HomeMy WebLinkAbout2024 - Beitler Real Estate Services Lansing City Hall Redevelopment Agreement Final
REDEVELOPMENT AGREEMENT
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by and among
THE CITY OF LANSING, COUNTIES OF INGHAM AND EATON, STATE OF
MICHIGAN
and
BEITLER REAL ESTATE SERVICES LLC
EXHIBITS
Exhibit A Legal Description of the Property
Exhibit B Purchase Agreement Term Sheet
EXHIBITS
Exhibit A Legal Description of the Property
Exhibit B Purchase Agreement Term Sheet
REDEVELOPMENT AGREEMENT
THIS REDEVELOPMENT AGREEMENT (this "Agreement"), dated as of
, 2024 (the "Effective Date"), is made by and among the CITY OF
LANSING, COUNTIES OF INGHAM AND EATON, STATE OF MICHIGAN, a municipal
corporation (the "City"), 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
"Pro erty"), which Property is currently utilized as the Lansing, Michigan City Hall
Administrative Building, as well as for certain police headquarters, police detention and court
services ("City 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 plans to relocate the City's City Hall and the governmental
operations currently taking place at the Property to new location(s); and
WHEREAS, the parties desire to enter into this Agreement to set forth the following
terms and conditions related to the redevelopment of the Property.
NOW, THEREFORE, in consideration of the promises 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 1.1. Redevelopment. The Developer will take ownership of and 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,subject further to applicable law and regulation.
Section 1.2. Proiect 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 "Proiect"). The Project is more fully described in Developer's Response to
RFP dated March 22, 2022, which is incorporated herein by reference. The final room count of
the Hotel Component and other final Project details and plans shall be subject to: (i) completion
of the necessary design development and cost documents; (ii) completion of a market and
REDEVELOPMENT AGREEMENT
THIS REDEVELOPMENT AGREEMENT (this "Agreement"), dated as of
, 2024 (the "Effective Date"), is made by and among the CITY OF
LANSING, COUNTIES OF INGHAM AND EATON, STATE OF MICHIGAN, a municipal
corporation (the "City"), 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
Administrative Building, as well as for certain police headquarters, police detention and court
services("City 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 plans to relocate the City's City Hall and the governmental
operations currently taking place at the Property to new location(s); and
WHEREAS, the parties desire to enter into this Agreement to set forth the following
terms and conditions related to the redevelopment of the Property.
NOW, THEREFORE, in consideration of the promises 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 1.1. Redevelopment. The Developer will take ownership of and 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,subject further to applicable law and regulation.
Section 1.2. Proiect 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 "Proiect"). The Project is more fully described in Developer's Response to
RFP dated March 22, 2022, which is incorporated herein by reference. The final room count of
the Hotel Component and other final Project details and plans shall be subject to: (i)completion
of the necessary design development and cost documents; (ii) completion of a market and
feasibility analysis to be prepared by the Developer; and(iii)the Land Use Approvals(as defined
herein) and other approvals necessary. As part of the Project, the exterior of the building may
be completely replaced except for the westernmost face of the building which is currently clad
in Indiana limestone, and on which Leonard Jungwirth's famous sculpture and the City Hall
name are displayed. This redevelopment limitation covenant shall survive termination or
expiration of this Agreement. Documentation acceptable to the City necessary to legally preserve
this covenant will be included in the Purchase Agreement and otherwise entered into by the
parties, and Developer agrees to cooperate with such preparation and execution of such
documentation.
ARTICLE II
RELOCATION OF CITY HALL; DEVELOPMENT OF NEW CITY FACILITIES; AND
PURCHASE OF THE PROPERTY
Section 2.1. Relocation of City Hall and Related Operations. As part of the
redevelopment of the Property by the Developer, the City shall entirely vacate the Property and
relocate the City's City Hall and any and all operations currently conducted therein, including,
without limitation, all administrative offices, police headquarters, courts, detention and all other
related City functions to a new city hall administrative building and other facilities contemplated
in the November, 2022 Public Safety Ballot Proposal of the City (collectively, the "New City
Facilities"), within sixty (60) days from the City's receipt of the last necessary certificate of
occupancy for the New City Facilities(the"City Relocation"). The City shall deliver possession
of the Property to the Developer pursuant to and in accordance with the Purchase Agreement(as
defined herein) (such date being the "Possession Date"). Upon taking possession on the
Possession Date, the Developer shall be responsible for all carrying costs, utilities, and insuring
and indemnifying agreements related to the Property as contemplated in the Purchase Agreement.
Section 2.2. Real Estate Purchase Agreement. Subject to Article 5 hereof, the City
shall sell to Developer and Developer shall purchase the Property from the City for the purpose
of the Project (the "Purchase Agreement"). The Purchase Agreement shall be based upon the
material terms identified in Exhibit B attached hereto. The closing date for the Purchase
Agreement and the Possession Date shall be on or before Project Commencement (as defined
herein).
