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HomeMy WebLinkAboutReal estate with state of mich senate townsend parking REAL ESTATE PURCHASE AGREEMENT This-Real Estate Purchase-Agreement(this"Agreement")is entered into effective December, 2018 (the "Effective Date"), by and between the City of Lansing, a Michigan municipal corporation,with offices located at 124 W. Michigan Avenue, Lansing, Michigan 48933 ("Seller"),and the Michigan Senate, established and existing pursuant to Article IV, Section 2 of the Constitution of the State of Michigan of 1963, with offices located at 201 Townsend Street, Suite 2500, Lansing, Michigan 48933 ("Purchaser"). Seller and Purchaser are sometimes collectively referred to as the"Parties" and individually as a "Party." RECITALS A. Seller is or will be the owner of certain real property, commonly known as the Townsend Parking Ramp, located in the City of Lansing, County of Ingham, State of Michigan, and legally described on the attached Exhibit A to this Agreement(the "Property"). B. Pursuant to Public Act 92 of 2001 (the "Act"), the Property is designated for use as a parking structure and is further subject to certain restrictions as stated in that certain quitclaim deed recorded at Liber 2936, Page 759,with the Ingham County Register of Deeds. C. In accordance with the Act,Seller has reserved not fewer than 400 parking spaces for the benefit of Purchaser's employees for which there is an outstanding balance for parking fees currently owed to Seller from Purchaser. D. Purchaser desires to purchase the Property from Seller, and Seller desires to sell the Property to Purchaser,subject to the terms and conditions of this Agreement, including but not limited to the resolution of the outstanding balance for parking fees. E. The Parties acknowledge that this Agreement is made in full satisfaction of Seller's obligation to reserve not fewer than 400 parking spaces for the benefit of Purchaser's employees under the Act. AGREEMENT Now,therefore,the Parties mutually agree as follows: 1. Purchase and Sale. Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, all of Seller's right, title, and interest in and to the Property, subject to the terms and conditions of this Agreement. 2. Purchase Price. The purchase price for the Property shall be Eighteen Million Dollars ($18,000,000)(the "Purchase Price"), payable as follows: A. Deposit. Within five business days after the Effective Date, Purchaser shall deposit in escrow with an escrow agent mutually agreed to by the Parties ("Escrow Agent") an earnest money deposit in the amount of One Million Dollars($1,000,000)(the"Deposit"),which sum shall be held by Escrow Agent in an interest-bearing account. The Deposit shall be applied against the Purchase Price at the Closing; however, if the transaction contemplated by this Agreement is not consummated, Escrow Agent shall return the Deposit,together with any interest earned,to Purchaser. 1 B. Closing. Purchaser shall pay Seller the balance of the Purchase Price, as may be adjusted as provided herein, by cashier's check or wire transfer at the Closing. 3. Outstanding Parking Fees.The Parties mutually agree to the following provisions in order to fully and finally satisfy the outstanding balance for certain parking fees owed to Seller from Purchaser. A. Parking Payment. Within five business days after Seller obtains any necessary approvals under Paragraph 6, Purchaser shall pay Seller the sum of One Million Dollars($1,000,000)in full satisfaction of the outstanding parking fees relating to the not fewer than 400 parking spaces reserved for Purchaser's employees in the Property (the "Parking Payment"). The Parties mutually acknowledge and agree that the Parking Payment fully and finally satisfies all outstanding obligations related to such parking for the time period from September 1, 2015, until and including the date of Closing. B. Failure to Proceed to Closing; Treatment of Parking Payment. If the transaction contemplated by this Agreement does not proceed to Closing,the Parking Payment shall fully and finally satisfy the outstanding obligation of Purchaser related to such parkingforthe time period from September 1, 2015, until and including December 31, 2018. C. Failure to Proceed to Closing; Parking Agreement. If the transaction contemplated by this Agreement does not proceed to Closing, the Parties shall, in good faith, negotiate the terms of a new parking agreement effective January 1, 2019, whereby Seller shall reserve for Purchaser not fewer than 400 parking spaces in the Property for use by Purchaser's employees at a rate to be negotiated by the Parties,taking into account the number and location of reserved parking spaces, the duration of the agreement,and any other relevant factors. While negotiations remain ongoing,Seller shall allow continued, uninterrupted parking access to the Property for Purchaser's employees and continue to reserve not fewer than 400 parking spaces for such purposes. If the Parties agree to a new parking agreement,Purchaser shall promptly pay Seller the