HomeMy WebLinkAboutResolution 05-42 06/20/2005
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RESOLUTION ~ - ~
AUTHORIZING AND DIRECTING THE CITY MANAGER TO SIGN A PURCHASE
AND SALE AGREEMENT WITH MCKENZIE FOREST PRODUCTS, LLC, TO
ACQUIRE CERTAIN REAL PROPERTY,.DESCRIBED THEREIN, AND TO EXECUTE
ALL CLOSING DOCUMENTS REQUIRED TO COMPLETE SUCH TRANSACTION
WHEREAS, since the City acquired an interest in the Springfield Mill Race by gift from
Georgia Pacific Corporation, the City has endeavored to undertake reasonable actions to
preserve adequate flow in the Mill Race; and
WHEREAS, engineering studies have documented that changing conditions in the Middle Fork
ofthe Willamette River make it improbable that the Citycan achieve that objective with the inlet
at its present location; and
WHEREAS, the City is obliged to maintain and improve the water quality of the Mill Race by
the terms of the clean Water Act; and
WHEREAS, the Mill Race is a cultural and social amenity which is an important part of the
history of the City of Springfield, and an important component of the public vision for the future
of the downtown section of the City of Springfield; and
WHEREAS, the rehabilitation of the Springfield Mill Race will facilitate the accomplishment of
all of these objectives, and has been established as a high priority by the City Council; and
WHEREAS, the U.S. Army Corps of Engineers has completed a preliminary restoration plan
and environmental restoration report, each of which conclude that a rehabilitation of the Mill
Race is consistent with the requirements of Section 206 of the Water Resources Development
Act; and
WHEREAS, the United States Department of the Army ("Department") has entered into a
Project Cooperation Agreement ("PCA") between the Department and the City of Springfield,
for the rehabilitation of the Springfield Mill Race; and
WHEREAS, the PCA contemplates that the value of the land and property rights contributed by
the City will approximate $1,910,710, leaving a maximum local cash obligation of not more than
$380,460; and
WHEREAS, a portion of the land and property rights anticipated to be contributed by the City,
consisting ofthe eastern one-third ofthe Mill Pond, and certain portions of the Mill Race and the
abutting bank east of the Mill Pond are presently owned by McKenzie Forest Products, LLC
("McKenzie"); and
WHEREAS, McKenzie advised the City that it would sell certain property, including the
property required for the Mill Race project, as part of a larger transaction involving certain
parcels owned by McKenzie; and
Page 1 of 2
WHEREAS, on September 8, 2003, council directed staff to negotiate an agreement with
McKenzie under which the City could acquire the property offered for sale by McKenzie on the .
basis of certain terms as proposed by City staff; and
WHEREAS, McKenzie and the City have reached agreement on the terms of a Purchase and
Sales Agreement in the form of a draft dated June 3, 2005 (the "Draft Agreement"), a true copy
whereof, marked Exhibit 1, is annexed hereto and by this reference incorporated herein, under
which McKenzie will convey to the City, inter alia, that property which it owns which is
required for the Mill Race project in consideration of a cash payment in the amount of
$1,277,000 and other terms as more particularly set forth in the Agreement; and
WHEREAS, the City Manager has submitted a report reviewing the terms of the Draft
Agreement and recommending that the Draft Agreement be approved; and
WHEREAS, the Council has reviewed the terms of the Draft Agreement and is fully informed
as to the contents thereof, and has determined that it is in the public interest to enter into the
Draft Agreement;
NOW THEREFORE, BE IT RESOLVED, that the common Council of the City of Springfield
fmds and determines that it is in the public interest to enter into a Purchase and Sale Agreement
with McKenzie Forest Products, LLC substantially in the form of the Draft Agreement; and
BE IT FURTHER RESOLVED, that the City Manager is hereby authorized and directed to .
execute the Purchase and Sales Agreement, with such changes or amendments thereto as he shall
determine to be necessary to effectuate the direction of the Council and give effect to the terms
of the Agreement, such determination to be evidenced by his execution of the Purchase and Sales
Agreement with McKenzie Forest Products, LLC; and
BE IT FURTHER RESOLVED, that the City Manager or his designee is hereby authorized
and directed to execute such other closing documents as shall be necessary to complete the
transaction; and
BE IT FURTHER RESOLVED, that this Resolution shall take effect upon adoption by the
Council and approval by the Mayor.
Adopted by the Common Council of the City of Springfield, Oregon, by a vote of ~
for and ~ against, this 20th day of June ,2005.
ATTEST:
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REVIEWED & APPROVED
AS JO FORM '\ \
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DATE: b C) c::. ~
OFFICE OF CITY AT DRNEY
Mayor
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Resolution #05-42
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PURCHASE AND SALE AGREEMENT
DATE:
, 2005
("Effective Date")
June
FROM:
McKenzie Forest Products, LLC ("Owner")
An Oregon Limited Liability Company
1651 South F Street
Springfield, OR 97477
TO:
City of Springfield ( "City")
A Municipal Corporation of the State of Oregon
RECITALS
Owner owns fee simple title to the parcels of real property
described in Exhibit A together with all improvements situated
thereon ( the ~Property").
