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HomeMy WebLinkAboutItem 14 Proposed Sale of City PropertyAGENDA ITEM SUMMARY Meeting Date: 6/17/2013 Meeting Type: Regular Meeting Staff Contact/Dept.: John Tamulonis/CMO Staff Phone No: 541-726-3656 Estimated Time: 10 Minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Encourage Economic Development and Revitalization through Community Partnerships ITEM TITLE: PROPOSED SALE OF CITY PROPERTY ACTION REQUESTED: 1. Hold a Public Hearing regarding the proposed sale of property in Glenwood; 2. Approve/not approve the following resolution: A RESOLUTION AUTHORIZING THE CITY MANAGER TO SELL TWO LOTS IN WEST GLENWOOD IN ACCORD WITH THE PURCHASE, SALE AND DEVELOPMENT AGREEMENT ISSUE STATEMENT: The property owner of Tax Lot 700 (adjacent and east of these tax lots) would like to buy the two westernmost tax lots under City ownership (Tax Lots 100 & 200). (See Attachments 2 & 3) SEDA purchased three parcels to begin the acquisition and development of a public storm water system in Glenwood. These westernmost two tax lots are currently under lease to Hamilton Construction through September 2013 with a possible extension to mid-2014. Combining the three tax lots, the property owner proposes to build an 85-97-room hotel (Attachment 2) that must open before July 2015 and has plans to make a subsequent investment on Tax Lots 100 and 200 after Hamilton’s leases ends and the hotel is constructed. The Council Briefing Memorandum outlines the terms and conditions of the sale and the required development (Attachment 1) with details in Attachment 6. ATTACHMENTS: 1. Council Briefing Memo 2. Map of Site 3. RLID Property Reports Tax Lots 100 & 200 4. Appraisal Review 2012-12-07 5. Preliminary Title Report 6. Purchase , Sale and Development Agreement 7. Notice of Public Hearing 8. Resolution DISCUSSION/ FINANCIAL IMPACT: See Council Briefing Memo ATTACHMENT 1 Page 1 of 2 M E M O R A N D U M City of Springfield Date: 6/17/2013 COUNCIL BRIEFING MEMORANDUM To: Gino Grimaldi From: John Tamulonis, Community Development Manager Subject: Potential Sale of City Property ISSUE: Provide staff direction regarding: 1. The Council’s interest in selling two tax lots in Glenwood purchased by SEDA several years ago where Hamilton Construction has a lease until mid-2014 based on Staff recommendations and 2. Any additional conditions of a sale before moving the sale process to a possible public hearing. COUNCIL GOALS/MANDATE: Community and Economic Development and Revitalization BACKGROUND: SEDA purchased the two properties along with Tax Lot 500 in 2008 to become the initial parts of a public stormwater and drainage system for Glenwood. All three are annexed to the City. The property owner of the Tax Lot 700 on the east wants to purchase Tax Lots 100 and 200 as part of two potential developments and has been working with staff for about two years on issues regarding development in Glenwood. The prospective purchaser plans to build a hotel on Tax Lot 700 (with annexation effective June 20, 2013) but needs these two parcels for hotel parking, access, stormwater treatment, etc. and for a likely second development. The purchaser prefers to develop in Glenwood and intends to build the facility for a planned June 2014 opening. For this Glenwood site he has already started his site planning process with pre-application meetings and site plan development. DISCUSSION The properties the City is being asked to sell were appraised in 2008 at a combined value of $250,000 ($195,000 -- Tax Lot 100; $55,000 -- Tax Lot 200). With a prospective purchaser staff had the property’s wetlands study re-evaluated and the appraisal reviewed. The wetlands showed a change in the configuration of the wetlands. The update to that appraisal (12/7/2012) indicates the values of the parcels total $227,000 with the new wetlands delineation and access constraining use of the properties (See Attachment 2) and reducing their value slightly. The prospective purchaser proposed that the City Sell the parcels for $150,000 and the City countered with a sale price of $160,000 with payments over ten years starting after the hotel is built in 2014 with annual simple interest paid on balance. SEDA would participate in the purchaser’s construction cost of the sanitary sewer line across the City-owned Tax Lot 500 to the east of Tax Lot 700. (A cost estimated at substantially under $8,000 and contributing to the future sale value of city- owned Tax Lot 500 in a future sale. Providing this sanitary line for Tax Lot 500 would otherwise be problematic or more expensive.) The purchaser will provide access and crossover easements for sanitary sewer, City’s maintenance of wetlands and storm water facilities, possible public sewer easements, and secondary access to city-owned parcels to the east and west. In addition, should the purchaser decide not to build the hotel or cannot start building the hotel by July 2014, the purchaser agrees to either return the parcel to city ownership or purchase Tax Lots ATTACHMENT 1 Page 2 of 2 100 and 200 for cash at full value of $227,000. In discussions of the proposed hotel development with the Oregon Department of Transportation regarding access to Tax Lots 700 and 100/200, ODOT will require all existing access points to be combined and located at the juncture of the parcels and limited through a Right of Indenture on a boundary line of Tax Lot 100 (See Attachment 2). This ODOT requirement is a one-way agreement that, once imposed, cannot readily be returned to existing conditions. This right-of-indenture would limit not only the purchaser’s access (from a right-of-access abutting a right-of-way to a right-of- indenture controlled by ODOT) but also the City/seller’s access (existing access by right-of- indenture for two lots to access by right-of-indenture for all three lots, even if Tax Lots 100 & 200 would remain or revert to City ownership). Should the Franklin Boulevard access be consolidated as ODOT requires prior to the property reverting to the City, access by right-of-indenture would encumber the City’s two parcels, likely reducing value for future sale. Other private crossover access agreements agreed to by the City and purchaser would provide secondary access among all four parcels. The City also has some time built into the P&S Agreement (end of July 2013) to relocate and save the historic home somewhere off the property by a private party or non-profit. City has had historic documentation one for the house and an asbestos study to facilitate private relocation of the building. If not relocated, the structure would be removed by the purchaser. The reduced price is reasonable in part with the purchaser’s interest in quickly constructing a facility that will generate substantial revenue to SEDA and the City. Estimated property taxes to SEDA would be about $85,000 per year for a hotel constructed for $10 million and assessed at $5 million once complete. Conservatively estimated, the City’s Transient Room Tax (TRT) revenue in the start-up years would be ~$42,000 based on 50% occupancy of 80 rooms at an average room rate of $80 per night. The City’s TRT revenue would likely increase to above $60,000 annually thereafter. RECOMMENDED ACTION: Staff recommends selling the two parcels for $160,000, somewhat below their current value because of the property tax and transient room revenue as well as having this significant development at the western entrance to Glenwood. Approving the attached resolution would authorize the City Manager to complete the sale and other transactions. The purchase payments would be equal payments on principle paid over ten years starting after the hotel is completed with annual simple interest paid on the outstanding balance. City has reasonable clawback provisions on the property to motivate the development. And should the purchaser not start construction of the hotel before June 2014 or does not complete construction before July 2015, the parcels will revert back to the City at no cost or, at purchaser’s option, City will sell the parcels to the purchaser for a cash amount of $227,000. Purchaser will sign all the access and crossover easements and necessary dedications for sanitary and access to maintain and service the wetland and riparian areas. City will participate in cost of sanitary sewer line across City-owned Tax Lot 500. Attachment 2 Detailed Property Report Site AddressN/A Map & Taxlot#17-03-33-44-00100 SIC N/A Tax Account#0295749 Property Owner 1 CITY OF SPRINGFIELD 225 5TH ST SPRINGFIELD, OR 97477 Approx. taxlot acreage 0.94 Tax account acreage data not available Map & Taxlot # 17-03-33-44-00100 Improvements No assessor photos, assessor sketches or building characteristic information is available for this tax account. Site Address Information No site address associated with this tax account number General Taxlot Characteristics Geographic Coordinates X4251488Y876526(State Plane X,Y) Latitude44.0437Longitude-123.0475 Zoning Zoning Jurisdiction Springfield Springfield Parent ZoneLMILIGHT MEDIUM INDUSTRIAL Land Use CodeDescription V Vacant General Land Use CodeDescription 9100Vacant, Unused, Undeveloped Land Detailed Land Use Taxlot Characteristics Incorporated City LimitsSPRINGFIELD Urban Growth BoundarySpringfield Year Annexed1999 Annexation #99-07 Approximate Taxlot Acreage 0.94 Approx Taxlot Sq Footage40,946 2010 Census Tract3600 2010 Census Block Group1 Plan Designation N/A Eugene NeighborhoodN/A Metro Area Nodal Dev