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HomeMy WebLinkAboutBuy and Sell Agreement WaverlyPark S 1 �G Chris Swope Lansing City Clerk rcH I O August 11, 2014 City Council President Boles and Members of the Lansing City Council 10th Floor City Hall Lansing, MI 48933 Dear President Boles and Council Members: Pursuant to Article 8, Chapter 4, Section 8-403.3 of the Lansing City Charter, on August 8, 2014 the Mayor's Office placed on file in my office a Buy and Sell Agreement for Property between the City of Lansing and Schostak Brothers &Company Inc. for Waverly Park and Michigan Avenue Park located at 3701 W. Saginaw Highway, Lansing Township, Michigan. Under the Charter, a public hearing may be held on this matter on or after September 8, 2014. This document is available for review at the office of the City Clerk or at http://www.lansingmi.gov/clerk under the heading of Documents Placed on File. Sincerely, Chris Swope, CIVIC Lansing City Clerk Lansing City Clerk's Office Ninth Floor, City Hall, 124 W. Michigan Ave., Lansing, MI 48933-1695 517-483-4131 • TDD 517-483-4479. 517-377-0068 FAX www.lansingmi.gov/clerk • clerk@lansingmi.gov REAL ESTATE SALES AGREEMENT BETWEEN THE CITY OF LANSING AND SCHOSTAK BROTHERS & COMPANY,INC. 6t"Guvrg Z9 This real estate sales agreement (this "Agreement") is entered into on —,'r014� � by and between the City of Lansing, Michigan, a Michigan municipal corporatio m124 5 W.Michigan Avenue, Lansing,MI 48911 ("Seller"), and Schostak Brothers &CoMIA' y,co T Inc., a Michigan corporation, 17800 Laurel Park Drive, Suite 200C, Livonia, MI 4 1 5, on behalf of an entity to be formed (`Buyer"), on the terms and conditions set fetth V-n below. r a. cn For valuable consideration received,the parties agree as follows; 9 CA 1. Agreement for Purchase and Sale. Seller shall sell, transfer, and convey to Buyer, and Buyer shall purchase from Seller, subject to, and on the terms and conditions set forth in this Agreement,the following(collectively,the "Property"): Certain land situated in the Township of Lansing, Ingham County, Michigan, and more particularly described in attached Exhibit A (the "Land"),together with the buildings and all other improvements of every kind and nature (the "Buildings"), all fixtures of every kind and nature located in or on the Land, the Buildings, or any such improvements, and all rights, privileges appurtenances and hereditaments to the Land including, all easements, rights-of-way or other appurtenances used in connection with the beneficial use and enjoyment of the Land, being commonly known as Waverly Park (Vk/a Waverly Golf Course) and Michigan Avenue Park, 3701 W. Saginaw Highway, Lansing Township, Michigan, consisting of approximately 121.46 acres. 2, Purchase Price and Earnest Money Deposit. The purchase price for the Property the"Purchase Price" shall be Five Million Seven Hundred Ninety Five Thousand Two Hundred Fifty and 001100 Dollars ($5,795,250.00), payable in cash at the Closing (defined in Paragraph 7). Within three (3) business days from the full execution of this Agreement (the "Effective Date"), Buyer shall deposit Fifty Thousand and 001100 Dollars ($50,000.00) (the "Earnest Money Deposit") in an account with the Title Company (as defined below). The Earnest Money Deposit shall be applied to the Purchase Price in the event of a closing. Should the transaction fail to close for any reason other than a Buyer's default, the Earnest Money Deposit, as well as all interest accrued thereon,shall be returned to Buyer. 3, Condition of Property and Inspection. (a) Buyer will have a period not to exceed one hundred eighty (180) days from City Council approval (the "Inspection Period") to review all documents which 1 Buyer may desire to review and/or to conduct all tests, surveys, and examinations which Byer may desire to conduct. At any time before the expiration of the Inspection Period, Buyer may provide to Seller a written notice (the "Notice to Proceed")pursuant to which the Inspection Period shall end and Buyer shall be deemed to be satisfied with the condition of the Property and, thereafter, Buyer may only terminate this Agreement as a result of default of Seller. If Buyer fails to give a Notice to Proceed before the expiration of the Inspection Period (because Buyer determines, in its sole and unreviewable discretion, that the Property is unsuitable for its business model), then this Agreement shalt terminate, in which event the Earnest Money Deposit and any interest thereon shall forthwith be returned to Buyer and thereupon neither party shall have any further rights or obligations hereunder, except for any rights or obligations that expressly survive the termination of this Agreement. (b) Buyer acknowledges that, except as otherwise set forth in this Agreement or in any of the Closing documents, Seller has not made, does not make, and specifically negates and disclaims any and all representations, warranties, promises, covenants, agreements, or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning, or with respect to (i) the value, nature, quality, or condition of the Property, including, without limitation, the water, soil, and geology or structural elements, or foundations; (ii) the suitability of the Property for any