City desires to purchase the Property for the purpose of
facilitating the development of the Springfield Mill Race and
Springfield downtown, and Corps of Engineers Ecosystem
Restoration Project and the Property will be utilized as a
portion of the City's share of such Corps of Engineers Project.
Owner has agreed to sell to City the Prop~rty and City has
agreed to purchase the Property upon the following terms and
conditions:
AGREEMENT
Section 1. Purchase Price
1.1 Purchase Price. The total purchase price for the
Property shall be $1,277,000.00 (Purchase Price).
1.2 Payment of Purchase Price. The Purchase Price shall be
paid in cash at closing.
Section 2. Requirement of Corps of Engineers Project.
2.1 The City of Springfield is planning on utilizing the
Property for City's share in part of a grant from the US Army
Corps of Engineers. If requested by City, Owner shall reasonably
facilitate and work with the City to the extent that Owner's
participation is necessary to secure such grant. Provided,
however, Owner shall incur no cost in providing such help and
assistance and to the extent that Owner incurs cost in providing
Draft of June 3, 2005
Attachment A, Page 3 of 19
Exhibit 1, Page 1 of 17
such requested assistance the City shall promptly reimburse Owner
for such costs.
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Section 3. Remedies.
3.1 City. In the event Owner breaches any term or
provision of this Agreement, then City, as its exclusive remedy
and in lieu of any other relief, may either (1) terminate this
Agreement by giving Owner written notice of termination or (2)
tender performance of the obligations of City and specifically
enforce all obligations of Owner. Except as noted in Section 3.3
and any specific remedies reserved elsewhere in this Agreement,
City expressly waives the right to pursue any other right or
remedy in law or equity against Owner other than the remedies
specified above, including any action for damages, in the event
of a default by Owner.
3.2 Owner. In the event City breaches any term or
provision of this Agreement, then Owner, as its exclusive remedy
and in lieu of any other relief, may either (1) terminate this
Agreement by giving City written notice of termination, or
(2) tender performance of the obligations of Owner and
specifically enforce all obligations of City. Owner acknowledges
(1) the adequacy of this exclusive remedy and (2) that this
limitation of remedies is an essential part of this Agreement
from the perspective of City. Except as noted in Section 3.3 and
any specific remedies reserved elsewhere in this Agreement, Owner
expressly waives the right to pursue any other right or remedy in
law or equity against City other than the remedies specified
above, including any action for damages, in the event of a
default by City.
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3.3 Other Remedies. The limitations on remedies set forth
in this section shall not preclude either party from seeking or
obtaining injunctive relief or from seeking recovery against the
other under any contractual indemnity set forth herein or for
causing physical damage or injury to persons or property.
Section 4. Conditions Precedent to City Closing
In addition to any other conditions contained in this
Agreement, set forth below are certain conditions precedent for
the benefit of City (the "City Coriditions"). The City Conditions
are intended solely for the benefit of City and City shall have
the right to waive, by written notice, any of the City
Conditions, at its sole discretion. In the event any City
Condition is not satisfied or waived on or before the deadline
for satisfaction specified herein, then City shall have the right
to terminate this Agreement, at its sole election, by giving
Owner notice of termination before the deadline expires, and to
Draft of June 3, 2005
Attachment A, Page 4 of 19
Exhibit 1, Page 2 of 17
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exercise any remedy available to City in the event that the .
subject City Condition was. not satisfied, by reason of a breach of
this Agreement by Owner. If City does not give Owner notice of
termination before the applicable deadline, then City shall be
deemed to have waived the termination privilege with respect to
the City Condition in question. The City Conditions specifically
delineated in this section are the following:
4.1 On the Closing Date, the Title Company (defined below)
shall be ready, willing, and able to issue, and shall issue to
City upon recordation of the Owner's deed mentioned below, the
title insurance policy required by Section 7.6.
4.2 On or before the Closing Date, Owner shall have
performed all of the covenants, cOI;1ditions, agreements, and
promises to be performed by it under this Agreement.
4.3 . Within 30 days from the date of execution of this
Agreement., City shall have conducted an environmental review and
audit (the "Environmental Audit") of the Property, indicating to
the satisfaction of City that the Property does not contain,
either on its surface or in its subsurface or underlying water
table, any Hazardous Substances (defined in Section 13.1.4). The
Environmental Audit may include an historical review of the use
of the Property, review of all regulatory agency permits and
compliance and enforcement files and records, soil tests, the
acquisition of core samples and water table samples by drilling
conducted on the Property, and such other tests and studies as
City may deem appropriate. All tests and studies shall be
conducted by agents selected by City and performed as City shall
direct, subject to the approval of Owner, which shall not be
unreasonably withheld, and the provisions of Section 10. City
shall pay the cost of all tests and studies undertaken. If City
elects to close the acquisition of the Property, the costs
attributable to the Environmental Audit shall not be credited
against the Purchase Price at Closing. If the sale does not
close, City shall provide a copy of the Environmental Audit and
related tests to Owner.