Area No Historic Property NameN/A City Historic Landmark?No National Historical Register?No Service Providers Fire Protection Provider City ofSpringfield Ambulance Provider Springfield Dept of Fire & Life Safety Produced by CITY OF SPRINGFIELD, City Manager's Office on 3/17/2013 at 7:03PM using RLID (www.rlid.org)Page 1 of 4 Attachment 3, Page 1 Ambulance District EC Ambulance Service Area East/Central LTD Service Area? Yes LTD Ride Source? Yes Soil Water Cons. Dist/Zone UPPER WILLAMETTEE / 0 Emerald People's Utility DistrictN Environmental Data CodeDescription X5Areas of 500-year flood, areas of 100-year flood with average depths of less than 1 foot or with drainage areas less than 1 square mile, and areas protected by levees from 100-year flood. FEMA Flood Hazard Zone FIRM Map Number41039C1141 F Community Number415592 Post-FIRM Date09/27/1985 Panel Printed?Yes Soil Map Unit#Soil Type Description% of TaxlotAg Class 1Hydric 26CHEHALIS SILTY CLAY LOAM, OCCASIONALLY FLOODED62%2 No 97NEWBERG-URBAN LAND COMPLEX38%2 No Soils Schools CodeName School District4J EUGENE Elementary School4739Camas Ridge Middle School526 Roosevelt High School539 South Eugene Political Districts Election Precinct2238 City Council WardSP2 City CouncilorHillary Wylie County Commissioner District2 (Springfield) County CommissionerSid Leiken EWEB CommissionerN/A LCC Board Zone4 State Representative District11 State RepresentativePhil Barnhart State Senate District6 State SenatorLee Beyer Liens None Building Permits RLID does not contain any building permit data for this jurisdiction Land Use Applications RLID does not contain any landuse application data for this jurisdiction Petitions RLID does not contain any petition data for this jurisdiction Tax Statements (current and previous tax years) Produced by CITY OF SPRINGFIELD, City Manager's Office on 3/17/2013 at 7:03PM using RLID (www.rlid.org)Page 2 of 4 Attachment 3, Page 2 ACCOUNT#: 0295749 View tax statement(s) for: 2012 2011 Owner/Taxpayer OwnerAddressCity/State/Zip CITY OF SPRINGFIELD225 5TH STSPRINGFIELD, OR 97477 Owners Party NameAddressCity/State/Zip CITY OF SPRINGFIELD225 5TH STSPRINGFIELD, OR 97477 Taxpayer Data source: Lane County Assessment and Taxation Account Status StatusActive Account Current Tax Year Account Status none Remarksnone Special Assessment Program N/A Data source: Lane County Assessment and Taxation General Tax Account Information Tax Account Acreage data not available Fire Acres N/A Property Class 300 INDUSTRIAL, VACANT Statistical Class N/A Neighborhood Code 90201 Category Land and Improvements Data source: Lane County Assessment and Taxation Township-Range-Section / Subdivision Data Subdivision Type N/ASubdivision Name N/ASubdivision Number N/A Phase N/ALot/Tract/Unit # TL 00100Recording Number N/A Data source: Lane County Assessment and Taxation Property Values & Taxes The values shown are the values certified in October unless a value change has been processed on the property. Value changes typically occur as a result of appeals, clerical errors and omitted property. The tax shown is the amount certified in October. This is the full amount of tax for the year indicated and does not include any discounts offered, payments made, interest owing or previous years owing. It also does not reflect any value changes. Real Market Value (RMV) Total Assessed Value Tax YearLandImprovementTotal 2012$112,560$0$112,560$36,667$ 0.00 2011$112,560$0$112,560$35,599$ 0.00 2010$113,697$0$113,697$34,562$ 0.00 2009$143,921$0$143,921$33,555$ 0.00 2008$132,038$0$132,038$32,578$ 0.00 2007$132,038$0$132,038$31,629$ 0.00 2006$122,258$0$122,258$30,708$ 0.00 2005$109,159$0$109,159$29,814$ 0.00 2004$94,921$0$94,921$28,946$ 0.00 Produced by CITY OF SPRINGFIELD, City Manager's Office on 3/17/2013 at 7:03PM using RLID (www.rlid.org)Page 3 of 4 Attachment 3, Page 3 2003$87,890$0$87,890$28,103$ 0.00 2002$87,890$0$87,890$27,284$ 0.00 2001$87,020$0$87,020$26,489$ 0.00 2000$54,220$0$54,220$25,717$ 0.00 1999$45,950$0$45,950$24,968$ 416.79 1998$38,610$0$38,610$24,241$ 392.74 1997$37,490$0$37,490$23,535$ 399.22 1996$29,290$0$29,290$29,290$ 449.85 1995$26,150$0$26,150$26,150$ 409.96 Current Year Assessed Value$36,667 Less Exemption Amount * ($36,667) Taxable Value $0 * Frozen Assessed Value Exemption Type Cities and Towns Data source: Lane County Assessment and Taxation Tax Code Area & Taxing Districts Tax Code Area (Levy Code) for current tax year 00480 Taxing Districts for TCA 00480 CITY OF SPRINGFIELD EUGENE SCHOOL DISTRICT 4J LANE COMMUNITY COLLEGE LANE COUNTY LANE EDUCATION SERVICE DISTRICT SPRINGFIELD ECONOMIC DEVELOPMENT AGENCY WILLAMALANE PARK & RECREATION DISTRICT Data source: Lane County Assessment and Taxation Sales & Ownership Changes Sale DateSale Price Doc #ImageAnalysis Code Multiple Accts? Grantor(s)Grantee(s) 07/22/2009$700,0002009-44325 K YesOR DEPT OF ADMINISTRATI VE SERVICES CITY OF SPRINGFIELD 09/23/1999$110,0001999-83204 3 YesMORSE ALEXANDRA F/FISCHER DODD OR DEPT OF ADMINISTRATI VE SERVICES 07/11/1993$01993-47140 6 data not available DALE FISCHER TR data not available 06/12/1992$01992-34078 J data not available FISCHER, DALE EST data not available Data source: Lane County Assessment and Taxation Produced by CITY OF SPRINGFIELD, City Manager's Office on 3/17/2013 at 7:03PM using RLID (www.rlid.org)Page 4 of 4 Attachment 3, Page 4 Detailed Property Report Site AddressN/A Map & Taxlot#17-03-33-44-00200 SIC N/A Tax Account#0295772 Property Owner 1 CITY OF SPRINGFIELD 225 5TH ST SPRINGFIELD, OR 97477 Approx. taxlot acreage 0.41 Tax account acreage 0.39 Map & Taxlot # 17-03-33-44-00200 Improvements No assessor photos, assessor sketches or building characteristic information is available for this tax account. Site Address Information No site address associated with this tax account number General Taxlot Characteristics Geographic Coordinates X4251327Y876480(State Plane X,Y) Latitude44.0436Longitude-123.0481 Zoning Zoning Jurisdiction Springfield Springfield Parent ZoneLMILIGHT MEDIUM INDUSTRIAL Land Use CodeDescription V Vacant General Land Use CodeDescription 9100Vacant, Unused, Undeveloped Land Detailed Land Use Taxlot Characteristics Incorporated City LimitsSPRINGFIELD Urban Growth BoundarySpringfield Year Annexed1999 Annexation #99-07 Approximate Taxlot Acreage 0.41 Approx Taxlot Sq Footage17,860 2010 Census Tract3600 2010 Census Block Group1 Plan Designation N/A Eugene NeighborhoodN/A Metro Area Nodal Dev Area No Historic Property NameN/A City Historic Landmark?No National Historical Register?No Service Providers Fire Protection Provider City ofSpringfield Ambulance Provider Springfield Dept of Fire & Life Safety Produced by CITY OF SPRINGFIELD, City Manager's Office on 3/17/2013 at 7:09PM using RLID (www.rlid.org)Page 1 of 4 Attachment 3, Page 5 Ambulance District EC Ambulance Service Area East/Central LTD Service Area? Yes LTD Ride Source? Yes Soil Water Cons. Dist/Zone UPPER WILLAMETTEE / 0 Emerald People's Utility DistrictN Environmental Data CodeDescription X5Areas of 500-year flood, areas of 100-year flood with average depths of less than 1 foot or with drainage areas less than 1 square mile, and areas protected by levees from 100-year flood. FEMA Flood Hazard Zone FIRM Map Number41039C1141 F Community Number415592 Post-FIRM Date09/27/1985 Panel Printed?Yes Soil Map Unit#Soil Type Description% of TaxlotAg Class 1Hydric 97NEWBERG-URBAN LAND COMPLEX53%2 No 26CHEHALIS SILTY CLAY LOAM, OCCASIONALLY FLOODED47%2 No Soils Schools CodeName School District4J EUGENE Elementary School4739Camas Ridge Middle School526 Roosevelt High School539 South Eugene Political Districts Election Precinct2238 City Council WardSP2 City CouncilorHillary Wylie County Commissioner District2 (Springfield) County CommissionerSid Leiken EWEB CommissionerN/A LCC Board Zone4 State Representative District11 State RepresentativePhil Barnhart State Senate District6 State SenatorLee Beyer Liens None Building Permits RLID does not contain any building permit data for this jurisdiction Land Use Applications RLID does not contain any landuse application data for this jurisdiction Petitions RLID does not contain any petition data for this jurisdiction Tax Statements (current and previous tax years) Produced by CITY OF SPRINGFIELD, City Manager's Office on 3/17/2013 at 7:09PM using RLID (www.rlid.org)Page 2 of 4 Attachment 3, Page 6 ACCOUNT#: 0295772 View tax statement(s) for: 2012 2011 Owner/Taxpayer OwnerAddressCity/State/Zip CITY OF SPRINGFIELD225 5TH STSPRINGFIELD, OR 97477 Owners Party NameAddressCity/State/Zip CITY OF SPRINGFIELD225 5TH STSPRINGFIELD, OR 97477 Taxpayer Data source: Lane County Assessment and Taxation Account Status StatusActive Account Current Tax Year Account Status none Remarksnone Special Assessment Program N/A Data source: Lane County Assessment and Taxation General Tax Account Information Tax Account Acreage 0.39 Fire Acres N/A Property Class 300 INDUSTRIAL, VACANT Statistical Class N/A Neighborhood Code 90201 Category Land and Improvements Data source: Lane County Assessment and Taxation Township-Range-Section / Subdivision Data Subdivision Type N/ASubdivision Name N/ASubdivision Number N/A Phase N/ALot/Tract/Unit # TL 00200Recording Number N/A Data source: Lane County Assessment and Taxation Property Values & Taxes The values shown are the values certified in October unless a value change has been processed on the property. Value changes typically occur as a result of appeals, clerical errors and omitted property. The tax shown is the