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HomeMy WebLinkAboutReg 2005-04-04 Item 7D - Agreement - Tukwila Station Property Exchange with Pacific Commercial Properties COUNCIL AGENDA SEVOPSIS Initials ITEM NO. I X 1 4 4 S Meeting Date Prepared by Ma yor's review Council review t— I 04/04/05 1 KAF 1 r5 rsoa 1 ITEM INFORMATION CAS NUMBER: 05-059 ORIGINAL AGENDA DA'L'E: APRIL 4, 2005 AGENDA ITEM TITLE Tukwila Station Property Exchange Agreement CATEGORY Discussion Motion Resolution Ordinance Bid Award Public Hearing Other Mtg Date Mtg Date 04/04/05 Mtg Date Mtg Date Mtg Date Mtg Date Mtg Date SPONSOR Council Mayor Adm Svcs DCD Finance Fire Legal P Police PW SPONSOR'S Attached for Council consideration is a property exchange agreement between the City SUMMARY and Pacific Commercial Properties (PCP). The agreement was prepared by City Attorney Kerslake. The property exchange proposal was reviewed with the Community Affairs Parks Committee on February 15, 2005, the Lodging Tax Advisory Committee on March 3, 2005, and the Committee of the Whole on March 28, 2005 REVIEWED BY COW Mtg. CA &P Cmte F &S Cmte Transportation Cmte Utilities Cmte Arts Comm. Parks Comm. Planning Comm. DA'Z'E: March 28, 2005 RECOMMENDATIONS: SPONSOR /ADMIN. Authorize the Mayor to sign the Property Exchange Agreement COMMI FI EE COST IMPACT FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION MTO. [SATE ATTACHMENTS .4141 4 5 1 Property Exchange Agreement PROPERTY EXCHANGE AGREEMENT THIS AGREEMENT ("Agreement") is made and entered into as of this day of , 2005, by and between the City of Tukwila, a municipal corporation ("City" or "the City"), and Pacific Commercial Properties ("PCP"). RECITALS A. The City is the owner of certain real property commonly known as Tax Parcel No. 2423049034 in the City of Tukwila, King County, Washington, legally described in Exhibit A attached hereto and incorporated herein by this reference ("City Property"). B. PCP is the owner of certain real property commonly known as Tax Parcel Nos. 2423049137 and 0005800013, in the City of Tukwila, King County, Washington, legally described in Exhibit B attached hereto and incorporated herein by this reference ("PCP Property"). C. The City of Renton has identified a preferred alternative for the future extension of Strander Boulevard eastward from West Valley Highway ("Strander Project"). This alternative would require the relocation of the Union Pacific Railroad ("UPRR") right-of-way from its current location to a location adjacent and west of the existing BNSF Burlington Northern right-of-way. This property would be owned by PCP. Tukwila would be required to acquire through condemnation, or other negotiated means, the property required for the Strander Project. This would be costly to the City if the property were fully developed at the time of condemnation. Therefore, the Parties wish to exchange property at the present time and further agree to deed other certain property at the time the Strander Proj ect is built. AGREEMENT The Parties hereto agree as follows: 1. Recitals Incorporated. The above recitals are incorporated herein as part of the substantive terms of this Agreement. 2. Property Exchange and Consideration. PCP, or its designated assigns pursuant to Section 20 of this Agreement, agrees to convey the PCP Property, legally described in Exhibit "B", to the City by Statutory Warranty Deed upon Closing, as set forth in Section 9 of this Agreement. As just compensation for the PCP Property, the City agrees to convey the City Property, legally described in Exhibit "A", to PCP by Statutory Warranty Deed at Closing. Page 1 of9 G:\City Attomey\DCD\CONTRACTS\Tukwila2 - fix.DOC 3. Tax Consequences. Neither party makes any representations or warranties, express or implied, regarding the actual tax consequences of the property exchange. 