negotiated rate for all reserved parking spaces for the period commencing January 1, 2019, until the date of the new parking agreement,and thereafter as provided in the new parking agreement. D. Failure to Proceed to Closing; Notice to Vacate. If the transaction contemplated by this Agreement does not proceed to Closing and the Parties are unable to agree to a new parking agreement under subparagraph C,Seller shall give Purchaser and Purchaser's employees not less than 60 days' notice to vacate the not fewer than 400 reserved parking spaces in the Property,and Purchaser shall pay Seller the prevailing market rate currently established for the Property for the reserved spaces forthe period from January 1, 2019, until the date the subject parking spaces are vacated by Purchaser's employees. E. Survival. All of the provisions of this Paragraph 3 shall survive whether or not the transaction contemplated by this Agreement proceeds to Closing and whether or not the Agreement is sooner terminated by either Party. 4. Title Insurance.Within 15 days after the Effective Date,Seller,at its expense,shall furnish to Purchaser a commitment (the "Commitment") for an ALTA fee owner's policy of title insurance (the "Title Policy") to be issued at the Closing by a title company mutually agreed to by the Parties. After receiving the Commitment, Purchaser shall have 10 business days to make any objections to the state and quality of title as evidenced by the Commitment. Upon receiving notice of any objections from Purchaser, Seller shall cure the objections to Purchaser's reasonable satisfaction, at Seller's expense, or notify Purchaser that Seller is unable or unwilling to cure the objection. If Seller fails to cure any objection prior 2 to the Closing, Purchaser may either(a) proceed to the Closing, in which case Purchaser shall be deemed to have waived the objection, or(b) terminate this Agreement without penalty, in which case Purchaser shall be entitled to the return of the Deposit. In the event any previously undisclosed exception to title is discovered at or prior to the Closing, Purchaser shall have the same rights to object to the exception,and Seller shall have 10 days to cure the objection to Purchaser's reasonable satisfaction. Notwithstanding anything to the contrary, Seller shall discharge or remove of record all monetary liens disclosed in the Commitment. Purchaser need not agree to accept, as a cure to any objection, the title company's agreement to insure over any objection made by Purchaser. 5: Inspection and Survey. Any time prior to the Closing, Purchaser may access the Property for purposes of conducting an inspection and survey of the Property, or any part of the Property. Any inspection or survey shall be at Purchaser's expense. 6. Seller Approvals. Purchaser acknowledges that the sale of the Property is contingent on the affirmative vote of two-thirds of the members of the Lansing City Council (the "City Council"). Seller makes no representation that the City Council members will approve this Agreement. 7. Delivery of Deed. At the Closing, Seller shall deliver to Purchaser a covenant deed, in substantially the form attached as Exhibit B to this Agreement (the "Covenant Deed"), conveying to Purchaser marketable, fee simple title to the Property, subject to any exceptions and reservations expressly provided for in the Covenant Deed. 8. Parking Agreement. Within 10 days of the Effective Date, the Parties shall negotiate, in good faith,the terms of an agreement under which Purchaser agrees to provide a total of not more than 228 covered parking spaces for Seller's employees on floors six through eight of the Property at a rate of $110 per space (to be adjusted annually by the Detroit consumer price index), for an initial term of five years, which term may be renewed, at Seller's option, for four additional five-year terms (the "Parking Agreement"). The Closing of the transaction contemplated by this Agreement shall be contingent on the Parties' entering into the Parking Agreement,which,when finalized,shall be attached as Exhibit C hereto and made a part hereof. 9. Conditions Precedent to Closing. Each Party's obligation to proceed to the Closing shall be conditioned on the satisfaction or written waiver, by the applicable Party, of each of the following conditions precedent: A. Purchaser shall be satisfied with the title conditions of Paragraph 4 and with the inspection and survey, if any, obtained under Paragraph 5. B. All of Seller's representations and warranties shall be true and correct as of the Effective Date and on the date of the Closing. C. Prior to the Closing, Seller shall have caused the title company to deliver to Purchaser, at Seller's expense, an update of the Commitment, which shall confirm the resolution of any objections to the state and quality of title raised (but not waived) by Purchaser pursuant to Paragraph 4 and otherwise reaffirm the title company's commitment to issue the Title Policy. D. Seller shall certify to Purchaser that no material adverse change has occurred in the condition of the Property. 