or all of Buyer's activities and uses; (iii) the compliance of or by the Property with any laws, codes, roles, ordinances, regulations, orders, decrees, or other requirement of any applicable governmental authority or body (collectively, the "Laws"), including, without limitation, compliance with any applicable zoning ordinance; (iv) the habitability, marketability, profitability, or fitness for a particular purpose of the Property; (v) existence in, on, under, or over the Property of any Hazardous Materials (defined below); or (vi) any other matter with respect to the Property. Additionally, except as expressly set forth in this Agreement or in any of the Closing documents, no person acting on behalf of Seller is authorized to make, and by execution of this Agreement Buyer acknowledges that no person has made, any representation, agreement, statement, warranty, guaranty, or promise regarding the Property, and no representation,warranty, agreement,guaranty, statement, or promise, if any, made by any person acting on behalf of Seller shall be valid or binding on Seller, "Hazardous Materials" means any substance that is or contains (A) any "hazardous substance" as now or hereafter defined in §101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), as amended (42 USC 9601 et seq.), or any regulations promulgated under CERCLA; (B) any "hazardous waste" as now or hereafter defined in the Resource Conservation and j Recovery Act (RCRA) (42 USC 6901 et seq.) or regulations promulgated under RCRA; (C) any substance regulated by the Toxic Substances Control Act (TSCA) (15 USC 2601 et seq.); (D) gasoline, diesel fuel, or other petroleum hydrocarbons; (E) asbestos and asbestos-containing materials In any form, whether friable or nonfriable; (F) polychlorinated biphenyls;(G)radon gas;and (H)any additional substances or materials that are now or hereafter classified or considered to be hazardous or toxic under any Laws. 2 (c) Buyer further acknowledges that having been given the opportunity to inspect the Property, Buyer is relying solely on its own investigation of the Property and not on any information provided or to be provided by Seller and agrees to accept the Property in "as-is" and "where-is" condition, and waive all objections or claims against Seller arising from or related to the Property or to any Hazardous Materials on the Property, except for a breach of any representations or warranties set forth in this Agreement or any of the Closing documents. Buyer further acknowledges that any information provided or to be provided with respect to the Property was obtained from a variety of sources and that Seller has not made any independent investigation or verification of the information and makes no representations as to the accuracy, truthfulness,or completeness of the information. (d) This Paragraph 3 shall survive the Closing for a period of 30 years. 4. Title Insurance and Survey, (a) As evidence of title to the Property, Seller shall,within ten(10)days after the City Council Approval, furnish or cause to be furnished to Buyer, a commitment(the "Title Commitment") for the issuance of an ALTA fee owner's policy of title insurance (which title insurance policy is to be issued at Closing or as soon as reasonably practicable thereafter), without standard exceptions (subject to subsection (b) below), in the amount of the Purchase Price,together with copies of all exception documents shown on Schedule B thereof, which commitment shall be issued by Fidelity National Title Insurance Company (the "Title Company"), 1050 Wilshire Drive, Suite 310, Troy, Michigan 48084, Attention; Jennifer VanCoillie. At the Closing, Seller shall cause to be issued, at Seller's sole cost and expense, a title insurance policy pursuant to the Title Commitment, subject only to the Permitted Exceptions and effective as of the date of the recording of the Warranty Deed(the "Title Policy"). (b) if Buyer wants a survey of the Property, or if Buyer requires the removal of any standard survey exceptions from the owner's policy of title insurance to be issued by the Title Company, Buyer, at its sole cost and expense, shall obtain a survey of the Property ("Survey") within forty five (45) days after the City Council Approval (the "Survey Deadline"). (c) Within ten (10) days after the later of (a) Buyers receipt of the Title Commitment or(b) if Buyer elects to order a Survey,the earlier of Buyer's receipt of the Survey or the Survey Deadline ("Title Review Date"), Buyer shall notify Seller of any objections to the title to the Property, including any matters of Survey. Seller shall have thirty (30) days from the date it is notified in writing of the particular defects claimed either to remedy the defect or defects, or advise Buyer in writing that it is willing to remedy the defect or defects on or before the Closing, or that it is unwilling to remedy the defect or one or more of the defects. If Seller elects not to remedy all of the defects, or fails to timely respond to Buyer's objections, Seller shall be deemed to have elected not to cure all of the defects,in which case Buyer may either(a)terminate this Agreement;or (b) elect to waive any defect (and such waived defects shall then become Permitted I 3 i Exceptions) and proceed