4. Condition of Title - City Property. (a) City Property Title Commitment. The City shall, as soon as practicable, cause to be furnished to PCP a commitment for an owner's standard coverage policy of title insurance ("City Property Title Commitment") issued through a title company mutually approved by PCP and the City ("Title Company"), describing the City Property, listing PCP as the prospective named insured, and showing six hundred fifty nine thousand, seven hundred seventeen dollars ($659,717.00) as the policy amount. (b) Review of City Property Title Commitment. PCP shall have until ten (10) days after receipt of the City Property Title Commitment in which to notify City of any objections PCP has to any matters shown or referred to in the City Property Title Commitment. Except as expressly set forth herein, any exceptions or other items which are set forth in the City Property Title Commitment to which PCP does not object within the 10-day review period shall be deemed to be pennitted exceptions ("PCP Pennitted Exceptions"). Building, zoning~ subdivision or use restrictions applicable to the City Property shall be considered PCP Pennitted Exceptions. With regard to items to which PCP objects, the following shall apply: (i) City shall have ten (10) days from receipt of PCP's objections to notify PCP whether it agrees to remove the unpennitted exceptions set forth in PCP's objections; (ii) If City does not agree to remove such unpennitted exceptions, PCP may, within ten (10) days, waive and withdraw its objections; and (iii) If the City agrees to remove such objections, the City shall use all reasonable efforts to cure such objections by the date of Closing. If the City is unable to cure such objections by the date of Closing, PCP may, as PCP's sole remedy, waive the objections not cured and proceed to Closing or tenninate this Agreement by notice to the City. 5. Condition of Title - PCP Property. (a) PCP Property Title Commitment. PCP shall, as soon as practicable, cause to be furnished to City a commitment for an owner's standard coverage policy of title insurance ("PCP Property Title Commitment") issued through the Title Company, describing the PCP Property, listing City as the prospective named insured, and showing Six hundred fifty nine thousand, seven hundred seventeen dollars ($659,717.00) as the policy amount. Page 2 of9 G:\City Attorney\DCmCONTRACTS\Tukwila2 - fix.DOC (b) Review of PCP Property Title Commitment. City shall have until ten (10) days after receipt of the PCP Property Title Commitment in which to notify PCP of any objections City has to any matters shown or referred to in the PCP Property Title Commitment. Except as expressly set forth herein, any exceptions or other items which are set forth in the PCP Property Title Commitment to which City does not object within the 10-day review period shall be deemed to be pennitted exceptions ("City Pennitted Exceptions"). Building, zoning, subdivision or use restrictions applicable to the PCP Property shall be considered City Pennitted Exceptions. (i) PCP shall have ten (10) days from receipt of City's objections to notify the City whether it agrees to remove the unpennitted exceptions set forth in the City's objections; (ii) If PCP does not agree to remove such unpennitted exceptions, the City may, within ten (10) days, waive and withdraw its objections; and (iii) If PCP agrees to remove such objections, PCP shall use all reasonable efforts to cure such objections by the date of Closing. If PCP is unable to cure such objections by the date of Closing, City may, as City's sole remedy, waive the objections not cured and proceed to Closing or tenninate this Agreement by notice to PCP. 6. Conditions Precedent. The Parties' obligations under this Agreement and the effectiveness of this Agreement shall be subject to the following conditions precedent: (a) Inspection Contingency. This Agreement is conditioned on an inspection report of the City Property. Within twenty (20) days of the mutual acceptance of this Agreement, PCP shall arrange an inspection of the City Property. The inspection report shall be prepared by a professional inspector of PCP's choice approved by the City and at PCP's expense. PCP may disapprove the inspection report on the basis of any condition identified in the inspection report that the inspector recommends be corrected. This contingency shall conclusively be deemed satisfied unless, by June 30, 2005, City receives from PCP written notice of disapproval identifying the condition( s) contained in the inspection report to which PCP objects and a copy of the inspection report. If City does not agree in writing to correct the condition( s) identified by PCP, then within three days thereafter, PCP may elect to tenninate this Agreement, in which event this Agreement shall be null and void and of no further force and effect. City hereby grants to PCP and its agents, employees, and independent contractors right of entry onto the City Property to make such soil tests and such other investigation as PCP may deem reasonably necessary; provided, however, that such investigation shall