Section 2.3. Real Estate Holding Company. To facilitate the Project and
development of the New City Facilities, the Developer may assign its rights and obligations
under the Purchase Agreement to one or more entities to be formed for the development of the
Project (the "Holding Company or Holding Companies" as the case may be) as further set
forth in the Purchase Agreement and further agreed to by the City.
Section 2.4. 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.
Section 2.5. Brownfield TIF. From and after the Effective Date, the City may pursue
reimbursement for certain of Developer's redevelopment/remediation costs through a
Brownfield tax increment revenue plan (the "TIF") covering the Property. If the City elects to
pursue such reimbursement, it shall be entitled to retain 100% of the eligible tax increment
revenue proceeds and shall also be responsible for all costs associated with the TIF. Developer
agrees to assign any rights it may have to any TIF reimbursement that may be available as
directed by the City and to otherwise reasonably cooperate with respect to the City's efforts to
obtain reimbursement through the TIF.
Section 2.6. Maintainin2 Taxable Status. It is acknowledged that future tax revenue
from the private development and ownership of the Property is a material part of the consideration
to the City for this agreement and the sale of the Property to the Developer. The Developer agrees
not to transfer or close on the sale of all or part of the Property to an entity, or take such other
actions that will result in the Property becoming tax exempt until the year after the Project
completion. The Developer further agrees that the Property, including the Project, will be placed
on the tax rolls and that Developer will not take any action, directly or indirectly, that causes the
Property, including the Project, to be removed from the tax rolls for a period of not less than
twenty (20) years, commencing with the date of Project completion. In the event Developer
causes the Property, including the Project, to be removed from the tax rolls after Project
completion, then the Developer will reimburse the City for an amount equal to the taxable value
of the Property, including the completed Project, in the year before it is no longer taxed (the
original "Base Value")times nineteen(19)mills(the"Annual Amount") for each year remaining
up to twenty (20) years from the date Project completion. The amount payable to the City will
either be paid in one lump sum, or on an annual basis. The lump sum payment shall be the net
present value calculated by increasing the Annual Amount by three percent (3%) for each year
remaining. The lump sum is due and payable on or before the Developer closes on the transfer or
sale of the property to any entity that results in the property becoming tax exempt. If annual
payments are selected, they shall be due and payable on or before June 15th commencing in the
year that the Property is no longer taxed, and on or before June 15th of each subsequent year for
the remaining years. If annual payments are selected,the Base Value shall be increased each year
over the prior year's Base Value by the rate promulgated annually by the State Tax Commission
to cap inflation of taxable value. If annual payments are selected, the Developer will secure this
obligation by providing a Letter of Credit in favor of the City from a financial institution approved
by the City; the Letter of Credit will be renewed annually and will be an amount equal to the net
present value as calculated above; such amount will be reduced each year after the annual payment
is made by the Developer; and in the event payment is not made as provided for in this Agreement
then the City will have the right to present the Letter of Credit for payment of the remaining lump
sum amount due. This section shall survive termination or expiration of the Agreement.
Section 2.5. Brownfield TIF, From and after the Effective Date, the City may pursue
reimbursement for certain of Developer's redevelopment/remediation casts through a
Brownfield tax increment revenue plan (the "TIF") covering the Property. If the City elects to
pursue such reimbursement, it shall be entitled to retain 100% of the eligible tax increment
revenue proceeds and shall also be responsible for all costs associated with the TIF. Developer
agrees to assign any rights it may have to any TIF reimbursement that may be available as
directed by the City and to otherwise reasonably cooperate with respect to the City's efforts to
obtain reimbursement through the TIF,
Section 2.6. Maintaining Taxable Status. It is acknowledged that future tax revenue
from the private development and ownership of the Property is a material part of the consideration
to the City for this agreement and the sale of the Property to the Developer.The Developer agrees
not to transfer or close on the sale of all or part of the Property to an entity, or take such other
actions that will result in the Property becoming tax exempt until the year after the Project
completion, The Developer further agrees that the Property, including the Project,will be placed
on the tax rolls and that Developer will not take any action,directly or indirectly,that causes the
Property, including the Project, to be removed`from the tax rolls for a period of not less than
twenty (20) years, commencing with the date of Project completion. In the event Developer
causes the .Property, including the Project, to be removed from the tax rolls after Project
completion, then the Developer will reimburse the City for an amount equal to the taxable value
of the Property, including the completed Project, in the year before it is no longer taxed (the
original"Base Value")times nineteen(1 )mills(the"Annual Amount")for each year remaining
up to twenty (20) years from the date Project completion. The amount payable to the City will
either be paid in one lump Sum, or on an annual basis. The lump sum payment shall be the net,
present value calculated by increasing the Annual Amount by three percent (3%) for each year
remaining.The lump sum is due and payable on or before the Developer closes on the transfer or
sale of the property to any entity that results in the property becoming tax exempt. If annual
payments are selected, they shall be due and payable on or before June 15th commencing in the
year that the Property is no longer taxed,and on or before Jude i 5th of each subsequent year for
the remaining years. If annual payments are selected,the Base Value shall be increased each year
over the prior year's Base Value by the rate promulgated annually by the Mate Tax Commission
to cap inflation of taxable value. If annual payments are selected,the Developer will secure this
obligation by providing a Letter of Credit in favor of the City from a financial institution approved
by the City; the Letter of Credit will be renewed annually and will be an amount equal to the net
present value as calculated above,such amount will be reduced each year after the annual payment
is made by the Developer,and in the event payment is not made as provided for in this Agreement
then the City will have the right to present the Letter of Credit for payment of the remaining lump
sum amount due. This section shall survive termination or expiration of the Agreement.