4.4 Within 30 days from the date of execution of this
Agreement, City shall have obtained a survey of the Property (the
"Survey") from a surveyor designated by City, indicating to
City's reasonable satisfaction that (1) there are no
discrepancies in the boundaries of the Property; (2) there are no
material encroachments on, or protrusions from, the Property; (3)
the Property has acceptable access to a dedicated public
right-of-way; (4) the Property contains approximately 36.6 acres;
and, (5) except for an area identified by Owner and acknowledged
Draft of June 3, 2005
Attachment A, Page 5 of 19
Exhibit 1, Page 3 of. 17
by City, the Property does not lie within any area designated as
wetlands by any governmental agency or any area determined by the .
United States Department of Housing and Urban Development to be
flood-prone or subject to a flood hazard. A copy of the survey
will be provided to Owner. City shall pay the charges due for
preparing the survey. If City elects to close the acquisition of
the Property, then the fees paid'by City for preparing the Survey
shall not be credited against the Purchase Price at Closing.
4.5 Within 30 days from the date of execution of this
Agreement, City shall have obtained a review of the Property from
an engineer designated by City indicating to City's reasonable
satisfaction that there are no geological, terrain, or ground
water problems associated with the site which would render it
unusable for the improvements contemplated by City.
4.6 On or before the Closing Date, City shall have obtained
from Union Pacific Railroad Company the assignment to City,
effective only upon closing, of the basic agreement between
Southern Pacific Transportation Company and Springfield Forest
Products dated August 7, 1990 as supplemented by the Adoption
Agreement between Union Pacific Railroad Company and McKenzie
Forest Products LLCdated April 28, 1998. City has been provided
with a copy of a proposed "Assignment Rider," Assignment Document
980220, by Union Pacific Railway and Owner has reviewed said
Assignment Rider and states that said Assignment Rider is .
acceptable to Owner for purposes of achieving the assignment.
Owner agrees to such assignment and shall reasonably cooperate
with City to provide for such an assignment and agrees to sign
all documents reasonably necessary to effectuate the assignment.
4.7 Owner shall provide to City a right of access
satisfactory to City from the Mill Race to the road at the
southern border of the retained property on the north side of the
Mill Race for purposes of City access to Mill Race for
maintenance purposes. Except in circumstances of emergency, City
shall provide reasonable advance notice of access needed. Owner
may fence and gate the southern border of the retained property.
City may remove the fence and/or utilize the gate if necessary
for access, and in such event City is responsible for any damage
caused to the fence or gate while exercising such access. City
shall provide security in the event the fence is removed or the
gate opened by City.
Section 5. Conditions Precedent to Owner Closing. In addition
to any other conditions contained in this Agreement, set forth
below are certain conditions precedent for the benefit of the
Owner. (the "Owner Conditions"). The Owner Conditions are
Draft of June 3, 2005
Attachment A, Page 6 of 19
Exhibit 1, Page 4 of 17
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intended solely for the benefit of Owner, and Owner shall have
the right to waive, by written notice, any of the Owner
Conditions at its sole discretion. In the event any Owner
Condition is not satisfied or waived on or before the deadline
for satisfaction specified herein, then Owner shall have the
right to terminate this Agreement, at its sole election, by'
giving City notice of termination before the deadline expires and
to exercise any remedy available to Owner in the event that the
subject Owner Condition was not satisfied by reason of a breach
of this agreement by City. If Owner does not give City notice of
termination before the applicable deadline, then Owner shall be
deemed to have waived the termination privilege with respect to
the Owner Condition in question. The Owner Conditions
specifically delineated in this section are the following:
5.1 City shall provide an access easement from the property
retained by Owner across the property to South B Street. The
terms, form, location and dimensions of such access easement to
be reasonpbly satisfactory to Owner. This access shall terminate
upon the extension of South B Street to the property retained by
Owner, p~oviding public access to such property.
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5.2 Upon City obtaining from Union Pacific Railroad Company
the assignment of the Basic Agreement as specified in Section
4.6. Owner has reviewed Assignment Document 980220 described in
Section 4.6 and said Assignment Rider is acceptable to Owner for
meeting the requirements of this Section 5.7. A copy is
attached.
5.3 City shall provide an access easement through the
railroad tunnel to Owner. In the event that City acquires an
easement through the railroad tunnel, Owner may have access to
such easement. Whether operating under the Basic Agreement 6r
after acquisition of an easement from the railroad, City shall
continue to provide Owner utility access through the railroad
tunnel, and such access shall be documented to Owner's reasonable
satisfaction.
5.4 City's agreement to provide to Owner an emergency
access easement across the Property to South 28th Street to allow
Owner to utilize that parcel for access in the event of an
emergency. Owner shall endeavor to provide at least 24-hours'
notice of such use, but it is understood that in the event of an
actual emergency, such notice may be less.
5.5 City, at City's expense, has completed lot line
adjustments necessary for this transaction.
Draft of June 3, 2005
Attachment A, Page 7 of 19
Exhibit 1, Page 5 of 17
Section 6. Title
Within 10 days following receipt of the Survey, Owner shall
deliver to City, at Owner's expense, a preliminary title report
(the "Title Report") covering the Property. The Title Report
shall be issued by the Title Company (defined in Section 7.1).
