HomeMy WebLinkAboutProvisional Adoption Ordinance 1894, MDT Land Exchange_14Page 1 of 3
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Chuck Winn, Assistant City Manager
SUBJECT: Provisional adoption of Ordinance No. 1894 authorizing the City Manager
to execute the Land Exchange Conveyance Agreement, Granting of an
Easement, and Leaseback between the Montana Department of
Transportation (MDT) and the City of Bozeman for City Property located
on Nelson and Frontage Roads and MDT property on Rouse Avenue.
MEETING DATE: July 14, 2014
AGENDA ITEM TYPE: Action (affirmative vote of 4 Commissioners required for
adoption of Ordinance 1894)
RECOMMENDATION: Conduct a public hearing and by an affirmative vote of 4
Commissioners provisionally adopt Ordinance 1894 authorizing
the City Manager to execute the Land Exchange Conveyance
Agreement with MDT including the execution of an easement for
property owned by the City at the Water Reclamation Facility and
a leaseback to MDT of the Rouse Avenue Property.
PROPOSED MOTION: Having considered public comment and the information presented
by staff, I hereby move to provisionally adopt Ordinance 1894 authorizing the City Manager to
execute documents on Exhibit A of said Ordinance including the Land Exchange Conveyance
Agreement, granting of easement, and leaseback with MDT.
BACKGROUND: Over the past year, the City has been looking for property to house a new
facility for the City’s criminal justice functions. We began discussions with MDT approximately
a year ago regarding MDT’s interest to relocate its shop functions on Rouse Avenue. MDT is
interested in locating its shops on property owned by the City at the corner of Nelson Road and
Frontage Roads. This action consummates a year of work with MDT to facilitate an exchange to
provide a high visibility location for the City’s criminal justice functions and provide for
redevelopment along the Rouse Avenue corridor.
On November 18, 2013, the Commission conducted a public hearing and determined 12 acres at
the Water Reclamation Facility was no longer necessary for the conduct of city business and that
the public interest was furthered by an exchange of the property for approximately 8.2 acres
owned by MDT at 907 North Rouse (as explained below, the property comprises 7.831 acres).
The motion directed the City Manager to complete all necessary steps to complete the exchange
with MDT. Subsequent to that Commission action, we have been working with MDT to finalize
the details and draft an agreement. Attached to this memo is Ordinance 1894. Exhibit A to the
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Ordinance is the Land Exchange Conveyance Agreement that specifies the elements of the
transaction. Ordinance 1894 authorizes the City Manager to sign and execute that agreement and
all related documents.
Also on November 18, 2013, the City Commission authorized pursuant to Resolution 4489 the
vacation of streets within blocks 14, 15, and 28 of Imes’ Addition. MDT subsequently
aggregated the parcels within said blocks and filed an amended plat showing the vacation,
aggregation, and resurvey of the Rouse Avenue Property. The amended plat also reserved for
MDT property it deemed necessary for future expansion of Rouse Avenue. As such, we
estimated the acreage originally to be 8.12 acres. After filing of the amended plat the total
acreage is 7.83. The value of the Rouse Avenue Property reflects its current acreage.
As previously discussed, the new Rouse Justice Center and its required parking will occupy
approximately five of the eight acres. The remainder of the property could be utilized for other
City purposes, held for future uses, or sold for private development. That decision is not a part
of the Commission’s action tonight.
Chpt. 2.06 of the Bozeman Municipal Code controls the Commission’s actions regarding
conveyance of real property and requires appraisals. During the process of negotiating the
agreement with MDT both the Rouse Avenue Property and the Nelson Road property were
appraised. The appraisals can be found here; Nelson Road Appraisal, Rouse Ave Appraisal.
Section 3 of Ordinance 1894 describes the method of equalizing the value of the properties as
specified in the Conveyance Agreement. The City will be required to remit $746,323, plus or
minus prorations and adjustments to MDT at closing.
The Conveyance Agreement includes a leaseback arrangement with MDT. The City will
leaseback to MDT a portion of the Rouse Avenue Property until such time as MDT’s new shops
complex is completed on the Nelson Road Property. The leaseback is provided for in Exhibit C
of the Conveyance Agreement. Such leaseback will not interfere with construction of the Rouse
Justice Center should the voters approve its funding this fall.
UNRESOLVED ISSUES: As part of the due diligence for the exchange, the City obtained a
Phase 1 Environmental Assessment for the Rouse Avenue Property. In addition, through
preliminary geo-tech work, the City obtained bore samples on the proposed location for the
Rouse Justice Center. The Phase 1 EA and bore samples show the probable existence of
petroleum products in the soil. As part of the exchange agreement, MDT will be responsible for
cleanup of all contaminants on the Rouse Avenue Property. While the responsibilities of MDT
regarding cleanup are not unresolved, the nature and extent of remediation activities MDT will
conduct are unresolved. This work will be ongoing after the exchange. The Conveyance
Agreement contains protections for the City regarding these issues and as such remediation
should not pose a bar to the execution of this Ordinance.
As for construction of the Rouse Justice Center, on July 21, 2014 the Commission will review
the design and projected cost information for the Rouse Justice Center. Approval of this
Ordinance will finalize the location and site assumptions used in the design and cost projections.
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ALTERNATIVES: None identified.
FISCAL EFFECTS: The City’s FY2014 budget includes $1M for the purchase of property and
site improvements for the construction of a new police and municipal courts facility. The
payments detailed in the agreement will be paid out of that fund. The City has had other
miscellaneous costs regarding this process including costs of appraisal, survey and boundary
relocation on the Nelson Road Property, outside counsel, and considerable staff time regarding
negotiating the conveyance, boundary and vacation process.
Attachments: Ordinance 1894 with Exhibit A Land Exchange Conveyance Agreement
(and related documents including easement and leaseback)
Report compiled on: 7-3-14
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ORDINANCE NO. 1894
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, AUTHORIZING THE CITY MANAGER TO APPROVE A LAND EXCHANGE CONVEYANCE AGREEMENT BETWEEN THE MONTANA DEPARTMENT OF TRANSPORTATION (MDT) AND THE CITY OF BOZEMAN FOR THE CONVEYANCE OF PROPERTY OWNED BY THE CITY GENERALLY
DESCRIBED AS APPROXIMATELY 12 ACRES LOCATED AT THE INTERSECTION
OF NELSON AND FRONTAGE ROAD TO MDT AND THE CONVEYANCE OF PROPERTY OWNED BY MDT GENERALLY DESCRIBED AS 7.83 ACRES AT 907 NORTH ROUSE.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY
OF BOZEMAN, MONTANA: Section 1
Legislative Findings.
The City Commission hereby makes the following findings in support of adoption of this Ordinance:
1. The City of Bozeman owns real property at the Water Reclamation Facility (the
“WRF”) known as Tract MDT of Certificate of Survey 473F located within the NW
¼ of Section 26, T01S, R05E, PMM, City of Bozeman, Gallatin County, Montana (the “Nelson Road Property”).
2. The Montana Department of Transportation (MDT) owns real property at 907 North
Rouse Avenue known as Parcel A of Amended Plat of Blocks 14, 15 & 28 of Imes’
Addition to Bozeman, located in the Southwest Quarter of Section 6, Township 2
South, Range 5 East, Principal Meridian Montana, Gallatin County, Montana (the “Rouse Avenue Property”).
3. Section 2.11 of the Bozeman City Charter requires adoption of an ordinance when
the City “convey[s]… or authorize[s] the conveyance… of any lands of the city.”
4. Section 2.06.870 of the Bozeman Municipal Code (BMC) grants the City
Commission the jurisdiction and power to sell and exchange city property, however acquired, belonging to the City that is not necessary to the conduct of city business
or the preservation of property.
5. Section 2.06.890.B, BMC, subject to section 2.06.870.D, authorizes the sale of City
property for not less than 90 percent of the appraised value.
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6. Section 2.06.900, BMC provides that “[N]o sale of real property shall be made of any property unless it has been appraised within one year prior to the date of the sale.
7. On November 8, 2013, the Bozeman City Commission conducted a public hearing
wherein the Commission determined by a vote of 5-0, adopted the findings included
in the November 18, 2013 staff memorandum and concluded that up to 12 acres City-owned property at the WRF is no longer necessary for the conduct of City business or the preservation of City property and also that the public interest would
be furthered by the exchange of the property with MDT for the purpose of locating
a new police and courts facility and/or other city uses. The Commission directed
the City Manager to complete all steps necessary to complete the exchange in accordance with 2.06.870.C, BMC, and return to the Commission with an ordinance authorizing the exchange.
8. Should the Bozeman City Commission provisionally adopt this ordinance by no less
than 4 votes of its total membership, notice of provisional adoption of this
ordinance shall be published in compliance with Sect. 7-1-4127, MCA, prior to final adoption. Section 2
The Bozeman City Commission hereby authorizes the City Manager to sign the attached Land Exchange Conveyance Agreement to exchange Real Estate (Exhibit A to this Ordinance).
In doing so, the Commission authorizes, subject to fulfillment of the contingencies as stated in
the attached Agreement and those contingencies listed below:
1. The conveyance of the fee title to the Nelson Road Property to the MDT;
2. The acceptance of fee title to the Rouse Avenue Property from MDT;
3. The granting of an easement to MDT on property owned by the City at the Water Reclamation Facility as stated in and shown on Exhibit C (Easement Agreement) of the Conveyance Agreement;
4. The lease back of the Rouse Avenue Property to MDT pursuant to the terms listed in
Exhibit F-1 of the Conveyance Agreement.
The Commission’s authorization for the City Manager to sign shall not be effective until 30 days after final adoption of this ordinance; as such, the Agreement to Sell and Purchase Real Estate
shall not be binding on the City of Bozeman until that time. The granting of the easement and the
leaseback agreement shall become effective upon exchange of the properties.
