HomeMy WebLinkAbout2017 - Beitler Real Estate Services LLC - New City Hall Redevelopment Agreement 2011 nq -9 P 4: 49
REDEVELOPMENT AGREEMENT
by and among
THE CITY OF LANSING, MICHIGAN
and
BUTLER REAL ESTATE SERVICES LLC
EXHIBITS
Exhibit A Legal Description of the Property
Exhibit A-1 Legal Description of the New City Hall Property
Exhibit B Real Estate Sale Agreement Term Sheet
Exhibit C Ground Lease Agreement Term Sheet
REDEVELOPMENT AGREEMENT
THIS REDEVELOPMENT AGREEMENT (this "Agreement'), dated as of
, 2017 (the "Effective Date"), is made by and among the CITY OF
LANSING, a municipal corporation (the " Lq'), and BEITLER REAL ESTATE SERVICES
LLC, an Illinois limited liability company(the "Developer').
RECITALS
WHEREAS, the City owns certain real property commonly known as 124 W. Michigan
Avenue, Lansing, Michigan 48933 and legally described on Exhibit A attached hereto (the
"Property"), which Property is currently utilized as the Lansing, Michigan City Hall ("Cif
Hall").
WHEREAS, the City and the Developer desire to cooperate in the redevelopment of the
Property in accordance with the terms of this Agreement; and
WHEREAS, the City and the Developer desire to cooperate in the relocation of the
City's City Hall and the governmental operations currently taking place at the Property to a new
building("New City Hall"); and
WHEREAS, the parties hereby desire to enter into this Agreement to set forth the
following terms and conditions related to the redevelopment of the Property and relocation to a
New City Hall.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of
the parties hereto, each of them does hereby covenant and agree with the other as follows:
ARTICLE I
REDEVELOPMENT OF THE PROJECT
Section 1.L Redevelopment. The Developer will redevelop the Property in accordance
with this Agreement and the City will cooperate with the Developer in connection therewith as set
forth in this agreement.
Section 1.2. Project Description. The redevelopment of the Property contemplated
by this Agreement consists of the rehabilitation of the existing building(s) on the Property to
include the following components: (a) an urban mixed use hotel component having
approximately 183 guest rooms within approximately 128,930 gross square feet of floor area
(the "Hotel Component"); (b) ancillary parking in the building; (c) a boutique specialty
restaurant and cocktail lounge to be constructed in the upper most floor of the existing shorter
portion of the building; and (d) a retail component consisting of approximately 2,961 square
feet (collectively, the "Project"). The Project is more fully described in Developer's Response
to RFQP dated August 21, 2017. The final room count of the Hotel Component shall be
subject to: (i) completion of the necessary design development documents; (ii) completion of a
market and feasibility analysis to be prepared by the Developer; and (iii) the Land Use
Approvals (as defined herein). As part of the Project, the exterior of the building will be
completely replaced except for the westernmost and southernmost faces of the building which
are currently clad in Indiana limestone, and on which westernmost face Leonard Jungwirth's
famous sculpture and the City Hall name are displayed.
ARTICLE II
RELOCATION OF CITY HALL; DEVELOPMENT OF NEW CITY HALL; AND
LEASING OF THE PROPERTY
Section 2.1. Relocation of City Hall. As part of the redevelopment of the Project by
the Developer, the City shall entirely vacate the Property and relocate the City's City Hall and
any and all operations conducted therein, including, without limitation, all administrative
offices, police headquarters, courts and all other related City functions to the New City Hall
within thirty (30) days from the closing contemplated in the Real Estate Sale Agreement (as
defined herein) (the "City Relocation"). The City shall deliver possession of the Property to
the Developer pursuant to and in accordance with the Ground Lease Agreement (as defined
herein) which shall be the date that the Developer obtains a building permit for the Project
("Possession Date"). Upon taking possession, the Developer shall be responsible for all
carrying costs, utilities, and insuring and indemnifying agreements related to the Property as
contemplated in the Ground Lease Agreement.