not cause any damage to the City Property. PCP shall hold City hannless from and against any and all liabilities incurred by PCP by reason of damage to persons or property arising from the negligent or intentional acts or omissions of PCP or its agents on the City Property. Furthennore, PCP shall not pennit any lien to be placed on the City Property by any person hired by PCP for the purpose of examining, Page 3 of9 G:\City Attomey\DCD\CONTRACTS\Tukwila2 - fix.DOC inspecting, or surveying the City Property. If any such lien or other charge of any kind is placed on the City Property, PCP shall promptly discharge it by paying the amount claimed or posting a bond in lieu of the lien. (b) This Agreement is contingent upon the Parties entering into a Development Agreement, attached as Exhibit "C". 7. Disclosure. (a) City Property Disclosure. PCP acknowledges that, except as expressly set forth in this Agreement, neither City nor any agent or representative or purported agent or representative of City has made, and City is not liable for or bound in any manner by, express or implied warranties, guaranties, promises, statements, inducements, representations, or infonnation pertaining to the City Property or any part thereof, the physical condition, title, size, zoning, thereof, the uses which can be made of the same or the fitness of any part thereof for any particular purpose or any other matter or thing with respect thereto. Without limiting the foregoing, PCP acknowledges and agrees that City is not liable for or bound by (and PCP has not relied upon) any oral or written statements, representations, or any other infonnation respecting to the City Property or any portion thereof furnished by City or any other broker, employee, agent, consultant, or other person representing or purportedly representing City. (b) PCP Property Disclosure. City acknowledges that, except as expressly set forth in this Agreement, neither PCP nor any agent or representative or purported agent or representative of PCP has made, and PCP is not liable for or bound in any manner by, express or implied warranties, guaranties, promises, statements, inducements, representations, or infonnation pertaining to the PCP Property or any part thereof, the physical condition, title, size, zoning thereof, the uses which can be made of the same or the fitness of any part thereof for any particular purpose or any other matter or thing with respect thereto. Without limiting the foregoing, City acknowledges and agrees that PCP is not liable for or bound by (and City has not relied upon) any oral or written statements, representations, or any other infonnation respecting the PCP Property or any portion thereof furnished by PCP or any other broker, employee, agent, consultant or other person representing or purportedly representing PCP. 8. Hazardous Materials. (a) PCP Property Hazardous Materials. PCP hereby represents and warrants to City that the PCP Property is not and has not been, during the period of PCP's ownership of the PCP Property, used for the storage or disposal of any toxic or hazardous waste, material, or substance and that no known hazardous materials or substances exist on the PCP Property. PCP hereby agrees to indemnify and hold City hannless from any and all loss, damage, liability, and expense (including reasonable consultant and attorneys' fees) incurred by City arising out of or related to PCP's breach of this Section. Page 4 of9 G:\City Attorney\DCmCONTRACTS\Tukwila2 - fix.DOC PCP further agrees to submit copies of all materials currently in its possession regarding any testing of the PCP Property for hazardous materials to City. Additionally, PCP shall, at PCP's expense and by May 31, 2005, provide the City with a Level One Environmental Report. If such report shows any reasonable possibility of environmental contamination, PCP shall provide City with a Level Two Environmental Report by June 30, 2005. If the Level Two Environmental Report shows any reasonable possibility of environmental contamination, the Parties agree that City may tenninate this Agreement with no penalty by written notice to all Parties not later than sixty (60) days after receipt of the Level Two Environmental Report. (b) City Property Hazardous Materials. Except as referenced in any reports provided by City, City hereby represents and warrants to PCP that the City Property is not and has not been (during the period of City's ownership of the City Property) used for the storage