HomeMy WebLinkAbout22- Ordinance 2101 Purchase and Sale Agreement for the sale of Fire Station 1ORDINANCE 2101 Page 1 of 5
ORDINANCE 2101
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, AUTHORIZING THE CITY MANAGER TO SIGN A PURCHASE AND
SALE AGREEMENT FOR THE SALE AND CONVEYANCE OF FIRE STATION 1
LOCATED AT 34 NORTH ROUSE AVENUE, BOZEMAN, MONTANA, INCLUDING
CONTINGENCIES REGARDING THE SALE AND REQUIRING THE PROCEEDS
FROM THE SALE BE DEPOSITED IN THE CITY’S GENERAL FUND, AND
PROVIDING FOR AN EFFECTIVE DATE.
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 known as the Fire Station 1 identified as
Lots 15, 16, 17, 18, and 19 in Block F of Rouse's First Addition, City of Bozeman, Gallatin
County, MT. EXCEPTING Therefrom the portion transferred to Montana Department of
Transportation for Highway Right of Way, further described in the Bargain and Sale Deed
recorded as Document 2527031 on 10/07/2015 with the Gallatin County Clerk and Recorder.
2. 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.”
3. Section 2.06.850 of the Bozeman Municipal Code (BMC) (Ordinance 1658) grants
the City Commission the jurisdiction and power to sell any real property, however
acquired, belonging to the City that is not necessary to the conduct of city business
or the preservation of property.
4. 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. In addition, section 2.06.900,
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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 and the City Manager
obtained an appraisal which was issued on October 14, 2021. The appraisal provides
the current market value of the property, as of October 12, 2021, is $3,240,000.00.
The proposed sale price of $2,916,000.00 is 90% of the appraised value.
5. On July 27, 2021, the Bozeman City Commission determined by a vote of 5 – 0,
adopting the findings included in the July 27, 2021 staff memorandum and concluded
Fire Station 1 was no longer needed for public use and the public interest will be
furthered by the sale of the property as provided for in §§ 2.06.880 through 2.06.910
of the Bozeman Municipal Code and directed the City Manager to complete all steps
necessary to negotiate a sale and transfer of the property.
6. Should the Bozeman City Commission provisionally adopt this ordinance by no less
than a two-thirds vote 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 enter into the attached
Agreement to Sell and Purchase Real Estate (Attachment A) and to take all other action necessary
to effectuate the sale of the Fire Station 1 property to purchaser Good Housing Partnership, LLC
and/or their assigns. The property is located at 34 North Rouse Avenue, Bozeman, MT and
described Lots 15, 16, 17, 18, and 19 in Block F of Rouse's First Addition, City of Bozeman,
Gallatin County, MT. EXCEPTING Therefrom the portion transferred to Montana Department of
Transportation for Highway Right of Way, further described in the Bargain and Sale Deed
recorded as Document 2527031 on 10/07/2015 with the Gallatin County Clerk and Recorder,
Gallatin County, Montana.
The Commission authorizes, subject to fulfillment of the contingencies as stated in the attached
Agreement and those contingencies listed below, the conveyance of the fee title to the Property by
warranty deed to Good Housing Partnership, LLC and/or their assigns:
1. The sale prices shall be Two Million Nine Hundred Sixteen Thousand Dollars
($2,916,000.00).
2. In consideration for the purchase price being below the October 12, 2021 appraised current
market value and below other offers, Buyer or its successors in interest must provide a
minimum of fifty (50) units of housing affordable to purchasers making an average of
120% of the area medium income as provided for in Section 2.5 of Attachment A.
3. The purchaser shall pay cash to the City at closing.
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ORDINANCE 2101 Page 3 of 5
4. The City Manager shall not be authorized to sign the attached Agreement to Sell and
Purchase Real Estate 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 executed by the City Manager at that time.
Section 3
Proceeds of the sale shall be deposited in the City’s general fund.
Section 4
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 5
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.
Section 6
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 7
Codification Instruction.
This Ordinance shall not be codified but shall be kept by the City Clerk and entered into a
disposition list in numerical order with all other ordinances of the City and shall be organized in a
category entitled “Ordinances for Sale, Transfer, or Conveyance of Real Property.”
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Section 8
Effective Date.
This ordinance shall be in full force and effect 30 days after final adoption.
PROVISIONALLY PASSED by the City Commission of the City of Bozeman, Montana,
on first reading at a regular session held on the 22nd day of March, 2022.
______________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
_________________________
MIKE MAAS
City Clerk
APPROVED AS TO FORM:
______________________________
GREG SULLIVAN
City Attorney
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 5th day of
April, 2022. The effective date of this ordinance is May 5, 2022.
______________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
__________________________
MIKE MAAS
City Clerk
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ORDINANCE 2101 Page 5 of 5
APPROVED AS TO FORM:
______________________________
GREG SULLIVAN
City Attorney
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Attachment A to Ordinance 2021
Purchase and Sale Agreement City of Bozeman Fire Station 1 Page 1 of 20
PURCHASE AND SALE AGREEMENT
This “Agreement” is made and entered into by and between:
“Buyer” and “Seller”
Cory Reistad and Allison Bryan City of Bozeman
(each a “Party” and collectively the “Parties”).
“Buyer’s Agent”: “Seller’s Agent”:
Louisa Hamlin
Pure West Christie’s International Real Estate
louisa@louisahamlin.com
406-570-2178
Ryan Springer
Sterling CRE Advisors Bozeman
Ryan.Springer@sterlingcreadvisors.com
406-579-5586
(each an “Agent” and collectively the “Agents”).