Section 2.2. Development of New City Hall. As part of the City Relocation, the
Developer has entered, or intends to enter, into a Real Estate Purchase Agreement (as may be
amended from time to time, the "Purchase Agreement") in connection with either the real
property commonly known as 120 E. Lenawee Street and vacant property on S. Grand Avenue,
Lansing, Michigan 48933 or other real property approved by the City (the "New City Hall
Pro er "). Subject to the terms and conditions of this Agreement, Developer shall acquire the
New City Hall Property in accordance with and subject to the terms and conditions of the
Purchase Agreement provided that the Acquisition Conditions Precedent (as defined herein)
contemplated in Section 2.3 are satisfied. As soon as reasonably possible after consummation of
the closing contemplated in the Purchase Agreement, Developer shall commence all
construction and rehabilitation of the New City Hall Property ("New City Hall Construction
Work") as may be necessary for the City's operation of the City's new City Hall pursuant to
plans and specifications reasonably approved by the City and Developer in accordance with the
terms and conditions of the Real Estate Sale Agreement (as defined herein).
Subject to Section 2.4, the Developer shall sell and the City shall purchase the New City
Hall Property pursuant to a real estate sale agreement (the"Real Estate Sale Agreement'). The
Real Estate Sale Agreement shall be based upon the material terms identified in Exhibit C
attached hereto. The execution of the Real Estate Sale Agreement shall occur as promptly as
possible after the Effective Date. The City will reasonably cooperate with the Developer in
the Developer's procurement of financing and/or equity in connection with Developer's
acquisition of the New City Hall Property and completion of the New City Hall Construction
Work by reaffirming its obligations under the Real Estate Sale Agreement and/or otherwise
providing any letters and/or confirmations as Developer may reasonably require confirming the
City's commitment to acquire the New City Hall Property in accordance with the terms and
conditions of the Real Estate Sale Agreement and/or as contemplated in this Agreement.
Section 2.3. Acquisition Conditions Precedent. The Developer's obligations to
consummate the closing contemplated in the Purchase Agreement are conditioned on
satisfaction of each of the following conditions (collectively, the "Acquisition Conditions
Precedent"):
(a) the Developer's procurement of all financing and/or equity placement necessary
to acquire the New City Hall Property and complete the New City Hall Construction Work.
(b) the satisfaction of all condition precedents to closing contemplated in the
Purchase Agreement, including, without limitation, the Developer's satisfaction and approval of
its due diligence under the Purchase Agreement.
(c) the City's satisfaction of the Sale Agreement Conditions Precedent (as defined
herein) as contemplated in Section 2.4.
Section 2.4. City's Conditions Precedent to Consummation of the Real Estate
Sale Agreement, The City's obligations to consummate the Real Estate Sale Agreement are
conditioned on satisfaction of each of the following conditions (collectively, the "Sale
Agreement Conditions Precedent"):
(a) Approval of a Brownfield Redevelopment Agreement for the capture of tax
incremental financing from the Project for payment towards eligible expenses the City
generates through relocation and renovation of the site for the New City Hall. The City shall
use good faith and best efforts to expedite and obtain such approval.
(b) The actual purchase price (as determined in accordance with the Real Estate
Sale Agreement) of the New City Hall Property under the Real Estate Sale Agreement being
equal to or greater than the appraised value of the New City Hall Property as described in the
City's Acquisition Ordinance, as determined by the median of three (3) appraisals performed
by three different, experienced and reputable commercial real estate appraisers. Such
appraisals shall be based upon the approved plans and specifications for the New City Hall
(taking into consideration of the value of the land, construction costs and anticipated value
upon completion of the New City Hall Construction Work, e.g. a "so-called plans and specs"
appraisal). Such appraisals shall be commissioned by the City promptly after approval of the
plans and specifications pursuant to the terms and conditions of the Real Estate Sale
Agreement.