Within 10 days of receiving the Title Report, City shall give
written notice (the "Initial Notice") to Owner of the exceptions
that City shall require Owner to remove of record at or before
Closing (the "Unacceptable Exceptions"). If City fails to give
Owner the Initial Notice, then City shall be deemed to have
approved the Title Report. Owner shall have 10 days following
receipt of the Initial Notice to give written notice to City (the
"Reply Notice") of those Unacceptable Exceptions that Owner
concludes, in good faith, that Owner cannot or will not remove at
or before Closing. Owner shall not have any obligation to
institute litigation or spend any sum of money to cure or remove
any Unacceptable Exceptions; provided, however, that Owner shall
be obligated to remove, at or before Closing, any Unacceptable
Exception created or suffered to be created by Owner that is
security for payment of a sum of money (including mortgages,
deeds of trust, tax liens, contractor's liens, and judgment
liens) and any Unacceptable Exception created, or suffered to be
created, by Owner after the Effective Date. Owner agrees to
remove all Unacceptable Exceptions not referenced in a duly given
Reply Notice. If one or more of the Unacceptable Exceptions
cannot be removed at or before Closing and Owner so states in a
duly given Reply Notice, then City may exercise any of the
following rights by giving written notice to Owner within 10 .days
of receiving the Reply Notice: (1) City may terminate this
Agreement, (2) City may accept title to the Property subject to
any such Unacceptable Exceptions; or (3) City may attempt to cure
the Unacceptable Exceptions or any of them without cost or
liability to Owner (but Owner shall be obligated to cooperate
with such cure efforts and to join in the execution of any
curative instruments that will operate to remove such
Unacceptable Exceptions)., Exceptions that are shown on the Title
Report and to which City does not object or to which City agrees,
in writing, to waive objection, are referred herein to as the
"Permitted Exceptions."
Section 7. Closing
7.1 Time and Place. Closing of the sale and purchase of
the Property (the "Closing") shall occur on a date (the "Closing
Date") selected by City, but in all events the Closing shall
occur within thirty (30) days after the date that the Exercise
satisfaction or waiver of all City Conditions and all Owner
Conditions. If all City Conditions and all Owner Conditions have
not been satisfied or waived by the appropriate party, either
Draft of June 3, 2005
Attachment A, Page 8 of 19
Exhibit 1, Page 6 of 17
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party may, at any time thereafter but prior to the satisfaction
or waiver of all City Conditions and Owner Conditions, elect to
terminate this Agreement by written notice to the other party.
The escrow for the Closing shall be established at the office of
Evergreen Land Title Company (the "Title Company"), at 1570
Mohawk Blvd., Springfield, Oregon.
7.2 Closing Obligations. On the Closing Date, Owner and
City shall deposit the following documents and funds in escrow,
and the Title Company shall close escrow in accordance with the
instructions of Owner and City.
7.2.1 Owner shall deposit the following:
(1) The deed described in Section 8, duly executed and
acknowledged;
(2) A duly executed affidavit certifying that Owner is not
a foreign person, trust, partnership, or corporation in
compliance with the requirements of IRC 1445;
(3), Original counterparts or legible photocopies of all
documents, feasibility studies, surveys, engineering reports, and
other items of a similar nature in the possession of Owner that
relate to the Property;
(4) Such documents as City or the Title Company may require
to evidence the 'authority of Owner to consummate this
transaction; and
(5) Such other documents and funds, including (without
limitation) escrow instructions, as are required of Owner to
close the sale in accordance with this Agreement.
7.2.2 City shall deposit the following:
(1) The cash payment specified in Section 1, minus any
credits available to City under the terms of this Agreement;
(2) Such documents as Owner or the Title Company may
require to evidence the authority of City to consummate the
transaction contemplated; and
(3) Such other documents and funds, including (without
limitation) escrow instructions, as are required of City to close
the sale and purchase of the Property in accordance with this
Agreement, including, without limitation, the documents required
to satisfy the Owner Conditions.
Draft of June 3, 2005
Attachment A, Page 9 of 19
Exhibit 1, Page 7 of 17
7.3 Costs. City and Owner each shall pay one-half of the
escrow fee of the Title Company with respect to the Closing.
Owner shall pay the premium for the title insurance policy that ~
Owner is obligated to provide to City. City shall pay the fee or
recording the deed referred to herein.
7.4 Prorations. All items of expense incurred by Owner
with respect to the Property shall be paid by Owner at Closing,
without proration. All real property taxes and assessments
payable with respect to the tax year in which Closing occurs
shall be prorated between Owner and City as of the Closing Date.
7.5 Tax Deferral/Acreage. At Closing, Owner shall pay all
deferred taxes, and taxes in arrears, if any encumbering the
property or, at the option of City, the amount of the deferred
taxes and taxes in arrears shall be credited against the Purchase
Price at Closing.
7.6 Title Insurance Policies. As soon as practicable after
Closing Owner shall cause the Title Company to issue its standard
form Owner's ALTA Title Insurance Policy in the amount of the
Purchase Price, insuring fee simple title to the Property vested
in City, subject only to standard printed exceptions, the
Permitted Exceptions, and any Unacceptable Exception accepted by
City. If City desires an extended coverage policy, City shall
pay the additional cost thereof.