The following terms shall have the following meanings for purposes of this Agreement:
“Real Property”: 34 N Rouse Avenue, Bozeman MT 59715
Legal Description: Lots 15, 16, 17, 18, and 19 in Block F of
Rouses First Addition, City of Bozeman, Gallatin County, MT.
EXCEPTING Therefrom the portion transferred to Montana
Department of Transportation for Highway Right of Way, further
described in the Bargain and Sale Deed recorded as Document
2527031 on 10/07/2015 with the Gallatin County Clerk and
Recorder. To be verified during escrow.
“Purchase Price” $2,916,000,00
“Closing Date” Closing to occur within 15 days of the City of Bozeman
vacating premises.
“Escrow Agent” Tammy Redfern, Montana Title, tredfern@montanatitle.com
“Escrow Method” Wire Transfer
“Earnest Money” $25,000.00
“Due Diligence Deadline” 45 days from Effective Date of
City of Bozeman Ordinance 2021
“Offer Expiration Deadline” Except as provided for in Section 2.2, Offer will remain open
unless and available for Buyer to rescind only until provisional
adoption of City of Bozeman Ordinance 2021; except as provided
for in Section 2.2 thereafter Offer will no longer be subject to
rescission.
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Attachment A to Ordinance 2021
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ARTICLE 1—Purchase & Sale
1.1 Purchase. The Seller agrees to sell and the Buyer agrees to buy, on the terms and
conditions set forth in this Agreement and Schedule 1.1, all of the Seller’s right, title, and
interest in the Real Property, and Significant Intangible Assets, including all rights,
improvements and fixtures located on the Real Property and all rights, privileges,
easements, and rights of way appurtenant to the Real Property (collectively, the
“Property”) excepting the Seller’s interests in water rights 41H 61642-00 and 41H
61643-00 and excepting the existing fire poles. If Seller has not accepted this offer by
the Offer Expiration Deadline, such offer shall be deemed to have been automatically
withdrawn as of the Offer Expiration Deadline.
1.2 Good Faith Deposit. Notwithstanding that this Agreement must be ratified by the Bozeman City Commission, no later than two (2) days after the City Manager’s signature
on this Agreement Buyer will cause the Earnest Money to be deposited with the Escrow
Agent.
1.3 Water Rights and Decommissioning of Well. Buyer recognizes and agrees the Seller
will retain its interests in the water rights described in Section 1.1. Buyer also recognizes the City will, prior to the Closing Date, decommission the well. After the Closing Date, Buyer will be responsible for all regulatory requirements for the well and Seller shall have no more responsibility.
1.4 Due Diligence. Buyer recognizes it has had opportunity to conduct due diligence during
the time period the Property was listed for sale. Nevertheless, Buyer shall have until the
Due Diligence Deadline to conduct inspections or reviews customary in the sale of
commercial real estate in Montana of the Real Property including the inspections and
evaluations listed on Schedule 1. During this period, Seller will make reasonable
accommodations for Buyer, or Buyer’s agents, to enter and inspect and evaluate the
Property. Buyer may terminate this Agreement, at Buyer’s sole and absolute discretion,
if the Property is not satisfactory and if Buyer provides notice to Seller before the
expiration of the Due Diligence Deadline. If Buyer so terminates, Buyer shall provide
Seller any reports or information relating to due diligence that were prepared by Buyer or
Buyer’s Agent.
1.5 Seller’s Deliveries. Prior to Seller’s Due Diligence Delivery Deadline, Seller shall
provide to Buyer legible copies of all material documents or contracts affecting the
Property in Seller’s possession or which are reasonably accessible to Seller.
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1.6 Title. By the Seller’s Due Diligence Delivery Deadline, Seller shall deliver to the Buyer
a commitment for a standard ALTA owner’s title insurance policy issued by the Closing
Agent (the “Preliminary Title Commitment”) in an amount equal to the Purchase Price
commitment to insurance merchantable title to the Real Property excluding only the
Water Rights mentioned in Section 1.3 and the Exceptions (as defined in Section 1.7).
Buyer shall have twenty (20) business days from the delivery of the Preliminary Title
Commitment to object to the title of the Property (a “Buyer Objection”). If Buyer so
objects, Seller shall have thirty (30) days—and the Closing Date shall be automatically
extended by thirty (30) days—to address such Buyer Objection to the satisfaction of
Buyer, in Buyer’s sole and absolute discretion.
1.7 Seller’s Title Delivery. At the closing the Seller shall convey good and marketable fee
simple title to the Real Property to the Buyer by warranty deed, free and clear of all liens,
encumbrances, easements, rights of way, restrictions, reservations, conditions, burdens,
and other defects in title (the “Warranty Deed”), except as follows (the “Exceptions”):
a. Easements, rights of way, restrictions, reservations, conditions, and burdens of
record;
b. Easements, rights of way, and encroachments which are apparent on inspection of
the Real Property or which would be disclosed by a survey of the Real Property;
c. Laws, ordinances, and regulations relating to zoning, land use, environmental
protection, and building;
d. Reservations made in patents or in acts authorizing the issuance of patents;
e. Taxes and assessments which are not yet due and payable;
f. All other conditions of title disclosed by the Preliminary Title Commitment, and
which did not receive a Buyer Objection; and
1.8 City Not Bound in Its Regulatory/Utility Authority. Buyer recognizes the City enters
this Agreements as a landowner and not in its regulatory role regarding any land use,
zoning, building inspection, subdivision, or any other circumstance where the Buyer may
need to receive regulatory approvals from the City prior to conducting any activity on the
Property after the Closing Date. In addition, Buyer recognizes the City is a provider of
certain utility services including but not limited to water, sewer, and stormwater. As such,
Buyer agrees that noting herein binds the City to make certain regulatory approvals should
the Property be redeveloped, reused, demolished, or in any capacity wherein the City may
have regulatory or utility authority after the Closing Date. In addition, Buyer recognizes
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the Covenant regarding affordable housing provided in Section 2.5 runs with the land and
in no way supersedes the City’s regulatory authority.