amount certified in October. This is the full amount of tax for the year indicated and does not include any discounts offered, payments made, interest owing or previous years owing. It also does not reflect any value changes. Real Market Value (RMV) Total Assessed Value Tax YearLandImprovementTotal 2012$34,326$0$34,326$14,792$ 0.00 2011$34,326$0$34,326$14,361$ 0.00 2010$34,673$0$34,673$13,943$ 0.00 2009$43,891$0$43,891$13,537$ 0.00 2008$40,267$0$40,267$13,143$ 0.00 2007$40,267$0$40,267$12,760$ 0.00 2006$37,285$0$37,285$12,388$ 0.00 2005$33,291$0$33,291$12,027$ 0.00 2004$28,949$0$28,949$11,677$ 0.00 Produced by CITY OF SPRINGFIELD, City Manager's Office on 3/17/2013 at 7:09PM using RLID (www.rlid.org)Page 3 of 4 Attachment 3, Page 7 2003$26,805$0$26,805$11,337$ 0.00 2002$26,805$0$26,805$11,007$ 0.00 2001$26,540$0$26,540$10,686$ 0.00 2000$21,880$0$21,880$10,375$ 0.00 1999$18,540$0$18,540$10,073$ 168.15 1998$15,580$0$15,580$9,780$ 158.46 1997$15,130$0$15,130$9,495$ 161.06 1996$11,820$0$11,820$11,820$ 181.55 1995$10,550$0$10,550$10,550$ 165.40 Current Year Assessed Value$14,792 Less Exemption Amount * ($14,792) Taxable Value $0 * Frozen Assessed Value Exemption Type Cities and Towns Data source: Lane County Assessment and Taxation Tax Code Area & Taxing Districts Tax Code Area (Levy Code) for current tax year 00480 Taxing Districts for TCA 00480 CITY OF SPRINGFIELD EUGENE SCHOOL DISTRICT 4J LANE COMMUNITY COLLEGE LANE COUNTY LANE EDUCATION SERVICE DISTRICT SPRINGFIELD ECONOMIC DEVELOPMENT AGENCY WILLAMALANE PARK & RECREATION DISTRICT Data source: Lane County Assessment and Taxation Sales & Ownership Changes Sale DateSale Price Doc #ImageAnalysis Code Multiple Accts? Grantor(s)Grantee(s) 07/22/2009$700,0002009-44325 K YesOR DEPT OF ADMINISTRATI VE SERVICES CITY OF SPRINGFIELD 09/23/1999$110,0001999-83204 3 YesMORSE ALEXANDRA F/FISCHER DODD OR DEPT OF ADMINISTRATI VE SERVICES 07/11/1993$01993-47140 6 data not available DALE FISCHER TR data not available 06/12/1992$01992-34078 J data not available FISCHER, DALE EST data not available Data source: Lane County Assessment and Taxation Produced by CITY OF SPRINGFIELD, City Manager's Office on 3/17/2013 at 7:09PM using RLID (www.rlid.org)Page 4 of 4 Attachment 3, Page 8 Attachment 4, Page 1 of 10 Attachment 4, Page 2 of 10 Attachment 4, Page 3 of 10 Attachment 4, Page 4 of 10 Attachment 4, Page 5 of 10 Attachment 4, Page 6 of 10 Attachment 4, Page 7 of 10 Attachment 4, Page 8 of 10 Attachment 4, Page 9 of 10 Attachment 4, Page 10 of 10 1651 Centennial Blvd. •Springfield, OR 97477 P.O. Box 931 • Springfield, OR 97477 Phone: 541.741.1981 Fax: 541.741.0619 260 Country Club Rd, Ste 120 •Eugene, OR 97401 P.O. Box 10211 •Eugene, OR 97440 Phone: 541.687.9794 Fax: 541.687.0924 TITLE INSURANCE SERVICES • ESCROW CLOSINGS June 11, 2013 Order No. 12-7261 SUPPLEMENTAL TITLE REPORT City of Springfield c/o Leahy, Van Vactor Cox & Melendy, LLP 188 West B Street Bldg N Springfield, OR 97477 Attn: Bill Van Vactor e-mail: bvv@emeraldlaw.com Dear Bill Van Vactor: Partial Billing Additional Chain TOTAL $100.00 $100.00 We are prepared to issue on request and on recording of the appropriate documents, a policy or policies as applied for, with coverage's as indicated, based on this preliminary report. LEGAL DESCRIPTION: SEE EXHIBIT "A" ATTACHED HERETO Showing fee simple title as of June 05, 2013, at 8:00 a.m., vested in: ALPESH PATEL AND KOMAL PATEL, as tenants by the entirety Subject only to the exceptions shown herein and to the terms, conditions and exceptions contained in the policy form. No liability is assumed until a full premium has been paid. Order No.: 12-7261 Page 1 of 4 Attachment 5, Page 1 of 8 SCHEDULE B GENERAL EXCEPTIONS 1. 2. 3. 4. 5. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records; proceedings by a public agency which may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the public records. Facts, rights, interests or claims which are not shown by the public records but which could be ascertained by an inspection of the land or by making inquiry of persons in possession thereof. Easements, or claims of easement, not shown by the public records; reservations or exceptions in patents or in Acts authorizing the issuance thereof; water rights, claims or title to water. Discrepancies, conflicts in boundary lines, shortage in area, encroachments or other facts which a correct survey would disclose. Any lien, or right to a lien, for services, labor, material, equipment rental or workers compensation heretofore or hereafter furnished, imposed by law and not shown by the public records. CURRENT EXCEPTIONS: 6. 7. 8. 9. 10. 11. INTENTIONALLY DELETED Any adverse claim based upon the assertion that the location of Slough has moved and that any portion of the subject property has been created by artificial means or has accreted to such portions so created, or based on the provisions of ORS 274.905 through 274.940. Easement, granted to Glenwood Water District, including the terms and provisions thereof, by instrument Recorded September 21, 1995, Reception No. 95-53025, Lane County Oregon Records. Urban Renewal Plan for Glenwood, including the terms and provisions thereof, as set forth by instrument Recorded December 14, 2004, Reception No. 2004-095229. INTENTIONALLY DELETED Lease as disclosed by Lane County Tax Rolls. NOTE: Taxes, Map No. 17-03-34-33-00700, Code 04-28, Account No. 1507381, 2012-2013, $101.43, paid in full. (Account Assessed to CBS Outdoor Inc.) Taxes, Map No. 17-03-34-33-00700, Code 04-28, Account No. 0299436, 2012-2013, $2,598.77, paid in full. NOTE: The address of the property to be insured herein is: 3005 -3007 Franklin Boulevard, Eugene, OR 97403. NOTE: A Judgment/Lien/Bankruptcy Search was done for the name(s) ALPESH PATEL AND KOMAL PATEL, and as of June 05, 2013, none were found. NOTE: As of June 5, 2013, there are no liens for the City of Eugene. INFORMATIONAL NOTE: EVERGREEN LAND TITLE COMPANY FINDS NO NOTICE OF RESCISSION RECORDED IN THE LAST 24 MONTHS. Order No.: 12-7261 Page 2 of 4 Attachment 5, Page 2 of 8 INFORMATIONAL NOTE: The current vesting deed and all changes back to the deed which vests ownership 24 months ago are as follows: WARRANTY DEED RECORDED JULY 5, 2007, FROM MERRILL LYNCH BANK & TRUST CO. FSB SUCCESSOR TRUSTEE OF THE ELAINE H. ARMES TRUST DATED NOVEMBER 27, 2001 AMENDMENT FEBRUARY 5, 2004, TO ALPESH PATEL AND KOMAL PATEL, AS TENANTS BY THE ENTIRETY, RECEPTION NO. 2007-046005. NOTE: SUPPLEMENTED TO UPDATE REPORT, SHOW TAXES PAID AND DELETE EXCEPTION #10 WHICH IS NOW SATISFIED. Very truly yours, EVERGREEN LAND TITLE COMPANY HOME OFFICE By: Joseph M. Silence Title Officer cc: NO LIABILITY IS ASSUMED HEREUNDER UNTIL POLICY IS ISSUED AND PREMIUM PAID. IF FOR ANY REASON THE REPORT IS CANCELLED, A MINIMUM CANCELLATION FEE OF $200.00 WILL BE CHARGED. Order No.: 12-7261 Page 3 of 4 Attachment 5, Page 3 of 8 EXHIBIT "A" LEGAL DESCRIPTION Order No.: 12-7261 Page 4 of 4 Attachment 5, Page 4 of 8 Attachment 5, Page 5 of 8 Attachment 5, Page 6 of 8 Attachment 5, Page 7 of 8 Attachment 5, Page 8 of 8 Attachment 6, Page 1 of 23 PURCHASE, SALE AND DEVELOPMENT AGREEMENT SELLER: City of Springfield, a municipal corporation of the State of Oregon 225 Fifth Street Springfield, OR 97477 PURCHASER: Alko Investments, LLC, Attn: Al Patel 1857 Franklin Blvd. Eugene, OR 97403 Owner of the real property more particularly described and set forth in Exhibit A (also known as Map Identification and Tax Lot No. 17-03-33-44-100) and Exhibit B (also known as Map Identification and Tax Lot No. 17-03- 33-44-200) and Exhibit D (also known as Map Identification and Tax lot No. 17-03-33-44- 500) attached hereto and incorporated herein by reference. Owner of the real property more particularly described and set forth in Exhibit C (also known as Map Identification and Tax Lot No. 17-03-33-44-700) attached hereto and incorporated herein by reference. THIS PURCHASE, SALE AND DEVELOPMENT AGREEMENT is entered into on May _________, 2013, by and between the City of Springfield, a municipal corporation of the State of Oregon, and Alpesh Patel and Komal Patel, Husband and Wife (“Purchaser”). RECITALS A. Seller owns certain real property more particularly described in Exhibits A (aka Map Identification and Tax Lot No. 17-03-33-44-100) , B (aka Map Identification and Tax Lot No. 17-03-33-44-200) and D (aka Map Identification and Tax Lot No. 17- 03-33-44-500) located in the Glenwood area of Springfield, Lane County, Oregon, as more particularly described and set forth in Exhibits A and B attached hereto and incorporated herein by reference. B. Purchaser owns certain real property more particularly described in Exhibit C (aka Map Identification and Tax Lot No. 17-03-33-44-700) located in the Glenwood area of Springfield, Lane County, Oregon, as more particularly described and set forth in Exhibit C attached hereto and incorporated herein by reference. C. Purchaser desires to acquire all the Property more particularly described and set forth in Exhibits A and B from Seller in order to assemble an abutting three parcels in a row, Exhibits A, B and C, Tax Lots 100, 200 and 700, and to facilitate construction of an approximately 80-room hotel on the real property more particularly described and set forth in Exhibit C; and, Seller is willing to sell and convey all the Property in Exhibits A and B to Purchaser, on and subject to the terms of this agreement (the “Agreement”). D. Seller has established the Glenwood area as an Urban Renewal