3 E. No action or proceeding to restrain, prohibit, or declare illegal the transaction contemplated by this Agreement shall be pending or threatened. No order restraining or prohibiting the transaction contemplated by this Agreement shall be issued by any public authority, governmental agency, or court. No attachment, garnishment, levy, or lien shall be filed or in effect regarding the transaction contemplated by this Agreement. F. The Parties shall execute the Parking Agreement. G. Purchaser shall agree, by restriction stated on the Covenant Deed, to allocate a total of 50 parking spaces in the Property for a period of 20 years for the benefit of the public. Purchaser, in its discretion, may charge a reasonable market rate for use of parking spaces allocated for the public. H. Purchaser shall remit to Seller the Parking Payment. I. Seller shall obtain any approval required by the Lansing Building Authority, the Tax Increment Financing Authority, and any other municipal or governmental authority or agency to release their respective interests in and to the Property and to extinguish any encumbrances affecting the Property. J. The City Council will have issued its approval to consummate the transaction contemplated by this Agreement. 10. Taxes and Assessments. The Parties acknowledge that the Property, under Seller's ownership, has not been subject to taxation and shall not be subject to taxation under Purchaser's ownership. In the event any taxes or assessments have been or will be levied against the Property,Seller shall pay all taxes and assessments attributable to the Property that are due and payable as of the Closing, and Purchaser shall pay all taxes and assessments attributable to the Property after the date of the Closing. 11. Representations and Warranties. A. Seller represents and warrants to Purchaser as follows: (i) The execution, delivery, and performance of this Agreement do not violate any contractual or other obligations of Seller. (ii) Except as otherwise stated in this Agreement and pending approval of City Council, Seller is duly and validly authorized to execute this Agreement with full power to enter into and perform under this Agreement,and each individual executing and delivering this Agreement on behalf of Seller has authority to do so. (iii) Seller has not received any notice and does not have any actual knowledge of any alleged violation of any federal,state, or local law affecting the Property. (iv) Except as listed in Exhibit D to this Agreement, there are no leases or other contracts affecting the Property. (v) To Seller's knowledge, the Property has not been used for disposing, refining, generating, manufacturing, producing, storing, handling, treating, transferring, releasing, 4 processing, or transporting any hazardous waste or hazardous substance, as those terms are defined in applicable state and federal law. B. The representations and warranties of Paragraph 11(A) shall survive the Closing for a period of one year. C. Purchaser represents and warrants to Seller that Purchaser is duly and validly authorized to execute this Agreement with full power to enter into and perform under this Agreement, and each individual executing and delivering this Agreement on behalf of Purchaser has authority to do so, but no such individual shall be personally liable hereunder. 12. Closing. The closing of the transaction contemplated by this Agreement (the "Closing") shall take place at the offices of Escrow Agent at the date and time agreed to by the Parties after all conditions precedent to the Closing have been satisfied or waived in writing; provided, however,that the Closing shall take place no later than February 15,2019. Priorto or at the Closing,the following documents shall be executed by the appropriate Party and delivered to Escrow Agent: A. the Covenant Deed; B. a property transfer affidavit; C. Michigan real estate transfer tax valuation affidavit; D. a recertification of warranties by Seller; E. a resolution by City Council evidencing Seller's authority to enter into this Agreement and of the authority of Seller's named representative to execute all documents reasonably necessary to consummate the transaction contemplated by this Agreement; F. a closing statement mutually agreed to by the Parties; G. the Parking Agreement; and H. any other documents reasonably required by Escrow Agent or necessary to consummate the transaction contemplated by this Agreement. All documents to be signed by both Parties shall be signed in counterparts and deposited with Escrow Agent. No documents shall be dated, and Escrow Agent shall date the documents as of the date of the Closing. Possession of the Property shall be delivered to Purchaser at the Closing. 13. Adjustments to Purchase Price. The Purchase Price shall be adjusted at the Closing in accordance with the allocation of closing costs to each Party, as provided in Exhibit E to this Agreement. Seller shall pay all applicable transfer taxes, if any, arising from the transaction contemplated by this Agreement. 