ARTICLE 2—Conditions to Performance
2.1 Conditions To Buyer’s Performance. The Buyer will have the right to terminate this Agreement, and shall not be obligated to complete the purchase of the Property or to perform the Buyer’s other obligations under this Agreement, unless all of the following conditions have been satisfied or waived:
a. The Seller’s title to the Property meets the requirements set forth in this Agreement;
b. On the Closing Date the Seller executes and delivers to the Closing Agent all of the documents which this Agreement, or the Closing Agent, requires the Seller to execute and deliver;
c. All of the warranties and representations of Seller contained in this Agreement shall have been true and correct when made, and shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as though such warranties and representations had been made on and as of the Closing Date;
d. Seller shall have maintained the Property until the Closing in its condition as of the date of Buyer’s signature hereunder, ordinary wear and tear excepted; e. Seller delivers possession of the Property to Buyer on the Closing Date;
f. All mortgages, judgments, and liens shall be paid or satisfied by the Seller at or prior to closing unless otherwise provided herein; and
g. No additional encumbrances, restrictions, easements or other adverse title
conditions have been placed against the title to the Property other than those
identified in the Preliminary Title Commitment.
2.2 Buyer’s Right To Rescind. The Buyer may rescind this Agreement without any further obligation or liability hereunder before the Due Diligence Deadline or the deadline for a Buyer Objection. In the event of the Buyer’s failure to timely reject any defect or deficiency in
writing by such deadline, Buyer will be deemed to have waived such contingency and to have accepted the Property and Personal Property subject to any existing conditions or defects. 2.3 Conditions to Seller’s performance. The Seller will have the right to terminate this Agreement, and shall not be required to convey the Property to the Buyer or to perform the other
obligations of the Seller under this Agreement, unless all of the following conditions have been satisfied or waived:
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a. On the Closing Date the Buyer executes and delivers to the Closing Agent all
of the documents which this Agreement, or the Closing Agent, requires the
Buyer to execute and deliver including the Purchase Price. b. On the Closing Date the Buyer executes and delivers to the Closing Agent all of the documents which this Agreement, or the Closing Agent, requires the
Buyer to execute and deliver.
c. All of the warranties and representations of Buyer contained in this Agreement
shall have been true and correct when made, and shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though such warranties and representations had been made on and as of the
Closing Date.
d. In addition, the Buyer recognizes and agrees the sale of the Property shall be
contingent upon the Seller’s compliance with Chapter 2, Article 6, Division 5,
Bozeman Municipal Code, and the ratification of this Agreement by duly
adopted ordinance of the Bozeman City Commission pursuant to the
requirements of the Section 2.11 of the Bozeman City Charter. Final ratification
of this Agreement shall not be effective until 30 (thirty) days after final adoption
of such ordinance. Should the Bozeman City Commission fail to ratify the City
Manager’s signature on this Agreement this transaction shall be terminated
automatically without any further action of the Seller required and the Earnest
Money returned to Buyer.
2.4 Remedies—Liquidated Damages. THE PARTIES ACKNOWLEDGE THAT
THEY HAVE DISCUSSED THE TYPE AND MAGNITUDE OF DAMAGES THAT
EACH COULD SUFFER IF THIS AGREEMENT TERMINATES BECAUSE OF
THE OTHER PARTY'S BREACH OR DEFAULT HEREUNDER.
FURTHERMORE, EACH ACKNOWLEDGES THAT IT HAS NEGOTIATED THIS
TOPIC IN GOOD FAITH WITH THE OTHER AND HAS CONCLUDED THAT IT
IS EXTREMELY DIFFICULT AND IMPRACTICAL TO AFFIX A DOLLAR
AMOUNT TO DAMAGES FOR BREACH OR DEFAULT AND THEREFORE
HAVE AGREED TO THE FOLLOWING REMEDIES:
a. Seller’s Remedies in the Event of Buyer’s Beach of Default. THE
PARTIES AGREE THAT SELLER'S SOLE REMEDY, AT LAW OR IN
EQUITY, IN THE EVENT OF A DEFAULT OR BREACH BY BUYER,
IS FOR SELLER TO KEEP THE EARNEST MONEY DEPOSIT AND
ALL INTEREST EARNED THEREON WITHOUT ADDITIONAL
INSTRUCTIONS TO ESCROW AGENT. THEREAFTER THIS
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AGREEMENT SHALL TERMINATE AND SELLER SHALL HAVE NO
FURTHER RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT
EXCEPT FOR THOSE THAT ARE EXPRESSLY STATED TO
SURVIVE THE TERMINATION THEREOF.
b. Buyer's Remedies in the Event of Seller's Breach or Default. THE
PARTIES AGREE THAT BUYER'S SOLE REMEDY, AT LAW OR IN
EQUITY, IN THE EVENT OF A DEFAULT OR BREACH BY SELLER
UNDER THIS AGREEMENT, IS FOR BUYER TO HAVE RETURNED
TO IT THE EARNEST MONEY DEPOSIT AND ALL INTEREST
EARNED THEREON AS LIQUIDATED DAMAGES (NOT AS A
PENALTY.