with the purchase subject thereto. If Buyer elects to temninate this Agreement, then the Title Company shall release the Earnest Money Deposit to Buyer, and thereupon neither party will have any further obligation or liability to the other party hereunder, except as otherwise expressly provided herein. If Seller elects to remedy a defect before Closing and fails to so remedy, then such failure shall be deemed a failure by Seller to perform a material obligation of Seller hereunder, Notwithstanding anything to the contrary, if Seller elects not to remedy (or is deemed to have elected not to remedy) an objected to item that can be discharged by the payment of an ascertainable amount (e.g. a mortgage or a lien), and Buyer waives in writing its objection to such disapproved item, then those ascertainable amounts necessary to discharge any such disapproved items shall be deducted from the Purchase Price at Closing. If Buyer shall fail to make any objections on or before the Title Review Date, Buyer shall be deemed to have accepted all exceptions to the Title Commitment(and all such exceptions shall then become Permitted Exceptions) and the form and substance of the Survey and all matters shown thereon. For purposes of this Agreement, Permitted Exceptions mean all exceptions to the Title Company that are not timely objected to by Buyer and all exceptions that Buyer timely objected to but subsequently waived (and which cannot be discharged by the payment of an ascertainable amount). 5. Pro-rations. Seller represents and warrants to Buyer that the Property is not currently subject to real property taxation. Any assessments that are a lien on the Property, or that otherwise relate to the Property and are due and payable as of Closing (other than the lien of general real estate taxes that are not due and payable as of Closing) shall be paid by Seller on or before Closing.The parties shall arrange for final readings of utility meters as of Closing and Seller shall pay at Closing final utility charges based on the readings. Any other charges for utilities or other services, materials, or labor furnished to or with respect to the Property (other than services, materials, or labor contracted for by Buyer)before Closing shall be paid by Seller on or before Closing. 6. Contingency, The obligation of the parties to close the transactions contemplated by this Agreement shall be contingent on final approval of the sale by Lansing City Council. Final approval by Lansing City Council may be withheld for any reason at its sole discretion. Final determination by the Lansing City Council shall be no later than sixty (60) days from the Effective Date. In the event the Lansing City Council does not approve the sale within sixty (60) days from the Effective Date, this Agreement shall terminate, the Earnest Money Deposit, as well as all interest accrued thereon, shall be, returned to Buyer, and neither party shall have any further liabilities or obligations under this Agreement. 7. Closing, The transactions contemplated under this Agreement shall, subject to the satisfaction of the contingency set forth in Paragraph 6, be consummated at a closing ("Closing"). At Closing, 4 (a) Seller shall: (1) execute and deliver to Buyer a Warranty Deed to the Property, subject to Permitted Exceptions only; (ii) execute and/or deliver affidavits and other documents that may be reasonably required by the Title Company for the issuance of Title Policy, except that any UCC, bankruptcy, or judgment lien searches or the like shall be done at the sole effort, cost,and expense of Buyer; (iii) cause the Title Company to be paid the premium for the issuance of the Title Policy; (iv) execute, at Buyer's option, a Michigan Real Estate Transfer Tax Valuation Affidavit; (v)execute and deliver to Buyer an Affidavit of non-foreign status;and (vi) deliver all keys to and exclusive possession of the Property to Buyer, free and clear of the possessory rights of any person or entity and in the same condition as exists on the date of Buyer's execution of this Agreement. (b) Buyer shall pay to Seller the Purchase Price, as adjusted pursuant to this Agreement, in cash or by wire transfer to an account designated by,Seller at least two (2) business days prior to Closing. (c) Seller and Buyer shall execute a mutually acceptable Closing Statement. (d) Closing Costs. Closing costs shall be divided as follows: (i) Seller will be responsible for and pay the following: (1) any transfer taxes or documentary stamp taxes on the transfer of the Property; (2) the costs of preparing and recording corrective instruments; and(3)one half(1/2) of any escrow fees;and (ii) Buyer will be responsible for and pay the following: (1) The costs of recording the deed; (2) the costs of a new survey; and (3) one half(1/2)of any escrow fees, (e) Closing Date and Place. The Closing shall be through the Title Company within thirty (30) days after Buyer's delivery of written notice to Seller that Buyer intends to close, but in any event no later than thirty(30) days after the expiration of the Inspection Period, at a location mutually agreeable to the Parties or via an escrow closing, Notwithstanding the foregoing, an additional period of five (S) business days shall be allowed for Closing