14. Default by Seller. In the event of a default by Seller, Purchaser, as its sole and exclusive remedy, may terminate this Agreement without penalty, in which case Purchaser shall be entitled to the return of the Deposit, and Seller shall retain the Parking Payment in accordance with Paragraph 3(B). 5 15. Default by Purchaser. In the event of a default by Purchaser, Seller, as its sole and exclusive remedy, may elect to terminate this Agreement without penalty. 16. Broker. The Parties each represent and warrant to the other that no broker has been engaged in connection with the transaction contemplated by this Agreement. The Parties shall each indemnify the other against any costs, claims, or expenses, including reasonable attorney's fees, arising out of a breach of the foregoing representation by the indemnifying party.The indemnification provision of this Paragraph 16 shall survive the Closing or termination of this Agreement. 17. Notice. Any notice required or permitted under this Agreement shall be in writing and deemed to have been served and given when (a) delivered in person to the Party to whom the notice is given; (b) sent via U.S. mail, postage prepaid, by registered or certified mail, return receipt requested;or (c) deposited with a nationally recognized overnight courier service. Notices shall be addressed to the Parties at their respective addresses as follows: If to Seller: City of Lansing Attn: Mayor Andy Schor 124 West Michigan Avenue Lansing, Michigan 48933 With a copy to: City Attorney James D. Smiertka 124 West Michigan Avenue Lansing, Michigan 48933 If to Purchaser: Michigan Senate Attn:Jordan C. Hankwitz 201 Townsend Street,Suite 2500 Lansing, Michigan 48933 With a copy to: Scott Hughes, General Counsel Capitol Building 100 N. Capitol Avenue, S-106 Lansing, Michigan 48933 18. Publicity. Prior to the Closing, unless disclosure of information is required by law, any news releases or other media releases to the public of information with respect to the sale and purchase of the Property or any matters set forth in this Agreement shall be mutually agreed upon by the Parties before being released. 19. Further Assurances. Each Party shall do and perform,or cause to be done and performed, such further acts and things (including the execution and delivery of such other agreements) as the other Party may reasonably request in order to carry out the intent of the Parties and accomplish the purposes of this Agreement and the consummation of the transaction contemplated by this Agreement. The provisions of this Paragraph shall survive the Closing. 20. Entire Agreement; Amendment. This Agreement embodies the entire agreement of the Parties concerning the subject matter of this Agreement. No amendment of this Agreement shall be binding on either Party unless set forth in a written agreement executed by both Parties. 6 21. Governing Law. Michigan law governs this Agreement. 22. Binding Effect. This Agreement shall be binding on and inure to the benefit of the Parties and their respective successors and assigns. 23. Construction.This Agreement shall not be construed more strictly against one Party than against the other merely by virtue of the fact that it may have been prepared by counsel for one of the Parties. This Agreement shall be interpreted in light of the probable intent of the Parties. 24. Counterparts; Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by facsimile transmission, and a facsimile of this Agreement or of a signature of a Party will be effective as an original. 25. Recitals.The Parties mutually acknowledge and agree that the recitals to this Agreement are true and correct and are incorporated herein by reference. [Signatures on following page] 7 The Parties have executed this Agreement as of the Effective Date. SELLER City of Lansing, a Michi unicipal corporation By: Andy c or Mayor PURCHASER Michigan Senate,established and existing pursuant to Article IV, Section 2 of the Constitution of the State of Michigan of 1963 By: Arlan B. Meekhof Senate Majority Leader By: Jordan C. Hankwitz Director,Senate Business Office i 4 8 The Parties have executed this Agreement as of the Effective Date. SELLER City of Lansing, a Michigan municipal corporation By: Andy Schor Mayor PURCHASER Michigan Senate,established and existing pursuant to Article IV, Section 2 of the Constitution of the State of Michigan of 1963 By: Arlan B. Meekhof Senate Majority L ader By: Jordan C. Hankwitz Director,Senate Business Office 8 The Parties have executed this Agreement as of the Effective Date. SELLER City of Lansing,a Michigan municipal corporation By: Andy Schor Mayor PURCHASER Michigan Senate,established and existing pursuant to Article IV, Section 2 of the Constitution of the State of Michigan of 1963 By: Arlan B. Meekhof Senate Majority Leader By:_�4 C — Jordan C. Hankwitz Director,Senate Business Of 8 EXHIBIT A TO REAL ESTATE PURCHASE AGREEMENT Legal Description Lots 7, 8, 9, and 10,ALSO that part of Lot 11 described as beginning at a point on the East line of Lot 11 a distance of 104.04 feet Southerly from the Northeast corner