2.5 Affordable Housing Covenant/Parking Incentives. Buyer’s performance under
this Agreement is conditioned upon the Bozeman City Commission authorizing an
ordinance approving an Urban Renewal Project for the Real Property which will make
eligible to Buyer an amount up to $1,600,000.00 at the time of redevelopment of the
Property (the “Urban Renewal Funds”). Buyer understands and agrees the Urban Renewal
Funds are not to be provided by the City at Closing; rather, the Urban Renewal Funds, if
approved, will be made available to Buyer pursuant to and conditioned upon the Buyer and
City entering into a development agreement no later than approval by the City of a site plan
for redevelopment of the Real Property. Failure by the Bozeman City Commission to
finally adopt the ordinance shall allow Buyer to rescind this Agreement.
Buyer understands and agrees as consideration for the Purchase Price and in consideration
for receiving the opportunity to obtain the Urban Renewal Funds at the time of
redevelopment of the Real Property, Buyer must record, at Closing, an affordable housing
restrictive covenant and agreement that binds the Buyer or the Buyer’s successors in
interest to the development of a minimum of 50 (fifty) affordable housing units on the Real
Property. The affordable housing units are housing units, regardless of ownership type, that
are perpetually affordable to households with income equal to an average of 120% of the
area medium income. In addition, Buyer recognizes the covenant will prohibit the use of
all affordable units for short term rentals as defined by Bozeman Municipal Code. The
covenant must run with the land and apply to not only the first sale from Buyer but also to
all future sales of the unit. All sales prices for the units must be based on the most recent
affordability data available through the Housing and Urban Development’s Affordability
Data System for Bozeman or similar affordability data available at the time of sale or resale.
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Buyer agrees the covenant will be a binding agreement between Buyer (and its successors
in interest) and the City, and that the Buyer benefits from such a covenant in consideration
for the Purchase Price and the opportunity to obtain the Urban Renewal Funds.
In addition to the above mentioned covenant, the Buyer understands and agrees Buyer and
Seller must enter into the above mentioned development agreement to make the Urban
Renewal Funds available to Buyer. Buyer understands and agrees the development
agreement must provide that the Urban Renewal Funds will be available to Buyer only
upon occupancy of redevelopment of the Real Property and the fulfillment of obligations
contained within the affordable housing covenant and agreement. Furthermore, the Urban
Renewal Funds will only be available as reimbursement to Buyer only for expenses directly
related to the redevelopment of the Real Property as such eligible expenses are listed in 7-
15-4288, MCA.
In addition to the above, the Parties agree the City will make available up to but no more
than 12 (twelve) parking spaces at a City-owned and operated parking facility for use by
Buyer for redevelopment of the Real Property and only as such off-site parking is
authorized by the requirements of the Bozeman Municipal Code in place at the time of
submittal of a site plan application for redevelopment of the Real Property. Buyer or its
successors will be responsible for all future parking permit fees as established by the City.
The above parking spaces will be available only if redevelopment of the Real Property
requires the use of these spaces. Buyer agrees it must exhaust all reasonable measures to
meet its parking demand on site prior to the City spaces being made available. As such,
these spaces are only available as the “last in” spaces; meaning, other reductions from
minimum parking requirements of the Bozeman Municipal Code must be considered and
used prior to reliance on the parking spaces available under this incentive. Finally, the
parking spaces contemplated herein will not be reserved specifically for residents or tenants
of redevelopment that occurs on the Real Property and Buyer recognizes there may be
times where the parking space is physically not available to its tenants or buyers.
Both the Urban Renewal Funds and the parking spaces at a City-operated parking facility
will be available to Buyer only at redevelopment as described herein and only for a period
of five (5) years after the Closing Date; after this five (5) year period eligibility for the
Urban Renewal Funds and the parking spaces expire. To maintain eligibility for the Urban
Renewal Funds or parking spaces after five (5) years, Buyer must seek approval from the
City Commission for renewal of extension of eligibility. Buyer understands and agrees that
while the Urban Renewal Funds and parking spaces are available only for five (5) years,
the affordable housing covenant will remain and run with the land in perpetuity regardless
of expiration of the eligibility for Urban Renewal Funds or parking spaces.
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As such, Buyer understands and agrees the Seller’s performance under this Agreement
related to the Urban Renewal Funds is only the adoption of the ordinance authorizing
redevelopment of the Real Property as an urban renewal project and the availability of the
Urban Renewal Funds described herein.
Buyer understands and agrees the Seller is only required by this Agreement to enter into
the development agreement on terms agreed to by the Seller and that any reimbursement
made to Seller pursuant to the development agreement must comply with all requirements
of the development agreement as negotiated between the Parties.
Buyer agrees that if a court of competent jurisdiction overturn the ordinance authorizing
the use of Urban Renewal Funds for redevelopment of the Real Property such action in no
way invalidates this Agreement or the affordable housing restrictive covenant and
agreement. If such ordinance is invalidated, Buyer recognizes the Urban Renewal Funds
will not be available for redevelopment of the Real Property.
Article 3—Closing
3.1 Escrow. The Earnest Money shall be deposited by the respective Agent with the
Escrow Agent within two (2) business days of provisional adoption of Ordinance 2021 according
to the Escrow Method.
3.2 Taxes and Assessments. Seller and Buyer shall prorate taxes, as well as pre-paid
rents, if any, as of the Closing Date. The prior year’s taxes should be used for proration in the
event that the current year taxes are not available, and shall not be adjusted based on any
subsequent change in assessed value. All non-perpetual Special Improvement Districts or
Association Special Assessments will be paid off at Closing by Seller.