to accommodate delays in title work or the correction of title defects and/or survey problems which can be readily collectable, delays in obtaining required inspections,and surveys or repairs, ' S 8. Default and Remedies. (a) If Seller fails to perform in accordance with this Agreement (and such failure shall continue ten (10) days after written notice from Buyer [except that Seller shall not be entitled to written notice or 10 days to cure if the failure relates to the failure by Seller to deliver the Warranty Deed and/or any other items required to be delivered by Seller at Closing in accordance with the terms of this Agreement) or if any representation or warranty of Seller in this Agreement is untrue when made or at Closing, Seller shall be in default. In the event of a default by Seller, Buyer may, as its sole and exclusive remedies, elect to either enforce specific performance of Seller's obligations under this Agreement or terminate this Agreement by written notice to Seller and the Title Company, in which event the Earnest Money Deposit shall be returned to Buyer and neither party shall have any further rights or obligations hereunder. (b) In the event of a default under this Agreement by Buyer, and such default shall continue ten (10) days after written notice from Seller, Seller may, as its sole and exclusive remedy, elect to terminate this Agreement and the Earnest Money Deposit will be forfeited to Seller as full liquidated damages for such failure or breach by Buyer, and not as a penalty, the parties hereto acknowledging that it is impossible to estimate more precisely the damages which might be suffered by Seller upon Buyer's default, and that the liquidated damage amount set forth in this Section represents both parties' best efforts to approximate such potential damages. Thereupon the parties shall be relieved of all further obligations and liabilities hereunder. 9. Representations and Warranties (a) Seller warrants and represents to Buyer that as of the date of this Agreement and at Closing; (i)Seller owns good and marketable fee simple title to the Property; (ii)this Agreement constitutes a legal,valid, and binding agreement of Seller; (iii) to Seller's actual knowledge, (A) there is no pending or threatened litigation or proceeding relating to the Property or the operation or use of it, and (B) there is no pending or threatened bankruptcy proceeding involving Seller; I (iv) to Seller's actual knowledge, the Property is not, and Seller has not received any notice that the Property is, in violation of any federal, state, local, or other governmental zoning, health, environmental, safety, platting, subdivision, or other law, ordinance, or regulation, or any applicable private restriction relating to the Property or the operation or use of it; 6 (v) Seller has not received any notice from any insurance carrier of any defects or inadequacies in the Property, which, if not corrected, could result in a cancellation of insurance coverage or a material increase in the cost of it; (vi)there are no leases or contracts relating to the Property or the operation or use of it that will be binding on Buyer or the Property subsequent to Closing; (vii) Seller has delivered to Buyer all surveys, title policies and commitments, and environmental studies, that pertain to the Property or the operation and use of it; and (viii) (A) Seller is a municipal corporation authorized and existing under the laws of the State of Michigan; (B)neither the execution of this Agreement nor the performance of Seller's obligations under this Agreement will constitute a default under its organizational documents or any contract or agreement by which Seller is bound; and (C) the execution and delivery of this Agreement by Seller and the consummation of the transactions contemplated by this Agreement by Seller will not violate any order, writ, injunction, or decree of any court in any litigation to which Seller is a party or bound or violate any law. (b) Buyer represents and warrants to Seller as of the date of this Agreement and at Closing that: (i) Buyer is a Michigan corporation authorized and existing under the laws of the State of Michigan; (H) neither the execution of this Agreement by Buyer nor the performance of Buyer's obligations under this Agreement will constitute a default under its organizational documents or any contract or agreement by which Buyer is bound; and (iii) the execution and delivery of this Agreement by Buyer and the consummation of the transactions contemplated by this Agreement by Buyer will not violate any order, writ, injunction, or decree of any court and any litigation to which Buyer is a party or bound or violate any law. 10.Broker. Seller and Buyer each represent and warrant to the other that no broker has been engaged by it in connection with the transactions contemplated by this Agreement except that CBRE ("Seller's Broker") is acting as Seller's agent in connection with the transactions contemplated by this- Agreement, and Synergy Properties ("Buyer's Broker") is acting as Buyer's agent in connection with the transactions contemplated by this Agreement. Seller shall be responsible for paying the commission payable to Seller's Broker pursuant to the agreement entered into by Seller and Seller's Broker, and Buyer shall be responsible for paying the commission I 7 payable to Buyer's Broker pursuant to the agreement entered into by Buyer and Buyer's Broker. 