including, without limitation, personal injury, death, property
damage, loss of use, and attorney's fees that may arise in connection with or as a
result of fulfilling the City's obligations under this Agreement.
9. Severability If any provision of this Agreement is held to be void or unenforceable
by a court, the validity of the remaining provisions shall not be affected and the rights
and obligations of the Parties shall be construed and enforced as if the Agreement did
not contain the particular provision held to be void or unenforceable.
10. Venue and Choice of Law This Agreement shall be construed under the laws of the
State of Montana and the Parties agree venue shall be the Eighteenth Judicial District,
Gallatin County, Montana.
11. Insurance Sleepy Eye shall maintain adequate liability and property insurance on the
Former City Hall from the date of Closing until termination of this Agreement. The
insurance declaration shall name the City of Bozeman as an additional insured and
contain no less than $750,000 per claim and $1,500,000 per occurrence. Sleepy Eye
Agreement for the Sharing and Severance of Utilities and Systems
GSC Fancily Limited Partnership and the City of Bozeman, MT
Page 6 of 10
shall provide a copy of the insurance declaration to the City prior to the Closing.
12. Remedies in Case of Breach Should either Party assert the other is in breach of any
obligation under this Agreement the Party asserting a breach must inform the other in
writing of the alleged breach and provide the accused Party with 30 days to cure the
alleged breach. If the Party alleging a breach determines the cure is inadequate that
Party may seek redress through any means available at law or in equity.
13. Attorney Fees That in the event it becomes necessary for either Party of this
Agreement to retain an attorney to enforce any of the terns or conditions of this
Agreement or to give any notice required herein, then the prevailing Party or the
Party giving notice shall be entitled to reasonable attorney's fees and costs, including
fees, salary, and costs of in -house counsel to include the Bozeman City Attorney.
14. Termination of Agreement This Agreement shall continue in full force in effect until
all obligations of the Parties or any successor in interest have been satisfied. The
Parties specifically understand that upon 36 months after Closing, the sharing of all
utilities shall be terminated.
15. No _Warranty/Waiver Nothing in this Agreement shall be construed to create an
express or implied warranty in the condition of any shared infrastructure or utility
lines or in the condition of any infrastructure or utilities located solely within the
Former City Hall. Sleepy Eye recognizes it has inspected all systems and
infrastructure located with the Former City Hall prior to Closing and hereby waives
any claim it may have regarding the status or condition of any infrastructure or utility
lines shared or otherwise located on the Former City Hall property or located in FS 1.
lb. Notice If either Parry is required to give notice under this Agreement to the other
Party for non - emergency circumstances, the Parties shall provide such notice as
follows:
All such notices shall be in writing and shall be delivered personally or sent by
certified mail, return receipt requested, to the addresses set forth below. All notices
shall be deemed effective at the time of personal delivery or three (3) days after
deposit in the U.S. Mail, postage prepaid.
City of Bozeman
Attn: City Manager
P.O. Box 1230
Bozeman, MT 59715
Sleepy Eye, LLC
Attn: Steve Kleimer
425 E. Main, Apt. 5
Bozeman, MT 59715
Agreement for the Sharing and Severance of Utilities and Systems
GSC Family Limited Partnership and the City of Bozeman, MT
Page 7 of 10
For emergency communications, the City contact shall be the Bozeman Fire Chief
and/or the senior officer on duty at FS1. Sleepy Eye's emergency contact shall be
Steve Kleimer. The Parties shall provide each other with a current emergency phone
number including backup contacts. For communications regarding maintenance or
billing of shared costs the City's contact shall be James Goehrung, Director of
Facility Services; Sleepy Eye's contact shall be Steve Kleimer.
17. Public Document The Parties agree this document is a public record under the laws
of the State of Montana and neither Party has any expectation of privacy nor trade
secretes regarding the contents herein.
18. Entire Agreement This written Agreement contains the entire understanding
between the Parties hereto in connection with the subject matter and it supersedes
and replaces any and all prior negotiations, agreements and representations,
whether oral or written. The Parties acknowledges that neither Parry, nor any agent
or attorney of any of either Party, has made any promises, representations or
warranties whatsoever, express or implied, not contained herein, concerning the
subject matter hereto, to induce each other to execute this Agreement, and both Parties
acknowledge that they have not executed this Agreement in reliance upon any
promises, representations, or warranties not contained herein. Sleepy Eye further
acknowledges that it has had a full and complete opportunity to independently
investigate all facts material hereto, and has done so.
19. Amendment/Modification That any amendment or modification of this Contract or
any provisions herein shall be made in writing or executed in the same manner as this
original document and shall after execution become a part of this Contract.
20. Interpretation and Construction This Agreement has been jointly drafted and/or
reviewed by the Parties hereto following negotiations between them. It shall be
construed according to the fair intent of the language as a whole, and not for or against
either of the Parties.
21. Independent Review/Authority to Sign: The Parties acknowledge that they have been
advised by independent legal counsel, not retained or paid by the other, regarding this
Agreement, and have entered it freely, without duress or coercion. Each Party
represents to the other that the person signing below on its behalf has authority to
bind their respective entities to this Agreement.
Agreement for the Sharing and Severance of Utilities and Systems
GSC Family Limited Partnership and the City of Bozeman, MT
Page 8 of 10
City of Bozeman, Montana:
JEFF r ■ S Y
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STA Y L M
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City, C'a r � E *.N7
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APPROVED AS TO FORM:
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CioAttonjey
Agreement for the Sharing and Severance of Utilities and Systems
GSC Family Limited Partnership and the City of Bozeman, MT
Page 9 of 10
Sleepy Eye, LLC:
/' k�e��
Gretchen' Member
STATE OF MONTANA
County of Gallatin
On this ZZ day of A wA, 2010, before me, a notary public in and for said State,
personally appeared Gretchen 'CI_Kleimer, known to me to be a Member of Sleepy Eye, LLC,
the limited liability company that executed this document, and acknowledged to me that such
limited liability company executed the same.
written.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the date first above
'r
(SEAL)..i-
r �
oc� v (Print name)
Notary Public for the State of Montana
Residing at: �) Ly A
My commission expires 7 (,� C
Agreement for the Sharing and Severance of Utilities and Systems
GSC Family Limited Partnership and the City of Bozeman, MT
Page 10 of 10