Section 3
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The Commission hereby authorizes the City Manager to take all steps necessary to finalize the Conveyance Agreement, leaseback, and easement, including execution of all necessary documents.
Section 4
The Commission determines the following regarding the values of the Nelson Road Property and Rouse Avenue Property:
1. The “as is” appraised values of the exchange properties are $1,033,000 for the Rouse
Avenue Property and $84,000 for the Nelson Road Property. 2. MDT and the City acknowledge the appraisal for the Rouse Avenue Property valued
0.211 acres MDT will retain for highway right-of-way purposes, and the City and MDT
agree the appraised value of such parcel shall be reduced accordingly by $32,169.00 thus
reducing the value of the exchanged properties for the purposes of this Agreement to $1,000,831 for the Rouse Avenue Property and $84,000 for the Nelson Road Property.
3. To compensate for the difference in agreed-upon values of the exchange properties, the
City shall pay to MDT at closing the sum of $916,831, plus or minus prorations and
adjustments (the “Deficiency Amount”).
4. The City will pay MDT the Deficiency Amount as follows;
a. The City shall transfer the impact fee credit presently associated with the Rouse
Avenue Property to MDT. The amount of that credit is $170,508; and
b. The City will pay MDT via warrant and check the balance of the Deficiency Amount, $746,323, plus or minus prorations and adjustments.
Section 3
Repealer. All provisions of the ordinances of the City of Bozeman in conflict with the provisions of
this ordinance are, and the same are hereby, repealed and all other provisions of the ordinances
of the City of Bozeman not in conflict with the provisions of this ordinance shall remain in full
force and effect. Section 4
Savings Provision.
This ordinance does not affect the rights and duties that matured, penalties that were incurred or proceedings that were begun before the effective date of this ordinance. All other provisions of the Bozeman Municipal Code not amended by this Ordinance shall remain in full
force and effect.
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Section 5 Severability. That should any sentence, paragraph, subdivision, clause, phrase or section of this
ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect
the validity of this ordinance as a whole, or any part or provision thereof, other than the part so decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman Municipal Code as a whole.
Section 6
Codification Instruction.
The provisions of this Ordinance shall not be codified in the Bozeman Municipal Code; rather, this Ordinance shall be maintained by the City Clerk in an indexed file of all Ordinances
not to be codified.
Section 7
Effective Date.
This ordinance shall be in full force and effect 30 days after final adoption.
PROVISIONALLY ADOPTED by the City Commission of the City of Bozeman,
Montana, on first reading at a regular session held on the 14th day of July, 2014.
____________________________________
JEFFREY K. KRAUSS
Mayor
ATTEST:
_______________________________ STACY ULMEN, CMC City Clerk
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FINALLY PASSED, ADOPTED AND APPROVED by the City Commission of the City of
Bozeman, Montana on second reading at a regular session thereof held on the ____ day of
_______________, 2014. The effective date of this ordinance is _________________, __ 2014.
_________________________________
JEFFREY K. KRAUSS
Mayor
ATTEST:
_______________________________
STACY ULMEN, CMC
City Clerk
APPROVED AS TO FORM:
_________________________________
GREG SULLIVAN City Attorney
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LAND EXCHANGE CONVEYANCE AGREEMENT (MONTANA DEPT. OF TRANSPORTATION / CITY OF BOZEMAN) ..................................... PAGE 1 OF 17
LAND EXCHANGE CONVEYANCE AGREEMENT
This Land Exchange Conveyance Agreement (“Agreement”) is made _________, 2014, by the
MONTANA DEPARTMENT OF TRANSPORTATION, PO Box 201001, Helena, Montana 59620-1001
(“MDT”), and THE CITY OF BOZEMAN, City Hall, 121 North Rouse Avenue, Bozeman, Montana
59715 (the “City”). MDT and the City are sometimes referred to herein collectively as the “Parties” and
individually as a “Party”. Each of MDT and the City are also sometimes referred to herein as either the
“Transferor” or the “Transferee” with respect to the Land that it will convey or receive, respectively, in
this exchange.
RECITALS
A. MDT is the current owner of a tract of land consisting of 7.831 acres, more or less, located at
907 North Rouse Avenue, Bozeman, Montana (the “Rouse Avenue Land”), legally described as
follows:
Parcel A of the Amended Plat of Blocks 14, 15 and 28 of the Imes Addition to the City
of Bozeman, being situated within the SW¼ of Section 6, Township 2 South, Range 6
East, P.M.M., Gallatin County, Montana. [Plat Reference: __________].
The Rouse Avenue Land is shown on the attached Exhibit A. MDT’s Bozeman Area Office and
Maintenance Site are currently located on the Rouse Avenue Land.
B. The City is the current owner of a tract of land consisting of 12.5447 acres, more or less, located
near the intersection of the Interstate 90 Frontage Road and Nelson Road, Gallatin County,
Montana (the “Nelson Road Land”), legally described as follows:
Tract MDT of Certificate of Survey No. _______, being situated within the NW¼ of
Section 26, Township 1 South, Range 5 East, P.M.M., Gallatin County, Montana,
according to the official plat thereof on file and of record in the office of the County
Clerk and Recorder of Gallatin County, Montana.
The Nelson Road Land is shown on the attached Exhibit B. The City acquired the Nelson Road
Land for the purpose of sewage and wastewater treatment and disposal, and in 2006 the land was
annexed into the City of Bozeman.
C. MDT has determined that it is necessary to relocate its Bozeman Area Office and Maintenance Site
and that the Nelson Road Land is a suitable site for its facilities. MDT desires to acquire the Nelson
Road Land for highway purposes. In lieu of MDT acquiring the Nelson Road Land by legal
proceedings, including condemnation, it has offered to exchange its Rouse Avenue Land for the
City’s Nelson Road Land.
D. The Bozeman City Commission has made findings and concluded that the Nelson Road Land is no
longer necessary for the conduct of City business or the preservation of City property. The City has
determined that the Rouse Avenue Land is suitably located for prospective City purposes, including
a new police and courts facility. The City desires to exchange its Nelson Road Land for the Rouse
Avenue Land.
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E. Accordingly, MDT and the City propose to exchange their respective properties, account for the
difference in the values of their respective properties, and facilitate the further development of the
properties each Party will receive, all on the terms and conditions set forth herein.
AGREEMENT
In consideration of the mutual promises, the exchange of property, the money consideration hereinafter
described, and other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, MDT and the City agree as follows:
1. Effective Date. The effective date (“Effective Date”) of this Agreement shall be thirty (30) days
after the Bozeman City Commission’s final adoption of an ordinance ratifying the City Manager’s
approval and execution of this Agreement. The City shall promptly notify MDT upon the
occurrence of such final adoption.
2. Exchange of Property. MDT shall transfer and convey to the City, and the City shall accept from
MDT, the Rouse Avenue Land. The City shall transfer and convey to MDT, and MDT shall accept
from the City, the Nelson Road Land. Except as otherwise specifically set forth in this Agreement,
MDT shall convey the Rouse Avenue Land and the City shall transfer and convey the Nelson Road
Land together with:
(a) All attached buildings and structures (except those buildings MDT may remove from the
Rouse Avenue Land pursuant to Paragraph 15(c) below), and all equipment, fixtures, and
other improvements owned by the Transferor and located at or used in connection with the
ownership, operation, and maintenance of the land, including without limitation all heating,
lighting, air conditioning, ventilating, plumbing, electrical or other mechanical equipment,
appliances, and other equipment used in the operation of the land (collectively
“Improvements”); provided, however, that the term “Improvements” shall not include
equipment located on the Rouse Avenue Land used in conjunction with its highway
maintenance operations, such as cranes, lifts, and other machinery and equipment used to
operate, load and unload, maintain, and repair its construction and maintenance vehicles and
equipment;
(b) All of the Transferor’s right, title, and interest in and to all rights of way, tenements,
hereditaments, easements, rights, interests, claims, minerals and mineral rights, water and
water rights, utility capacity, and appurtenances in any way belonging or appertaining to the
Land and all of the Transferor’s right, title, and interest, insofar as the Transferor holds such
right, title, and interest by virtue of its ownership of the land in and to all adjoining streets,
alleys, private roads, parking areas, curbs, sidewalks, landscaping, signage, sewers, and
public ways (collectively “Appurtenant Rights”);
(c) To the extent assignable, all of Transferor’s right, title, and interest in and to all (i) plans,
drawings, designs, specifications, blueprints, surveys, engineering reports, environmental
reports, and other technical descriptions or materials relating in any way to the land,
Improvements or Appurtenant Rights; and (ii) licenses, franchises, certificates, occupancy
and use certificates, permits, authorizations, consents, variances, waivers, approvals and the
like from any federal, state, county, municipal or other governmental or quasi-governmental
body, agency, department, board, commission, bureau or other entity or instrumentality
affecting the ownership, operation or maintenance of the land or the Improvements
(collectively “Licenses”);
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The Rouse Avenue Land and its Improvements, Appurtenant Rights, and Licenses are collectively
referred to herein as the “Rouse Avenue Property.” The Nelson Road Land and its Improvements,
Appurtenant Rights, and Licenses are collectively referred to herein as the “Nelson Road Property.”
The Parties agree that this Agreement shall be amended to conform the legal descriptions of the
Rouse Avenue Land and the Nelson Road Land stated in the recitals above to the legal descriptions
set forth in the policies of title insurance to be obtained pursuant to Section 9.
3. Deficiency Amount and Manner of Payment.
(a) Appraisals; Adjusted Value of Exchange Properties. The Parties acknowledge that the “as is”
appraised values of the exchange properties are $1,033,000 for the Rouse Avenue Property
and $84,000 for the Nelson Road Property. MDT and the City further acknowledge that the
appraisal for the Rouse Avenue parcel valued 0.211 acres that MDT will retain for highway
right-of-way purposes, and they agree that the appraised value of such parcel shall be reduced
by $32,169 to account for that retention. Thus, the agreed-upon values of the exchange
properties for the purposes of this Agreement are $1,000,831 for the Rouse Avenue Property
and $84,000 for the Nelson Road Property.
