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HomeMy WebLinkAboutCommercial Property Buy and Sell Agreement Parking Lot 1 425 S Grand Land Sale COMMERCIAL PROPERTY BUY AND SELL AGREEMENT Dated: 4Zer'll, 2023 Effective Date: dabber 2_ ,2023 1. PURCHASER'S OFFER. The undersigned: Boji Group, LLC,whom may form an entity prior to the closing of this agreement and assign this agreement to that entity ("Purchaser"), hereby offers to buy from the City of Lansing, a Michigan municipal corporation, (the"Seller") Parking Lot#1, located at 425 South Grand Avenue in Lansing, Michigan with Parcel#33-01-01-16-452- 023, including all of Seller's right, title and interest in property. Legal Description: See Attached Exhibit A The property includes all buildings, improvements, appurtenances, fixtures, air, oil, gas and mineral rights, all tenements,hereditaments, privileges together with any land lying in the bed of any adjacent street, avenue, alleys, or rights-of-way and the personal property owned by Seller and used in connection with the operation of the property, all warranties and guaranties express or implied issued to Seller in connection with any improvements to the property or personal property(hereinafter collectively called the"Property"), subject only to the"Permitted Exceptions", and under the following terms and conditions. 2. PURCHASE PRICE. The purchase price for the real property is Seven Hundred Sixty Thousand and 00/100 Dollars ($760,000.00), subject to performance by Purchaser of the closing obligations specified in Section 17, and by Seller of the closing obligations specified in Section 16 below. 3. TERMS OF PAYMENT. The Purchaser shall pay the fall purchase price to Seller by wire transfer or certified funds upon execution and delivery of the Covenant Deed at closing, subject only to the Permitted Exceptions. 4. SURVEY. Within fifteen (15) business days following the Effective Date of this Agreement, Seller will provide Purchaser with copies of all surveys of the Property in its possession. Purchaser shall be responsible for, at its cost, obtaining any survey (the "Survey") it desires and to satisfy the Title Company's requirements to remove any exception that is not a Permitted Exception from the Title Policy. 1 i 5. CLOSINGADJUST]IMNTS I i The following adjustments, including to the purchase price, if applicable, shall be made between the parties after the close of business on the Closing Date. Purchaser shall receive a credit or assume responsibility, as the case may be, for amounts attributable to time periods following the closing date: a. Prepaid rent and additional rent(as defined in this paragraph); b. Intentionally omitted; C. Prepaid insurance and utility deposits will be credited to Purchaser; and d. Security deposits will be assigned to Purchaser for holding and maintenance. 6. SPECL4L ASSESSMENTS/TAXES. a. All special assessments which are or become a lien on the Property on or before the Closing Date shall be paid by Seller. All special assessments which will become a lien on the Property after the Closing Date shall be paid by Purchaser. b. Purchaser shall be responsible for paying all transfer fees and taxes on the Covenant Deed delivered to Purchaser. C. Purchaser acknowledges that the Property is currently tax exempt. Upon purchase by Purchaser, the Property will be placed on the tax rolls for the tax year of purchase. Purchaser will be solely responsible for payment of tax obligations. 7. TITLE INSURANCE. Purchaser, at its sole costs and expense, shall obtain upon the Closing Date an ALTA owner's policy of title insurance, without standard exceptions, and containing zoning, access and comprehensive endorsements(the"Endorsements"),insuring the Purchaser is vested with good, fee simple,marketable and insurable title to the Property, subject only to the Permitted Exceptions, covering the Property in the amount of the purchase price (the "Title Policy"). The issuance of the Title Policy shall be a condition to Purchaser's obligation to close this transaction. a. Title Commitment. Within five(5)business days following the Effective Date of this Agreement, Seller shall cause to be issued and delivered to Purchaser a commitment (hereinafter referred to as the "Commitment'), for the Title Policy to be issued on the Closing Date by the title company, First American Title(the"Title Company") in the full amount ofthe purchase price. The Title Company shall deliver to Purchaser copies of all items set forth therein as exceptions or defects of title to permit Purchaser to review the state of title to 2 the Property,including,but not limited to tax appeals, tax liens and financing statements. All standard exceptions to coverage shall be deleted by the Title Company. Purchaser shall have the right to require such additional endorsements to the Title Policy as Purchaser's counsel may reasonably require, at Purchasers expense. The Purchaser shall pay the premium for the Title Policy at or before closing. b. Objections