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Section 8. Conveyance
At the Closing, Owner shall execute, acknowledge, and
deliver to City a Statutory Warranty Deed conveying the Property
to City, subject only to the Permitted Exceptions and' any
Unaccept~ble Exception accepted by City.
Section 9. Possession
City shall be entitled to exclusive possession of the
Property on and after the Closing Date. Owner expressly
acknowledges that all trees, shrubs, and plants are included in
the Property and that Owner shall have no right to such
vegetation after Closing.
Section 10. Access to Property
10.1 Access. Owner grants to City and its agents the right
to enter on the Property at any reasonable times before the
Closing Date for the purpose of conducting tests or studies that
City may deem necessary or appropriate in connection with its
acquisition of the Property. Owner shall reasonably cooperate
with City in making such tests and studies. No soil tests or
drilling shall be undertaken without first obtaining Owner's
Draft of June 3, 2005
Attachment A, Page 10 of19
Exhibit 1, Page 8 of 17
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approval with respect to the agents retained to perform such
work and the location and purpose of the tests or drilling. City
shall not interfere with or disturb the rights of Owner in
possession of any portion of the Property. Subject to the
limitations of the Oregon Government Tort Claims Act, City shall
protect, defend, and hold Owner harmless from any loss,
liability, or damage to persons or property arising out of or
related to City's activities on the Property. If City fails to
purchase the Property, City shall fully compensate Owner for any
physical damage to the Property or any lien, encumbrance, or
charge on it attributable to City's activities pursuant to this
paragraph. The damages in this Section 10.1 are in addition to
other damages which may be specified elsewhere in this Agreement.
Section 11. Covenants of Owner
Owner acknowledges that the covenants of Owner contained in
this Agreement, including the covenants contained in this Section
11 (the "Covenants"), are material inducements to City to enter
into this. Agreement. The Covenants specifically delineated in
this section are the following:
11.1' Information. Owner agrees to deliver to City, within
10 days after the Effective Date, photocopies of all documents
related to the use or ownership of the Property that Owner
possesses, including (without limitation) all studies,
environmental assessments, surveys, reports, aerial photographs,
and other documents of a like nature.
11.2 Maintenance. Before the Closing Date, Owner shall
,maintain the Property in the same condition as it now exists,
ordinary wear and tear excepted, and shall not cause or permit
any waste.
11.3 Ownership. Before the Closing Date, Owner shall not
sell, contract to sell, assign, lease,or otherwise transfer the
Property or any part of it, nor grant an option to any third
party to acquire all or any portion of it.
Section 12. Ongoing Covenants. The parties agree that the
covenants of the parties set forth below constitute ongoing
covenants of each party that shall specifically survive and
continue after the closing of the sale set forth in this
Agreement.
12.1 Until such time as Owner may redevelop the retained
property, Owner may continue current stormwater drainage as long
as such drainage complies with municipal state and federal
provisions relating to stormwater discharge, state water quality,
Draft of June 3, 2005
Attachment A, Page 11 of 19
Exhibit 1, Page 9 of 17
and federal clean water act requirements. At the time of such
redevelopment, City shall work in good faith with Owner to
address and resolve stormwater issues which may arise in the .
redevelopment approval process. Nothing herein affects any
existing water rights to Millrace possessed by Owner.
12.2 City shall relocate and construct a fire pond at a
location satisfactory to Owner arid City for the discharge of
processed water by Owner into such pond. Additionally,City
shall be responsible for all costs associated with the relocation
and construction of such pond and the cost of new pumps and pipes
from the pond to Owner's existing fire system. Owner shall be
provided access to the fire P9nd to allow Owner to perform pump
maintenance. Owner shall be responsible for all maintenance
costs of the pump equipment after installation by City. Owner
shall be responsible to maintain, at its expense, the fire pond.
City agrees that to the extent reasonably required by Paragraph 4
of the Donation Agreement dated December 17, 1985 between the
City of Springfield and Georgia Pacific Corporation it will
maintain water in the Mill Race. Owner and City shall work
together to provide for the use of the fire pond for storm
drainage management to the extent reasonably feasible, but at a
minimum at the same level as currently used by Owner. City shall
agree not to impose a requirement for 50-foot riparian setback
from the top of the north bank of the relocated fire pond. In
the event that Owner ceases to need said fire pond for fire ..
prevention, all of City's obligations with respect to the fire
pond shall cease.
12.3 Owner may limit public access to
may provide fencing for security measures.
fencing shall be Owner's. The construction
approval from City Building Division.
Owner's property and
The cost of such
of a fence requires
12.4 City agrees that the industrial use which Owner
maintains on the premises retained by Owner will, in the normal
course of operations, result in noise associated industrial uses,
and all such noise shall be permitted.
12.5 City acknowledges that the retained property of Owner
is presently zoned Heavy Industrial and the uses permitted are
specified in Springfield Development Code Section 20.020.To the
extent permitted by the Springfield Municipal Code all existing
buildings and improvements shall be grandfathered as complying
structures as long as they exist and, if required, the same may
be rebuilt in the same location for the same functions as
currently used. In the event of a total redevelopment of the
Draft of June 3, 2005
AttacmnentA,Page12of19
Exhibit 1, Page 10 of 17
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site, then all future improvements must comply with all then
applicable laws and regulations.