(b) Deficiency Amount. To compensate for the difference in agreed-upon values of the exchange
properties, the City shall pay to MDT the sum of $916,831, plus or minus prorations and
adjustments (the “Deficiency Amount”).
(c) Manner of Payment. The City will pay MDT the Deficiency Amount as follows:
(i) Credit for Transfer of Impact Fee Credit. The City shall transfer the impact fee credit
presently associated with the Rouse Avenue Property to MDT. The amount of that
credit is $170,508.
(ii) Payment Agreement. The City will pay the balance of the Deficiency Amount,
$746,323, plus or minus prorations and adjustments as provided herein, to MDT at
closing in certified or other immediately available cash funds.
(d) Post Closing Adjustment – Impact Fee Credit. The Parties anticipate that the impact fee
amounts assessed by the City of Bozeman for MDT’s development of the Nelson Road
Property will exceed the $170,508 impact fee credit being transferred to MDT pursuant to
Subparagraph 3(c)(i) above. If that is not the case and MDT does not use the entirety of the
impact fee credit, the City agrees to purchase from MDT the balance of the impact fee credit
then remaining. The City shall make such payment within sixty (60) days of the date that
MDT notifies the City of its desire to receive payment for the remaining balance of the
impact fee credit, and upon receipt of payment MDT shall promptly reassign such credit to
the City by executing an instrument of assignment and conveyance in a form reasonably
acceptable to the City.
4. Easement; Approaches; Construction Permits.
(a) Easement Benefiting the Nelson Road Land. The City agrees to convey to MDT a non-
exclusive access easement across that portion of Tract COB of Certificate of Survey
No. _______, situated immediately north of the Nelson Road Property, for general ingress to
Nelson Road Land from Nelson Road and egress to Nelson Road from the Nelson Road Land
by MDT, its successors and assigns, and their respective employees, invitees, tenants,
occupants, and invitees. The easement shall not extend into the main body of Tract COB. The
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Nelson Road Land shall be the dominant tenement and the sixty (60) foot (more or less) strip
of Tract COB lying immediately north of the Nelson Road Land shall be the servient
tenement of the easement. The easement shall be documented substantially in the form
attached hereto as Exhibit C.
(b) Approaches. The parties acknowledge that MDT will require approaches off of Nelson Road
and the City will require approaches off of Rouse Avenue for their intended uses of the
properties. The parties agree to cooperate with each other in securing the necessary
approaches; provided, however, that nothing in this Paragraph shall be deemed to obligate
MDT or the City, acting in their capacities as a state governmental agency and municipal
government, respectively, to approve or permit any particular location or number of
approaches.
(c) Construction Permit Areas. The City acknowledges that MDT has sited temporary
construction permit areas for its Rouse Avenue Project at several locations on the Rouse
Avenue Property. These construction permit areas are designated on project plans attached
hereto as Exhibit D. Subsequent to the Closing Date, the City and MDT will negotiate and
finalize a right-of-way agreement for the Rouse Avenue Land that grants MDT the designated
construction permit areas and also generally addresses the City’s desired number of
approaches onto Rouse Avenue and the general location of those approaches. The City shall
be entitled to compensation for MDT’s use of the construction permit areas in the same
manner that other landowners abutting the Rouse Avenue project will be compensated for
construction permit areas located on their lands.
5. Conveyance Documents.
(a) Quit Claim Deed – Rouse Avenue Land. MDT agrees that it will, on the Closing Date, convey
the Rouse Avenue Land, Improvements, and Appurtenant Rights to the City by a good and
sufficient quitclaim deed. MDT shall be responsible for the costs of preparing and recording
the Rouse Avenue Land deed and plat.
(b) Quit Claim Deed – Nelson Road Land. The City agrees that it will, on the Closing Date,
convey the Nelson Road Land, Improvements, and Appurtenant Rights to MDT by a good
and sufficient quitclaim deed. The City shall be responsible for the costs of preparing and
recording the Nelson Road Land deed and plat.
(c) Transfer of Impact Fee Credit. The impact fee credits associated with the Rouse Avenue
Property as of the Closing Date shall be deemed to have transferred to MDT for use in
conjunction with the Nelson Road Property upon closing of the exchange contemplated by
this Agreement. Upon closing, MDT may submit this Agreement to the City of Bozeman for
registration of the change in ownership of such credits.
(d) Bill of Sale. At the City’s request, MDT will convey any other personal property remaining
on the Rouse Avenue Land with the consent of the Parties after the expiration or termination
of the leaseback term referenced in Paragraph 15(a) by bill of sale. The bill of sale shall
convey such property “as is,” “where is,” and “without warranty of condition.”
(e) Easement Agreement – Nelson Road Land. MDT and the City will execute the easement
agreement referenced in Paragraph 4(a). MDT shall be responsible for the cost of recording
the easement agreement.
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(f) Right of First Offer. MDT and the City will execute the right of first offer agreement
referenced in Section 17 on the Closing Date. The City shall be responsible for the cost of
recording the right of first offer agreement.
(g) Additional Documentation. Each Party from time to time, on or subsequent to the Closing
Date, at the other Party’s request and without further consideration, shall execute and deliver
to the other Party such other instrument of conveyance, assignment or transfer and take such
other action as the other Party may reasonably require in order to effectively convey, transfer
and vest and put MDT or the City, as the case may be, in possession of the property each is to
receive pursuant to this exchange.
6. Closing and Possession Dates. Subject to the terms and conditions herein, the closing of the
exchange transaction contemplated by this Agreement shall take place fifteen (15) days after the
Effective Date (“Closing Date”) unless shortened or extended by mutual agreement of the Parties in
writing. Each Party shall deliver possession and occupancy of the exchange property it is
transferring to the other Party on the beginning of the day following the Closing Date, subject to
MDT’s continued occupancy of the Rouse Avenue Property as allowed by the leaseback provisions
referenced in Paragraph 15(a).
7. Closing Agent, Fees. The closing agent (“Closing Agent”) for the exchange transaction shall be
Security Title Company, 600 South 19th Avenue, P.O. Box 6550, Bozeman, Montana 59715. MDT
and the City will deposit with the Closing Agent all instruments and monies necessary to complete
the exchange in accordance with this Agreement. The closing fee charged by the Closing Agent
shall be divided equally between MDT and the City. Except as otherwise specifically provided
herein, MDT and the City will each pay its own attorney’s fees for document preparation, review,
and counsel prior to closing.
8. Prorations.
(a) Taxes and Assessments. Each Party shall pay all taxes and assessments levied on the
exchange property it will convey to the other Party and all delinquent taxes and assessments,
if any, prior to the Closing Date. After the Closing Date, MDT shall be responsible for
payment all of such taxes and assessments levied on the Nelson Road Property after the
Closing Date, and, subject to the Leaseback provisions referenced in Paragraph 15(a), the
City shall be responsible for payment of all such taxes and assessments levied on the Rouse
Avenue Property after the Closing Date.
(b) Utility Charges. MDT shall continue to pay all gas, electricity, water, sewer, and other utility
and service charges currently associated with the Rouse Avenue Property until such time as
the Leaseback term referenced in Paragraph 15(a) expires or is sooner terminated. The City
represents that there are no current gas, electricity, water, sewer, and other utility and service
charges associated with the Nelson Road Property. Accordingly, no proration of utilities on
the Closing Date will be necessary.
9. Title Insurance.
(a) Commitments for Title Insurance. The City has ordered a commitment for title insurance
from Security Title Company, Bozeman, Montana, for standard coverage owner’s title
insurance policy in an amount to be determined covering title to the Rouse Avenue Property
and its Improvements and Appurtenant Rights. MDT has ordered a commitment for title
insurance from First American Title Company, Bozeman, Montana, for standard coverage
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owner’s title insurance policy in an amount to be determined covering title to the Nelson
Road Property and its Improvements and Appurtenant Rights. The Parties each acknowledge
receipt of copies of the title insurance commitments.
(b) Approval of Title Exceptions. On or before a date that is twenty (20) days after the date of this
Agreement, the Transferee of an exchange property shall notify the Transferor of any
exceptions to title set forth in the title report for such property that are unacceptable to the
Transferee. Within ten (10) days following the delivery of the Transferee’s notice (“Title
Clearance Date”), the Transferor shall identify in writing to the Transferee any of those
exceptions that Transferor, using Transferor’s reasonable efforts and without material cost to
Transferor, will not be able to resolve prior to closing. Transferee shall then report in writing
to Transferor, on or before the later of five (5) days after the Title Clearance Date, whether
Transferee is willing to accept the title as shown in the title report subject to those exceptions
or whether Transferee has elected to terminate this Agreement. If Transferee makes no such
written report to Transferor on or before such date, then Transferee shall be deemed to have
waived its right to terminate this Agreement pursuant to this Paragraph. If Transferee has
elected to terminate this Agreement, then the Parties hereto shall have no further obligations
hereunder (except for obligations which are expressly intended to survive the termination of
this Agreement).
(c) Exception. The Parties are informed of a tax deed issued to Gallatin County on property that
may include the Nelson Road Property. City shall make its best efforts to secure a Quitclaim
Deed from Gallatin County releasing any interest the County may have in the Nelson Road
Property by reason of the tax deed. City shall indemnify MDT against any future claim
against the Nelson Road Property, or any portion of the property, asserted under the identified
tax deed by Gallatin County or any third party.