To Title. The Purchaser shall have thirty (30) days from the date it receives the Commitment to notify Seller in writing of Purchaser's objections to any exceptions, other than Permitted Exceptions. If Purchaser objects to Seller's title as disclosed by the Commitment within the time and in the manner required by this section, Seller shall have thirty (30) days after receiving written notice of the particular defect(s)claimed either:(1)to remedy the title defects to the satisfaction of the Purchaser, or (2) to obtain a Commitment for title insurance"insuring over"the defect(s) in title. If Seller fails or refuses to remedy the defect(s), or obtain a Commitment for title insurance "insuring over" the defect(s) in title, then Purchaser may elect, so long as the election is made prior to the Closing Date to either proceed to closing, taking title subject to the defect(s) without reduction of the purchase price, or to instruct the Title Company to return the Deposit to the Purchaser in full termination of this Agreement and thereafter neither party shall have any further rights or obligations under this Agreement. C. Permitted Exceptions. Subject to Purchaser's rights under sections 9a and 9b above,the Property shall be conveyed to Purchaser subject only to the following Exceptions,all ofwhich shall be"Permitted Exceptions": (i) Those Exceptions which are affirmatively approved by the Purchaser in writing; (ii) Those Exceptions which the Title Insurer will "insure over" with affirmative coverage that is acceptable to Purchaser in writing; (iii) Easements for water, sanitary sewer, storm sewer, electricity, telephone, and other utility purposes, if any, which do not interfere with Purchaser's intended use of the Property;and (iv) Real estate taxes subject to the tax proration provisions of this Agreement. 8. CONVEYANCE. a. Upon performance by Purchaser of the closing obligations specified herein, including in Section 17 below, Seller shall convey fee simple,marketable title to the Property to Purchaser by Covenant Deed free and clear of all liens, defects and encumbrances, except for the Permitted Exceptions. b. This conveyance is subject to Lansing Building Authority approval, prior to the date of conveyance. 3 9. MTPRESPIYT'A7'dONS WARZA1 TIESAND COVENANTS OFSE'.LLEP.. Except as otherwise set forth in this Agreement, Seller represents and warrants to Purchaser as follows: a. Seller is the fee title owner of the Property; b. There are no unrecorded or undisclosed legal or equitable interest in the Property owned or claimed by any party other than Seller; C. Seller is not aware of any proposed assessments or any public improvements affecting the Property which have been ordered to be made and/or which have not been completed,assessed and paid for as of the Effective Date; d. Seller has not received any notice of,and has no knowledge of,any existing or threatened condemnation, eminent domain proceeding, or any action of a similar kind or any change, redefinition,or other modification of the zoning classification which would affect the Property; e. Seller is not currently a party to any proceedings under any applicable bankruptcy,reorganization,insolvency,or similar laws; f. Seller shall deliver to Purchaser, on or before the Closing Date, currently executed tenant estoppel certificates in form acceptable to Purchaser covering any of the Property that has been leased, each with a full and complete copy of the lease attached; g. Seller's interest in the Real Property shall be transferred to Purchaser on the Closing Date, free from liens, encumbrances, claims of others, except for the Permitted Exceptions; h. Performance of the obligations of Seller under this Agreement will not violate any contract, indenture, statute, ordinance,judicial or administrative order or judgment applicable to Seller or the Property; i. There is no litigation or proceeding pending, or to Seller's knowledge threatened, against or involving Seller or Property, and Seller does not know or have reason to know of any ground for any such litigation or proceeding, which could have a material adverse impact on Purchaser or Purchaser's title to and use of the Property, either before or after closing; j. Seller shall continue to operate the Property in the ordinary course of business and maintain the Property in its current condition and repair during the interim period between the acceptance of this Agreement and the Closing Date,except to the extent such operating and repair is Tenant's responsibility under any lease; 4 k. If a statement(s) of income and expense with respect to the operation of the Property is (are) attached as Exhibit B, such statement(s)is (are) accurate for the period(s)designated; 1. Copies of all written leases, if any, shall be supplied to Purchaser by Seller within fifteen(15) days after Effective Date: I (i) All of the leases are in full force and effect; no party is in default thereunder, and no leases have been modified, amended or