District of the City of Springfield for the purpose of stimulating economic development and growth Attachment 6, Page 2 of 23 in Glenwood and in the Springfield area and as such desires to sell the real property more particularly described and set forth in Exhibits A and B upon the terms and conditions herein in order to stimulate that economic growth. E. There are substantive provisions in this Agreement which are placed there for the purpose of effecting positive economic development. In the absence of these conditions effecting positive economic development, Seller would not be interested in this sale. Purchaser understands the critical importance that Seller has placed upon these substantive conditions to effect positive economic development and in consideration for Seller entering into this Purchase, Sale and Development Agreement agrees to be bound by said conditions. AGREEMENT 1. Purchase and Sale of the Property. Seller agrees to sell the Property more particularly described and set forth in Exhibits A and B including all improvements thereon to Purchaser, and Purchaser agrees to purchase said Property from Seller, on the terms and conditions set forth in this Agreement; provided, however, Seller discloses and Purchaser accepts that the property is conveyed subject to an existing Ground Lease between the City of Springfield and Hamilton Construction Company dated October 14, 2009, which was amended May 6, 2011, which unless terminated earlier in conformance with its terms shall remain in full force and effect until September 30, 2013, with the option to extend in accordance with its terms for one additional extension term of one year ending September 30, 2014, , and Seller shall receive and retain all payments made by Hamilton Construction Company as Lessee under that Lease. Seller discloses that Seller will extend said Lease and Purchaser agrees to such extension. A copy of said Lease together with its amendment is attached hereto and incorporated herein by reference as Exhibit E. Purchaser understands that as part of said Lease Agreement, there exists a restroom and fence erected by Hamilton Construction Company on Tax Lot 200. Seller agrees to work with Hamilton regarding the relocation of the restroom and fence on the real property more particularly described and set forth in Exhibit B to a location at least 70 feet west of the real property more particularly described and set forth in Exhibit C. 2. Purchase Price. Except as may be modified by Section 4, the total purchase price for the Property is One Hundred Sixty Thousand Dollars ($160,000.00). 3. Payment of Purchase Price 3.1 The purchase price must be paid as follows: Except as may be specified in Section 4, Purchaser shall pay ten (10) annual installments of not less than $16,000.00 per year together with interest thereon on the unpaid balance commencing October 1, 2013, and continuing on July 1st each and every year thereafter. The entire balance, principal and interest, is to be paid not later than July 1, 2023. The unpaid balance shall bear interest at the rate published by the Wall Street Journal, or if not available, a comparable publication (COFI) annually adjusted on July 1st of each year. Attachment 6, Page 3 of 23 3.2 All payments shall be made to Finance Director, City of Springfield, 225 Fifth Street, Springfield, Oregon 97477. 4. Positive Economic Development 4.1 It is the express purpose of this sale to provide Purchaser the opportunity to assemble ownership of three abutting parcels, Exhibits A, B and C, Tax Lots 100, 200 and 700, to facilitate the construction of a hotel, parking, access areas and other needed infrastructure on Tax Lot 700 (Exhibit C) presently owned by Purchaser and to use as much of the real property more particularly described in Exhibits A and B (Tax Lots 100 and 200) as necessary to facilitate that construction. In addition, Purchaser is looking to further develop commercial improvements on the real property more particularly described and set forth in Exhibits A and B to complement the hotel to be built on the real property more particularly described and set forth in Exhibit C. 4.2 Purchaser shall build a multi-story hotel on Exhibit C, Tax Lot 700, with a construction cost of the building of not less than $7,000,000 with actual commencement of the construction (e.g. commencement of construction work under land alteration and development permit) not later than June 30, 2014, and the completion of construction (e.g. opening of hotel) not later than June 30, 2015. 4.2.1 In the event that Purchaser fails to commence construction by June 30, 2014, the property will revert to the Seller and Seller shall reimburse Purchaser any installment payments made by Purchaser on the price through the reversion date and Purchaser shall take all action necessary to clear title to the property and convey it to Seller. In lieu of reversion, at Purchaser’s option, Purchaser may pay to Seller an additional $67,000.00 (in addition to the $160,000.00 specified in Section 2) together with the balance owed on the installment contract in payments specified in Sections 2 and 3. Said payments shall be in accordance with a mutual agreed upon payment plan which may include deferred payments and upon such agreement, Purchaser shall receive full title to the property at that time subject to an agreed upon First Trust Deed encumbrance of the Seller to provide security for such payments. In the event that Purchaser and Seller mutually agree upon such a plan, Purchaser shall take the property free of any requirements for commencement or completion of construction. 4.2.2 In the event that Purchaser commences construction by June 30, 2014, but fails to complete construction by June 30, 2015, Purchaser shall pay an additional $90,000.00 (in addition to the $160,000.00 specified in Section 2) to Seller to reflect the original price that the Seller paid for the property together with the balance owed on the installment contract in payments specified in Sections 2 and 3. Said payments shall be in accordance with a mutually agreed upon payment plan which may include deferred payments and upon such agreement, Purchaser shall receive full title to the property at that time subject to an agreed upon First Trust Deed encumbrance of the Seller to provide security for such payments. In the event that Purchaser and Seller mutually agree upon such a plan, Purchaser shall take the property free of any requirements for commencement or completion of construction. 4.2.3 Purchaser and Seller acknowledge that the provisions of 4.2.1 and 4.2.2 are onerous for Purchaser and they are designed to be so to encourage the Attachment 6, Page 4 of 23 Purchaser to perform on the economic development for which Seller is seeking and for which Seller would not be selling the property to Purchaser but for that promised economic development made by Purchaser. 4.2.4 In the event that Purchaser misses a deadline as a direct result of a delay caused by Seller, Seller shall extend a deadline commensurate with the number of days involved in the delay. 5. Easements/Access/Consolidation 5.1 Seller shall provide private sewer easements at a location to be determined by Seller across Exhibit D (Tax Lot 500); provided, however, said provision will be subject to Seller reaching a mutual agreement with a third-party who has presently a right to purchase Exhibit D (Tax Lot 500). 5.2 Seller shall also provide ingress and egress access 24 feet in width to Exhibit A (Tax Lot 100), Exhibit B (Tax Lot 200), Exhibit C (Tax Lot 700) across Tax Lot 500; provided, however, said provision will be subject to Seller reaching a mutual agreement with a third-party who has presently a right to purchase Tax Lot 500. 5.3 Purchaser shall provide ingress and egress access of 24 feet in width across Exhibit C (Tax Lot 700) to provide access to Exhibit A (Tax Lot 100) and Exhibit B (Tax Lot 200). 5.4 Purchaser shall provide access to Owner of Tax Lot 500 and City of Springfield as may be applicable and execute appropriate easements to Owner and City of Springfield as may be applicable for the maintenance and servicing of wetlands, riparian areas, buffer zones and setbacks as depicted on Exhibit E attached hereto and incorporated herein by reference. 5.5 Purchaser shall consolidate Exhibit A (Tax Lot 100) and Exhibit B (Tax Lot 200) into one tax lot not later than installation of the private sewer lines. Purchaser may at Purchaser’s discretion consolidate Exhibit A (Tax Lot 100), Exhibit B (Tax Lot 200), and Exhibit C (Tax Lot 700) into one tax lot not later than installation of the private sewer lines. The purpose of these consolidations is to reduce the number of sewer lines and to enable Seller to utilize the concept of a private sanitary sewer to serve Tax Lots 100 and 200 together, and Tax Lot 700 separately, in which case two private lines would be necessary or to serve Tax Lots 100, 200, and 700 together, in which case one private line would be necessary. 5.6 Purchaser shall construct a connection to the public sewer system at the manhole that is south of the southeast corner of Tax Lot 500 with at least an 8-inch sanitary sewer line and provide a wye- or a tee- connection at a location the City Engineer specifies along the line through Exhibit D (Tax Lot 500). Seller will reimburse Purchaser the actual documented cost of the sewer line construction from the manhole to the mutual boundary of Tax Lot 500 and Tax Lot 700 with costs not to exceed $10,000.00. 