(c) Coverage Amounts; Costs of Premiums. MDT, in its sole discretion, shall determine the
coverage amount for the title insurance policy covering title to the Nelson Road Property, and
it may obtain any endorsements it deems necessary or advisable. MDT shall be responsible
for paying the premium for the Nelson Road Property policy. The City, in its sole discretion,
shall determine the coverage amount for the title insurance policy covering title to the Rouse
Avenue Property, and it may obtain any endorsements it deems necessary or advisable. The
City shall be responsible for paying the premium for the Rouse Avenue Property policy.
10. Conditions Precedent.
(a) City Ratification. The Parties acknowledge and understand that the City Manager’s execution
of this Agreement must be ratified by the Bozeman City Commission by a duly adopted
ordinance made pursuant to the requirements of Section 2.11 of the Bozeman City Charter
and Chapter 2, Article 6, Division 5 of the Bozeman Municipal Code. Accordingly, the City’s
obligation to close the exchange transaction contemplated by this Agreement is conditioned
upon the Bozeman City Commission’s ratification of the City Manager’s approval and
execution of this Agreement. If such ratification does not occur for any reason, this
Agreement shall terminate, and neither Party shall have any further obligation to the other.
(b) State Approval. The Parties acknowledge and understand that MDT’s execution of this
Agreement must be ratified and approved by the Director of the Montana Department of
Transportation and by the Governor of the State of Montana. Accordingly, MDT’s obligation
to close the exchange transaction contemplated by this Agreement is conditioned upon the
Director’s and Governor’s approval of this Agreement. If such approval does not occur for
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any reason, this Agreement shall terminate, and neither Party shall have any further
obligation to the other.
(c) Other Conditions. The obligations of MDT and the City to close the exchange transaction
contemplated by this Agreement are subject to the conditions that: (i) all of the
representations and warranties of MDT and the City (as the case may be) contained in this
Agreement are true and correct, in all material respects, at the Effective Date and as of the
Closing Date, and (ii) all of the obligations and duties of MDT and the City (as the case may
be) to be performed hereunder have been timely and duly performed on or before the Closing
Date.
11. Representations and Warranties.
(a) MDT’s Representations. MDT represents and warrants to the City, as of the Effective Date
and again on the Closing Date, that:
(i) MDT has fee simple title to the Rouse Avenue Property.
(ii) MDT has all necessary power and authority under applicable law to exchange real
property for highway purposes, and it is duly authorized and has obtained all necessary
approvals to enter into the exchange transaction contemplated by this Agreement.
(iii) Neither the execution and delivery of this Agreement, nor the consummation by MDT
of the transaction contemplated hereby, will result in a breach of any applicable statute
or regulation, or of any administrative or court order or decree, nor conflict with or
result in the breach of any term, provision, covenant or condition of any agreement or
other instrument to which MDT is a party or by which it or the Rouse Avenue Property
may be bound, or which with the giving of notice or lapse of time or both would
constitute an event of default thereunder.
(iv) There is no action, suit, proceeding, or investigation pending, or to MDT’s knowledge
threatened, before any agency, court or other governmental or quasi-governmental
authority that relates to MDT’s ownership, maintenance or operation of the Rouse
Avenue Property.
(v) MDT has received no notice of any violation of any building, fire, insurance, safety,
health, environmental or other applicable laws, ordinances or regulations (whether
related to the Rouse Avenue Property or the use and occupancy thereof).
(vi) No building or other improvement encroaches onto the Rouse Avenue Property, nor
does any building or improvement that is part of the Rouse Avenue Property encroach
on lands of others or any public or private road or right-of-way.
(vii) With respect to the environmental condition of the Rouse Avenue Property, MDT
warrants and represents that:
(A) MDT has not conducted, transported, generated, stored, treated, used or disposed
of any Hazardous Substances (as defined below) at or from the Rouse Avenue
Property in violation of Environmental Laws (as defined below). Contamination
of the Rouse Avenue Property has resulted from past use by MDT, however,
MDT is under no current regulatory requirements to address past contamination.
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All known contamination issues have been resolved to the satisfaction of the
regulatory agencies including DEQ and EPA.
(B) To MDT’s knowledge, the Rouse Avenue Property does not currently contain
any Hazardous Substances in violation of any Environmental Laws. The
representations in this Subparagraph are made subject to the following
exceptions: the buildings on the Rouse Avenue Property are of an age that they
may contain asbestos and/or lead-based paint. MDT has conducted limited
testing for asbestos and lead-based paint in the buildings however makes no
representation as to the extent or need for asbestos or lead-based paint abatement
in the buildings; and
(C) Except as disclosed in Subparagraph 11(a)(vii)(A), MDT has not received any
current or active notice of, and has no actual knowledge that, any administrative
agency or other governmental authority or any employee or agent thereof has
determined or alleged that there has been (or is investigating whether there is) a
presence at, release or threat of release from, or placement on or in, the Rouse
Avenue Property of any Hazardous Substances, or any generation, transportation,
storage, treatment or disposal at or from the Rouse Avenue Property of any
Hazardous Substance in violation of any Environmental Laws.
(b) The City’s Representations. The City represents and warrants to MDT, as of the Effective
Date and again on the Closing Date, that:
(i) The City has fee simple title to the Nelson Road Property.
(ii) The City has all necessary power and authority under applicable law to exchange
property it owns, and it is duly authorized and has obtained all necessary approvals to
enter into the exchange transaction contemplated by this Agreement.
(iii) Neither the execution and delivery of this Agreement, nor the consummation by the
City of the transaction contemplated hereby, will result in a breach of any applicable
statute or regulation, or of any administrative or court order or decree, nor conflict with
or result in the breach of any term, provision, covenant or condition of any agreement
or other instrument to which the City is a party or by which it or the Nelson Road
Property may be bound, or which with the giving of notice or lapse of time or both
would constitute an event of default thereunder.
(iv) There is no action, suit, proceeding, or investigation pending, or to the City’s
knowledge threatened, before any agency, court or other governmental or quasi-
governmental authority that relates to the City’s ownership, maintenance or operation
of the Nelson Road Property.
(v) The City has received no notice of any violation of any building, fire, insurance, safety,
health, environmental or other applicable laws, ordinances or regulations (whether
related to the Nelson Road Property or the use and occupancy thereof).
(vi) No building or other improvement encroaches onto the Nelson Road Property, nor does
any improvement that is part of the Nelson Road Property encroach on lands of others
or any public or private road or right-of-way.
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(vii) With respect to the environmental condition of the Nelson Road Property, the City
warrants and represents that:
(A) The City has not conducted, transported, generated, stored, treated, used or
disposed of any Hazardous Substances (as defined below) at or from the Nelson
Road Property in violation of any Environmental Laws;
(B) To the City’s knowledge, the Nelson Road Property does not contain any
Hazardous Substances in violation of any Environmental Laws;
(C) The City has not received any notice of, and has no actual knowledge that, any
administrative agency or other governmental authority or any employee or agent
thereof has determined or alleged that there has been (or is investigating whether
there is) a presence at, release or threat of release from, or placement on or in, the
Nelson Road Property of any Hazardous Substances, or any generation,
transportation, storage, treatment or disposal at or from the Nelson Road Property
of any Hazardous Substance in violation of any Environmental Laws; and
(D) To the City’s knowledge, no underground storage tanks are located on the Nelson
Road Property.
(c) Definitions–Hazardous Substances; Environmental Laws. The term “Hazardous Substances”
as used in this Agreement means (1) any petroleum or petroleum products, radioactive
materials, asbestos in any form that is or could become friable, urea formaldehyde foam
insulation, polychlorinated biphenyls and radon gas and (2) any chemicals, materials or
substances defined as or included in the definitions of “hazardous substances,” “hazardous
wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “bio-hazard,”
“biological waste,” “medical waste” or words of similar import, under any applicable federal,
state or local environmental, safety or health laws, ordinances, rules of common law,
regulations or directives (“collectively “Environmental Laws”).
(d) Survival. All of the representations and warranties of MDT and the City contained in this
Section 11 are material, none shall merge into the deeds herein provided for, and all shall
survive the Closing Date or termination of this Agreement.
12. Operation of Property Pending Closing. From and after the date of this Agreement through the
Closing Date, MDT at its expense with respect to the Rouse Avenue Property and the City at its
expense with respect to the Nelson Road Property will:
(a) Maintain the property in the condition in which it existed as of the date of this Agreement,
normal wear and tear excepted, free from construction liens or other claims for liens, not
commit waste of or on the property;
(b) Keep in existence all fire and extended coverage insurance policies, and all public liability
insurance policies that are in existence as of the date of this Agreement with respect to the
property;
(c) Except for the leaseback arrangement referenced in Paragraph 15(a), not enter into any
transaction with respect to or affecting the property that would affect or bind the property or
the Transferee of the property following the Closing Date;
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(d) Grant the Transferee access to any records, documents, and agreements concerning the
property within the Transferor’s possession or control;
(e) Provide the Transferee with any other relevant information with respect to the property upon
Transferor’s reasonable request.
13. Risk of Loss. MDT assumes all loss or damage to the Rouse Avenue Property by any cause
through the Closing Date. The City assumes all loss or damage to the Nelson Road Property by any
cause through the Closing Date. If any loss, casualty or other occurrence shall have taken place,
whether or not covered by insurance, which has or could have a material adverse impact on an
exchange property, then the Transferee, at its option, shall have no obligation to complete the
exchange on the Closing Date unless such loss or damage is fully repaired or restored on or before
the Closing Date or, if not fully repaired or restored, is covered by insurance in an amount
satisfactory to Transferee and the proceeds of such insurance are assigned or delivered to the
Transferee at closing.