extended, except as provided in the written leases; (ii) No renewals or extension options have been granted; (iii) No tenant has an option to purchase the Property; (iv) The rents set forth are being collected on a current basis and there are no arrearages in excess of onemonth; (v) Any security deposits will be credited to Purchaser at time of closing; (vi) No real estate brokerage commission will be payable under any existing arrangement upon exercise of any option or other right to extend or renew the term of any lease; (vii) Prior to the Closing Date, Seller(1)shall not amend or modify a Lease without the prior written consent of the Purchaser; (2) shall fully perform and observe all requirements of any Lease to be performed by Seller and shall not enter into any contracts or agreements relating to the operation or maintenance of the Property which would or could survive the Closing Date; (3) shall not plat, restrict or encumber, or permit to be platted, restricted or encumbered any portion of the Property, and(4) shall not grant any licenses, easements or other uses affecting any portion of the Property or to place or permit or to be placed on,or removed or permit to be removed from,the Property,any buildings, structures or other improvements of any kind except as expressly authorized under the Lease. in. Seller is without actual knowledge as to the presence of any toxic or hazardous substances or any underground storage tanks on the Property; n. To the best of Seller's actual knowledge,the Property is properly zoned for its current use. Seller has not initiated, nor is Seller participating in, any action for a change or modification in the current subdivision, site plan, zoning or other land use permits for the Property and Seller has no knowledge that the Property may be rezoned; and o. Seller will not intentionally take or cause to be taken any action which would cause any of the representations or warranties contained in this Agreement to be untrue as of Closing. 5 10. WARRANTIES OFPURCIIASER. Except as otherwise provided in this Agreement,Purchaser represents and warrants to Selleras follows: a. Purchaser is familiar with the physical condition of the Property and upon expiration of the Due Diligence Period agrees to accept the Property "as is" subject to reasonable use, wear and tear between the date of this Agreement and the Closing Date; b. The performance of the obligations of Purchaser under this Agreement will not violate any contract, indenture, statue, ordinance, judicial or administrative order or judgment applicable to Purchaser; C. There is no litigation or proceeding pending, or to Purchaser `s knowledge threatened, against or involving Purchaser, and Purchaser does not know or have reason to know of any ground for any such litigation or proceeding,which could have an adverse impact on Seller or Seller's interest under this Agreement; d. In entering into this Agreement, Purchaser has not relied upon any written or verbal representations or warranties made by or on behalf of Seller unless same are expressly set forthinthis Agreement; and e. The person executing this Agreement on behalf of Purchaser warrants and represents that said person is duly authorized by Purchaser to execute this Agreement and bind Purchaser to the terms of this Agreement. 11.DAMAGE TO PROPERTY. If between the date of this Agreement and the Closing Date, all or any part of the Property is damaged by fire or natural elements or other causes beyond Seller's control which cannot be repaired prior to the Closing Date, or any part of the Property is taken pursuant to any power of eminent domain, Seller shall immediately notify Purchaser of such occurrence, and Purchaser may terminate this Agreement by written notice to the other within fifteen(15) days after the date of damage or notice of taking. If Purchaser exercises the right to terminate this Agreement under this Section 11, the Good Faith Deposit shall be returned to Purchaser and this Agreement shall be null and void. If Purchaser does not elect to terminate this Agreement,there shall be no reduction of the purchase price and at closing, Seller shall assign to Purchaser whatever rights Seller may have with respect to any insurance proceeds or eminent domain award. 6 12. CLOSING. Sale shall be closed as promptly as practical after all necessary documents have been prepared,on a date agreed to in writing by the Purchaser and Seller,but in any event not later than ninety(90) days after expiration of the Due Diligence Period as same may be extended, unless otherwise agreed to in writing by Purchaser and Seller("Closing Date"). If sale is not closed by the Closing Date,this Agreement may be terminated at the option of Seller. 