of Lot 12; thence Southerly along the East line of Lot 11 to the Southeast corner of Lot 11; thence Westerly along the South line of Lot 11 to the Southwest corner of Lot 11;thence Northerly along the West line of Lot 11 to a point on the West line of Lot 11 a distance of 104.33 feet Southerly from the Northwest corner of Lot 12; thence Easterly to the point of beginning of Block 116, of the Original Plat of the City of Lansing, according to the recorded Plat as thereof recorded in Liber 2 of Plats, Page 36, Ingham County Records. Subject to easements, encumbrances, and restrictions of record. EXHIBIT B TO REAL ESTATE PURCHASE AGREEMENT Form of Covenant Deed COVENANT DEED On City of Lansing, a Michigan municipal corporation, whose address is 124 W. Michigan Avenue, Lansing, Michigan 48933 (Grantor), conveys to the Michigan Senate, established and existing pursuant to Article IV, Section 2 of the Constitution of the State of Michigan of 1963, with offices located at 201 Townsend Street, Suite 2500, Lansing, Michigan 48933 (Grantee), the real property commonly known as 221 Townsend Street, in the City of Lansing, Ingham County, Michigan, and described on Exhibit A(the Premises)togetherwith all tenements,hereditaments,and appurtenances and subject to agreements,easements, restrictions of record, including, but not limited to,the following: This deed is given for good and valuable consideration (a transfer valuation affidavit is filed with this deed). Grantor hereby covenants to and with Grantee, its successors and assigns, that Grantor has not done or suffered to be done anything whereby the granted Premises are, or may be in any manner, encumbered or changed, except as herein recited; and Grantor covenants to and with Grantee that Grantor will warrant and defend the granted Premises unto Grantee, its successors and assigns, against the lawful claims and demands of all persons claiming by, from or under Grantor, but against no other claims or persons. This conveyance is exempt from real estate transfertaxes pursuant to MCL 207.505(h)(i)and MCL 207.526(h), because the Grantor is a municipality of the State of Michigan. City of Lansing Dated: By: Andy Schor Its: Mayor STATE OF MICHIGAN ) INGHAM COUNTY ) Acknowledged before me in County, Michigan, on by ,of City of Lansing, a Michigan municipal corporation, on behalf of the corporation. /s/ Print Name: Notary public, State of Michigan, County of My commission expires Acting in the County of When recorded, return to: Send subsequent tax bills to: Drafted by: Grantee Grantee City of Lansing 124 W. Michigan Ave., 5tn Floor Lansing, MI 48933 Exhibit A to Covenant Deed Legal Description Lots 7,8, 9, and 10, ALSO that part of Lot 11 described as beginning at a point on the East line of Lot 11 a distance of 104.04 feet Southerly from the Northeast corner of Lot 12; thence Southerly along the East line of Lot 11 to the Southeast corner of Lot 11; thence Westerly along the South line of Lot 11 to the Southwest corner of Lot 11;thence Northerly along the West line of Lot 11 to a point on the West line of Lot 11 a distance of 104.33 feet Southerly from the Northwest corner of Lot 12; thence Easterly to the point of beginning of Block 116, of the Original Plat of the City of Lansing, according to the recorded Plat as thereof recorded in Liber 2 of Plats, Page 36, Ingham County Records. Subject to easements, encumbrances, and restrictions of record. EXHIBIT C TO REAL ESTATE PURCHASE AGREEMENT Parking Agreement EXHIBIT D TO REAL ESTATE PURCHASE AGREEMENT Leases and Contracts Affecting the Property EASEMENTS OF RECORD 1) EASEMENT AGREEMENT dated August 19,2005 between ACCIDENT FUND INSURANCE COMPANY OF AMERICA,INC.,and LANSING BUILDING AUTHORITY. See attached. 2) EASEMENT AGREEMENT dated April 15,2004 between BOJI GROUP OF LANSING, LLC and LANSING BUILDING AUTHORITY. See attached. CONTRACTS 1) DOWNTOWN RESIDENTIAL PARKING PROGRAM administered by the CITY OF LANSING PARKING SERVICES OFFICE. See attached. (Currently 1 Resident) 2) PARKING PERMIT APPLICATION for resident,Malavika Padmanabhan-Kabana. See attached. (See#1) 3) PARKING AGREEMENT dated May 1,2015 between DYKEMA GOSSETT PLLC and the CITY OF LANSING PARKING SERVICES OFFICE. See attached. 4) AMENDMENT TO REAL ESTATE PURCHASE AND DEVELOPMENT AGREEMENT dated May 22,2013 to the Real Estate Purchase and Development Agreement dated July 25, 2003 between TOWER RAMP DEVELOPMENT COMPANY,LLC,BOJI GROUP OF LANSING,LLC,BOJI GROUP,LLC the CITY OF LANSING,and the LANSING BUILDING AUTHORITY. See attached. i i 12/18/2018 EXHIBIT E TO REAL ESTATE PURCHASE AGREEMENT Allocation of Closing Costs 1. Escrow Agent Fee:Shared equally by the Parties 2. Title Insurance: Responsibility of Seller(See Paragraph 4) 3. Real Estate Taxes and Assessments: Responsibility of Seller for all assessments, if any, prior to and including Closing; responsibility of Purchaser for all assessments, if any, after Closing(See Paragraph 10) 4. Recording Fees: Responsibility of Purchaser 5. Real Estate Transfer Taxes (if any): Responsibility of Seller(See Paragraph 13)