14. Allocation of Responsibility.
(a) MDT agrees to indemnify and hold the City, its successors, assigns and agents, harmless from
any loss, damage, expense, liability, or claim, including without limitation, attorney’s fees
and expenses of litigation, to which the City may become subject arising, directly or
indirectly, from:
(i) Any falsity, omission or misstatement of MDT with respect to the representations and
warranties set forth in this Agreement;
(ii) Any failure of MDT to perform any of its covenants, agreements or undertakings
contained in this Agreement or in any other agreement executed in connection with the
transactions contemplated herein;
(iii) Any circumstances, events, occurrences, defaults or obligations that are based on or
arose from MDT’s operation of or activities on the Rouse Avenue Property through the
Closing Date; and
(iv) The assertion of any liability or obligation first occurring, existing or arising on or
before the Closing Date and relating to the Rouse Avenue Property.
(b) The City agrees to indemnify and hold MDT, its successors, assigns and agents, harmless
from any loss, damage, expense, liability, or claim, including without limitation, attorney’s
fees and expenses of litigation, to which MDT may become subject arising, directly or
indirectly, from:
(i) Any falsity, omission or misstatement of the City with respect to the representations
and warranties set forth in this Agreement;
(ii) Any failure of the City to perform any of its covenants, agreements or undertakings
contained in this Agreement or in any other agreement executed in connection with the
transactions contemplated herein;
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(iii) Any circumstances, events, occurrences, defaults or obligations that are based on or
arose from the City’s operation of or activities on the Nelson Road Property through
the Closing Date; and
(iv) The assertion of any liability or obligation first occurring, existing or arising on or
before the Closing Date and relating to the Nelson Road Property.
15. Post-Closing Rights, Obligations, and Continuing Covenants – Rouse Avenue Property.
(a) Leaseback to MDT. Subject to its acquiring the Rouse Avenue Property on the Closing Date,
the City hereby leases to MDT, and MDT hereby rents from the City, the Rouse Avenue
Property. The leaseback agreement (“Leaseback”) shall be on the terms and conditions set
forth in Exhibit F-1.
(b) Removal of Underground Storage Tanks. On or before April 1, 2015, MDT shall remove all
underground storage tanks existing on the Rouse Avenue Property, transport the tanks from
the Rouse Avenue Property, and store or dispose of them in full compliance with applicable
law. MDT shall provide the City with all information available to MDT regarding any
Hazardous Substances (defined in Paragraph 11(c)) associated with the underground storage
tanks. MDT shall remediate or abate all known contamination to regulatory acceptable levels,
and it shall have continuing responsibility, at its sole cost and expense, to remediate or abate
to regulatory acceptable levels all later-discovered contamination stemming from the
installation, existence, operation, maintenance, removal, or transport of the underground
storage tanks. All areas of the Rouse Avenue Property from which underground storage tanks
were removed shall be restored to grade level.
(c) Removal of Buildings. MDT may retain and remove one trapezoid-shaped building and the
mechanic’s shop from the Rouse Avenue property at MDT's sole expense; provided,
however, that those buildings must be removed within the time periods set forth in
Exhibit F 1. When removing the buildings, MDT shall remove foundations, footings,
concrete slabs, and the like underlying the buildings, and it shall restore the land on which the
buildings were situated to grade level. MDT shall also repair any damage to the Rouse
Avenue Property occasioned by removal of the two buildings. All other existing structures on
the Rouse Avenue Land shall become the property of the City on the Closing Date.
(d) Environmental Matters. The City is solely responsible for any future environmental impacts
incurred by City actions on the Rouse Avenue Property, and it is solely responsible for
obtaining any necessary environmental permits, notifications or any other necessary
environmental clearances. MDT covenants, at its sole cost, risk, and expense (including but
not limited to the fees and costs of consultants, engineers, and attorneys), to implement and
complete to closure any and all Remediation Activities as necessary to comply with
Environmental Laws with respect to Hazardous Substances discovered on the Rouse Avenue
Property which are found (whether before or at anytime after the Closing Date) to be present
as a result of MDT’s activities and operations upon and use of such property prior to the
Closing Date or during the Leaseback term described in Paragraph 15(a) and Exhibit F-1. The
term “Remediation Activities” as used in this Agreement means any cleanup, response,
removal, remedial, corrective or other action to clean up, detoxify, treat, prevent, cure,
mitigate or otherwise remedy any release of any Hazardous Substance; any action to comply
with applicable Environmental Laws or governmental directives; and any inspection,
investigation (including subsurface investigation), study, monitoring, assessment, sampling,
analysis or evaluation relating to any Hazardous Substance. MDT may select any remedial
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alternative that is protective of human health and the environment and is consistent with and
meets the requirements of Environmental Laws and governmental authorities; provided that
no Remediation Activities may be based upon or result in any requirement that the City agree
to limit its use of the Rouse Avenue Property pursuant to, or encumber title to the Property
with, any restrictive covenant that would restrict the use of such property for any purposes
that are currently permitted or reasonably may be permitted (by rezoning or otherwise) under
the City of Bozeman’s zoning and land use restrictions.
The City and MDT acknowledge that testing of drilling samples recently taken on the Rouse
Avenue Property, on or near the site of the City’s proposed police department and municipal
court building, revealed the possible presence of petroleum hydrocarbons in the soils. Based
on those results, MDT, at its expense, will commission a Phase 2 environmental assessment
on areas of concern on the Rouse Avenue Property where contamination is suspected. If
contamination by Hazardous Substances is confirmed above regulatory levels that require
remediation, MDT will proceed promptly and with diligence to conduct the Remediation
Activities as necessary to abate all disclosed discovered contamination during the Phase 2, so
that the property is in compliance with the requirements of Environmental Laws. With
respect to the site for the proposed police and municipal courts facilities, soil excavation
necessary to complete the Remediation Activities alternatives will be implemented and
completed by April 1, 2015, in order to facilitate the construction of the City’s proposed
buildings. Follow up monitoring and testing of the implemented alternative (i.e. groundwater
monitoring) may be required and may extend beyond April 1, 2015
16. Continuing Covenants – Nelson Road Property.
(a) Nelson Road Approaches. The City will grant MDT’s request for two approaches onto
Nelson Road from the Nelson Road Property in locations complying with the standards of the
City of Bozeman’s Unified Development Ordinance or allowed variances thereto.
(b) Use of Adjacent City Property. MDT acknowledges that the City owns property adjoining the
Nelson Road Property on its east boundary and that is using or may use such property for
water reclamation purposes. MDT agrees that the continued use of the City-owned property
for water reclamation purposes after the Closing Date shall not constitute a nuisance
actionable by MDT or its assigns or successors in interest.
(c) Environmental Matters. MDT is solely responsible for any future environmental impacts
incurred by MDT actions on the Nelson Road Property, and it is solely responsible for
obtaining any necessary environmental permits, notifications or any other necessary
environmental clearances. The City covenants, at its sole cost, risk, and expense (including
but not limited to the fees and costs of consultants, engineers, and attorneys), to implement
and complete to closure any and all Remediation Activities as necessary to comply with
Environmental Laws with respect to Hazardous Substances discovered on the Nelson Road
Property which are found (whether before or at anytime after the Closing Date) to be present
as a result of the City’s activities and operations upon and use of such property prior to the
Closing Date. The City may select any remedial alternative that is protective of human health
and the environment and is consistent with and meets the requirements of Environmental
Laws and governmental authorities; provided that no Remediation Activities may be based
upon or result in any requirement that MDT agree to limit its use of the Nelson Road Property
pursuant to, or encumber title to the Property with, any restrictive covenant that would restrict
the use of such property for any purposes that are currently permitted or reasonably may be
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permitted (by rezoning or otherwise) under the City of Bozeman’s zoning and land use
restrictions.
17. Right of First Offer – Nelson Road Property. At closing MDT agrees to execute a Right of First
Offer Agreement substantially in the form attached hereto as Exhibit E, subject to the requirements
of State statute or administrative rule in place at the time this Agreement may be exercised. In such
agreement MDT shall grant to the City a right of first offer to purchase the Nelson Road Property.
The City may record the Right of First Offer Agreement at its expense.
18. Default; Remedies.
(a) If MDT fails to close under the provisions of this Agreement because of MDT’s default, then
the City shall have as the City’s sole remedy the option of either of the following:
(i) Terminating this Agreement by giving written notice to MDT; or
(ii) Enforcing specific performance by MDT of MDT’s obligations under this Agreement.
(b) If the City fails to close under the provisions of this Agreement because of the City’s default,
MDT shall have as MDT’s sole remedy the option of either of the following:
(i) Terminating this Agreement by giving written notice to the City; or
(ii) Enforcing specific performance by the City of the City’s obligations under this
Agreement.
(c) For all other breaches by a Party of the express representations, warranties, continuing
obligations, made or given in this Agreement (including the attached exhibits), the other Party
shall have any and all remedies available to it in law or in equity.
19. Radon Disclosure Statement. Pursuant to the requirements of Montana Code Annotated
§75-3-606, MDT makes the following disclosure with respect to the Rouse Avenue Property:
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.
By executing this Agreement, the City acknowledges receipt of this disclosure. MDT and the City
acknowledge and agree that the Nelson Road Property is not currently “inhabitable real property”
within the meaning of the Montana Radon Control Act in that no building is currently affixed to
that property, and the property is not subject to the disclosure requirements of the Act.
20. Mold Disclosure.
(a) Description; General Information. 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
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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 Centers for Disease Control and Prevention is studying the link between mold
and serious health conditions. The Transferor of exchange property under this Agreement
cannot and does not represent or warrant the absence of mold. It is the Transferee’s obligation
to determine whether a mold problem is present on property it will receive. To do so, the
Transferee should hire a qualified inspector and make any contract to exchange contingent
upon the results of that inspection. A Transferor of exchange property 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 or exchange.
(b) Disclosure. MDT discloses that the Rouse Avenue Property has mold present on it. This
disclosure is made in recognition that all inhabitable properties contain mold, as defined by
the Montana Mold Disclosure Act (“any mold, fungus, mildew, or spores”). MDT does not
represent that a significant mold problem either exists or does not exist on the Rouse Avenue
Property as such a determination may only be made by a qualified inspector. MDT has no
knowledge of any testing for mold conducted on the Rouse Avenue Property. MDT and the
City acknowledge and agree that the Nelson Road Property is not currently “inhabitable real
property” within the meaning of the Montana Mold Disclosure Act in that no building is
currently affixed to that property, and the property is not subject to the disclosure provisions
of the Act.