13.POSSESSION. a. Seller shall grant to Purchaser possession of the Property upon completion of the closing, subject to all existing leases and rights of tenants then in possession, which existing leases are more fully described in the attached Exhibit C. b. Purchaser acknowledges that Seller currently leases the Property on a month- to-month basis to tenants who use the Property for parking. For a period of sixty(60)days after the Closing Date,or such additional reasonable time as is necessary for the Seller, not to exceed one hundred twenty (120) days, Seller will work with such tenants to terminate the various leases and assist the tenants with arranging alternate parking. After such period, Seller will promptly take any additional actions reasonably necessary to terminate such parking and allow the Purchaser to prepare the Property for development. C. Purchaser acknowledges it is a condition of this Agreement that Purchaser commits to develop the Property within thirty-six (36) months from the Closing Date; otherwise the Seller will have the right to retake ownership and possession of the Property. Upon such failure to developer the Property, Purchaser agrees that it will take all such actions necessary to deed the Property back to the Seller,free and clear of any liens and restrictions that would restrict Seller's use of the Property, except as agreed to in writing by the Seller. 14. SELLER'S CLOSING OBLIGATIONS In advance of closing, Seller shall deliver the following to Purchaser: a. The Covenant Deed as specified in Section 8 of this Agreement; b. An assignment by Seller of Seller's interest in all leases which shall contain an assumption by Purchaser of Seller's obligations arising after the closing, together with the original or a true copy of each lease; C. A notice to any tenants advising the tenants of the sale and directing that future payments be made to Purchaser; and d. Any other documents required by this Agreement to be delivered bySeller. 7 Seller shall pay for all costs required to convey clear title. 15. PURCHASER'S CLOSING OBLIGATIONS. At closing, Purchaser shall deliver to Seller the following: a. The cash portion of the purchase price specified in Section 2 above in the form of a wire transfer in U.S. currency, as adjusted by the costs, apportionments and assignments in accordance with this Agreement; b. The assumption by Purchaser of the obligations of Seller under the Leases and other contracts; and C. Any other documents required by this Agreement to be delivered by Purchaser. 16. ENVIRONMENTAL. During the Due Diligence Period(as defined further herein) or any extension thereof, Purchaser may,at its expense,conduct a Phase I environmental site assessment of the Property in accordance with ASTM International Standard Practice E1527-13 ("Phase I") and such further sampling and testing of soil, groundwater, soil vapor, indoor air, or any other environmental medium or building component at the Property("Phase II Work"). Purchaser and its environmental consultant shall have the right to interview representatives of Seller who have knowledge of conditions and events relevant to the operating history or environmental condition of the Property. If the Property is a"facility"within the meaning of Part 201 of the Michigan Natural Resources and Environmental Protection Act, MCL 3 24.20101 et seq. ("Part 201"),or determined to be contaminated property within the meaning of any environmental statute, Purchaser may, at Purchaser's expense, prepare and submit to the Michigan Department of Environment, Great Lakes & Energy a"baseline environmental assessment,"or`BEA,"pursuant to Section 26 of Part 201,MCL 324.20126. Purchaser may also, at its expense, prepare a plan ("Due Care Plan") to meet due care obligations at the Property imposed under Section 7a of Part 201, MCL 324.20107a. If any environmental condition disclosed by the environmental assessment is unacceptable to Purchaser, then, Purchaser may terminate this Agreement, in which case the Good Faith Deposit shall be returned to Purchaser.If it is determined by Purchaser to be necessary to file the BEA,the date for closing shall be extended by sixty(60) days. It is hereby acknowledged that neither Purchaser, nor its assignee, assumes any responsibility or liability that Seller may have as a result of the environmental condition of the Property that may be imposed upon Seller by any state, federal or local law, rule, regulation or ordinance (including, but without limitation, a requirement to report, assess, investigate, abate and/or remediate the Property), resulting from a release of petroleum product or hazardous substance(as defined under CERCLA, 42 U.S.C. Section 9601 et seq.) upon the Property during Seller's ownership or operation of the Property, and Seller shall be 8 responsible for compliance with any such requirement,if any. 17. PURCHASER'S CONTINGENCIES. This offer and the obligations of Purchaser hereunder are contingent upon Purchaser's receipt and satisfactory review and approval of the following all of which must be satisfactory to Purchaser in its sole and absolute discretion: a. Survey,the Title Commitment and Title Policy; b. Inspection of the Property by Purchaser by a licensed contractor and/or inspector