(c) Review by the City's Planning Board of the purchase of the New City Hall
Property, pursuant to the City's Acquisition Ordinances and the Michigan Planning Enabling
Act (Public Act 33 of 2008, formerly enabled in Public Act 285 of 1931). The City shall use
good faith and best efforts to expedite and obtain such approval.
Section 2.5. Real Estate Lease. Subject to Article 5 hereof, the City shall lease to
Developer and Developer shall lease the Property from the City for the purpose of the Project
(the "Ground Lease Agreement"). The Ground Lease Agreement shall be based upon the
material terms identified in Exhibit C attached hereto. The execution of the Ground Lease
Agreement shall occur prior to commencement of construction of the Project as contemplated
in Section 4.1(e), unless otherwise agreed to by the parties. The commencement date of the
Ground Lease Agreement shall be the date that Developer obtains a Certificate of Occupancy for
the Project (the "Ground Lease Commencement Date"). Payment of rent shall commence six
(6) months after the Ground Lease Commencement Date. A short form memorandum of the
Ground Lease Agreement shall be recorded promptly upon the full execution of the Ground
Lease Agreement.
Section 2.6. Real Estate Holding Company. To facilitate the overall redevelopment
of the Project and development of the New City Hall, the Developer may, assign its rights and
obligations under the Ground Lease Agreement, the Purchase Agreement and/or Real Estate
Sale Agreement to one or more entities to be formed by the Developer (the "Holdint:
Company or Holding Companies" as the case may be) as further set forth in the Ground
Lease Agreement, the Purchase Agreement and/or Real Estate Sale Agreement.
Section 2.7. Access. From and after the Effective Date, Developer shall have access
to the Property for all investigation and planning for the Project at all reasonable times
provided that during such access Developer shall not unreasonably interfere with the City's
ongoing business operations at the Property. The City shall be responsible for all repairs and
maintenance of the Property and otherwise shall be responsible for properly securing the
Property until the Possession Date.
ARTICLE III
LAND USE APPROVALS; PERMITTING
Section 3.1. Land Use Approvals.
(a) Applications. As soon as reasonably possible after approval of the Design
Plans by the City, the Developer will submit application materials required under the
City of Lansing municipal code for zoning and any other municipal land use and development
approvals required, if any, in order to undertake the Project (collectively, the "Land Use
Approvals"). All applications for any Land Use Approvals shall be reviewed in accordance
with the ordinances of the City of Lansing.
(b) City Cooperation. The City will reasonably cooperate with and assist
the Developer in applying for and processing the applications for Land Use Approvals in
connection with the Project.
Section 3.2. Building and Construction Permits; Fees. The Developer shall
comply with all applicable City building codes and construction requirements and shall be
responsible for obtaining all building permits with respect to construction of the Project and
the Developer shall pay the normal and customary City charges and shall be responsible for
obtaining all building permits prior to such construction.
ARTICLE IV
CONSTRUCTION/REHABILITATION OF PROJECT
Section 4.1. Proiect Redevelopment.
(a) Design. The Developer shall prepare and submit detailed plans and
specifications for the Project for review and approval by the City (collectively, the "Design
Plans"), which approval shall not be unreasonably withheld, conditioned or delayed.
(b) Pre-Development Costs. The Developer shall be solely responsible for all pre-
development costs associated with the Project incurred by Developer, including, without
limitation, architectural, engineering, planning and design fees; legal, accounting and other
professional fees; and any, filing or other development or redevelopment fees.
(c) Bi ding. No portion of the Project shall be construed as "public construction"
and, as such, the Developer shall not be required to comply with any Michigan law governing
public construction with respect to the Project.
(d) Financing. The Developer shall be solely responsible for the total cost and
expense for the construction of the Project. The closing of financing for the Project (the
"Financing Closing') shall occur no later than thirty (30) days prior to Project
Commencement. The Developer shall provide proof of financing to the City on or before
Financing Closing.