21. Noxious Weeds Disclosure. Persons acquiring property in Montana should be aware that some
properties contain noxious weeds. Montana law requires owners of property within the state to
control, and to the extent possible, eradicate noxious weeds. For information concerning noxious
weeds and your obligations as an owner of property, contact a county extension agent or the Weed
Control Board.
22. Assignment. Except as otherwise provided herein, neither Party shall assign its rights under this
Agreement, in whole or in part, without the prior written consent of the other Party.
23. Notices. Any notice, demand, request or other communication which either Party hereto may be
required or may desire to give under this Agreement shall be in writing and shall be deemed to have
been properly given if (a) hand delivered (effective upon delivery), (b) mailed (effective three (3)
days after mailing) by United States registered or certified mail, postage prepaid, return receipt
requested, (c) sent by a nationally recognized overnight delivery service (effective one (1) day after
delivery to such courier) or (d) sent by facsimile (effective upon confirmation of transmission), in
each case, addressed as follows:
IF TO MDT:
Montana Department of Transportation
Attn: Kim Janzen, Facilities Bureau Chief
PO Box 201001
Helena, Montana 59620-1001
Fax: (406) __________________
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IF TO THE CITY:
The City of Bozeman
Attn: Chuck Winn, Assistant City Manager
City Hall
121 North Rouse Avenue
Bozeman, Montana 59715
Fax: (406) 582-2273
24. Brokerage Fees. MDT and the City represent and warrant that they have dealt with no brokers in
connection with the Rouse Avenue Property or the Nelson Road Property or the exchange
transaction that is the subject matter of this Agreement.
25. Miscellaneous.
(a) No Construction Against Drafting Party. This Agreement shall not be construed more strictly
against one Party than against the other merely by virtue of the fact that the Agreement may
have been prepared primarily by counsel for one of the Parties, it being recognized both
Parties and/or their counsel have contributed substantially and materially to the preparation of
this Agreement.
(b) Relationship of the Parties. Nothing contained in this Agreement shall be deemed or
construed by either Party hereto or by any third party to create the relationship of principal
and agent or create a partnership, joint venture or any other association between MDT and the
City.
(c) Time is of the Essence. Time of payment and performance shall be of the essence of each and
every provision of this Agreement.
(d) Entire Agreement. This Agreement, including the exhibits attached hereto, contains the entire
agreement and understanding of the Parties, and supersedes any and all prior negotiations and
understandings. This Agreement shall not be modified, amended or changed in any respect
except by a written document signed by all Parties hereto.
(e) Captions. The captions, titles and section headings throughout this Agreement are for
convenience and reference only and shall not be deemed or held to explain, modify, amplify
or aid in the interpretation, construction or meaning of the provisions of this Agreement, nor
to define, limit or describe the scope or intent of a particular section.
(f) Successors and Assigns. The terms, covenants and conditions of this Agreement shall be
binding upon, and shall inure to the benefit of, the Parties hereto and their respective
successors and assigns.
(g) Nonwaiver. No waiver of any condition expressed in this Agreement shall be implied by any
neglect of MDT or the City to enforce any remedy on account of the violation of such
condition, whether or not such violation be continued or repeated subsequently, and no
express waiver shall affect any condition other than the one specified in such waiver for the
time and in the manner specifically stated.
(h) Survival of Terms. All express representations, warranties, indemnities, and continuing
obligations made in or given in this Agreement (including its exhibits), including but not
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limited to those stated in Paragraphs 3(d), 4(b), 4(c), 5(d), and 5(g),) and Sections 11, 14, 15,
16, and 24 will survive the closing of the exchange transaction contemplated by this
Agreement or the expiration or the termination of this Agreement for any reason, and such
express representations, warranties, and continuing obligations shall not merge into the terms
of any deed or other instrument of conveyance.
(i) Governing Law. This Agreement and any disputes arising hereunder shall be governed
hereafter and construed and enforced in accordance with the laws of the State of Montana,
without reference to principles of choice or conflicts of laws.
(j) Counterparts; Facsimile. This Agreement (and any amendment hereto) may be executed in
any number of counterparts, all of which when taken together will constitute one and the
same instrument. A counterpart signed and delivered by facsimile transmission copy thereof
or via electronic means in pdf, tiff, or jpeg file format shall be as valid and effectual as the
original of that counterpart.
(k) Non-Discrimination. The Parties agree to not discriminate in the fulfillment of this
Agreement on the basis of race, color, religion, creed, sex, age, marital status, national origin,
or actual or perceived sexual orientation, gender identity or disability.
[Signatures on next page]
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LAND EXCHANGE CONVEYANCE AGREEMENT (MONTANA DEPT. OF TRANSPORTATION / CITY OF BOZEMAN) ................................... PAGE 17 OF 17
IN WITNESS WHEREOF, the Parties have executed this Land Exchange Conveyance Agreement
effective as of the Effective Date.
Dated: __________________, 2014
Dated: __________________, 2014
MONTANA DEPARTMENT OF TRANSPORTATION
By: __________________________________________
Jeff Ebert
MDT Butte District Administrator
By: __________________________________________
Jon Swartz
MDT Maintenance Division Administrator
Approved for Legal Content:
By: __________________________________________
MDT Legal Counsel
Dated: __________________, 2014
CITY OF BOZEMAN
By: ___________________________________
Chris Kukulski
City Manager
Approved for Legal Content:
By: __________________________________________
City Attorney
Attached Exhibits:
Exhibit A – Depiction of Rouse Avenue Land & Affidavit of Correction
Exhibit B – Depiction of Nelson Road Land
Exhibit C – Easement Agreement
Exhibit D – Construction Permit Sites
Exhibit E – Right of First Offer
Exhibit F-1 – Leaseback of Rouse Avenue Property to MDT
Exhibit F-2 – Construction Site – Bozeman Justice Center
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EXHIBIT A – DEPICTION OF ROUSE AVENUE PROPERTY ........................................................................................................................... PAGE 1 OF 1
EXHIBIT A
DEPICTION OF ROUSE AVENUE PROPERTY
[Attach amended plat]
317
318
319
320
EXHIBIT B – DEPICTION OF NELSON ROAD PROPERTY ............................................................................................................................. PAGE 1 OF 1
EXHIBIT B
DEPICTION OF NELSON ROAD PROPERTY
[Attach COS designating Tract MDT]
321
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EXHIBIT C– EASEMENT AGREEMENT ....................................................................................................................................................... PAGE 1 OF 3
EXHIBIT C
EASEMENT AGREEMENT
THIS AGREEMENT (“Agreement”) is made ______________, 2014 (“Effective Date”), by the
MONTANA DEPARTMENT OF TRANSPORTATION, PO Box 201001, Helena, Montana 59620-1001
(“MDT”), and THE CITY OF BOZEMAN, City Hall, 121 North Rouse Avenue, Bozeman, Montana
59715 (the “City”). MDT and the City are sometimes referred to herein collectively as the “Parties” and
individually as a “Party”.
RECITALS
A. MDT is the owner of certain real property located in Bozeman, Gallatin County, Montana, more
particularly described as: Tract MDT of Certificate of Survey No. _______, being situated within
the NW¼ of Section 26, Township 1 South, Range 5 East, P.M.M., Gallatin County, Montana,
according to the official plat thereof on file and of record in the office of the County Clerk and
Recorder of Gallatin County, Montana (“MDT Tract”).
B. The City is the owner of certain real property located in Gallatin County, Montana, more
particularly described as: Tract MDT of Certificate of Survey No. _______, being situated within
the NW¼ of Section 26, Township 1 South, Range 5 East, P.M.M., Gallatin County, Montana,
according to the official plat thereof on file and of record in the office of the County Clerk and
Recorder of Gallatin County, Montana (“City Tract”).
C. In conjunction with an exchange of real property between MDT and the City pursuant to a Land
Exchange Conveyance Agreement dated ________, 2014 (the “Exchange Agreement”), MDT
wishes to acquire, and the City is willing to grant, an easement across a portion of the City Tract for
ingress to and egress from the MDT Tract to and from Nelson Road. The Parties also desire to enter
into agreements for the use of the easement and maintenance of the improvements thereon, all as set
forth in the following Agreement.
AGREEMENT
IN CONSIDERATION of the mutual covenants contained herein and for other good and valuable
consideration, the Parties agree as follows:
1. Easement Grant. The City hereby grants to MDT, and to its successors and assigns, a permanent,
perpetual, and non-exclusive easement across that portion of the City Tract situated immediately
north of the MDT Tract. This easement is intended to encumber only that portion of the City Tract
consisting of an approximately 60-foot wide strip of land situated adjacent to the north boundary of
the MDT Tract. The easement shall run with the land. The dominant estate is the MDT Tract, and
the servient estate is the 60-foot wide strip described in the preceding sentence.
2. Consideration. The City’s grant of this easement is a negotiated term of the Exchange Agreement,
and MDT shall not be required to provide additional consideration in exchange for such grant.
3. Location. The easement area is depicted on the attached “Easement Exhibit.”
4. Use. MDT, its successors and assigns, and their respective agents, employees, and invitees, may use
the existing roadway on the easement area for ingress to the MDT Tract from Nelson Road and
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EXHIBIT C– EASEMENT AGREEMENT ....................................................................................................................................................... PAGE 2 OF 3
egress from the MDT Tract to Nelson Road. All reasonable modes of transportation may be
employed. MDT shall not use the easement for the construction or installation of utilities, parking,
or any purpose other than ingress and egress from and to Nelson Road. The Parties agree that the
easement may be used for ingress and egress to serve all uses allowed on the dominant estate under
applicable law.
