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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.