ARTICLE III
LAND USE APPROVALS; PERMITTING
Section 3.1. Land Use Approvals.
(a) Applications. Developer will submit application materials required under the
City 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 Ap rovals').
All applications for any Land Use Approvals shall be reviewed in accordance with the
ordinances of the City,
(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.The Developer
shall be responsible for all'fees associated with obtaining any building permits.
ARTICLE IV
CONSTRUCTION/REHABILITATION OF PROJECT
Section 4.1. Proect Redevelopment.
(a) Design. The Developer shall prepare and submit detailed plans and specifications
for the Project for review' and approval by the City and the City's appointed representatives
(collectively, the " gign Plans"), which approval shall not be unreasonably withheld,
unreasonably conditioned or unreasonably 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.
(c) Bidding. 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 sixty (60) days after City Relocation. 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 iProject shall take place within ninety (90) days
after the date of the City Relocation (the "Project Commencement") unless extended at the
request of Developer and approved in writing by the City, which approval shall not be
unreasonably withheld. With the City's written agreement,portions of the Project may commence
after the Possession Date and Closing Date,but before City Relocation is fully complete,provided
Financing Closing has occurred. In such case, Developer will become responsible for such
carrying costs contemplated in Section 2.1 relative to the portions of the Property it then occupies.
(f) Design, Style, Size. The Project shall be built in accordance with the terms of
Section 1.2,the Design Plans and any other written agreements or approvals between the parties.
(g) Project Completion. Subject to Unavoidable Delays, Developer'shall use good
faith and best efforts to substantially complete the Project within eighteen (1 ) months from
Project Commencement(the"Target Completion Date").
ARTICLE 'V
CONDITIONS PRECEDENT TO PROJECT COMMENCEMENT
Section 5,1, Conditions Precedent to Project Commencement. The Developer's
obligations to close'under the Purchase Agreement and undertake the Project contemplated by
this Agreement are conditioned on satisfaction of each of the following conditions(collectively,
the"Project 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) Execution of a Parking Agreement wherein the City shall guarantee availability
of no less than 100 parking spaces to Developer at market rates for use in connection with the
Project.
(d) Delivery by the City to the Developer, at City's cost, and acceptance by the
Developer,of a current Phase I environmental report covering the Property ("Phase I").
(e) City's completion of any follow-up testing (e.g. phase 1I environmental testing)
recommended by the Phase 1, at City's cost.
(f) Consummation of the Financing Closing, which Developer will pursue with
reasonable diligence.
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. The insurance policies and provisions to be set forth in the Purchase
Agreement contemplated by this Agreement shall be subject to the review and approval of the
City,including its Risk Manager and the Developer. For the avoidance of doubt,Developer shall
be responsible for insuring the Project and Property on an after the Possession Date.
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 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 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.
(d) Developer acknowledges that it is acquiring the Property in its as is condition,
including the presence of hazardous materials,and Developer shall be solely responsible for any
remediation of such materials as required to complete the Project.
(e) Developer agrees that if this Agreement is 'terminated due to the fault of the
Developer, including for failure to consummate Financing Closing, City will retain the Property
and have no obligation to transfer it to Developer.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1. 'Notice and Oyyortun& 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 Relays if the alleged default is not cured within thirty (30) days after the defaulting
arty'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) The non-defaulting party may take whatever action, including legal, equitable or
administrative action, which may appear necessary or desirable to the non-defaulting party,
including any actions to collect any payments validly due and unpaid under this Agreement,to
seek reimbursement of payments made, to terminate the Purchase 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 terra "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 not caused by the
Developer, governmental actions, judicial action commenced by third parties that are not the
fault of the Developer,the implementation of an environmental agency-approved work plan for
rernedation, or severe weather, acts of God,fire or other casualty,or other events or conditions
beyond the reasonable control of the parties, or an emergency(defined.as an urgent, sudden,and
serious event or an unforeseen change in circumstances that necessitates immediate action to
remedy harm or avert imminent danger to life, health,or property).