5. Improvement and Maintenance. MDT may, at its own expense and with the City’s prior written
consent, improve the roadway within the easement area. Such improvements may include
installation of drainage devices, applying gravel, paving, and any other improvements reasonably
necessary for the uses and purposes of the easement contemplated by this Agreement. The City
shall not unreasonably withhold or delay its consent to such improvements. The City reserves the
right to make such improvements to the roadway and easement area as it deems necessary or
advisable; provided, however that the City’s improvements shall not impair the easement rights
granted to MDT herein. Each Party agrees to repair damage to the roadway caused by such Party’s
activities. The Parties agree to share equally the reasonable costs of routine maintenance of the
roadway for its intended purposes, including but not limited to the costs of grading and plowing the
roadway and controlling noxious weeds in the easement area.
6. Gates. The Parties acknowledge that there presently exists a locked gate near the easement area’s
intersection with Nelson Road. The City will supply MDT with the key or combination necessary to
unlock the gate. MDT agrees to close and lock the existing gate each day, at the end of use. MDT
may, at MDT’s expense, relocate the gate to a point near the east end of the easement area (i.e.,
where a northerly extension of the MDT Tract’s eastern boundary would intersect the easement
area); provided, however, that the City shall have the right to review and approve the plans for
relocation. Except for the single gate described in this Paragraph, neither Party will place gates on
the travelled way without the prior written consent of the other Party.
7. Indemnification. MDT agrees to hold harmless and indemnify the City from and against any loss,
damage, expense, liability or claim, including without limitation, attorney’s fees, and expenses of
litigation, to which the City may become subject arising may arise by virtue of or in connection
with MDT’s use, maintenance or improvement of the easement granted herein.
8. Cooperation. Each Party hereto agrees to execute and deliver such additional documents and
instruments and to perform such additional acts as any Party may reasonably request or as may be
reasonably necessary or appropriate to effectuate, consummate and perform any of the terms,
provisions, or conditions of this Agreement.
9. Miscellaneous.
(a) No Construction Against Drafting Party. This Agreement shall not be construed more strictly
against one Party than against the other merely by virtue of the fact that the Agreement may
have been prepared primarily by counsel for one of the Parties, it being recognized both
Parties and/or their counsel have contributed substantially and materially to the preparation of
this Agreement.
(b) Attorney Fees. Should a Party incur any costs or expenses, including reasonable attorney fees,
in enforcing any of the provisions of this Agreement, the other or unsuccessful Party shall
reimburse the prevailing Party on demand.
(c) Equitable Remedies Allowed. The Parties recognize that damages or other legal remedies will
not be adequate for a breach of this Agreement. Therefore a Party enforcing any of the terms
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EXHIBIT C– EASEMENT AGREEMENT ....................................................................................................................................................... PAGE 3 OF 3
of this Agreement shall be entitled to the remedies of injunctive relief and specific
performance in addition to other remedies allowed at law or equity
(d) Entire Agreement. This Agreement constitutes the entire understanding among the Parties
with respect to the subject matter thereof and supersedes all negotiations, representations,
prior discussion and preliminary agreements among the Parties hereto relating to the subject
matter of this Agreement.
(e) Captions. The captions, titles and section headings throughout this Agreement are for
convenience and reference only and shall not be deemed or held to explain, modify, amplify
or aid in the interpretation, construction or meaning of the provisions of this Agreement, nor
to define, limit or describe the scope or intent of a particular section.
(f) Binding Effect. The terms, covenants, and conditions contained in this Agreement shall run
with the land, shall bind the MDT Tract and the City Tract, and shall inure to the benefit of
and be binding upon the Parties hereto and their respective successors and assigns.
(g) Recording. Either Party may record this Agreement in the records of Gallatin County,
Montana.
(h) Governing Law. This Agreement and any disputes arising hereunder shall be governed
hereafter and construed and enforced in accordance with the laws of the State of Montana,
without reference to principles of choice or conflicts of laws.
(i) Counterparts. This Agreement may be executed in any number of counterparts, all of which
when taken together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
MONTANA DEPARTMENT OF TRANSPORTATION
By: __________________________________________
MDT Butte District Administrator
By: __________________________________________
MDT Maintenance Division Administrator
CITY OF BOZEMAN
By: ___________________________________
City Manager
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EXHIBIT D – CONSTRUCTION PERMIT SITES ............................................................................................................................................. PAGE 1 OF 1
EXHIBIT D
CONSTRUCTION PERMIT SITES
[Insert exhibit to be provided by MDT]
326
327
328
329
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EXHIBIT E – RIGHT OF FIRST OFFER TO PURCHASE REAL PROPERTY ....................................................................................................... PAGE 1 OF 3
EXHIBIT E
RIGHT OF FIRST OFFER TO PURCHASE REAL PROPERTY
THIS AGREEMENT (“Agreement”) is made ______________, 2014, by the MONTANA
DEPARTMENT OF TRANSPORTATION, PO Box 201001, Helena, Montana 59620-1001 (“MDT”),
and THE CITY OF BOZEMAN, City Hall, 121 North Rouse Avenue, Bozeman, Montana 59715 (the
“City”). MDT and the City are sometimes referred to herein collectively as the “Parties” and individually
as a “Party”.
RECITALS
A. MDT owns the following described real property (“Property”) located in Bozeman, Gallatin
County, Montana:
Tract MDT of Certificate of Survey No. _______, being situated within the NW¼ of
Section 26, Township 1 South, Range 5 East, P.M.M., Gallatin County, Montana,
according to the official plat thereof on file and of record in the office of the County
Clerk and Recorder of Gallatin County, Montana.
Together with all improvements and appurtenances thereto.
B. MDT acquired the Property in an exchange with the City. The City owns adjacent property that it
uses for a water reclamation facility. The City desires to obtain a right of first offer to reacquire the
Property.
C. The Parties desire to enter into this Agreement to provide the City with a right of first offer to
purchase the Property should MDT decide to sell or otherwise transfer the Property.
AGREEMENT
IN CONSIDERATION of the mutual covenants contained herein and intending to be legally bound, the
Parties agree as follows:
1. Right of First Offer to Purchase. Subject to the terms and conditions of this Agreement, if MDT
desires to sell or otherwise transfer, whether directly or indirectly, the Property, the City shall have
the right of first offer to purchase the Property.
2. Applicability of Montana Code Annotated. This Agreement is made subject to the requirements
of the Montana Code Annotated in place at the time the right of first offer granted to the City under
this Agreement may be exercised.
3. Procedure. Subject to Section 2, MDT agrees that, should it elect to dispose of the Property, it will
first offer to sell the Property to the City directly, without public auction, pursuant to the provisions
of Mont. Code Ann. §60-4-202(2)(a)(i) (or its successor statute). The purchase price shall be the
fair market value of the Property. If MDT is required by law to dispose of the Property at a public
auction, whether as required by Mont. Code Ann. §60-4-202(3) or otherwise, the City has the right
to match the high bid at the auction. The City must notify MDT if it intends to match the high bid at
the auction and submit a 10% deposit of the high bid from the auction within three business days of
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EXHIBIT E – RIGHT OF FIRST OFFER TO PURCHASE REAL PROPERTY ....................................................................................................... PAGE 2 OF 3
the auction. All other terms and conditions of the public auction shall apply to the City if it
matches the high bid from the auction.
4. Consideration. This Agreement is a negotiated term of a separate agreement to Land Exchange
Conveyance Agreement dated ___________, 2014 (“Exchange Agreement”) between the Parties.
5. Notices. Any notice required to be given under this Agreement shall be deemed given when
addressed as follows and (i) personally delivered, (ii) deposited with the United States Postal
Service, registered or certified mail, postage prepaid and properly addressed, return receipt
requested, or (iii) sent via a recognized over-night courier service such as Federal Express or United
Parcel Service provided that proof of delivery is obtained. Notices, demands, and communications
shall be addressed as follows:
To the City:
The City of Bozeman
Attn: City Manager
City Hall
121 North Rouse Avenue
Bozeman, Montana 59715
To MDT:
Montana Department of Transportation
Attn: Facilities Bureau Chief
PO Box 201001
Helena, Montana 59620-1001
The City or MDT may change its above address by a notice in writing delivered to the other Party
in accordance with the provisions of this Section.
6. Recording. The City, at its expense, may record this Agreement in the records of Gallatin County,
Montana.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date set forth above.
MONTANA DEPARTMENT OF TRANSPORTATION
By: __________________________________________
MDT Butte District Administrator
By: __________________________________________
MDT Maintenance Division Administrator
CITY OF BOZEMAN
By: ___________________________________
City Manager
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EXHIBIT E – RIGHT OF FIRST OFFER TO PURCHASE REAL PROPERTY ....................................................................................................... PAGE 3 OF 3
ACKNOWLEDGEMENTS
STATE OF MONTANA )
: ss.
County of Gallatin )
This instrument was acknowledged before me on _____________, 2014, by _______________ as City
Manager of the City of Bozeman, a self-governing Montana local government.
Printed Name: ______________________________
NOTARY PUBLIC for the State of Montana
RESIDING AT _________________, Montana
My Commission Expires ____________, 20___
STATE OF MONTANA )
: ss.
County of ______________ )
This instrument was acknowledged before me on _____________, 2014, by _______________ as
_______________ of the Montana Department of Transportation, an agency of the State of Montana.
_______________________________________
Printed Name: ______________________________
NOTARY PUBLIC for the State of Montana
RESIDING AT _________________, Montana
My Commission Expires ____________, 20___
STATE OF MONTANA )
: ss.