(e) Commencement of Construction. Subject to Unavoidable Delays (as defined
herein), commencement of construction of the Project shall take place within ninety (90) days
from the date of the City Relocation (the "Project Commencement") unless extended at the
request of Developer and approval by the City, which approval shall not be unreasonably
withheld.
(f) Design, Style, Size. The Project shall be built in accordance with the terms of
Section 1.2.
(g) Project Completion. Subject to Unavoidable Delays (as defined herein),
Developer shall use good faith and best efforts to substantially complete the Project within
eighteen(18) months from Project Commencement (the"Target Completion Date").
ARTICLE V
CONDITIONS PRECEDENT TO PROJECT COMMENCEMENT
Section 5.1. Conditions Precedent to Proiect Commencement. The Developer's
obligations to undertake the Project contemplated by this Agreement are conditioned on
satisfaction of each of the following conditions (collectively, the "Proiect Conditions
Precedent") at or prior to Project Commencement:
(a) Completion of the City Relocation.
(b) Approval of any required Land Use Approvals for the Project.
(c) Delivery by the City to the Developer, and acceptance by the Developer, of a
current Phase I environmental report covering the Property("Phase 1").
(d) Completion of any follow-up testing (e.g. phase 2 environmental testing)
recommended by the Phase I. If the Phase I or any such follow-up testing reveal the
need for remediation, this condition precedent shall also include the City completing such
remediation in a timely manner and obtaining and delivering to the Developer a written "no
further action" or "no further remediation" or similar confirmation from all governmental
entities with jurisdiction that the remediation has been completed in accordance with all
applicable laws and requirements.
(e) Consummation of the Financing Closing.
ARTICLE VI
INSURANCE
Section 6.1. Insurance. The parties shall purchase and maintain such
insurance coverages as may be reasonably required by the parties' respective lenders and
risk managers and as the parties otherwise agree is necessary to adequately protect the
parties' respective interests in the Project, including coverage for the activities contemplated in
Section 2.7. The insurance policies and provisions to be set forth in the Ground Lease
contemplated by this Agreement to be shall be subject to the review and approval of the City's
Risk Manager and the Developer.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties by the City. The City represents and
warrants that:
(a) The City is a municipal corporation duly organized and existing under the laws
of the State of Michigan. The City has the power to enter into this Agreement and carry out
its obligations hereunder and provision has been made to pay the liability that will accrue under
this Agreement.
(b) The City has no knowledge as to the presence of hazardous substances as
the same are described in the regulations promulgated under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986, and/or in the environmental laws
of the State of Michigan in, on or under the Property. With respect to the Project, the City of
Lansing is aware of no facts the existence of which would cause it to be in violation of any
state, local or federal environmental law, regulation or review procedure, or which would give
any person a valid claim under the environmental laws of the State of Michigan.
(c) There is not pending, nor to the best of the City's knowledge after due inquiry
is there threatened, any suit, action or proceeding against the City before any court, arbitrator,
administrative agency or other governmental authority that materially and adversely affects the
validity of any of the transactions contemplated hereby, the ability of the City to perform its
obligations hereunder, or the validity or enforceability of this Agreement.
Section 7.2. Representations and Warranties by the Developer. The
Developer represents and warrants that:
(a) The Developer is a limited liability company organized and validly existing
under the laws of the State of Illinois.
(b) The Developer has duly authorized the execution of this Agreement and the
performance of its obligations hereunder, and neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement, is prevented, limited by or
conflicts with or results in a breach of, any indebtedness, agreement or instrument of whatever
nature to which the Developer is now a party or by which it is bound, or constitutes a default
under any of the foregoing.
