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HomeMy WebLinkAbout4-16-07 Packet Item_Authorize City Manager to sign the purchase agreem_10 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Sara Folger Chris Kukulski, City Manager SUBJECT: Land Acquisition, “Bonn Property” MEETING DATE: April 16, 2007 BACKGROUND: Last spring the City sponsored a grant request from Gallatin Valley Land Trust to the MT Fish, Wildlife and Parks’ (FWP) FY07 Recreational Trails Program for funding to acquire a parcel of land in Bozeman, to complete public ownership of the Linear Trail (Gallagator). The parcel is commonly referred to as “the Bonn property”. The deed is currently owned by Trust for Public Land (TPL), which has an office in Bozeman. TPL purchased the property in January 2006 to forestall private residential development on the parcel. The grant request was successful, and the City was awarded the full grant amount of $35,000.00 for a portion of the purchase. FWP has a high interest in acquiring public trail and park lands, and more than doubled the FY’07 grant with a supplemental award of $44,453.71 in unused funds from previous grant years. Thus the City has been awarded $79,453.71 toward this purchase. The Gallatin County Open Lands Board has made a commitment of $75,000.00 to assist in acquiring the parcel, in exchange for dissolution of development rights on the property. TPL will contribute $40,000 in private donations made for purchase of the property and conveyance to City Parks inventory. The combined funding will cover the purchase price of the parcel, $190,000.00, and the remaining 4,453.71 will cover costs of trail reconstruction, benches, information kiosk and trail markers on the site. Thus for no cost to the City this transaction can be completed and use of the parcel will be permanently established as a crucial link in the Bozeman trails system. There is one important caveat, in that FWP has required the City to expend the supplemental grant funds by May 1st. The parties hope to close by April 27th. The Agreement has been reviewed and signed by the County, and reviewed and approved by the City Legal Department. FWP will accept a completed Agreement as proof of purchase for grant reimbursement. 67 RECOMMENDATION: Authorize City Manager Kukulski to sign the Purchase and Sale Agreement for the Bonn Property acquisition. FISCAL EFFECTS: None for the acquisition. Some staff time is required for administration, and City Parks Dept. as part of normal trail maintenance. ALTERNATIVES: As suggested by the Commission. Respectfully submitted, _________________________________ ____________________________ Sara Folger, Grants Administrator / Chris A. Kukulski, City Manager CTEP Coordinator Report compiled on April 10, 2007 68 After recording please return to: The City of Bozeman _______________________________________ Space Above This Line For Recorder's Use Only REAL ESTATE PURCHASE AND SALE AGREEMENT This Real Estate Purchase and Sale Agreement ("Agreement") is made and entered into this _____________day of March, 2007, by The Trust for Public Land, a nonprofit California public benefit corporation with mailing address of 1011 Western Avenue, Suite 605, Seattle, Washington 98104 (hereinafter "TPL" or "Seller") and The City of Bozeman, a political subdivision of the State of Montana (hereinafter referred to as the "City"), with mailing address of ____________________, Bozeman, Montana, and Gallatin County, Montana, a political subdivision of the State of Montana, with mailing address of 311 West Main Street, Bozeman, Montana 59715, (herein referred to as "County"). RECITALS: A. Seller is the owner of the following real property located in Gallatin County, Montana: Parcel 1 and Parcel 2 of Certificate of Survey No. 2457, a tract of land located in the SE1/4 of Section 7, Township 2 South, Range 6 East, P.M.M., City of Bozeman, Gallatin County, Montana, according to the official plat thereof on file and of record in the office of the County Clerk and Recorder, Gallatin County, Montana (the "Land"), together with the following: (a) All rights, privileges, easements and appurtenances to the Land including, without limitation, all of Seller's right, title and interest in and to all mineral and water rights, if any (and without warranty), and all easements, rights-of-way and other appurtenances used or connected with the beneficial use or enjoyment of the Land (the Land, any improvements thereon, and all such easements and appurtenances are sometimes collectively hereinafter referred to as the "Property"); Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 1 of 12 Seller’s Initials 69 (b) All right, title and interest of Seller (if any) in and to all site plans, plats, surveys, inspections, tests, drainage, grading, soil and substratus studies, environmental, wildlife and mineral studies, utility (water, sewer, natural gas, telephone, cable TV, or electricity, as applicable) studies or agreements, marketing and/or development studies, traffic studies, entitlement and zoning information, governmental and private party applications and approvals, proposed plats, re-platting, approved or proposed development plans, proposed or approved amendments to existing covenants, conditions, and restrictions of record, plans specifications and working drawings for any buildings, improvements and structures that are located on and/or are planned to be constructed on the Property, and other plans, studies, data, or materials of any kind, whether in written or computer (or other electronically) based or retrievable form if existing and Seller's possession or control (including any of the foregoing prepared by consultants or other third parties on