County of ______________ )
This instrument was acknowledged before me on _____________, 2014, by _______________ as
_______________ of the Montana Department of Transportation, an agency of the State of Montana.
_______________________________________
Printed Name: ______________________________
NOTARY PUBLIC for the State of Montana
RESIDING AT _________________, Montana
My Commission Expires ____________, 20___
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EXHIBIT F-1 – LEASEBACK OF ROUSE AVENUE PROPERTY TO MDT ........................................................................................................ PAGE 1 OF 3
EXHIBIT F-1
LEASEBACK OF ROUSE AVENUE PROPERTY TO MDT
Effective on the Closing Date, the Leaseback of the Rouse Avenue Property (the “Premises”), as provided
in Paragraph 15(a) of the Agreement, shall be on the terms and conditions set forth in this Exhibit F and
in Sections 23 and 25 of the Agreement.
1. Term. The leaseback term shall begin on the first calendar day following the Closing Date and end
on the date that is sixty (60) days after MDT gives the City notice of termination of the tenancy.
MDT will give the City notice of termination of the tenancy on the same date the City issues a
“Certificate of Occupancy” for MDT’s new facilities on Nelson Road. Notwithstanding the
preceding sentences of this section, in no event shall the Leaseback term exceed two (2) years,
measured from the Closing Date.
2. Rent. MDT shall pay the City rent in the amount of $1.00 per month during the term of this
Leaseback. The rent shall remain at $1.00 per month for the entire period that MDT occupies any
portion of the Premises and conducts any of the usual activities related to its Bozeman Area Office
and Maintenance Site thereon. The rent amount shall not be affected by the City’s occupancy of the
northern portion of the Rouse Avenue Property for the purpose of planning and constructing City
facilities. Rent shall be payable in advance on the Closing Date and on the first day of each month
thereafter during the term without advance notice, demand, offset or deduction and shall be deemed
paid when the City receives it. Rent shall be prorated for any partial month at the beginning or end
of the Leaseback term. Rent shall be payable to the City at the following address: The City of
Bozeman, Attn Assistant City Manager, City Hall, 121 North Rouse Avenue, Bozeman, Montana
59715.
3. Intended Use. The Premises shall be used as it is presently being used by MDT for its Bozeman
Area Office and Maintenance Site. MDT shall not use the Premises for any other purposes (other
than those necessary to comply with the Agreement and this Leaseback and to vacate the Premises
prior to termination or expiration of the Leaseback term) without the advance written consent of the
City. MDT’s use of the Premises shall be in full compliance with all statutes, ordinances, laws,
rules, regulations, restrictive covenants, bylaws, and other agreements of record applicable to or
affecting the Premises, with any costs for such compliance paid by MDT. In its use of the Premises,
MDT shall not use, store, transport, store, treat or dispose of any Hazardous Substance (as defined
in the Agreement) in violation of any applicable environmental laws, and it agrees to fully
indemnify the City from any loss, liability, claim, suit, cost or expense of whatever kind (including,
without limitation, reasonable attorney’s fees and litigation costs), resulting from MDT’s breach of
this covenant. MDT shall not use the Premises in any manner that would constitute waste.
4. Real and Personal Property Taxes. MDT shall pay prior to delinquency all real estate taxes (if
any) and assessments assessed or levied against the Rouse Avenue Property and all taxes assessed
or levied against MDT’s personal property in, on or about the Premises during the leaseback term.
If the real property taxes and assessments are paid by the City for such periods, MDT shall
reimburse the City for such payments on demand.
5. Utilities. MDT shall pay in a timely manner all electricity, gas, water, sewer, trash removal,
telecommunication, internet, janitorial, and other utilities and services used by MDT in the
Premises.
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EXHIBIT F-1 – LEASEBACK OF ROUSE AVENUE PROPERTY TO MDT ........................................................................................................ PAGE 2 OF 3
6. Removal of Buildings. If MDT elects to remove the buildings it is permitted to remove pursuant to
the Agreement, it must do so before the expiration or sooner termination of the leaseback term,
except that if MDT desires to remove the mechanics shop it shall do so by April 1, 2015. If MDT
fails to remove the buildings during such time period, its right to do so shall cease and the City shall
have all right, title, and interest in and to those buildings.
7. City’s Entry Onto and Occupancy of Portion of Rouse Avenue Property. The City may enter
onto the Rouse Avenue Property anytime after the Agreement is signed to conduct investigations,
surveys, and other planning for its future development of the property. On and after April 1, 2015,
the City may occupy and use a portion of the north end of the Rouse Avenue Property for
construction of the Bozeman Justice Center. The land to be set aside for such purpose is depicted on
Exhibit F-2, and upon commencement of excavation or other earthwork, such land shall no longer
be part of the Premises under this Leaseback.
8. Return of Premises. Upon the expiration or earlier termination of this Leaseback, MDT shall
surrender possession of the Premises to the City in as good order and condition as the same are at
the Closing Date, reasonable wear and tear excepted and allowing for the required or permitted
removal of buildings and storage tanks. MDT shall, without expense to the City, remove from the
Premises all debris, rubbish, and property that MDT has the right to remove from the Premises, and
MDT shall surrender the Premises’ buildings in a broom clean condition. MDT shall remove all of
MDT’s signage from the Improvements and Land and restore any damage to the Improvements and
Land caused by the removal of such signs.
9. Maintenance; Alterations. MDT takes the Premises “as is” and without any warranty of condition.
The City shall have no obligation to make any improvements to the Premises during the term of this
Leaseback. MDT shall, at MDT’s own expense, maintain the buildings on the land in good and safe
order, condition, and repair. The City shall have no obligation during the Leaseback term to
perform any maintenance of the Premises, whether structural or non-structural. MDT shall make no
permanent alterations in, or additions to, the Premises without first obtaining the City’s written
consent. Unless removal is a condition of the City’s consent as provided in this Paragraph, all
improvements, alterations, additions, and fixtures of a permanent or attached nature shall remain
with the Premises upon the expiration or sooner termination of this Leaseback and shall
immediately become the property of the City upon their installation or inclusion, whether or not
such improvements, additions, alterations, and fixtures have been approved as required. MDT shall
pay, when due, all claims for labor or materials furnished to MDT at or for use in the Premises and
shall cause no construction liens or other liens or encumbrances of any of any kind or type to be
placed upon the Premises by reason of any act or omission of MDT or MDT’s contractors.
10. Insurance.
(a) Worker’s Compensation Insurance. MDT shall, at MDT’s sole expense, purchase and
maintain in effect at all times during the Leaseback term Workers’ Compensation Insurance
with a minimum limit as defined by statute and as same may be amended from time to time.
(b) Comprehensive State Insurance Plan. MDT represents, and the City acknowledges, that
MDT participates in a comprehensive insurance plan for the State of Montana administered
by the Department of Administration pursuant to the provisions of Mont. Code Ann.
§§2-9-201, et. seq. (the “State Insurance Plan”). During the term of this Leaseback, and to the
full extent allowed by the State Insurance Plan, MDT will maintain in full force and effect
insurance coverages equivalent to those typically included in policies of (i) employers
liability insurance and (ii) comprehensive general liability, bodily injury/property damage
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EXHIBIT F-1 – LEASEBACK OF ROUSE AVENUE PROPERTY TO MDT ........................................................................................................ PAGE 3 OF 3
insurance. The limits of coverage shall be the maximum limits of such insurance allowed and
offered under the State Insurance Plan.
(c) MDT shall provide the City thirty (30) days prior written notice of any cancellation of its
participation in the State Insurance Plan. If MDT does not procure substitute insurance in
coverage amounts reasonably acceptable to the City, and such failure shall continue for ten
(10) days after notice thereof, the City may, upon advance written notice to MDT, cause this
insurance to be issued, and MDT shall pay to the City the premium for this insurance within
ten (10) days of the City’s demand, plus interest at ten (10) percent per annum from the date
of payment by the City until repaid by MDT.
11. Indemnity. MDT agrees to indemnify and hold the City harmless against all actions, claims,
demands, costs, damages or expense of any kind on account thereof, including attorneys’ fees and
costs of defense, that may be brought or made against the City, or that the City may pay or incur, by
reason of (i) the negligent acts or omissions or willful misconduct of MDT, its employees and
agents, in its or their activities and operations on the Premises, including but not limited to MDT’s
use and occupancy of the Premises and removal of buildings and storage tanks; or (ii) MDT’s
failure to perform the terms and conditions of this Leaseback, all subject to MDT’s limitation of
liability under Mont. Code Ann. §2-9-108.
12. Limitation of the City’s Liability. Notwithstanding any provision in this Leaseback to the
contrary, the City shall not be liable for any damage to or loss, by theft or otherwise, of property of
MDT or of others located on the Premises, except if caused by the negligent acts or omissions or
willful misconduct of the City, its employees or agents. The City shall not be liable for injuries or
damage to property resulting from fire, explosion, sprinklers, falling plaster, steam, gas, electricity,
water, rain, snow or leaks from the pipes, appliances, plumbing, street or subsurface, or from any
other place or from dampness, except if caused by the negligent acts or omissions or willful
misconduct of the City, its employees or agents. MDT assumes the risk of all property kept or
stored on the Premises and shall hold the City harmless from any claims arising out of damage to
the same. MDT shall give immediate notice to the City in case of fire or accidents on or in the
Premises.
13. No Assignment. MDT shall not sublease or assign its interests as a tenant in the Premises without
the advance written consent of the City, which consent may be withheld by the City in its sole
discretion.
14. Remedies. Either party shall have all remedies allowed by law or equity in the event of the other
party’s material breach of this Leaseback. Such remedies are cumulative and the enforcement of a
specific remedy shall not constitute an election of remedies and/or a waiver of other available
remedies.
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EXHIBIT F-2 – CONSTRUCTION SITE – BOZEMAN JUSTICE CENTER .......................................................................................................... PAGE 1 OF 1
EXHIBIT F-2
CONSTRUCTION SITE – BOZEMAN JUSTICE CENTER
[Attach depiction of construction site on north portion of Rouse Avenue Property.]
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