(c) There are no pending or threatened legal proceedings of which the Developer
has knowledge which seek to restrain or enjoin the transactions contemplated by this
Agreement or which question the authority of the Developer to execute and deliver this
Agreement or the validity of this Agreement.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1. Notice and Opportunity to Cure. Whenever any party to this Agreement
alleges a default by the other, the party alleging the default shall provide written notice to the other
specifying the nature of the default and the actions necessary to cure the default. Subject to
Unavoidable Delays, if the alleged default is not cured within thirty (30) days after the defaulting
party's receipt of such notice, the non-defaulting party may take any one or more of the actions set
forth below:
(a) The non-defaulting party may suspend its performance under this Agreement
until it receives in writing and accepts in writing assurances from the defaulting party that the
defaulting party will cure its default and continue its performance under this Agreement.
(b) The non-defaulting party may cancel and terminate this Agreement.
(c) Take whatever action, including legal, equitable or administrative action, which
may appear necessary or desirable to the defaulting party, including any actions to collect any
payments due under this Agreement or to pursue any claims for monetary damages at law or to
enforce performance and observance of any obligation, agreement, or covenant to the
defaulting party under this Agreement.
The non-defaulting party may elect to take no such action, notwithstanding an event of
default not having been cured within said thirty (30) day period, if the defaulting party
provides the non-defaulting party with written assurances satisfactory to the non-defaulting
party that the event of default will be cured as soon as reasonably possible. No notice of
such election by the non-defaulting party shall be required. As used in this Agreement, the
term "Unavoidable Delays" means delays which are the direct result of strikes or other labor
troubles, lack of responsible bidders, unforeseeable and unavoidable casualties to the Project,
governmental actions, judicial action commenced by third parties, the implementation of an
environmental agency-approved work plan for remediation, or severe weather, acts of God,
fire or other casualty, or other events or conditions beyond the reasonable control of the parties.
Section 8.2. No Remedy Exclusive. No remedy hereunder is intended to be
exclusive of any other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this Agreement or now
or hereafter existing at law or in equity. No delay or omission to exercise any right
accruing upon any default shall impair any such right or shall be construed to be a waiver
thereof but any such right may be exercised from time to time and as often as may be deemed
expedient.
Section 8.3. No Implied Waiver. In the event any agreement contained herein
should be breached by any party and thereafter waived by the other party, such waiver shall
be limited to the particular breach so waived and shall not be deemed a waiver of any rights
or remedies which the non-breaching party shall have and shall not be deemed a waiver of any
subsequent default of any such terms, conditions and covenants to be performed hereunder.
ARTICLE IX
ADDITIONAL PROVISIONS
Section 9.1. Amendments; Incorporation of Exhibits. As the parties continue work
on the pre-development activities contemplated herein and prepare the Ground Lease Agreement
in connection with the design, development, and financing of the Project, the parties will amend
this Agreement to incorporate additional details, terms and conditions referenced herein. The
parties may amend this Agreement, including but not limited to extending any deadlines, only
by a written document agreed to by the parties, and in conformity with Section 10.2 below.
Section 9.2. Consents and Approvals; Good Faith. Except for matters for which
there is a standard of discretion specifically set forth herein, wherever this Agreement
provides for a determination, decision, selection, consent, approval, acceptance, adoption,
satisfaction, or other action, the parties hereto shall exercise good faith in undertaking such
actions and shall not unreasonably withhold, condition or delay any determination, decision,
selection, consent, approval, acceptance, adoption, satisfaction or other action that may be
necessary to fully implement the terms of this Agreement.
Section 9.3. Conflict of Interests. No member, official, or employee of the City
shall have any personal interest, direct or indirect, in this Agreement, nor shall any such
member, official or employee participate in any decision relating to this Agreement which
affects his or her personal interests or the interests of any corporation, partnership, or
association in which he or she is, directly or indirectly, interested. No member, official, or
employee of any party to this Agreement shall be personally liable to any other party, or any
of their respective successors in interest, in the event of any default or breach by a party to this
Agreement for any amount which may become due to any other party on any obligations under
the terms of this Agreement.