or disposal of any toxic or hazardous waste, material, or substance, and no known hazardous materials or substances exist on the City Property. City hereby agrees to indemnify and hold PCP hannless from any and all loss, damage, liability, and expense (including reasonable consultant and attorneys' fees) incurred by PCP arising out of or related to City's breach of this Section. City further agrees to submit copies of all materials currently in its possession regarding any testing of the City Property for hazardous materials. Such materials shall be supplied to PCP prior to signing this Agreement. City shall, at City's expense and by May 31, 2005, provide PCP with a Level One Environmental Report. If such report shows any reasonable possibility of environmental contamination, City shall provide PCP with a Level Two Environmental Report by June 30, 2005. If the Level Two Environmental Report shows any reasonable possibility of environmental contamination, the Parties agree that PCP may tenninate this Agreement with no penalty by written notice to all Parties not later than sixty (60) days after receipt of the Level Two Environmental Report. 9. Closing. (a) Time and Place for Closing. Within thirty-five (35) days after the date that all of the conditions precedent set forth in Sections 5, 6 and 7 above have been satisfied (or such other date as the Parties may agree), the closing ("Closing") shall take place. (b) Events at Closing. (i) At Closing, City shall deliver to PCP the following: (A) A Statutory Warranty Deed duly executed and acknowledged by City conveying the City Property to PCP; Page 5 of9 G:\City Attomey\DCmCONTRACTS\Tukwila2 - fix.DOC (B) A standard coverage policy of Title Insurance issued by the Title Company confonning to the requirements of Section 5 above insuring PCP's title in the amount of Six hundred fifty nine thousand, seven hundred seventeen dollars ($659,717.00) and containing no exceptions other than the PCP Pennitted Exceptions; and (C) A Non-Foreign Affidavit duly executed and acknowledged by City. (ii) At Closing, PCP shall deliver to City the following: (A) A Statutory Warranty Deed duly executed and acknowledged by PCP conveying the PCP Property to City; (B) A standard coverage policy of Title Insurance issued by the Title Company confonning to the requirements of Section 5 above insuring City's title in the amount of Six hundred fifty nine thousand, seven hundred seventeen dollars ($659,717.00) and containing no exceptions other than the City Pennitted Exceptions; and (C) A Non-Foreign Affidavit duly executed and acknowledged by PCP. ( c) Expenses. The expenses associated with the above transactions shall be allocated among the Parties as follows: (i) Escrow Fees. The City and PCP shall share all escrow fees charged by the Title Company equally. (ii) Attorneys' Fees. Subject to Section 11 below, each party shall pay its own attorneys' fees. (iii) Costs. Each party shall pay its own transaction costs associated with this Agreement. (d) Prorations. Real estate taxes, installments of current year special assessments (if and to the extent they are approved exceptions), utility charges, and other operating income or expenses applicable to the City Property and the PCP Property shall be prorated up to and including the date of Closing, based upon the actual days involved. To the extent that the amounts of such charges, expenses, and income referred to in this Section are unavailable at the Closing date or in the event of prorations made on the basis of erroneous infonnation or clerical errors, a readjustment of these items shall be made within thirty (30) days after Closing or as soon as practical after discovery of any Page 6 of9 G:\City Attomey\DCmCONTRACTS\Tukwila2 - fix.DOC erroneous infonnation or clerical error. After Closing, City shall be responsible for all expenses related to the PCP Property and PCP shall be responsible for all expenses related to the City Property. City and PCP shall, on or before Closing, furnish each other and the Title Company with all infonnation necessary to compute the prorations provided for in this Section. 10. Default. Any party hereto shall be in default hereunder if such party shall fail to comply with any tenn, covenant, agreement, or obligation on its part required, within the time limits and in the manner required in this Agreement. In the event of a default hereunder, the non-defaulting party or parties shall be entitled to pursue all remedies available at law or in equity, including, but not limited to, specific perfonnance. 