3.3 Closing Date. Buyer recognizes the Property currently serves as the City’s Fire
Station 1. Buyer also recognizes the City is currently constructing the Bozeman Public Safety
Center (BPSC) with an estimated completion date of July 1, 2022. Buyer enters into this
Agreement recognizing the Buyer may not take ownership of the Property until such time as the
City completes construction of the BPSC and Fire Station 1 has relocated to the BPSC. As such,
Buyer recognizes the Closing Date is subject to change by the City if the BPSC is not completed.
Closing Date is estimated to be no more than 15 days after City notifies Buyer it has vacated the
Real Property. Buyer agrees the City may unilaterally extend the Closing Date to a date reasonably
necessary to allow the City to complete construction of the BPSC and move Fire Station 1 to the
BPSC. The City must take all reasonable steps necessary to complete the construction of the BPSC
and move Fire Station 1. The Buyer may request updates from the City on the status of the BPSC
construction and relocation of Fire Station 1.
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Recognizing the above, the Parties anticipate closing this transaction on the Closing Date. In
addition to the City’s authority to extend the Closing Date for issues related to the BPSC and
relocation of Fire Station 1, either Party may extend the Closing Date by ten (10) business days,
by prior notice, unless such extension would cause adverse tax consequences to other Party (i.e. in
the case of an exchange pursuant to 26 USC § 1031) and the other Party has provided notice of
such implications by the Due Diligence Deadline.
3.4 Closing Costs. Buyer and Seller shall equally split all costs related to conducting
the closing and the fee of the Closing Agent. Seller shall pay the cost for a standard 2021ALTA
® Owner’s Policy for Title Insurance, with any enhancements in such coverage to be paid by
Buyer.
3.5 Seller Documents to be Delivered at Closing. On the Closing Date, the Seller
shall deliver to Buyer:
a. The Warranty Deed with a realty transfer certificate recognizing the Seller reserves
unto itself water rights listed herein;
b. A title insurance policy in the amount of the Purchase Price of the Real Property to
insure the Buyer’s title to the Real Property;
3.6 Buyer Closing Deliveries. On the Closing Date, the Buyer shall deliver to the
Escrow Agent the Purchase Price in immediately available funds.
3.7 Purchase Price Adjustment. The Earnest Money and any accrued interest shall
be applied to the Purchase Price.
Article 4—Representations and Warranties
4.1 Representations and Warranties of Seller. The Seller hereby warrants, represents, and
covenants that all of the following warranties and representations are true and correct as
of the date of Seller’s signature hereunder. For purposes of this section “knowledge”
shall mean the due and reasonable inquiry of Seller.
a. Authority of Seller. Seller is the owner of the Property and/or has the full right,
power and authority to sell, convey, and transfer the Property to Buyer as provided
herein, and to perform Seller’s obligations hereunder. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
organizational action on the part of Seller. Notwithstanding the above, the Buyer
recognizes and agrees the sale of the Property will be subject to and contingent
upon fulfillment of provisions of Sections 2.3 and 2.5.
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b. Compliance. Except as disclosed to Buyer by the Due Diligence Deadline, Seller
has no knowledge of any aspect or condition of the Property which violates
applicable laws, rules, regulations, codes or covenants, conditions or restriction, or
of improvements or alterations made to the Property without a permit where one
was required, or of any unfulfilled order or directive of any applicable
governmental agency or casualty insurance company requiring any investigation,
remediation, repair, maintenance, or improvement to be performed on the Property.
c. Possessory Rights. Except as disclosed to Buyer by the Due Diligence Deadline,
Seller has no knowledge of anyone having any rights in the Property adverse to the
Seller.
d. Liens. There are no unsatisfied mechanics’ or materialmens’ lien rights concerning
the Property, and none of the personal property to be conveyed to Buyer under this
Agreement, are subject to any lien or encumbrance affecting such, except as
disclosed in writing to Buyer.
e. Actions, Suits, or Proceedings. Seller, and no agent of Seller, has any knowledge
of any actions, suits, or proceedings which are pending or threatened before any
commission, board, bureau, agency, arbitrator, court, or tribunal that would affect
the Property or Seller’s ability to convey the Property to Buyer hereunder.
f. Bankruptcy. Seller, nor any equity owner of Seller, is the subject of a
bankruptcy, insolvency, conservatorship, or probate proceeding.
g. Conflicts. Except as disclosed to Buyer by the Due Diligence Deadline, no other
person has any right or option to acquire any portion of the Property and the
execution, delivery and performance of this Agreement by Seller and the
consummation by it of the transactions contemplated hereby will (i) not violate any
provision of its organizational documents or any applicable law, rule, regulation,
order or comparable requirement; or (ii) require notice to or the consent,
authorization, approval or order of any person, except for notices that have been
given and consents that have been obtained.
h. Access and disputes. Except as disclosed to Buyer by the Due Diligence Deadline,
the Seller has legal and physical access to the Property which is adequate for the
current use of the Property, and the Seller, and no agent of Seller, knows of any
dispute or disagreement which could threaten access to the Property. Buyer is
aware of the tunnel in the basement of the Real Property.
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i. Adverse Change. Except as disclosed to Buyer by the Due Diligence Deadline,
the Seller has no information or knowledge of any action by adjacent landowners,
or natural or artificial conditions on the Property or adjacent property, which could
have a material adverse effect upon the Property or its value. There is no significant
adverse fact or condition relating to the Property which has not been specifically
disclosed in writing by the Seller to the Buyer.
j. Incomplete Inaccurate or Misleading Information. The Seller doesn’t know of
any materially incomplete, inaccurate, or misleading information in the documents,
lists, and reports furnished to the Buyer under this Agreement.
k. Hazardous Substances on the Property. Except as disclosed to Buyer by the
Seller Delivery Deadline, that with respect to the period during which the Seller
owned or occupied the Property, and to the knowledge of the Seller with respect to
the time before the Seller owned or occupied the Property, no hazardous substances
have been manufactured, processed, treated, handled, stored, installed, recycled,
disposed, or released, intentionally or unintentionally, on the Property, and there
have been no activities or events on the Property which could subject the Seller, the
Buyer, or any subsequent owner of the Property to damages, penalties, injunctive
relief, or cleanup or response costs under any environmental law or common law
theory of liability. To the knowledge of Seller, no hazardous substances have been
manufactured, processed, treated, handled, stored, installed, recycled, disposed, or
released, intentionally or unintentionally, on land which is adjacent to the Property.