Section 9.4. Restrictions on Use. The Developer shall not discriminate upon the
basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or
occupancy of the Project, or any part thereof.
Section 9.5. Broker's Commission. The parties acknowledge that no broker's
commission or finder's fee is payable with regard to this transaction except to
CBRE/Martin ("CBRE") pursuant to a separate agreement with the City in that the City shall
be responsible for any and all commissions due CBRE in connection with this Agreement, the
Purchase Agreement and/or the Real Estate Sale Agreement as contemplated per separate
agreement; provided, however, notwithstanding the foregoing, the commission due CBRE in
connection with the Purchase Agreement ("Purchase Agreement Commission") shall be paid
by Developer on or about the closing contemplated in the Purchase Agreement (or a reasonable
time thereafter in accordance with a construction draw schedule); further, provided, however,
that the City shall reimburse the Developer such Purchase Agreement Commission as part of
the purchase price contemplated under the Real Estate Sale Agreement (i.e. such commission
shall be identified as a cost to be included within the actual purchase price to be paid at the
closing under the Real Estate Sale Agreement). Each party agrees to indemnify and hold the
other harmless from and against all liability, claims, demands, damages, or costs of any kind
arising from or connected with any other broker's commissions or finder's fees or other
charges claimed to be due any person arising from the indemnifying party's conduct with
respect to this transaction.
Section 9.6. Titles of Articles and Sections. Any titles of the several parts,
Articles and Sections of this Agreement are inserted for convenience of reference only and
shall be disregarded in construing or interpreting any of its provisions.
Section 9.7. Notices and Demands. Except as otherwise expressly provided in
this Agreement, a notice, demand, or other communication under this Agreement by either
party to the other shall be sufficiently given or delivered if it is dispatched by registered or
certified mail, postage prepaid, return receipt requested, transmitted by facsimile, delivered by
a recognized overnight carrier, or delivered personally to the following addresses:
If to the Developer: Beitler Real Estate Services LLC
Attn: J. Paul Beitler
980 North Michigan Avenue, Suite 1225
Chicago, IL 60611
Phone: 312-768-7000
Fax: 312-768-7001
With a copy to: Thompson Coburn LLP
Attn: James Oakley
55 East Monroe Street. 37 h Floor
Chicago, Illinois 60603
Phone: 312-580-2344
Fax: 312-580-2201
If to City: City of Lansing Mayor's Office
9''Floor, City Hall
124 W. Michigan Avenue
Lansing, Michigan 48933
Phone: 517-483-4000
Fax:517-483-6066
With copy to: Office of City Attorney
5"'Floor, City Hall
124 W. Michigan Avenue
Lansing, Michigan 48933
Phone: 517-483-4320
Fax: 517-483-4081
Section 9.8. Counterparts. This Agreement may be executed with facsimile (or
PDF or similar) signatures and/or in counterparts, each of which shall constitute one and the
same instrument.
Section 9.9. No Third-Party Beneficiaries. It is the intention of the parties to
this Agreement that no person who is not a party signatory to this Agreement shall, under
a third party beneficiary theory or otherwise, have any rights or interests hereunder as against
the City, and no such other party shall have standing to complain of the City's exercise of, or
alleged failure to exercise, its rights and obligations, or of its performance or alleged lack
thereof under this Agreement.
Section 9.10. Litigation. The City and the Developer will reasonably cooperate
with one another with respect to any litigation commenced by third parties in connection
with this Agreement, provided, however, that any party to this Agreement that is not a party to
the actual litigation shall not be required to incur substantial expense in so cooperating.
Section 9.11. Exclusivity. During the term of this Agreement, the Developer shall
have the exclusive right to negotiate with the City concerning development, redevelopment,
leasing and acquisition of the Property and the City agrees that it shall not directly or
indirectly solicit or entertain any other proposals for such development, leasing or acquisition
of the Property during the term of this Agreement.