5.7 Seller shall work with ODOT and use its best efforts to extinguish the 25- foot easement ODOT has on the north side of Tax Lot 700. In the event ODOT fails to extinguish the 25-foot easement by commencement of construction by June 30, 2014, the property will revert to Seller and Seller shall reimburse Purchaser any installments Attachment 6, Page 5 of 23 made by Purchaser on the price through the reversion date and Purchaser shall take all action necessary to clear title to the property and convey it to the Seller. 5.8 Seller will work with Purchaser and ODOT to redefine access to the real property more particularly described and set forth in Exhibits A, B and C at Judkins Drive and Franklin Blvd. Seller and Purchaser have both met with representatives of ODOT and Purchaser possesses all information that Seller possesses with respect to ODOT and the access issue. Based on that information, Purchaser understands that it may be necessary to prohibit direct access from Tax Lot 700 to the Franklin Blvd. right- of-way except as part of an existing, amended or new right of indenture approved by ODOT which provides common mutual access for Tax Lots 100, 200 and 700 (including any necessary reciprocal crossing easements as required by ODOT). Seller shall work with Purchaser to obtain such access for Tax Lot 700. In the event that: 1) the ODOT access process is completed prior to purchase, or 2) in the event that Purchaser fails to perform pursuant to Section 4 and Tax Lot 700 remains in Purchaser ownership, Purchaser consents to the modified shared access for Tax Lot 700 across Tax Lots 100 and 200. Seller also acknowledges that the shared access from Franklin Blvd. across Tax Lots 100, 200 and 700 is acceptable. Notwithstanding the previous two sentences, Seller shall, if requested by Purchaser, work with Purchaser to re-establish direct abutting access to Franklin Blvd. right-of-way from Tax Lot 700. 5.9 Seller shall provide location for an informational sign for Purchaser’s business at a location to be determined on Exhibit D (Tax Lot 500); provided, however, said provision shall be subject to Seller reaching a mutual agreement with any third- party Purchaser of Exhibit D (Tax Lot 500) from Seller. 5.10 The House. 5.10.1 The sale includes the house presently located on Tax Lot 700; however, Seller may relocate said house at no expense to Purchaser. Purchaser shall not receive any payment or compensation for removal and relocation of the house by Seller. Said relocation shall be accomplished by a licensed structure mover selected by Seller. Relocation shall be to a site selected by Seller. 5.10.2 The house shall be removed not later than July 31, 2013, or when it becomes necessary to utilize the immediate and underlying area of the house in any land alteration including fill, whichever shall first occur. Purchaser agrees to reasonably work with Seller to defer such land alteration and/or fill for the immediate and underlying area of the house as long as reasonably possible if such deferment does not interfere with Purchaser’s development schedule. The determination of “interference” with Purchaser’s development schedule is solely a determination by Purchaser. 5.10.3 In the event that Seller is unable to relocate the house within the time constraints imposed by this Section 5.10, Seller’s opportunity to relocate the house shall expire and Purchaser shall be solely responsible for all costs associated with the house including any removal and/or demolition thereof. Attachment 6, Page 6 of 23 6. Necessary Documents. Purchaser and Seller each agree to execute all documents, applications, permits, deeds, records which may be necessary to give effect to this Section 4, Positive Economic Development. 7. Inspection Contingency 7.1 Environmental Assessments. Purchaser is responsible for obtaining its own environmental inspections of the Land and Improvements. Purchaser agrees to provide Seller with a true and complete copy of all environmental studies, tests, and reports that Purchaser obtains in connection with its inspection of the Land or Improvements and, if authorized by Seller as provided in Section 5.1, with independent splits of each soil or groundwater sample or other substance or material that may be obtained by Purchaser or its consultant in form and quantity sufficient for independent analysis. Purchaser will pay for all costs of its environmental inspections regardless of whether this sale closes. If any person is required to make any report to any governmental agency as the result of any environmental inspection, the report will be submitted solely by Seller. 7.2 Confidentiality Requirements. Purchaser will use and disclose information it obtains about the Property solely in connection with its purchase evaluation. Unless and until it acquires the Property, Purchaser will not disclose any such information to any third party except (a) as and to the extent required by its purchase-money lender; (b) to its members, shareholders, partners, permitted assignees, successors, property consultants, and lawyers; (c) to any court of competent jurisdiction in connection with any mediation, arbitration, or litigation in connection with this Agreement; and (d) as to any information that is otherwise a matter of public record. 8. Title to the Property 8.1 Title Report. Within fourteen (14) days after the Effective Date, Seller will order a preliminary title report from the Escrow Agent with respect to the Land (the “Title Report”). The Title Report will be accompanied by the most legible copies available of all special exceptions listed therein. Purchaser will have until ten (10) days after its receipt of the Title Report and copies in which to notify Seller in writing of Purchaser’s disapproval of any exceptions shown in the Title Report. Any special assessments shown on the Title Report that are objected to by Purchaser will be included in Purchaser’s notice. In the event of any disapproval, Seller will notify Purchaser in writing within ten (10) days after Purchaser’s notification as to whether Seller agrees to remove any of the exceptions so disapproved, and upon delivering the notice, Seller will have until the Closing Date described in Section 12.1 to cause the exceptions that Seller has agreed to remove to be removed of record and from the Title Report. Purchaser will be deemed to have accepted all title exceptions to which it has not timely objected. 8.2 Rescission of Agreement—Title Defects. If Seller elects not to eliminate any title exception disapproved by Purchaser, Purchaser may elect to cancel this Agreement by written notice to Seller given on or before ten (10) days after Seller’s notification of the election. In this event, the Deposit will be refunded to Purchaser and Attachment 6, Page 7 of 23 this Agreement will terminate. If Purchaser does not elect to cancel this Agreement, Purchaser’s objections to the disapproved exceptions that Seller elected not to eliminate are deemed waived and the Property will be conveyed to the Purchaser with such defects without credit against the purchase price. The foregoing notwithstanding, Seller agrees that it will cause all trust deed liens against the Property that are not accepted by Purchaser to be released of record by the Closing Date. If Purchaser fails to give timely notice to Seller of termination under this paragraph, then Purchaser’s right of termination will be deemed waived. 9. Seller’s Representations 9.1 Content of Representations. Seller represents, warrants, and covenants to Purchaser as follows: (a) No Notice of Violation of Zoning and Other Laws. Seller has not received any written notice from any governmental authority alleging that the Improvements violate any building codes, building or use restrictions, or zoning ordinances, rules, or regulations. (b) No Litigation. To Seller’s knowledge, there is no pending or threatened litigation or administrative action with respect to the Property, except for any actions for possession, damages, or rent against tenants who are in default under their Leases as described in the Rent Roll. (c) No Additional Assessments. To Seller’s knowledge, there are no extraordinary governmental assessments or impositions levied against, applicable to, or proposed for the Property as distinct from ordinary ad valorem property taxes, which will be disclosed in the Title Report. (d) No Seller Contamination. To Seller’s knowledge, Seller has not caused any hazardous substance, waste, or material to be used, generated, stored, or disposed of on or transported to or from the Land or Improvements in violation of any applicable law before or during the period in which the Seller has owned the Property. For the purposes of this paragraph, “hazardous substance, waste, or material” means all petroleum-based products, radon, asbestos, PCBs, and all substances, wastes, and materials that are so defined in the Comprehensive Environmental Response, Compensation, and Liability Act, 42 USC §§9601–9675; the Resource Conservation and Recovery Act, 42 USC §§6901–6992k; and the Hazardous Materials Transportation Act, 49 USC §§5101–5128. (e) Authority of Seller. Seller’s execution of, delivery of, and performance under this Agreement are undertaken according to authority validly and duly conferred on Seller and the signatories hereto. (f) No Breach of Agreements. This Agreement and the consummation of the transaction evidenced by this Agreement do not violate any other agreement to which Seller is a party. (g) Nonforeign Status. Seller is not a “foreign person” as defined in IRC §1445(f)(3), and Seller is not a “transferor” as defined in ORS 314.258(2)(b). 