12.6 City agrees to grant to Owner such utility easements
over the Property necessary to provide utilities to the property
being retained.
12.7 City hereby provides authorization to Owner to
maintain an existing oil water separator on the north bank of the
Mill Race at approximately 21st Street. The maintenance of such
oil water separation facility is solely the responsibility of
Owner. Owner shall be granted a perpetual license for such
maintenance. Owner may gate the oil water separator. In the
event that Owner determines to move the existing oil water
separator, Owner may do so and in such event the perpetual
license shall terminate. The continued existence of such oil
water separator shall be subject to a stormwater discharge permit
and shall be reviewed annually.
Section 13. Warranties and Representations of Owner
13.A Warranties. Owner acknowledges that the warranties
and repr~sentations of Owner contained in this Agreement,
including the warranties and representations contained in this
Section 13 (the "Warranties"), are material inducements to City
to enter into this Option Agreement. All Warranties, and City's
right to assert a breach of them, shall survive execution of this
Agreement, the Closing, and the execution and delivery of the
Closing documents. If, before Closing, City discovers or is
advised that any of the Warranties was materially untrue when
made, then City shall have the option to either (1) terminate
this Agreement without waiving any cause of action that City may
be entitled to assert against Owner by reason of the breach of
the Warranty, or (2) continue this Agreement, without waiving any
cause of action that City may be entitled to assert against Owner
by reason of the breach of the Warranty. If, after Closing, City
discovers or is advised that any of the Warranties was untrue
when made, then City may pursue any remedy available to City at
law or in equity by reason of the breach of such Warranty. Owner
warrants and represents to City that the following matters are
true and correct:
13.1.1 No Condemnation or Assessment Proceedings. There is
no pending or threatened condemnation or similar proceeding or
assessment affecting the Property, or any part of it and, to the
knowledge of Owner, no such proceeding is contemplated by any
governmental entity.
Draft of June 3, 2005
Attachment A, Page 13 of 19
Exhibit 1, Page 11 of 17
13.1.2 Litigation; Law. There is no litigation,
arbitration, or administrative hearing pending before any
governmental authority that concerns or affects the Property or .
any portion of it and, to the knowledge of Owner, no such
proceeding is threatened. Owner has not received any notice from
any governmental body that the Property fails to comply with all
laws, ordinances, and governmental approvals and decisions that
relate to it.
13.1.3 Access and Site Conditions. Owner warrants and
represents to City that, to the knowledge of Owner, that portion
of the property located north of the Union Pacific Railroad
tracks has unimpeded access to South A Street, Springfield,
Oregon. Owner has no knowledge of , any pending changes in the
land use designation, (zoning ordinance or comprehensive plan)
that apply to the Property. To the knowledge of Owner, there are
no material encroachments onto the Property.
13.1.4 Hazardous Substances. For purposes of this
subsection, the phrase "Hazardous Substahces" has the same
meaning as is designated in ORS 465.200(9). Owner warrants,
represents, and covenants as follows:
(1) To the knowledge of Owner, Owner has not taken any
action that would result in any Hazardous Substances in, upon, or
buried on or beneath the Property and no Hazardous Substances .
have been emitted or released by Owner from the Property in
violation of any environmental laws of the federal or state
government;
(2) To the knowledge of Owner, Owner has not brought onto,
stored on, buried, used on, emitted or released from, or allowed
to be brought onto, stored on, buried, used on, or emitted or
released from, the Property any Hazardous Substances in violation
of any environmental laws of the federal or state government.
13.1.5 Status of Owner. Owner warrants that Owner is not a
foreign person, foreign partnership, foreign corporation, or
foreign trust, as those terms are defined in IRC 1445.
13.1.6 Breach of Agreements. Neither the execution of this
Agreement, nor the execution, delivery, or recordation of any
document or agreement referenced herein, nor Closing of the
transaction contemplated herein, constitutes or will constitute' a
default under any other agreement or contract that relates to the
Property or to which Owner is a party, subject to documenting
verbal consent previously granted by GE Capital.
Draft of June 3, 2005
Attachment A, Page 14 of 19
Exhibit 1, Page 12 of 17
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13.1.7 Contracts and Leases. Owner warrants and represents
to City that there are no lease agree~ents, maintenance
contracts, service agreements, or other contracts of any nature
that pertain to, cover, or affect the Property or any part of it.
As used herein, the phrase "to the knowledge of Owner" or
any variation of that phrase shall refer to matters within the
actual knowledge of Steven Killgore (CEO of Owner) and where
circumstances within the actual knowledge of Owner would warrant
a reasonable person to undertake further inquiry when presented
with similar circumstances. Except as set forth in the previous
sentence, actual knowledge shall not include constructive or
imputed notice or knowledge and the use of that phrase shall not
imply that Owner has undertaken any special inquiry or
investigation with respect to the representation modified by such
phrase.