Section 9.12. Adequate Consideration. The parties acknowledge and agree that
this Agreement is intended to be binding and enforceable and each party waives any right to
challenge the enforceability of this Agreement based on discretion afforded either party in
evaluating the fulfillment of certain conditions precedent to the redevelopment of the Project.
City acknowledges that this Agreement requires Developer to commit time and resources in
pursuing the Project and that such expenditures constitute good and sufficient consideration to
City for entry into this Agreement. Furthermore, the parties agree that, upon satisfaction or
waiver of the last of the contingencies set forth herein, this Agreement shall be deemed affirmed
without inclusion of such contingencies.
Section 9.13. City Authority. Unless expressly stated otherwise in this Agreement,
where consent, authority or agreement of the City is required or requested under this
Agreement or any other agreements referenced herein, such consent, authority or agreement
may be negotiated and provided by the Mayor of the City of Lansing.
ARTICLE X
TERMINATION OF AGREEMENT
Section 10.1. Termination. This Agreement shall terminate upon the following:
(a) In the event all of the Project Conditions Precedent are not satisfied on or
before the Project Commencement, the Developer shall have the option to terminate this
Agreement upon written notice to the City, unless the parties agree in writing to extend
such date.
(b) In the event the Developer fails to commence construction of the Project as
contemplated in Sections 4.1(e), the City shall have the option to terminate this Agreement upon
written notice to the Developer, unless the parties agree in writing to extend such date.
(c) In the event that all of the Acquisition Conditions Precedent are not satisfied, the
Developer shall have the option to terminate this Agreement upon written notice to the City.
(d) In the event that all of the Sale Agreement Conditions Precedent are not
satisfied, the City shall have the option to terminate this Agreement upon written notice to
the Developer.
Section 10.2. Expiration. If not terminated pursuant to Section 10.1 above,
this Agreement shall terminate upon the date all of the parties' other respective obligations
hereunder are satisfied, but no such termination shall terminate any indemnification or other
rights or remedies arising hereunder due to any default which occurred and was continuing
prior to such termination.
Section 10.3. Effect of Termination. Upon termination of this Agreement pursuant
to this Article XI, this Agreement shall be null and void and, except for obligations that
expressly survive termination, neither party shall have any further obligations or liabilities
hereunder. Upon such termination the Developer and the City shall deliver to each other such
documents as may be necessary to evidence the termination of this Agreement.
(Signatures begin on next page)
CITY OF LANSING, MICHIGAN, a municipal corporation
By:
Virg Bernero, Mayor
By:
Chris Swope, City Clerk
BEITLE L EST E CES LLC
By:
J. aul Beitler, Manager
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
LOTS 6 & 7, W 50 FT LOT 8, LOTS 4 & 5 EXC N 105 FT, ALSO COM 16 FT W OF SE
COR LOT 3, TH N 25 FT, W 24 FT, N 6 FT, W 26 FT, S 31.12 FT TO SW COR LOT 3, E 50
TO BEG; BLOCK 101 ORIG PLAT.
Property Parcel No.: 33-01-01-16-183-009
Commonly Known as the Lansing City Hall, 124 West Michigan Ave, Lansing, Michigan
48933.
EXHIBIT A-1
LEGAL DESCRIPTION OF THE NEW CITY HALL PROPERTY ON EFFECTIVE DATE
Lots 1, 2, 3, 4 and the North 1/2 of Lot 5, except the West 10 feet of said Lots. ALSO the East 6
rods of the South 1/2 of Lot 5 and the East 6 rods of Lot 6, all in Block 150. ALSO Lots 3, 8, 9
and 10, except the North 1 foot of said Lot 10, Block 151, of the Original Plat of the Town of
Michigan, now City of Lansing, Ingham County, Michigan, as recorded in Liber 2 of Plats,
Page 36.