9.2 Effect of Purchaser’s Knowledge. Purchaser agrees that in the absence of an intent on the part of Seller to fraudulently conceal information about the Property or Attachment 6, Page 8 of 23 fraudulently mislead Purchaser, Purchaser will not have the right to rely on any warranty or representation of Seller, and Seller will not be liable for any breach of any such warranty or misrepresentation, if and to the extent Purchaser is given access to data or information relating to the Property before the Closing Date that reveals, or Purchaser’s tests or inspections before the Closing Date reveal, or Purchaser otherwise knows or has reason to know before the Closing Date of any information that reveals the warranty or representation to be incorrect, and in any of such events Purchaser nevertheless elects to close this purchase. 9.3 Survival of Warranties. All Seller’s warranties in this Agreement are deemed given only as of the date of this Agreement. Seller’s liability for any misrepresentation or the breach of any warranty under this Agreement will survive the closing of this transaction, but any claim for any misrepresentation or breach of any covenant will be deemed to have been waived unless Purchaser files and serves a complaint for damages or other remedies based on the alleged misrepresentation or breach within 24 months after the Closing Date or, if this transaction fails to close, within 24 months after the date this Agreement is canceled or terminates. 10. Purchaser’s Representations Purchaser represents, warrants, and covenants to Seller as follows: 10.1 Purchaser’s Right to Assign. Purchaser may assign its rights under this agreement to an entity owned and controlled by Purchaser, either before or after closing without additional consent from Seller. 10.2 No Third-Party Consents. The execution of this Agreement by Purchaser and Purchaser’s performance of all its obligations hereunder are not subject to any approval or consent of any person, board, committee, or third party. 10.3 No Litigation. Purchaser is not a party to any litigation or civil or criminal proceedings; no petitions in bankruptcy have been filed by or against Purchaser; and none of Purchaser’s assets are currently subject to any insolvency, receivership, or foreclosure proceedings. 10.4 No Breach of Agreements. This Agreement does not breach or violate any term or provision of any other agreement or contract to which Purchaser is a party. 11. Conditions to Closing 11.1 Purchaser’s Conditions. Purchaser acknowledges that Seller does not guarantee the satisfaction of the conditions precedent listed in this Section 11.1 and that Seller’s failure to satisfy the conditions (for any reason other than Seller’s bad faith) will not be deemed to be a default hereunder but will merely be a failure of a condition to closing, in which event Purchaser’s sole remedy will be to (1) waive the condition(s) and any claim against Seller with respect thereto, including, without limitation, as provided in Section 9.3, or (2) terminate this Agreement and receive a refund of the earnest money deposit. Furthermore, at Seller’s election, Seller will be permitted to extend the Closing Date for any period of time up to thirty (30) days to Attachment 6, Page 9 of 23 satisfy any of the conditions set forth in this Section 11.1. Purchaser’s obligation to close this transaction is subject to the satisfaction of each of the following conditions: (a) Seller’s Compliance. Seller’s fulfillment of each of its obligations under this Agreement in all material respects. (b) Seller’s Representations. The continuing accuracy of all Seller’s warranties and representations in this Agreement in all material respects. (c) Title Insurance. The Title Company must be ready, willing, and able to issue an extended coverage American Land Title Association owner’s policy of title insurance in the amount of the Purchase Price, insuring title in Purchaser to the Premises consistent with the terms of this Agreement and subject only to the title exceptions approved or deemed approved by Purchaser. 11.2 Seller’s Conditions. Seller’s obligation to close this transaction is subject to the satisfaction of each of the following conditions: (a) Purchaser’s Compliance. Purchaser’s fulfillment of each of its obligations under this Agreement. (b) Purchaser’s Representations. The continuing accuracy of all Purchaser’s warranties and representations in this Agreement. 12. Closing 12.1 Closing Date. This transaction will be closed within ten (10) days following the end of the Review Period (the date that this transaction closes, as evidenced by the recordation of Seller’s deed to Purchaser, being herein referred to as the “Closing Date”). Each party may extend the Closing Date one (1) time by up to fourteen (14) days if the extension is required by illness, transportation delays, the unavailability of the Escrow Agent, or other causes beyond the party’s reasonable control. 12.2 Manner and Place of Closing. This transaction will be closed by the Escrow Agent at Evergreen Land Title Company, Springfield, Oregon, or at such other place as the parties may mutually agree to in writing. Closing will take place in the manner and in accordance with the provisions set forth in this Agreement. 12.3 Prorations, Adjustments. (a) All ad valorem real property taxes, assessments, personal property taxes, utility expenses, and obligations under all repair and maintenance contracts that are not terminated or required to be terminated by this Agreement by the Closing Date (collectively, the “Expenses”), and all rentals from tenants and other use fees receivable under any lease or other agreement concerning the Property (collectively, the “Income”), will be prorated and adjusted between the parties as of the Closing Date. At closing, Purchaser will be given a credit against the purchase price equal to the sum of all accrued but unpaid Expenses, all refundable tenant security deposits held by Seller, and all prepaid but not yet accrued Income, and Purchaser will pay to Seller all prepaid but not yet accrued Expenses and all accrued but not paid Income, except past-due rentals. Any taxes or additional penalties that would be due as a result of removal of the Property from any tax deferral or special use assessment program will be assumed by Purchaser. Attachment 6, Page 10 of 23 (b) Seller and Purchaser will each pay one-half of all conveyance, excise, or transfer taxes and fees in connection with this sale, and Purchaser will pay the recording fees for Seller’s deed. (c) Seller will pay the premium for a standard owner’s title insurance policy in favor of Purchaser in the amount of the purchase price. Any additional title insurance coverage or endorsements requested by Purchaser or its lender will be paid by Purchaser. (d) Seller and Purchaser will each pay one-half of the escrow and closing fees charged by the Escrow Agent. (e) Purchaser will pay all costs and expenses related to Purchaser’s financing. (f) Each party will pay its own attorney fees. 12.4 Events of Closing. If the Escrow Agent has received the sums and is in a position to cause the title insurance policy to be issued as described below, this transaction will be closed on the Closing Date as follows: (a) Seller will convey the real property to Purchaser by special warranty deed, subject to the matters accepted or deemed accepted by Purchaser under this Agreement, in the form attached hereto as Exhibit F. (b) Seller will convey all its interests in the Personal Property to Purchaser by good and sufficient bill of sale in the form attached hereto as Exhibit G. (f) Seller will provide Purchaser with (i) the Certificate of Nonforeign Status as provided in IRC §1445(b)(2) and (ii) a certificate or other documentary evidence complying with ORS 314.258 that is reasonably acceptable to Purchaser and the Escrow Agent and sufficient to assure Purchaser and the Escrow Agent that no withholding is required under ORS 314.258. (g) Seller will deliver the original copies of all current Leases and contracts relating to the Property that are in Seller’s possession or control. (h) Immediately upon closing, Seller and Purchaser will jointly execute and deliver a notice to each tenant of the Property advising the tenant of the sale of the Property and advising the tenant to continue to pay all future rent to Seller. (i) The Escrow Agent will calculate the prorations agreed to herein, and the parties will be charged and credited accordingly. (j) Any liens to be paid by Seller at closing will be paid and satisfied of record at Seller’s expense. (k) Purchaser will pay the entire purchase price to Seller in cash, minus the Deposit and the principal amount of the Assumed Loan assumed by Purchaser, as adjusted for the charges and credits set forth in this Agreement. (l) Purchaser will execute and deliver all documents required by Lender in connection with Purchaser’s assumption of the Assumed Loan. (m) The Escrow Agent will be committed to issuing the policy described in Section 12.5 upon recordation of the closing documents. (n) Upon compliance with the parties’ closing instructions, the Escrow Agent will record the deed to Purchaser at Purchaser’s expense. 