Except as disclosed by the Seller prior to the Due Diligence Deadline, for the
purposes of this paragraph, “Hazardous Substances” shall mean any and all
substances, materials, chemicals, or wastes that now or hereafter are classified or
considered to be hazardous or toxic under any Environmental Law, or that are or
become regulated by any governmental authority because of toxicity,
infectiousness, radioactivity, explosiveness, ignitability, corrosiveness, or
reactivity under any environmental law applicable to the Property, and shall also
include: (a) gasoline, diesel fuel, and any other petroleum hydrocarbons; (b)
asbestos and asbestos containing materials, in any form, whether friable or non-
friable; (c) polychlorinated biphenyls; (d) radon gas; and (e) flammable liquids and
explosives.
l. Broker. Except for the Seller’s Broker, no broker, finder, or investment banker is
entitled to any brokerage, finder’s, or other fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements made
by or on behalf of Seller.
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m. Statutory Disclosures. Except for the disclosures provided on Schedule 2, no
other disclosures are required by Seller.
4.2 Representation and Warranties of Buyer. The Buyer hereby warrants, represents, and
covenants that all of the following warranties and representations are true and correct as of
the date of Buyer’s signature hereunder. For purposes of this section “knowledge” shall
mean the due and reasonable inquiry of Buyer.
a. Authority of Buyer. Buyer has the full right, power and authority to purchase and
acquire the Property from Seller as provided herein, and to perform Buyer’s
obligations hereunder. The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary organizational action on the part
of Seller.
b. Broker. Except for Buyer’s Broker, no broker, finder, or investment banker is
entitled to any brokerage, finder’s, or other fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements made
by or on behalf of Buyer.
c. Due Diligence. Except as expressly set forth in this Agreement to the contrary, and
recognizing Buyer has had an opportunity to inspect the Property prior to the date
of this Agreement, Buyer is purchasing the Property in its existing condition "AS
IS, WHERE-IS, AND WITH ALL FAULTS” with respect to all facts,
circumstances, conditions and defects, and, Seller has no obligation to determine or
correct any such facts, circumstances, conditions or defects or to compensate Buyer
for same. Seller has specifically bargained for the assumption by Buyer of all
responsibility to investigate the Property, and of all risk of adverse conditions and
has structured the Purchase Price and other terms of this Agreement in
consideration thereof. Buyer has undertaken all such investigations of the Property
as Buyer deems necessary or appropriate under the circumstances as to the status
of the Property and based upon same, Buyer is and will be relying strictly and solely
upon such inspections and examinations and the advice and counsel of its own
consultants, agents, legal counsel and officers. Buyer is and will be fully satisfied
that the Purchase Price is fair and adequate consideration for the Property and, by
reason of all the foregoing, Buyer assumes the full risk of any loss or damage
(subject to Section 5.3 below) occasioned by any fact, circumstance, condition or
defect pertaining to the Property.
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d. No Warranty or Other Representation. Except as expressly set forth in this
Agreement to the contrary, Seller hereby disclaims all warranties of any kind or
nature whatsoever INCLUDING, WITHOUT LIMITATION, WARRANTIES
OF HABITABILITY AND FITNESS FOR PARTICULAR PURPOSES,
whether expressed or implied including, without limitation warranties with respect
to the Property. Except as is expressly set forth in this Agreement to the contrary,
Buyer acknowledges that it is not relying upon any representation of any kind or
nature made by Seller, or Seller's Agent, or any of their respective direct or indirect
officers, directors, employees or agents (collectively, the "Seller Related Parties")
with respect to the Property, and that, in fact, except as expressly set forth in this
Agreement to the contrary, no such representations were made. To the extent
required to be operative, the disclaimers and warranties contained herein are
"conspicuous" disclaimers for purposes of any applicable law, rule, regulation or
order.
Article 5—Additional Provisions
5.1 Assignment. This Agreement may not be assigned by the Buyer without the prior written
consent of the Seller. Any other assignment or purported assignment of the Agreement
shall be null and void.
5.2 1031 Exchange. In connection with any 1031 exchange or exchanges, the Buyer may
assign its respective rights under this Agreement to a qualified intermediary or exchange
accommodation titleholder, as required by IRS Regulations. No such assignment will
modify or release any of the obligations of either the Buyer or the Seller under this
Agreement. Notwithstanding any such assignment or assignments, the Seller will convey
the Property directly to the Buyer. The Parties each agree to cooperate in any exchange
performed by the other party provided that they incur no additional liability, cost, or
expense as a result of the cooperation, but neither Party will be obligated to acquire or
convey any other property as part of the other Party’s 1031 exchange.
5.3 Risk of Loss. All loss or damage to the Property shall be retained by Seller until the
Closing.
5.4 Entire Agreement. This Agreement, together with any other documents incorporated
herein by reference and all related exhibits and schedules, constitute the sole and entire
agreement of the Parties to this Agreement with respect to the subject matter contained
herein and therein, and supersedes all prior and contemporaneous understandings,
agreements, representations, and warranties, both written and oral, with respect to such
subject matter.