11. Attorneys' Fees. If it shall be necessary for any party hereto to employ an attorney to enforce its rights pursuant to this Agreement because of the default of another party, the non-defaulting party shall be entitled to recover from the defaulting party or parties all costs, including reasonable attorneys' fees, incurred in connection with such default. 12. Brokerage Commission. Each party hereto represents and warrants that it has not dealt with or engaged any real estate broker in connection with the above transactions. Each party agrees to indemnify, defend, and hold hannless the other party from and against any claims or liability attributable to such party's breach of the foregoing representation and warranty. 13. Notices. All notices, demands, requests, and other communications required or pennitted hereunder shall be in writing and shall be deemed delivered on the earlier of (i) three days after posting of registered or certified mail, addressed to the addressee at its address set forth below or at such other address as such party may have specified theretofore by notice delivered in accordance with this Section, or (ii) actual receipt by the addressee, as follows: TO CITY: City of Tukwila Attn: City Clerk 6200 Southcenter Blvd. Tukwila, W A 98188 With a copy to: Ms. Shelley Kerslake, Esq. Kenyon Disend, PLLC 11 Front St. So. Issaquah, W A 98027 Page 7 of9 G:\City Attomey\DCmCONTRACTS\Tukwila2 - fix.DOC TO PCP: Ken Kester P.O. Box 53405 Bellevue, W A 98015 14. Governing Law: Venue. The laws of the State of Washington shall govern the validity, enforcement, and interpretation of this Agreement. Any dispute or cause of action under this Agreement shall be resolved in King County Superior Court, State of Washington. 15. Mutual Agreement. Both Parties agree that this Agreement has been mutually negotiated and drafted with the advice of legal counsel and that in the event of a dispute arising out of this Agreement, neither party shall be construed as the drafting party. 16. Integration: Modification: Waiver. This Agreement constitutes the complete and final expression of the agreement of the Parties with respect to the herein described transactions, and supersedes all previous contracts, agreements, and understandings of the Parties, either oral or written. This Agreement cannot be modified, or any of the terms hereof waived, except by an instrument in writing (referring specifically to this Agreement) executed by the party against whom enforcement of the modification or waiver is sought. 17. Counterpart Execution. This Agreement may be executed in several counterparts, each of which shall be fully effective as an original and all of which together shall constitute one and the same instrument. 18. Invalid Provisions. If anyone or more of the provisions of this Agreement, or the applicability of any such provision to a specific situation, shall be held invalid or unenforceable, such provision shall be modified to the minimum extent necessary to make it or its application valid and enforceable, and the validity and enforceability of all other provisions of this Agreement and all other applications of any such provision shall not be affected thereby. 19. Binding Effect. This Agreement shall be binding upon and inure to the benefit of each party hereto, and their respective heirs, personal representatives, successors, and assigns. 20. Assignment. No party may assign its rights hereunder without the written consent of the other party, which consent shall not be unreasonably withheld. For purposes of this Agreement, a party's refusal to consent to a proposed assignment shall be deemed reasonable if such assignment would cause any of the above transactions not to qualify as exchanges pursuant to Section 1031 of the Internal Revenue Code, as amended. 21. Authority. City warrants that the City Council of the City has lawfully approved this Agreement and has authorized its Mayor to execute this Agreement and Page 8 of9 G:\City Attorney\DCmCONTRACTS\Tukwila2 - fix.DOC lawfully bind the City to its tenns. PCP warrants that its shareholders, executive officers, and directors are fully authorized to enter into this Agreement and lawfully bind PCP to its tenns. CITY OF TUKWILA By: Steven M. Mullet, Mayor Approved as to Fonn: By: Shelley M. Kerslake, City Attorney PACIFIC COMMERCIAL PROPERTIES By: Its: Page 9 of9 G:\City Attomey\DCmCONTRACTS\Tukwila2 - fix.DOC