11.Notice. All notices given pursuant to this Agreement by either party to the other shall be in writing and delivered by overnight mail or delivery service or via facsimile to the address below, or at such other address or addresses as either party may designate by notice given to the other party. All such notices shall be deemed effective on the day of facsimile transmission or the next day for overnight delivery service or mail.All notices shall be addressed to the parties as follows: To Buyer: Schostak Brothers&Company 17800 Laurel Park Drive North Suite 200C Livonia,MI 48152 Attn: Angela Mader With a copy to: Jacob&Weingarten,P.C. 2301 W.Big Beaver Road, Suite 777 Troy,Michigan 48084 Attn: Steven Schubiner,Esq. To Seller: c/o Van Martin,CC1M, SIOR, CRE CBREIMartin Commercial Real Estate Services 1111 E.Michigan Avenue East Lansing, MI 48223 With a copy to: Bob Johnson Director of Planning and Neighborhood 316 N. Capitol Ave. Lansing,MI 48933 12.Saturday, Sunday, or Legal Holiday. Whenever any determination is to be made or action to be taken on a date specified in this Agreement, if the date falls on a Saturday, Sunday, or legal holiday, the date of the determination or action shall be extended to the next business day. 13.Entire Agreement. This Agreement embodies the entire agreement of the parties and supersedes any prior or contemporaneous understandings or written or oral agreements between them concerning the Property, No variation, modification, or alteration of these terms shall be binding on either party unless set forth in an express and formal written amendment executed by all parties to this Agreement. I 8 i� i 14.Survival, The representations and warranties of the parties contained in this Agreement shall survive the Closing for one year and shall not merge in the covenant deed or any of the other documents executed in connection with the Closing. 15. Governing Law. This Agreement shall be governed by and construed under and in accordance with the laws of the State of Michigan. 16.Binding Effect. All of the terms and provisions in this Agreement shall bind and inure to the benefit of the parties and their respective heirs, personal representatives, successors, and assigns. Buyer shall have the right to assign this Agreement to an entity controlled by or affiliated with Buyer, and upon notice from Buyer, Seller shall convey the Property directly to Buyer's assignee provided that Buyer and/or assignee have fulfilled Buyer's obligations under this Agreement. 17. Construction. This Agreement shall not be construed more strictly against one party than against the other merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being acknowledged and agreed that this Agreement shall be interpreted in light of the probable intent of the parties. 18.Attorney Fees. In connection with any litigation, including appellate proceedings, arising out of this Agreement, the prevailing party shall be entitled to recover from the losing party the reasonable attorney fees and other costs incurred by the prevailing party in connection with the litigation. 19. Counterparts, Facsimile. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by facsimile transmission, and a facsimile of this Agreement or of a signature of a party will be,effective as an original. 20.Statement of Lack of Necessity. Pursuant to Lansing City Charter 8-403 and the real property disposition ordinances promulgated thereunder, the real property to be disposed of in this Agreement or any other agreements referenced or required herein is not necessary for public purposes,as set forth in this Agreement. [Remainder of page intentionally left blank/Signatures to follow] 9 The parties have executed this Agreement on the date listed on the first page. SELLER: City of Lansing,Michigan, a Michigan municipal corporation By: �~— Virg Berne Its: Mayor Approved as to form: I certify that funds are available In account No.:NIA (o(- 6'7310 City orney Finance BUYER: Schostak Brothers&Company, Inc, a Michigan Corporation N.W,By: Its: C#t' F afte'aV7'O'ved OFCIC62 I to EXH1131T A Legal Description 11 A parcel of land in the Northwest fractional 114 of Section 18, T4N, R2W, City of Lansing, Ingham County, Michigan, the surveyed boundary of said parcel described as: Beginning at the Northwest corner of said Section 18; thence S89°29'42"E along the North line of said Section 18 a distance of 2010.33 feet to the West line of Bonair Farms Subdivision, as recorded in Liber 6 of Plats, Page 48, Ingham County Records as extended; thence S00°35'43"W along said West line and its extension 2631.77 feet to the East-West 114 line of said Section 18; thence N89044'1 VW along said East-West 114 line 2004.00 feet to the West 114 corner of said Section 18; thence N00°27'26"E along the West line of said Section 18 a distance of 2640.21 feet to the point of beginning; said parcel containing 121.46 acres, more or less, including 6.12 acres more or less, for right of way along Saginaw Highway, Waverly Road and Michigan Avenue; said parcel subject to all easements and restrictions if any.