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5.5 Amendment and Modification. This Agreement may only be amended, modified, or
supplemented by an agreement in writing signed by each Party hereto.
5.6 Waiver. No waiver by any party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and signed by the party so waiving. No waiver by any party
shall operate or be construed as a waiver in respect of any failure, breach, or default not
expressly identified by such written waiver, whether of a similar or different character, and
whether occurring before or after that waiver. No failure to exercise, or delay in exercising,
any right, remedy, power, or privilege arising from this Agreement shall operate or be
construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power, or privilege hereunder preclude any other or further exercise thereof or the exercise
of any other right, remedy, power, or privilege.
5.7 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto
and their respective successors and permitted assigns, and nothing herein, express or
implied, is intended to or shall confer upon any other person or entity any legal or equitable
right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.
5.8 Governing Law & Forum. All matters arising out of or relating to this Agreement shall
be governed by and construed in accordance with the laws of the State of Montana without
giving effect to any choice or conflict of law provision or rule (whether of the State of
Montana or any other jurisdiction).
5.9 Submission to Jurisdiction. The Parties hereby agree that any suit, action, or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in connection
with this Agreement or the transactions contemplated hereby, whether in contract, tort or
otherwise, shall be brought in the United States District Court for the District of Montana
or district court for the State of Montana, so long as one of such courts shall have subject-
matter jurisdiction over such suit, action, or proceeding. Each of the Parties hereby
irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding that is brought in any such court has been brought in an inconvenient
form. Service of process, summons, notice or other document by certified mail to the
address set forth in Section 5.19 shall be effective service of process for any suit, action,
or other proceeding brought in any such court.
5.10 Attorneys’ Fees. In the event that any party institutes any suit, action, or proceeding,
against the other Party to enforce the covenants contained in this Agreement (or obtain any
other remedy in respect of any breach of this Agreement) or arising out of or relating to
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this Agreement, the prevailing party in the suit, action or other proceeding shall be entitled
to receive, in addition to all other damages to which it may be entitled, the costs incurred
by such party in conducting the suit, action, or proceeding, including reasonable attorneys’
fees (to include the fees, and expenses of the Bozeman City Attorney’s Office) and
expenses and court costs. This includes, subject tto any limits under applicable law,
attorneys’ fees for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment collection
services.
5.11 Further Assurances. Each of the Parties hereto shall, and shall cause their respective
affiliates to, execute and deliver such additional documents, instruments, conveyances, and
assurances and take such further actions as may be required to carry out the provisions
hereof and give effect to the transactions contemplated hereby.
5.12 Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall be deemed to be one and the same
agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means
of Electronic Transmission shall be deemed to have the same legal effect as delivery of an
original signed copy of this Agreement (e.g. DocuSign). The Parties have consented to
execute this Agreement electronically in conformance with the Montana Uniform
Electronic Transactions Act, Title 30, Chapter 18, Part 1, MCA.
5.13 Time of the Essence. Time shall be of the essence in this Agreement.
5.14 Remedies. Seller’s sole and exclusive remedy is monetary damages against Buyer. Buyer
may either require Seller to specifically perform, or recover monetary damages against
Seller as provided for in Section 2.4.
5.15 Severability. If any term or provision of this Agreement is invalid, illegal, or
unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not
affect any other term or provision of this Agreement or render unenforceable such term or
provision in any other jurisdiction. Upon such determination that any term or other
provision is invalid, illegal, or unenforceable, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the greatest extent possible.
5.16 Relationship of the Parties. Nothing herein shall be construed to create a joint venture or
partnership between the parties hereto or an employer/employee or agency relationship.
Neither party hereto shall have any express or implied right or authority to assume or create
any obligations on behalf of or in the name of the other party or to bind the other party to
any contract, agreement, or undertaking with any third party.
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5.17 Confidentiality. Until the Closing, Buyer shall treat the information disclosed to it by
Seller, or otherwise gained through Buyer's access to the Property and Seller's books and
records, as confidential, giving it the same care as Buyer's own confidential information,
and make no use of any such disclosed information not independently known to Buyer
except in connection with the transactions contemplated hereby; provided, however, that
Buyer may, without the consent of Seller, disclose such information: (a) to its partners,
members, managers, employees, advisors, consultants, attorneys, accountants, prospective
and actual investors, and lenders (the "Transaction Parties"), so long as any such
Transaction Parties to whom disclosure is made shall also agree to keep all such
information confidential in accordance with the terms hereof and (b) if disclosure is
required by law or by regulatory or judicial process, provided that in such event, Buyer
shall notify Seller of such required disclosure, shall exercise all commercially reasonable
efforts to preserve the confidentiality of the confidential information, including, without
limitation, reasonably cooperating with Seller to obtain an appropriate order or other
reliable assurance that confidential treatment will be accorded such confidential
information by such tribunal and shall disclose only that portion of the confidential
information which Buyer is legally required to disclose. Notwithstanding the foregoing,
the confidentially provisions of this Section 5.17 shall not apply to any information or
document which: (i) is or becomes generally available to the public other than as a result
of a disclosure in violation of this Agreement or (ii) subject to compliance with clause (b)
in this Section 5.17 above, is required by law or court order to be disclosed. In the event of
a termination of this Agreement, Buyer shall promptly return all such confidential
information to Seller.