Parcel Identification Numbers: 33-01-01-16-455-091; 33-01-01-16-456-012 and 33-0I-01-16-
456-101.
EXHIBIT B
REAL ESTATE SALE AGREEMENT TERM SHEET
Seller. Holding Company or Holding Companies
Purchaser. The City of Lansing
Closing Date. Within thirty(30)days of substantial completion of the New City Hall.
Purchase Price. An amount equal to 105% of the Seller's Acquisition/Development Costs; provided,
however, the actual purchase price shall not exceed $50,000,000.00 ("Maximum Purchase Price")
unless otherwise approved by the City. The term "Seller's Acquisition/Development Costs" shall
mean the aggregate of. (i) the property acquisition and related costs (including, without limitation, the
Seller's acquisition purchase price, all closing costs, all costs associated with negotiating the purchase
agreement and Seller's due diligence in acquiring the subject property); (ii) all construction costs
(including, without limitation, all hard and soft construction costs, including, without limitation,
architectural and engineering fees); and (iii) all financing, debt and/or equity placement costs and
expenses (including, without limitation, any points, interest, investment returns or the like required to be
paid by Seller).
Plan/Specifications Approval. The Real Estate Sale Agreement shall contain provisions allowing the
City to maintain control of the cost and specification for the development of the New City Hall
(provided, however, the City shall not cause the Purchase Price to exceed the Maximum Purchase Price
in that the City in approving the plans and specifications as contemplated herein shall take into account
any and all Seller's Acquisition/Development Costs to ensure that the Maximum Purchase Price is not
exceeded). In that regard, the City shall have the right to approve, which approval shall not be
unreasonably withheld, conditioned or delayed, (i) the plans and specifications for the New City Hall,
and (ii) all bid packages by contractors and subcontractors; provided, however, notwithstanding the
foregoing, Seller shall retain the right to select the architect and/or engineers for the development of the
New City Hall.
EXHIBIT C
GROUND LEASE AGREEMENT TERM SHEET
Landlord. The City of Lansing
Tenant. Holding Company or Holding Companies
Premises. The Property as described in Exhibit A
Possession Date. As defined in Section 2.1 of the Agreement.
Project Commencement. As defined in Section 4.1(e)of the Agreement.
Project Completion. Subject to Unavoidable Delays, Developer shall use good faith and best efforts to
substantially complete the Project by the Target Completion Date.
Term. Ninety-nine(99)years with two fifty(50)year extension options with the commencement of the
term to be the Ground Lease Commencement Date.
Rent. $225,000 annually
Tax Assurance/Payment in Lieu. In the event of any assignment of the Ground Lease Agreement to
any entity that is exempt from paying real estate taxes on the Premises, the Ground Lease shall contain
a provision that such exempt assignee shall make a payment in lieu of taxes, in addition to rent under
the Ground Lease, in an amount equal to the amount of such taxes that would have been imposed
against the Premises without such tax exemption, on an annual basis, during the period of time of any
such claimed exemption.
Rent Escalation. Beginning in the fifth lease year, the Rent shall escalate five percent (5%) every
five(5)years.
Rent Commencement. The first payment of Rent shall begin six (6) months after the Ground Lease
Commencement Date.
Pronerty/Leasehold Interest Taxes. The Tenant shall pay its Property/Leasehold Interest
Taxes.
Insurance. Tenant shall maintain, at its sole cost, a policy of commercial general liability insurance,
in an amount to be agreed upon by the parties.
Assignment and Transfer. The Ground Lease Agreement shall be assignable and transferable by
Tenant.
Subordination. Any debt encumbering the Project shall be subordinate to the Ground Lease
Agreement.
Termination. The Ground Lease Agreement shalt terminate upon the follow events: 1) at the end of
the term of the Ground Lease Agreement, including any extensions; 2) in the event of default under the
Ground Lease Agreement subject to reasonable notice and cure periods; and 3) upon mutual
agreement of the parties.