13.2 Changed Conditions. If prior to closing Owner
discover~ that one or more of the Warranties or one of the
conditions referred to in the Warranties has changed after this
Agreement is executed, through no fault of Owner, 'Owner shall
immediately inform City, in writing, of such discovery. If the
changed condition or Warranty cannot be cured within 10 days of
the date Owner discovers the change, then City may terminate this
Agreement by giving written notice of termination to Owner within
15 days after receiving the notice from Owner. If the changed
condition or Warranty can be corrected at reasonable cost within
10 days after discovery by Owneri City shall not have the right
to terminate this Agreement pursuant to this section and Owner
shall correct the changed condition or Warranty within 10 days of
the discovery_ If City does not terminate this Agreement and the
changed condition or Warranty can be corrected under the
preceding sentence and is not corrected by the Closing Date, then
City shall have the right to withhold 150% of the estimated costs
of correcting the changed condition or Warranty until such time
as the changed condition is corrected, and Owner shall correct
such changed condition, at Owner's sole expense and in an
expeditious manner, failing which City may use the withheld sums
to make the correction. Any withheld funds shall be immediately
paid to Owner when the condition or Warranty change is corrected.
Section 14. Recording
This Agreement shall not be recorded and Owner shall not
cause, permit, or suffer any matter to be recorded with respect
to the Property prior to the Closing Date.
Draft of June 3, 2005
Attachment A, Page 15 of 19
Exhibit 1, Page 13 of 17
Section 15. Waiver
No waiver of any right arising out of a breach of any
covenant, term or condition of this Agreement shall be a waiver tit
of any right arising out of any other or subsequent breach of the
same or any other covenant, term or condition or a waiver of the
covenant, term or condition itself.
Section 16. Successors and Assigns
Subject to the limitations on Owner's right to convey the
Property set forth elsewhere herein, the terms, covenants, and
conditions herein contained shall be binding on and inure .to the
benefit of the heirs, successors, and assigns of Owner and City.
Owner and City specifically agree that City may not assign its
interest in this Agreement and the Property to any person or
entity, without the consent of Owner.
In the event that an assignee assumes the obligations of
City hereunder, then City shall continue to have responsibility
for compliance with terms and conditions of this Agreement for
which only the City has jurisdiction or authority therefor,
unless such responsibility is modified by the mutual agreement of
the City and Owner.
Section 17. Notices
All notices required or permitted to be given shall be in
writing and shall be deemed given and received upon personal .
service or deposit in the United States Mail, certified or
registered mail, postage prepaid, return receipt requested,
addressed as follows:
To Owner:
McKenzie Forest Products, LLC
1651 South F Street
Springfield, OR 97477
With a
copy to:
William R. Potter
Arnold Gallagher Saydack Roberts Percell
& Potter, P.C.
800 Willamette Street, Suite 800
P.O. Box 1758
Eugene, OR 97440-1758
To City:
City of Springfield
c/o Director of Public Works
Department of Public Works
225 Fifth Street
Springfield, OR 97477
Draft of June 3, 2005
Attachment A, Page 160f19
Exhibit 1, Page 14 of 17
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The foregoing addresses may be changed by written notice, given
in the same manner. Notice given in any manner other than the
manner set forth above shall be effective when received by the
party for whom it is intended.
Section 18. Attorney Fees
If litigation is instituted with respect to this Agreement,
the prevailing party shall be entitled to recover from the losing
party, in addition to all other sums and allowable costs, its
reasonable attorney fees, both in preparation for and at trial
and any appeal or review, such amount to be set by the court
before which the matter is heard.
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Section 19. Risk of Loss
Owner shall bear the risk of all loss or damage to the
Property from all causes, through the Closing Date. If, before
the Closing Date, all or part of the Property is damaged by fire
or by any other cause of any nature or if all or any portion of
the Property is taken by condemnation, or if any such
condemnation is threatened, Owner shall give City written notice
of such event. City may terminate this Agreement by giving
written notice to Owner within 15 days following receipt by City
of written notice from Owner of such casualty or condemnation.
If City does not elect to terminate this Agreement, then this
Agreement shall continue in force and, if the Property is
conveyed to City, then all interest of Owner in and to any
insurance proceeds or condemnation 'awards that may be payable to
Owner on account of such casualty or condemnation shall be
assigned to City at Closing.
Section 20. Integration, Modification, or Amendments
This Agreement contains the entire agreement of the parties
with respect to the Property and supersedes all prior written and
oral negotiations and agreements with respect to the Property.
Any modifications, changes, additions, or deletions to this
Agreement must be approved by Owner and City, in writing.
Section 21. Representation
Owner and City have each been represented by separate legal
counsel of choice with respect to this transaction. Except as
otherwise provided in Section 18, each party shall be responsible
for all attorney fees incurred by it with respect to this
Agreement.
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Section 22. Counterparts; Pronouns
This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same Agreement and
shall be effective when one or more counterparts have been signed
Draft of June 3, 2005
Attachment A, Page 17 of 19
Exhibit 1, Page 15 of 17
and delivered by Owner and City. With respect to any pronouns
used, each gender used shall include the other gender and the
singular and the plural, as the context may require.
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Section 23. Governing Law; Interpretation
This Agreement shall be governed by the laws of Oregon. In
the event a court of competent jurisdiction holds any portion of
this Agreement to be void or unenforceable as written, Owner and
City intend that (1) that portion of this Agreement be enforced
to the extent permitted by law, and (2) the balance of this
Agreement remain in full force and effect.