5.18 Notices & Communication. All communication between the Parties regarding this
transaction shall be between the Agents and be conducted via email at the address(es) set
forth on the first page of this Agreement. Any notices, requests, consents, claims, demands,
waivers, and other communications hereunder (each, a “Notice”) shall be in writing and
addressed to the party at the email addresses set forth on the first page of this Agreement,
with cc to their respective Agent (or to such other email address that may be designated by
the receiving party from time to time in accordance with this Section) and sent to the party
and their respective Agent at the mailing address set forth on the first page of this
Agreement. Except as otherwise provided in this Agreement, a Notice is effective only if
the party giving the Notice has complied with the requirements of this Section.
5.19 Survival. The provisions of Sections 2.4 and 2.5, Article IV, and this Article V, shall
survive the termination of this Agreement and the Closing.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of
the date first written above by their respective officers thereunto duly authorized.
Seller:
By: Jeff Mihelich
Title: Bozeman City Manager
Date:
Buyer:
Name: Cory Reistad
Title: Developer, the Firehouse
Date:
Buyer:
Name: Allison Bryan
Title:
Date
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Schedule 1—Specific Inspections
Buyer has permission to perform the following tests: Radon, Mold, Lead, and Asbestos
In addition, Buyer may choose to consult with the following professional prior to the Due
Diligence Deadline: plumber, HVAC, roofer, structural engineer, civil engineer, geotechnical
engineer.
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Schedule 2—Seller’s Form Statutory Disclosures
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.
MOLD DISCLOSURE: There are many types of mold. Inhabitable properties are not, and
cannot be, constructed to exclude mold. Moisture is one of the most significant factors
contributing to mold growth. Information about controlling mold growth may be available from
your county extension agent or health department. Certain strains of mold may cause damage to
property and may adversely affect the health of susceptible persons, including allergic reactions
that may include skin, eye, nose, and throat irritation. Certain strains of mold may cause
infections, particularly in individuals with suppressed immune systems. Some experts contend
that certain strains of mold may cause serious and even life-threatening diseases. However,
experts do not agree about the nature and extent of the health problems caused by mold or about
the level of mold exposure that may cause health problems. The Centers for Disease Control and
Prevention is studying the link between mold and serious health conditions. The seller, landlord,
seller's agent, buyer's agent, or property manager cannot and does not represent or warrant the
absence of mold. It is the buyer's or tenant's obligation to determine whether a mold problem is
present. To do so, the buyer or tenant should hire a qualified inspector and make any contract to
purchase, rent, or lease contingent upon the results of that inspection.
A seller, landlord, seller's agent, buyer's agent, or property manager who provides this mold
disclosure statement, provides for the disclosure of any prior testing and any subsequent
mitigation or treatment for mold, and discloses any knowledge of mold is not liable in any action
based on the presence of or propensity for mold in a building that is subject to any contract to
purchase, rent, or lease.
LEAD BASED PAINT. Residential real property on which a residential dwelling was built
prior to 1978 may present exposure to lead from lead-based paint that may place young children
at risk for developing lead poisoning. Lead poisoning in young children may produce permanent
neurological damage, including learning disabilities, reduced intelligence quotient, behavioral
problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant
women. A risk assessment or inspection for possible lead-based paint hazards is recommended
prior to occupancy of this Premises. Risk assessments for lead based paint are the responsibility
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of Buyer or the prospective buyer. Information on protecting your family from lead paint risks
can be found at: https://www.epa.gov/sites/production/files/2017-
06/documents/pyf_color_landscape_format_2017_508.pdf
The Property is equipped with __ smoke detectors [and Carbon monoxide detectors].
METHAMPHETAMINE CONTAMINATION DISCLOSURE STATEMENT: Pursuant to
the provisions of Title 75, Chapter 10, Part 13 of Montana Code Annotated, certain owners of
real property which has been contaminated with hazardous chemical residues created by the
clandestine manufacture of methamphetamine are required to notify any acquiring party of such
contamination and the certification of any remediation or decontamination project. Seller
represents that it has no knowledge of any such contamination of the Property, nor has it
received any notice of any such contamination of the Property. Seller represents that it has no
knowledge of the presence of methamphetamine in any habitable structure, nor has it received
any notice that methamphetamine is present in any habitable structure.
Megan’s Law Disclosure Statement. Pursuant to the provisions of Title 46, Chapter 23, Part 5
of the Montana Code Annotated, certain individuals are required to register their address with the
local law enforcement agencies as part of Montana's Sexual and Violent Offender Registration
Act. In order to provide the public with information so they can protect themselves and their
children from convicted sexual and violent offenders, the Montana Department of Justice
maintains an electronic database entitled the "Montana Sexual or Violent Offender Registry"
which can be found at http://www.doj.mt.gov/svor/. Buyer agrees to be solely responsible to
conduct any investigation regarding the existence of any individuals residing near the Property
that are registered as part of Montana's Sexual and Violent Offender Registration.
Noxious Weeds Disclosure Statement. The Buyer of the Property acknowledges Buyer is aware
that all property in the State of Montana potentially contains the existence of noxious weeds.
Further, the laws of the State of Montana require owners of property within this state to control,
and to the extent possible, eradicate noxious weeds. Pursuant to the provisions of Title 7, Chapter
22, Section 2116 of the Montana Code Annotated, it is unlawful for any person to permit any
noxious weed to propagate or go to seed on the person's land unless they adhere to a noxious weed
management plan as provided for under Montana law. Buyer acknowledges and agrees that before
purchasing the Property, Buyer is solely responsible to conduct any investigation of the Property
regarding the existence or potential existence of noxious weeds on the Property. The Seller cannot
and does not represent or warrant the absence of noxious weeds on the Property. It is the Buyer’s
obligation to determine whether noxious weeds are present. To do so, the Buyer may hire a
qualified inspector and make this Agreement contingent upon the results of that inspection.
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