behalf of Seller) that relate to the Property (collectively, the "Property Documents") (The Property and Property Documents are sometimes hereinafter collectively referred to as the "Property"). If this Agreement is terminated as permitted hereunder or the purchase and sale of the Property fails to close because of a failure of any of the City's or Seller's Conditions Precedent (as set forth in Section 6 below), City shall promptly return to Seller all copies of the Property Documents Seller has previously provided to City; and B. City wishes to purchase the Property from Seller on the terms of this Agreement. AGREEMENTS: 1. Sale and Purchase. City agrees to purchase the Property from Seller and Seller agrees to sell the Property to City for a price of $190,000.00 ("Purchase Price"). Of the Purchase Price, Seller will contribute $40,000.00, representing grants received by Seller to be applied toward the Purchase Price. Seller will not be retaining any ownership interest in the Property. In addition, County will be contributing $75,000.00 in exchange for the extinguishment of all development rights on the Property as provided for below. 2. Payment of Purchase Price. The Purchase Price shall be paid in cash (by cashier's check or wire transfer) at Closing. 3. Charitable Gift Element of Bargain Sale. In selling the Property to City, Seller intends that the Property shall remain forever as public open-space and park land, thereby providing important public recreational opportunities, wildlife habitat opportunities as well as contributing to the ecological integrity for residents of the City, Gallatin County and other members of the public, for the benefit of the public and future generations. Seller and City mutually acknowledge and agree that Seller's agreement to sell and City’s agreement to buy includes a purchase price, set forth above, that is less than the fair market value of the Property. Sellers intend that the conveyance of the Property pursuant to this Agreement Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 2 of 12 Seller’s Initials 70 will constitute a "bargain sale" to City pursuant to the applicable provisions of the Internal Revenue Code and Treasury Regulations. City does not represent or warrant that Seller will receive charitable income, estate or gift tax deductions or other tax benefits if Seller claims a bargain sale charitable contribution. 4. Closing. The conveyance contemplated by this Agreement shall be closed on or before April 27, 2007 (the "Closing") or ("Closing Date"). The Closing will be at Security Title Company in Bozeman, Montana. Seller will pay for the cost to release liens, if any, and any other documents necessary to convey clear title to the City. City shall pay for all other costs associated with closing the transaction including, without limitation, all costs associated with obtaining financing, cost of any escrow accounts required or permitted by the terms of this Agreement, the preparation of the deed, title insurance, bill of sale, cost of water rights transfer, the recording of all documents. 5. Preliminary Title Commitment. Within ten (10) days after mutual execution of this Agreement, Seller shall at City's cost, order a Preliminary Title Commitment showing the condition of title to the Property in the amount of the Purchase Price, together with legible copies of all instruments of record affecting the Property, issued by Security Title Company in Bozeman, Montana. This offer is contingent upon City's receipt and approval (to City's satisfaction) of the Preliminary Title Commitment. City shall have seven (7) business days from City's receipt of the Preliminary Title Commitment to examine title and either give City's approval of the Preliminary Title Commitment or terminate this Agreement by providing written notice to Seller. 6. Deeds. At Closing, Seller shall execute and deliver to City a Warranty Deed, conveying marketable title to the Property to City, free and clear of all liens and encumbrances, subject only to easements, any Declaration of Covenants, Conditions, and Restrictions and other matters of records as identified in the Preliminary Title Commitment and accepted by City. Seller shall convey by Bill of Sale and Assignment executed by Seller, title to the Property Documents and any water rights (the "Bill of Sale"). The Warranty Deed shall include deed restrictions extinguishing all development rights on the Property as required by the County due to funding distributed under the "Open-Space Land and Voluntary Conservation Easement Act." Such deed restrictions shall be in the form of Exhibit B attached hereto and hereby incorporated by this reference. 7. Conditions. The Closing of this Agreement is conditioned upon: 7.1 On or before April ___, 2007 City having conducted its inspection of the Property and approved the physical condition and use of the Property (including but not limited to review of soils, survey, environmental, septic, wells, zoning, title, financial analysis, and any due diligence required by the Open Lands Board to receive funding, etc.). This period shall be known as City's "Due Diligence" period. During such Due Diligence Period, Seller will allow City access to the Property upon prior notice and will allow City and/or City's agents to conduct any tests or sampling City Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 3 of 12 Seller’s Initials 71 deems necessary, provided City will hold Seller harmless from any claims related to City's activity and will leave the Property in the same condition as it was prior to the inspection. In addition, City shall not allow any of City's agents to place liens on the Property and that City shall indemnify and hold Seller harmless from any liens placed on the Property as a result of City's actions. City may at any time prior to the end of the Due Diligence period, by written notice delivered to Seller or Seller's agent, elect to either (i) purchase the Property (subject to any other conditions contained herein), in which event this Agreement shall continue to be in full force and effect, or (ii) terminate this Agreement. Failure to give such notice shall be deemed an election to terminate this Agreement and it shall be no further force or effect. 