12.5 Title Insurance. As soon as possible after the Closing Date, the Escrow Agent will furnish Purchaser a standard American Land Title Association form of owner’s Attachment 6, Page 11 of 23 policy of title insurance in the amount of the purchase price for the Property, subject only to the Escrow Agent’s standard preprinted exceptions and exclusions for the form and except for the matters accepted or deemed accepted by Purchaser under this Agreement. The costs of additional or extended title insurance beyond standard coverage will be paid by Purchaser, and the availability of any such coverage will not be a condition of closing. 12.6 Possession. Subject to the rights of tenants, Seller will deliver possession of the Property to Purchaser on the Closing Date. Seller will continue to be entitled to receive all rents coming due directly from the tenancy of Hamilton Construction, Inc. during the term of the Lease or any renewal or extension thereof according to its terms after the Closing Date. 12.7 Acceptance of Property. Purchaser acknowledges that Purchaser has assessed, or has had the opportunity to assess, the size, configuration, utility service, environmentally sensitive areas, means of access, permitted uses, status of title, value, condition, and all other material aspects of the Property, and, except as specifically stated herein, Purchaser is not relying on, nor has Purchaser been influenced by, any statement or representation of Seller or any agent or representative of Seller regarding any of such items. Except for any actionable breaches of Seller’s representations and warranties contained herein, Purchaser’s acceptance of the Property and the satisfaction or waiver of all Purchaser’s conditions to closing will be evidenced solely by the closing of this transaction and without any other act or confirmation by Purchaser. Purchaser does not have the option to close this transaction without accepting the Property in its then current condition, and Purchaser acknowledges that except for any Seller’s breach of an express warranty stated in this Agreement, Purchaser is acquiring the Property “AS IS, WHERE IS” in its current condition existing as of the Closing Date, without any representation or warranty of any kind or nature by Seller. 12.8 Waiver of Certain Claims. As part of the consideration for this Agreement, Purchaser agrees that except for any breach by Seller of an express warranty stated in this Agreement, Seller has no liability, and Purchaser hereby waives any claims and releases Seller for all liability, for any title, physical condition, or any other aspect of the Property, whether direct or indirect, absolute or contingent, foreseen or unforeseen, and known or unknown. The waiver and release extend to Seller and Seller’s affiliates, successors, members, partners, shareholders, directors, officers, employees, and agents, and their respective heirs, successors, and assigns. Without limiting the generality of the foregoing, Purchaser waives all rights to contribution, offsets, and damages that in any manner relate to the compliance of the Property with any law or regulation applicable thereto, including, without limitation, the Americans with Disabilities Act, 42 USC §§12101–12213; the Fair Housing Act, 42 USC §§3601– 3631; the Comprehensive Environmental Response, Compensation, and Liability Act, 42 USC §§9601–9675; the Resource Conservation and Recovery Act, 42 USC §§6901– 6992k; the Clean Water Act, 33 USC §§1251–1387; the Safe Drinking Water Act, 42 USC §§300f–300j-26; the Hazardous Materials Transportation Act, 49 USC §§5101– 5128; the Toxic Substances Control Act, 15 USC §§2601–2692; and any and all other federal, state, and local personal disabilities and environmental laws or regulations. Attachment 6, Page 12 of 23 12.9 Indemnification. Purchaser will defend, indemnify, and hold harmless Seller from and against all actions, claims, losses, liabilities, damages, costs, and expenses (including without limitation reasonable attorney fees) that are caused by Purchaser’s failure to perform any landlord’s or owner’s obligation under any lease of, or contract relating to, the Property on and after the Closing Date or for which Purchaser is responsible in accordance with the terms of this Agreement. Seller will defend, indemnify, and hold harmless Purchaser from and against all third-party claims for premises liability regarding any injury or damage to the third party or its property that occurred on or about the Property before the Closing Date. 13. Defaults and Failure to Close 13.1 Seller’s Remedies. In the event that this transaction fails to close on account of a default by Purchaser under this Agreement, the Deposit, if any, will be forfeited by Purchaser and retained by Seller as liquidated damages as Seller’s sole remedy for the default. SUCH AMOUNT HAS BEEN AGREED BY THE PARTIES TO BE REASONABLE COMPENSATION AND THE EXCLUSIVE REMEDY FOR PURCHASER’S DEFAULT, SINCE THE PRECISE AMOUNT OF SUCH COMPENSATION WOULD BE DIFFICULT TO DETERMINE. 13.2 Purchaser’s Remedies. If this transaction fails to close on account of a default by Seller under this Agreement, Purchaser’s sole and exclusive remedy will be either (but not both) (a) the return of the Deposit (with Purchaser thereby waiving any other remedy that Purchaser may have against Seller at law or in equity, including without limitation the right to specific performance), and for recovery of Purchaser’s attorney fees and costs incurred in this transaction not to exceed $__________, or (b) an action for specific performance of this Agreement for the conveyance of the Property to Purchaser with Purchaser thereby waiving any other remedy that Purchaser may have against Seller at law or in equity. 13.3 Defaults. Except for (a) Purchaser’s failure to pay any portion of the Deposit as and when due hereunder or (b) either party’s wrongful failure to close or satisfy a condition to closing by the required Closing Date, neither party will be deemed in default under this Agreement unless the party is given written notice of its failure to comply with this Agreement and the failure continues for a period of _________ (____) days after the date the notice is given. This section will not be construed as extending the time by which any notice or contingency waiver must be given. 13.4 Late Payments. Any debt due to either party by the other under this Agreement that is not paid when due will bear interest from its due date to and including the date of payment at the rate of nine percent (9%) per annum. Debts stated to be payable on demand herein will be considered delinquent as of the fifth (5th) day after a demand is made in writing. The nondefaulting party will also be entitled to reimbursement by the defaulting party of all costs, expenses, collection agency charges, and attorney fees incurred, with or without litigation, in collecting any debt not paid within fifteen (15) days after its due date and written notice of the delinquency. Attachment 6, Page 13 of 23 13.5 Costs and Attorney Fees. If suit, action, arbitration, or mediation is instituted to interpret or enforce the terms of this Agreement or with respect to any dispute under this Agreement, the prevailing party is entitled to recover from the other party the sum that the court, arbitrator, or mediator may adjudge reasonable as costs and expert witness and attorney fees in any such proceeding, at trial, on any appeal or petition for review, and in any bankruptcy proceeding (including the adjudication of any issues peculiar to bankruptcy law), in addition to all other sums provided by law. 13.6 Waiver of Jury Trial. AS PART OF THE CONSIDERATION FOR THIS AGREEMENT, EACH OF THE PARTIES HERETO WAIVES THE RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE OR ACTION UNDER THIS AGREEMENT. 14. Legal Relationships 14.1 Relationship of Parties. This Agreement creates only the relationship of seller and buyer, and no joint venture, partnership, or other joint undertaking is intended hereby. Neither party hereto will have any rights to make any representations or incur any obligations on behalf of the other. Neither party has authorized any agent to make any representations, admit any liability, or undertake any obligation on its behalf. Neither party is executing this Agreement on behalf of an undisclosed principal. 14.2 No Third-Party Beneficiaries. No third party is intended to be benefited or afforded any legal rights under or by virtue of this Agreement. 14.3 Joint and Several Liability. If either party comprises more than one person or entity, the obligations of each person or entity comprising such party under this Agreement will be joint and several. 14.4 Real Estate Brokers. Neither party has employed a real estate broker. Neither Seller nor Purchaser is responsible for the payment of any real estate broker’s commission. 14.5 Indemnified Parties. Any indemnification contained in this Agreement for the benefit of a party will extend to the party’s members, directors, shareholders, officers, employees, and agents. 14.6 Assignments and Successors. Purchaser may not assign or otherwise transfer this Agreement or any interest herein, voluntarily, involuntarily, or by operation of law, without the prior written consent of Seller in each instance. Consent is hereby provided to Purchaser for an assignment of this Agreement or any interest therein to a corporation or LLC in which Purchaser owns no less than 51% of the interest in said corporation or LLC. Purchaser will not be released from its obligations under this Agreement in the event of any assignment or transfer by Purchaser. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties hereto and their respective successors and assigns. 15. General Provisions 15.1 Notices. Notices under this Agreement must be in writing and, if personally delivered or sent by facsimile, will be effective when received. If mailed, a notice will be deemed effective on the second day after deposited as registered or Attachment 6, Page 14 of 23 certified mail, postage prepaid, directed to the other party. Notices must be delivered, mailed, or sent by facsimile to the following addresses and telephone numbers: Seller: City of Springfield Attn: John Tamulonis 225 Fifth Street Springfield, OR 97477 With a copy to: Joseph J. Leahy Springfield City Attorney 188 West B Street, Bldg N Springfield, OR 97477 Purchaser: Alpesh and Komal Patel 1857 Franklin Blvd. Eugene, OR 97403 With a copy to: Dean Kaufman Cox & Associates, LLC 142 West 8th Avenue Eugene, OR 97401 Either party may change its address for notices by at least fifteen (15) days’ advance written notice to the other. 15.2 Time of Essence. Except as otherwise specifically provided in this Agreement, time is of the essence for each and every provision of this Agreement. 15.3 Invalidity of Provisions. If any provision of this Agreement, or any instrument to be delivered by Purchaser at closing under this Agreement, is declared invalid or is unenforceable for any reason, the provision will be deleted from the document and will not invalidate any other provision contained in the document. 15.4 Neutral Construction. This Agreement has been negotiated with each party having the opportunity to consult with legal counsel and will be construed without regard to which party drafted all or part of this Agreement. 15.5 Captions. The captions of the sections and paragraphs in this Agreement are used solely for convenience and are not intended to limit or otherwise modify the provisions of this Agreement. 15.6 Waiver. The failure of either party at any time to require performance of any provision of this Agreement will not limit the party’s right to enforce the provision. Waiver of any breach of any provision will not be a waiver of any succeeding breach of the provision or a waiver of the provision itself or any other provision. 15.7 Subsequent Modifications. This Agreement and any of its terms may be changed, waived, discharged, or terminated only by a written instrument signed by the party against whom enforcement of the change, waiver, discharge, or termination is sought. Attachment 6, Page 15 of 23 15.8 Saturdays, Sundays, and Legal Holidays. If the time for performance of any of the terms, conditions, and provisions hereof falls on a Saturday, Sunday, or legal holiday, then the time of the performance will be extended to the next business day thereafter. 15.9 Venue. In any action brought to interpret or enforce any of the provisions of this Agreement, the venue will be in Lane County, Oregon. 15.10 Applicable Law. This Agreement will be construed, applied, and enforced in accordance with the laws of the state of Oregon. All sums referred to in this Agreement will be calculated by and payable in the lawful currency of the United States. 15.11 Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the Property and supersedes and replaces all written and oral agreements previously made or existing between the parties. 15.12 No Offer. By providing an unexecuted copy of this Agreement to any person, neither party is deemed to have made an offer to sell or purchase or otherwise indicated its willingness to enter into any transaction with respect to the Property, and this Agreement will not be binding on any party unless and until it has been fully executed and delivered by Seller and Purchaser. 15.13 Counterparts. This Agreement may be executed simultaneously or in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same contract. 15.14 Facsimile Copies. Either party may rely on facsimile copies of this Agreement to the same extent as the originals. 15.15 Statutory Warning (ORS 93.040(2)). THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE LAWS AND REGULATIONS THAT, IN FARM OR FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE AND THAT LIMIT LAWSUITS AGAINST FARMING OR FOREST PRACTICES, AS DEFINED IN ORS 30.930, IN ALL ZONES. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSON’S RIGHTS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS 92.010 OR 215.010, TO VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO VERIFY THE EXISTENCE OF FIRE PROTECTION FOR STRUCTURES AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010. 15.16 Force Majeure. Neither party to this Agreement shall be held responsible for delay or default caused by fire, riot, acts of God and/or war which is beyond that party’s reasonable control. Purchaser may terminate this Agreement upon written Attachment 6, Page 16 of 23 notice after determining such delay or default will unreasonably prevent successful performance of the Agreement. 16. Survival of the Provisions of this Agreement Due to the critical importance and reliance that Seller and Purchaser have placed upon Sections 1, 2, 3 and 4 of this Agreement with respect to economic development, the parties agree that the provisions of Sections 1, 2, 3 and 4 shall survive and may be enforced for 4 years after execution of this Agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written. SELLER: CITY OF SPRINGFIELD PURCHASER: ALKO INVESTMENTS, LLC ______________________________ ______________________________ Gino Grimaldi, City Manager Alpesh Patel Date Executed: _________________ Date Executed: _________________ ______________________________ Komal Patel Date Executed: _________________ EXHIBIT A Description of Property owned by Seller EXHIBIT B Description of Property owned by Seller EXHIBIT C Description of Property owned by Purchaser EXHIBIT D Description of Property owned by Seller EXHIBIT E Hamilton Construction Company Lease EXHIBIT F Warranty Deed EXHIBIT G Bill of Sale Attachment 7 NOTICE OF PROPOSED SALE OF REAL PROPERTY BY CITY OF SPRINGFIELD PURSUANT TO OREGON REVISED STATUTE 221.725 NOTICE is hereby given of a proposed sale of two parcels of real property owned by the City of Springfield to Alko Investments, LLC. The properties proposed to be sold are: Map Identification 17-03-33-44, Tax Lots 100 and 200. The Council considers it necessary to sell the properties to stimulate community and economic development and revitalization in the Glenwood area of Springfield. Alko, the property owner of Map Identification 17-03-33-44, Tax Lot 700, an abutting parcel, plans to build a hotel and would use these two parcels for hotel parking, access, and future development. Construction of the hotel will stimulate economic development in the Glenwood area of Springfield. A public hearing on the proposed sale will be held at 7:00 p.m. on June 17, 2013, at the City Council Chambers of the City of Springfield, 225 Fifth Street, Springfield, Oregon. The proposed contract of sale includes the purchase price of $160,000.00, other terms to encourage construction, and terms (in the event of failure to construct the hotel) to increase the sales price or terminate the sale. For a complete copy of the proposed sale agreement, Council information packet, and responses to any questions, contact John Tamulonis, Community Development Manager, at 541-726-3656 or jtamulonis@springfield-or.gov. Materials may be viewed at the Office of the City Manager, City of Springfield, 225 Fifth Street, Springfield, Oregon. Attachment 8 CITY OF SPRINGFIELD RESOLUTION NO. _______ A RESOLUTION OF THE COUNCIL OF THE CITY OF SPRINGFIELD REGARDING SALE OF REAL PROPERTY IN GLENWOOD. WHEREAS, the Common Council of the City of Springfield has reviewed the proposed “Purchase, Sale and Development Agreement” between the City of Springfield and Alko Investments, LLC (“Alko”) regarding the purchase by Alko of City owned property in the Glenwood area of Springfield, Map Identification 17-03-33-44, Tax Lots 100 and 200; and WHEREAS, the sale of such lots would facilitate Alko’s construction of a multistory hotel and other commercial development on Tax Lot 17-03-33-44-700 as well as commercial development on Tax Lots 100 and 200; and WHEREAS, such construction and development would stimulate economic development and growth in the Glenwood area of Springfield and specifically within the Glenwood Urban Renewal District; and WHEREAS, the City has published notice of the proposed sale and held a public hearing regarding the proposed sale in conformance with the requirements of ORS 221.725; and WHEREAS, the Council has carefully considered the proposed sale of Tax Lots 100 and 200 and considers such sale necessary to stimulate the economic growth and development of the City. NOW THEREFORE, BE IT RESOLVED THAT: 1. The Purchase, Sale and Development Agreement between the City of Springfield and Alko Investments, LLC is hereby approved. 2. The City Manager or his designee are authorized to take all action necessary to execute the Purchase, Sale and Development Agreement described above and complete the sale. 3. This Resolution shall take effect upon its adoption by the Council and approval by the Mayor. ADOPTED by the Common Council of the City of Springfield this _____ day of June, 2013, with a vote of _____ for and _____ against. ______________________________ Christine L. Lundberg Mayor ATTEST: _______________________ Amy Sowa City Recorder