Section 24. Time Is of the Essence
Time is of the essence of this Agreement.
Section 25. Authority to Execute
Each person executing this Agreement on behalf of Owner and
City, respectively, warrants his or her authority to do so.
Section 26. Statutory Disclaimer
THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED
IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND
REGULATIONS. 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 APPROVED
USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR
,FOREST PRACTICES AS DEFINED IN ORS 30.930. .
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, WHICH, IN FARM OR
FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING OF A
RESIDENCE AND WHICH LIMIT LAWSUITS AGAINST FARMING OR FOREST
PRACTICES AS DEFINED IN ORS 30.930 IN ALL ZONES. 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 APPROVED USES AND EXISTENCE OF FIRE
PROTECTION FOR STRUCTURES. (IF THE PROPERTY IS TAXED AS HISTORIC
PROPERTY, INCLUDE A STATEMENT IN ORS 93.040(3))
Section 27. No Realtor's Commission
Neither party has employed a real estate broker or sales
person in arriving at this Agreement and there are no real estate
brokers' fees or commissions which will accrue in the event of
the sale of the property by Owner to City.
Draft of June 3, 2005
Attachment A, Page 18 of 19
Exhibit 1, Page 16 of 17
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Section 28. Truck Access Easement to Morse Bros. Quarry
City agrees to confer with Owner and the owners of Morse
Bros. Quarry to determine if an alternate route may be found to
relocate the truck access easement to that quarry.
Section 29. Land Use. Nothing in this Agreement shall be
construed as waiving any requirements of the Springfield
Development Code or Springfield Municipal Code which may be
applicable to the use and development of this property.
Section 30. Donation. Owner believes that the fair market value
of the real property being sold hereunder exceeds the purchase
price of $1,277,000. Owner intends to donate the excess to the
City. After closing, Owner will obtain an appraisal of the real
property. If the fair market value of the real property exceeds
$1,277,000, the excess will be a donation by Owner to the City.
In such event, City shall work with Owner at no cost to City to
assist Owner in verifying the donation.
OWNER:
McKENZIE 'FOREST PRODUCTS, LLC
By:
CITY:
By:
V:\MILL_RAC\Purchase and Sale Agreement 06030S.wpd
Draft of June 3, 2005
Attachment A, Page 19 of 19
Exhibit 1, Page 17 of 17
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McKenzie Forest Products
TermS of Offer
1.
The parties agree that the property included in parcel one may be used, as appropriate, to
support reasonable storm water management of the run off from property retained by
McKenzie Forest Products. The parties agree to collaborate on storm water management
planning and solutions at the time the property retained by McKenzie is redeveloped.
2. McKenzie Forest Products will be granted an access easement over parcel one to South
"B" Street until such time as South "B" street is extended as a public street to the property
retained by McKenzie
3. City will assume the obligations of McKenzie with respect to the license granting access
under the Union Pacific tracks immediately South of 16th Street. City will exercise best
efforts to convert that license to an easement. If city acquires an easement it will, to the
extent it is authorized by that easement, continue to allow for the provision of current and
future utilities to the McKenzie property using the tunnel.
4. McKenzie will be granted an emergency access easement over tract 3 to allow them to
use that parcel on 24 hours notice in the event of an emergency.
5. The north property boundary of parcel three will be set at least 90 feet from the top of
bank of the Mill Race, so that, in conjunction with the 10 foot building setback required
by the Springfield Development Code, as now in effect, any buildings would be at least
100 feet from the top of bank.
6.
Where feasible, the north property line of parcel 2 will be established 25 feet from the top
of bank of the Mill Race. To the extent that is not practicable, the City will work with the
U.S. Army Corps of Engineers to make best efforts to assure that the top of bank of the
reconstructed Mill Race, in the vicinity of the boundary of parcel 2, is at least 25 feet
from that boundary. This may include, where possible, relocating the Mill Race to the
south. Where this is not possible, the City would consider, on redevelopment, a variance
to permit encroachment to no more than 25 feet from the top of bank of the reconstructed
Mill Race.
7. As part of the Corps project, a fire pond will be constructed at the northeastern comer of
the existing Mill Pond and pump facilities and piping will be provided to make it possible
to bring that water to a point of connection to the existing McKenzie fire suppression
system.
8. In the vicinity of the [lIe pond, there will not be a requirement for a 50 foot riparian
setback from the top of bank of the north bank of the fire pond. City and McKenzie will
collaborate on optimizing use of fire pond for storm drainage management.
9. McKenzie will be given a maintenance easement over the fire pond, and will assume
responsibility for that maintenance.
10.
The offer is contingent upon successful completion of borings recommended by staff as a
result of the environmental assessment performed by Omnicom..
Attachment B, Page 1 of 2
11. City will pay McKenzie $1,277,000 as the cash portion of the consideration for the
transfer of parcels one through four.
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Attachment B, Page 2 of 2
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McKenzie Forest Products Property
Attachment C
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IIIJ] Tract 1
nm Tract 2
mIl Tract 3
mIl Tract 4
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