7.2 City having approved the Preliminary Title Commitment as per the timeline and requirements described above in Section 5 of this Agreement. 7.3 The foregoing conditions are for the benefit of City and Seller respectively. In the event the foregoing conditions are not satisfied or waived prior to Closing, then this Agreement shall terminate. 8. Title Insurance. Within 30 business days after Closing, Seller shall cause Security Title Company to furnish City with a standard owner's policy of title insurance for the Property, insuring City against loss or damage sustained by it by reason of the unmarketability of its title, or encumbrances thereon, other than the exceptions contained in such policies which City previously has accepted. City shall be responsible for the cost of any extended title insurance or endorsements to the title insurance. 9. Taxes and Assessments. Real property taxes, and any county special assessments for the current year shall be prorated as of Closing and such prorations shall be a final proration and not subject to adjustment. 10. Water. To the extent any water rights exist on the property they will be transferred to City. 11. Seller's Representations. The following constitute representations of Seller to City, to the best of Seller's actual knowledge: a. There are no pending or threatened claims, actions, suits, litigation, governmental investigations, or judicial or administrative proceedings, arbitrations, grievance proceedings or unfair labor practice claims involving the Property or Seller's actions with respect thereto, or which might impede the closing of the transaction contemplated under this Agreement, or which would interfere with City's intended use of, and benefit from, the Property. b. No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against Seller, nor are any of such proceedings contemplated by Seller. Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 4 of 12 Seller’s Initials 72 c. At Closing, Seller will convey fee simple title to the Property, and will have good, marketable, and insurable title to the Property, free and clear of all liens, encumbrances, claims, covenants, conditions, restrictions, easements, rights of way, land use, zoning and other government regulations, options, judgments, or other matters, except as disclosed on the Preliminary Title Commitment and accepted by City. d. Seller has received no notice of any governmental agency or authority having jurisdiction over the Property that the Property is currently in violation of any law, ordinance, or regulation applicable to the Property. e. To the best of Seller's knowledge, and without warranty, the Real Property does not contain and has not been used in any manner for the storage of any hazardous or toxic waste, materials, discharge, deposit, dumping, or contamination, whether of soil, groundwater or otherwise and no activity on the Land has produced any such substances. f. Seller has the legal power, right, and authority to enter into this Agreement and the instruments referenced herein and, upon filing of the final survey described in Recital A above, to consummate the transactions contemplated hereby. The execution of this Agreement and the Closing will not violate any other agreement of Seller. Seller represents that it is the sole owner of the Land. g. Seller agrees, within ten (10) business days of mutual execution of this Contract, to provide City with complete copies of any and all Property Documents in Seller's, or their agents', possession, as defined in Recital A, above. h. At Closing, all of the above representations shall continue o be true and correct. Seller hereby covenants with City that from the date hereof until the Closing, no part of the Property, or any interest therein, will be sold or otherwise transferred or encumbered without City's prior written consent. 12. City's Representations. In addition to any express agreements of City contained herein, the following constitute representations of City to Seller, to the best of City's knowledge after diligent inquiry: a. City has the legal power, right, and authority to enter into this Agreement and the instruments referenced herein and to consummate the transactions contemplated hereby. b. City will fully inspect and examine the Property. City is relying on its own independent judgment regarding the Property's value, condition and potential use. c. City acknowledges the disclosures of Seller contained in Exhibit A, which are incorporated by this reference. Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 5 of 12 Seller’s Initials 73 13. Possession. City shall be entitled to possession of the Property immediately upon Closing. 14. Remedies. Time is of the essence of this Agreement. Each party shall retain all rights and remedies at law or in equity under Montana law, including City is entitled to the remedy of specific performance. 