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 Im lied'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 Purchase 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 and executed by the parties.
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 goad 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 Agreement or the Project.
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 ether 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
707 Skokie Blvd.., Suite 600
Northbrook,IL 60062
Attn:J.Paul Beitler,Manager
Email:pbeitier@beitterre.com
Attn: John Paul Beitler III,Manager
Email:jpbeitler@beitlerre.com
With a copy to: Taft Stettinius& Hollister LLP
111 East Wacker Drive, Suite 2800
Chicago, U,60601
Attention:'James`Oakley
Email:joakley@taftlaw.com
if to City: City of Lansing Mayor's Office
9t'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'h 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. Assignment. With the written approval of the City, Developer shall be
permitted to assign its rights under this Agreement to a person or entity with similar or greater real
estate development expertise and experience, subject to the City's reasonable approval of the
assignee,which shall not be unreasonably delayed. Developer shall provide the City with a written
notice of any proposed assignment.
Developer anticipates that its lender, at the time of Financing Closing, will have the right
to pursue completion of the Project in the event of default or other actions of Developer resulting
in Developer's failure to complete the Project.
Developer also agrees that in the event the lender fails to pursue completion of the Project
in such instance,Developer will take such actions necessary to assign,pledge,transfer and set over
to city, all of its right, title and interest in and to any general contractor, architect or other
agreements relating to the Project,'including all amendments,modifications,supplements,general
conditions and addenda thereto, and shall take such other steps to enable City to continue
completion of the Project. Prior to such occurrence described in this paragraph,City,by executing
this Agreement does not assume any of Developer's obligations or duties concerning the
agreements until and unless`City shall exercise the rights under this provision.
This covenant of Developer includes, as necessary, its appointment' of City as its
attorney-in-fact to demand,receive and enforce Developer's rights with respect to the agreements,
to give appropriate receipts, releases and satisfactions for and on behalf of Developer and to do
any and all acts in the name of Developer or in the name of City with the same force and effect as
Developer could do if this assignment had not been made. Developer hereby agrees not to assign,
sell,pledge,transfer,mortgage or otherwise encumber'its interest in the contemplated agreements
relating to the Project.
The provisions of this section shall be binding upon and inure to the benefit of the assigns
and successors in interest of the Developer and the City. This section shall survive termination
or expiration of the Agreement.
Section 9.11.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, but provided
further, however that any legal or other costs 'incurred by the City because of the Developer's
litigation,shall be an obligation payable by the Developer to the City.
Section 9.12. Exclusivity,.During the term of this Agreement and unless the Agreement
is Terminated,the Developer shall have the exclusive right to negotiate with the City concerning
the Property and the Project 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 9.13. Adequate Consideration. The parties acknowledge and agree that this
Agreement is intended to be binding and enforceable and each parry 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 9.14. 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 or his designee confirmed in writing.
ARTICLE X
TERMINATION OF AGREEMENT
Section 10.1. Termination. This Agreement shall terminate upon the following:
(a) In the event the City has cause to terminate the Agreement. As used in this Section,
"cause" shall mean one or more of the following: (i)';any material breach of this Agreement by
Developer,which is not timely cured by Developer as permitted by the terms of this Agreement;
(ii)Developer's indictment for alleged criminal activity related to the Property or Project;or(iii)
willful'misconduct or gross negligence by Developer related to this Agreement or the Project.
(b) 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.
(c) In the event the Developer fails to commence construction of the Project as
contemplated,including timely completion of Financing Closing,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.
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 X.this Agreement shall be null and void and,except for obligations that expressly
survive termination or expiration, 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.
CITY OF LANSING,COUNTIES OF INGRAM AND EATON
STATE OF MICHIGAN,a municipal corporation
By:
Andy Schor,Mayor
By:
Chris Swope,City Clerk
REITL REAL ESTATE SERVICES LLG
By:
vv '*'�'
ul eider,Manager
Signature page—City of Lansing City Nall Redevelopment Agreement( fl24)
EXHIBIT AA
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, THN25 FT, W`24 FT, N6 FT, 26 FT, S31.12FTTOWCOR LOT 3, E50TO
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 B
PURCHASE AGREEMENT TERM SHEET[to be more fully developed]
Seller. The City of Lansing
Purchaser. Holding Company or Holding Companies
Clos ne Date. 4n or before the Project Commencement.
Purchase Price. Two Million Seven Hundred Eight Thousand and 00/100 Dollars ($2,780,000)
("Purchase Price").
076492.000048 4855-4356-9839.E