of Purchaser's choice. Purchaser shall have the right to enter upon the Property during reasonable business hours for purposes of inspections and tests; C. Purchaser obtaining all necessary site plan and land use approvals for its intended use of the Property from all governmental entities having jurisdiction over the Property and the Property being appropriately zoned for Purchaser's intended use; d. All easements and restrictions; e. Phase I and II environmental assessments and Baseline Environmental Assessment if determined necessary,; f. All legal and financial documents, leases,service contracts and other documentation; g. Available public incentives; h. Representations and warranties contained herein are accurate and correct as of the date of Closing with the same force and effect as those such representations and warranties that have been made on such date; i. Purchaser's receipt at its own costs and expense of an engineering report or study to its satisfaction of the Property, including, but without limitation, that its soil condition and drainage is suitable for Purchaser's intended developmental use; j. Legal description of the Property-Exhibit A; and k. All laws, ordinances,rules, and regulations which govern the Property. It is agreed that in the event Purchaser is not satisfied with any one or more of the above in its sole and absolute discretion, and Purchaser does not notify Seller of the removal of the above contingencies within 180 days of the Effective Date of this Agreement ("Due 9 Diligence Period"),then this Agreement shall be null and void. Purchaser shall be entitled to a full and prompt refund of its Good Faith Deposit,less reasonable expenses,and neither party shall have any further liability to the other. If Purchaser does so notify Seller of the removal of all the above contingencies, this sale shall be closed as promptly as practical, and before the Closing Date, after all necessary documents have been prepared. 18. ACCESS TO PROPERTY. Purchaser and its agents and representatives shall have the right, during normal business hours and after reasonable advance notice,to enter upon the Property during the Due Diligence Period for the purpose of conducting such inspections,investigations and studies as Purchaser deems reasonably necessary. Purchaser's access to the Property shall be subject to the rights of tenants and Purchaser shall not unreasonably disturb any of the tenants in conducting any inspections, tests and studies. In the event of any physical damage to the Property resulting from the exercise by Purchasers of its rights under this paragraph,Purchaser shall restore the Propertyto its condition prior to incurring such damage. 19.NOTICES. All notices, requests, demands or other communications required or permitted to be given under this Agreement shall be in writing and deemed to have properly given: (i)two(2) days after the due date of mailing,if mailed by certified mail,postage prepared return receipt requested, directed to the parties at the addresses set forth below; or(ii) on the date of actual delivery (or refusal) if personally delivered or served upon the party to be given notice hereunder; or (iii) one (1) day after the date of delivery to an overnight courier service with all fees prepaid, directed to the parties at the addresses set forth below;or(iv)upon receipt by the sending party of successful transmissions,if sent by facsimile or electronic transmission, to the parties at the facsimile numbers or e-mail addresses set forth below. To the SELLER: City of Lansing Department of Economic Development and Planning Attn: Jordan Hankwitz 316 N Capitol Avenue, Suite D-1 Lansing,MI 48933 Phone: (517)483-4060 With a copy to: Office of the City Attorney 124 W. Michigan Ave., 5ch Fl. Lansing,MI 48933 Phone: (517)483-4320 10 To the PURCHASER: Boji Group, LLC Attn: John N. Hindo 132 N. Old Woodward Ave. Birmingham,MI 48009 Phone: (248) 909-9416 JHindo@bojigroup.com With a copy to: Attorney for Purchaser Mekani Orow Mekani Shallal& Hindo PC Attn: Alexander J. Shallal,Esq. Phone: (248)223-9830 alex@momshlaw.com 20. ADDITIONAL ACTS. Seller shall provide to Purchaser within fifteen (15) days of the Effective Date, complete copies of the following; (1) all existing site assessments, environmental reports, engineering reports,soil,radon,hazardous substance,termite or other tests,studies or reports; (2) all plans, surveys and specifications for the Property; (3) copies of contracts and service agreements affecting the Property which will not be terminated by Seller prior to closing; (4)itemized and inventory of all personal property owned by Seller and used in connection with the operations of the Property; (5) current rent roll, current tenant ledger, current delinquent report and all leases (with any and .all amendments and all tenant correspondence); (6) full set of plans, working drawings including, but not limited to, all changes, updates and as-built; (7) any other relevant useful information Purchaser may request. Purchaser and Seller agree to execute and deliver such additional documents and to perform such additional acts as may become reasonably necessary to effectuate the transfer contemplated by this Agreement. 21. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties with respect to the sale of the Property. All contemporaneous or prior negotiations. have been merged into this Agreement. This Agreement may be modified or amended only by written instrument signed by the parties of this Agreement. This Agreement shall be governed by and construed in accordance with the laws ofthe State of Michigan. 22. PURCIIASER'SDEPOSIT. Within three (3)business days of the Effective Date of this Agreement, Purchaser shall deposit $5,000.00 evidencing Purchaser's good faith (the "Good Faith Deposit"), said Good Faith Deposit to be deposited with the Title Company("Escrow Agent")trust account, in accordance with current State of Michigan licensing regulations, and apply as part of the purchase price. If title is not marketable or insurable, or if the Purchaser does not remove the 11 contingences pursuant to paragraph 19 above, or if Purchaser terminates this Agreement pursuant to other terms and conditions expressly written herein, or any other contingencies as specified, which cannot be met, this Good Faith Deposit will be refunded forthwith. In the event of default by the Purchaser, the Good Faith Deposit may be forfeited as liquidated damages to Seller and shall be the sole remedy for Seller. In the event of any default by Seller hereunder,the Purchaser may,in addition to any other remedies that may be available to it as law or equity, elect to enforce the terms of this Agreement. In the event Purchaser seeks to enforce the terms of this Agreement,Purchaser shall be entitled to specific performance. All remedies are cumulative. 23. EFFECTIVE DATE. The Effective Date of this Agreement shall be the later of(a)the date on which Seller executes this Agreement,or(b)the date of a written acceptance(by either Seller or Purchaser) of the final counteroffer submitted by the other party. The Effective Date shall be entered in the upper left-hand corner of the first page of this Agreement and shall be initialed and acknowledged by both parties. 24. OTHER PROVISIONS. A Purchaser and Seller represent and warrant to each other that negotiations relative to this Agreement and the transactions contemplated hereby have been carried on by the parties without the assistance of any broker, finder or other originator who is entitled to a fee or other compensation or commission for such services. Seller assumes full responsibility for any commission due. 25. ASSIGNMENT. Purchaser may assign its rights under this Agreement with written approval from Seller,provided,however,that such assignment does not relieve the original Purchaser under this Agreement from liability under this Agreement. M CONFIDENTL4LITY. All leases, surveys, environmental reports, inspection reports and other information provided by Seller or Seller's agents, attorneys,consultants, accountants, and experts shall be deemed confidential information which Purchaser agrees not to disclose to third parties (except for Purchaser's agents, attorneys, consultants; accountants and other professional advisors)without Seller's prior written consent. Seller further agrees that Seller will not disclose the fact that discussions or negotiations are taking place concerning this transaction except on a need-to-know basis only, including but not limited to the process for all Necessary Governmental Approvals (defined below). 12 2Z NECESSARY GOVERNMENT APPROVALS. After the Effective Date, as a condition to any obligation of Seller to close this transaction,Seller will submit this transaction for review and recommendation by its Planning Commission and subsequently for review and approval by the Lansing City Council,pursuant to Lansing City Charter and Codified Ordinances("Necessary Government Approvals"). The recommendation of the Planning Commission and approval of Lansing City Council are independent, and may be given or withheld at the sole and unreviewable discretion of each body. If Lansing City Council does not approve this transaction, then Seller shall have no obligation to close this transaction,the Good Faith Deposit shall be returned to Purchaser, and this Agreement shall be null and void. 28. LIST OF EXHIBITS(which may or maynot be attached). • Exhibit A-Legal Description • Exhibit B - Statement of Income and Expenses • Exhibit C -Leases The parties have executed this Agreement effective on the date and year first above written as the Effective Date. i [The remainder of this page is intentionally left blank Signatures are contained on the following page) 13 PURCHASER: SELLER: Boji Group, LLC City of Lansing i By: At - I By: Ron J. Bo 4� chor Its: President Its: Mayor Approval as to Form: Its: 076492.000039 4870-1988-2096.6 Signature Page—City of Lansing Lot#1 Buy Sell Agreement 14