15. Preservation of Property; Risk of Loss. Seller acknowledges that City is acquiring the Land to protect and preserve in perpetuity the Land's natural and recreational values. Seller agrees that the Land's natural and recreational values shall remain as they are as of the date of signing this Agreement until the Closing Date, and that Seller shall refrain from and shall not actively permit any use of the Land for any purpose or in any manner which would adversely affect City's intended use. In the event that either (a) Seller shall fail to refrain from or shall actively permit such adverse use of the Land, or (b) loss or damage occurs to the Land at any time prior to Closing, City may, without liability, refuse to close, or, alternatively, City may elect to accept the Land in which case there shall be an equitable adjustment of the purchase price based on the change in circumstances. In addition, prior to Closing, Seller without written consent of City shall not place any new easements or grant additional rights-of-way over the Land which cannot be removed by Seller prior to Closing. Moreover, while Seller may pledge the Land as security; however, such security interest, deed, mortgage, etc. shall be removed at Seller's sole cost and expense prior to Closing. 16. Binding Effect. This Agreement is binding upon and shall inure to the benefit of the parties and their respective heirs, legal representatives and assigns. 17. Attorneys Fees. If suit, action, or other proceeding of any nature whatsoever (including any proceeding under the U.S. Bankruptcy Code) is instituted in connection with any controversy arising out of this Agreement or to interpret or enforce any rights hereunder, the prevailing party shall be entitled to recover its attorney fees, experts' fees and all other fees, costs, and expenses actually incurred and reasonably necessary in connection therewith, as determined by the court at trial or on any appeal or review, in addition to all other amounts provided by law. 18. Notices. a. Form. All notices or deliveries required under this Agreement shall be hand delivered or given by facsimile transmittal, regular mail, or overnight courier directed to the telecopier number or address of City and Seller set forth under their signatures. All notices so given shall be considered effective, if hand-delivered, when received; if delivered by facsimile transmittal, upon telephone confirmation of receipt; if delivered by courier, one business day after timely deposit with the courier service, charges prepaid; or if mailed, three days after deposit, first class postage prepaid, with the United States Postal Service. Either party may change the address to which future notices shall be sent by notice given in accordance with this Section. Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 6 of 12 Seller’s Initials 74 19. Modification. This Agreement may not be modified except by a written agreement executed by all parties. 20. Jurisdiction and Venue. This Agreement shall be construed in accordance with Montana law. Jurisdiction for any dispute or claim raised under this Agreement or proceeding brought to interpret the Agreement shall lie solely in the State of Montana, Gallatin County. 21. Brokers or Third Parties. Each party represents to the other that no party has any claim for compensation or expenses as a result of this transaction and each party shall indemnify the other against any claims for commissions or other compensation by any other broker, finder or third party with whom the indemnifying party has dealt. 22. Facsimile. This Agreement, plus any modifications, may be transmitted by facsimile transmission. All parties agree that their signatures which are copied on the transmitted documents shall be binding as if they were original signatures. Each party agrees to fully execute with original signatures on all original documents following execution of facsimile transmitted. 23. Counterparts. This Agreement may be executed by the parties in counterparts, each of which when executed and delivered shall be an original, but all of which together shall constitute one and the same instrument. 24. Survival. Sections 8, 9, 10, 12, 14, 16, 17, 18 and 20 shall survive Closing. 25. Entire Agreement. This Agreement constitutes a full and final expression by the parties and supersedes all prior oral or written negotiations and agreements regarding the Property. City agrees to purchase the Property on the terms and conditions set forth in this Agreement and agree that City or City's agent shall have until April __, 2007 at 5:00p.m. (Mountain Standard Time) to secure Seller's written acceptance. City may withdraw this offer at any time prior to City being notified of Seller's written acceptance. If Seller has not accepted this offer by the time specified this offer is automatically withdrawn. Signatures to Follow Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 7 of 12 Seller’s Initials 75 CITY: The City of Bozeman, a political subdivision of the State of Montana Dated: ________________________ By ________________________________ Time: ________________________ Address: Phone: Fax: 406 Federal Tax ID # COUNTY: Gallatin County, Montana a Political Subdivision of the State of Montana Dated: ________________________ By ________________________________ Time: ________________________ Address: 311 W. Main Street Bozeman, Montana 59715 Phone: 406- Fax: 406- Additional Signatures to Follow Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 8 of 12 Seller’s Initials 76 SELLER: This offer was accepted: The Trust for Public Land, a non-profit California public benefit corporation Dated: ________________________ By ________________________________ Time: ________________________ Address: 1011 Western Avenue, Suite 605 Seattle, WA 98104 Phone: 206-587-2447 Fax: 206-382-3414 Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 9 of 12 Seller’s Initials 77 EXHIBIT A DISCLOSURES Radon Disclosure Statement The following disclosure is given pursuant to the Montana Radon Control Act, Montana Code Annotated Section 75-3-606. RADON GAS: RADON IS 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 HOUSE. If any building on 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 any building has received radon mitigation treatment, the Seller will provide the evidence of the mitigation treatment concurrent with an executed copy of this Agreement. The furnishing of test results is not to be construed as a promise, warranty, or representation of any sort by the Seller or the Seller's agent that the test results are accurate or that any mitigation or treatment is effective. 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 local law enforcement agencies as part of Montana's Sexual and Violent Offender Registration Act. In some cases law enforcement offices will make the information concerning registered offenders available to the public. You may contact the Sheriffs office, the Montana Department of Justice, or a County probation officer for further information. Noxious Weeds City acknowledges the following noxious weeds disclosure: The laws of the State of Montana require sellers of Property to notify buyers of Property that noxious weeds exist or potentially exist on the Property being offered for sale. The State of Montana and Gallatin County have established certain requirements for the control of noxious weeds. For information concerning noxious weeds and a Property owner's obligations, City may contact either the local County extension agent or the County Weed Control Board. Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 10 of 12 Seller’s Initials 78 EXHIBIT B DEED RESTRICTIONS DECLARATION OF PROTECTIVE COVENANTS FOR OPEN SPACE LAND AND VOLUNTARY CONSERVATION ACT FOR THE GALLATIN COUNTY REGIONAL PARK-GALLATIN COUNTY, MONTANA THE CITY OF BOZEMAN, MONTANA, a political subdivision of the State of Montana, by and through its City Council, hereinafter referred to as the “Declarant,” states as follows in regard to real property owned by the Declarant, more particularly described as: Parcel 1 and Parcel 2 of of COS 2457, a tract of land located in the SE1/4 of Section 7, Township 2 South, Range 6 East, P.M.M., Gallatin County, Montana. Hereafter referred to as the “Property”. WHEREAS, Declarant obtained fee simple title to the Property on April 27, 2007 with proceeds partially provided by Gallatin County using proceeds of bonds issued under the authority, inter alia, of the Montana Open Space and Voluntary Conservation Easement Act, Title 76, Chapter 6, Montana Code Annotated (“The Act”); and WHEREAS, in its _________20027, order authorizing the Declarant’s purchase of the Property and the use of County bond proceeds, the Board of County Commissioners conditioned said purchase and contribution on recording a covenant, running with the land, restricting the use of the Property consistent with The Act; and WHEREAS, Declarant has agreed that the Property shall only be used as ‘Open-space land’ in accordance with The Act, its purposes, findings and policy.”; and WHEREAS, April 27, 2007, Declarant completed the purchase of the Property from The Trust for Public Land for the purpose of dedicating the Property for the use of parkland to benefit the public; and WHEREAS, the purpose of this declarative covenants is to preserve the Property as “Open-space Land” in accordance with The Act as further described below; and NOW THEREFORE, Declarant does hereby amend, make, and declare the Property as “Open- space Land” in accordance with The Act, to be placed upon the Property as set forth below. 1. These Covenants shall attach to and run with the Property subject to these covenants and shall constitute an equitable servitude upon the Property and every part of it, including all titles, interest and estates as may be held, conveyed, owned, claimed, devised, encumbered, used, occupied and improved. Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 11 of 12 Seller’s Initials 79 These Covenants are declared for the benefit of the entire Property and every part of it and for the benefit of any owner. They shall constitute benefits and burdens to Declarant and to all persons or entities hereafter acquiring any interest in the Property. 2. The following restriction shall apply to the Property: a. The Property shall only be used as “Open-Space land” in accordance with The Act, its purposes, findings and policy. 3. These Covenants shall continue in full force and effect and shall run with the land as a legal and equitable servitude in perpetuity unless amended in accordance with The Act. If the Act is amended, revoked or rescinded or determined invalid these Covenants may be modified consistent with the same. 4. Determination of invalidity of any portion of these Covenants shall not in any manner affect the other portions or provisions. IN WITNESS WHEREOF, the undersigned hereby certifies that this Declaration of Covenants for Open Space Lands and Voluntary Conservation Act for the Gallatin County Regional Park- Gallatin County, Montana has been approved and duly adopted. This ______ day of _______________, 2007. The City of Bozeman By: _____________________ Title: ____________________ IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Official Seal the day and year in this certificate first above written. Notary Signature ___________________________ Printed Name ___________________________ Notary Signature for the State of ___________________________ Residing at ___________________________ My commission expires ___________________________ Real Estate Purchase and Sale Agreement City’s’ Initials County’s Initial Page 12 of 12 Seller’s Initials 80 81 82 83