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HomeMy WebLinkAbout16-Development Services OUHAL CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Valerie C. Ross, Director Subject: Resolution approving a Purchase and Sales Agreement with Tim Burgess for the property located at 120 S. "D" Street for a Fire Department Maintenance Facility and authorization to prepare financing documents for purchase under the Joint Powers Financing Authority. MCC Date: June 15,2009 Dept: Development Services Date: June 3, 2009 File No. 15.05-267 Synopsis of Previous Council Action: 04-23-2009 - Resolution No. 2009-85 was adopted, approving a right of way contract with Caltrans for the sale of the Fire Department Repair Facility located at the corner of Base Line and "H" Streets. Recommended Motion: 1. Adopt Resolution; AND 2. That the City Attorney's Office and the Director of Development Services be authorized to proceed with the preparation of all necessary documents for financing the proposed purchase under the Joint Powers Financing Authority. ~j1JOf~ Valerie C. Ross Contact person: Laszlo "Les" Fogassy Staff Report, Map, Supporting data attached: Reso., Agreement Ward: 1 $400,000 (Down payment) / $60,000 annual payments for 5 years; $1.2 Million after 5 years, or $100,000 and extension of annual payments FUNDING REQUIREMENTS: Amount: for an additional 5 years. Phone: 5026 Source: (Acct. No.) N/A (Acct. Description) Council Notes: g'5C) J- 5:3 Finance: Agenda Item No. {iP CI.. (S -Uf CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report SUBJECT: Resolution approving a Purchase and Sales Agreement with Tim Burgess for the property located at 120 S. "D" Street for a Fire Department Maintenance Facility and authorization to prepare financing documents for purchase under the Joint Powers Financing Authority. BACKGROUND: As a result of the 1-215 widening project, Caltrans recently acquired the City's Fire Department Maintenance Facility located at the northwest corner of Base Line Street and "H" Street. In addition to $1,430,000 for the purchase of the property, Caltrans will also be reimbursing the City for certain allowable relocation costs. In May, 2008, the City entered into a one year lease for a temporary maintenance facility at 225 W. Orange Show Lane. That lease expired on April 30,2009. Economic Development Agency ("EDN') staff has been working with the Fire Department to obtain a suitable long term location. The vacant building located at 120 S. "D" Street was determined to be a suitable site. Due to the urgency of establishing a more permanent location, a short term lease was entered into on April 1, 2009, between the property owner of that location, Tim Burgess, and the EDA, at a cost of $1 per month subject to a 30-day termination provision by either party. The EDA thereby allowed the City Fire Department to take occupancy of the building under this interim arrangement pending the preparation and approval of all final documents by the City and the Joint Powers Financing Authority ("JPF A") between the City and EDA. A longer term solution with an immediate purchase of the building was negotiated between the property owner and EDA staff. The property was appraised for $1,500,000 in its prior "as is" condition. The negotiated sales price of $1,600,000 includes $200,000 worth of improvements to the property to include ADA compliance, electrical upgrades and alarms, roof repairs, new ceilings and fixtures and a clarifier that could not be relocated from the former "H" Street facility. As set forth in the Purchase and Sales Agreement, the City will make a cash down payment of $400,000, and interest only payments at 5% for five years, to be paid semi-annually at $30,000 per payment. At the end of five years, the City will have the option to pay the remaining principal balance of $1,200,000 in full, or extend payments to the seller for an additional five year term upon payment of a $100,000 to the seller to reduce the principal balance of the loan. The payment of the $100,000 will thus allows the City to continue the interest only payments for an additional 5-year term. The City may prepay the balance to the seller at anytime without a pre-payment penalty. At the end of the second 5-year term, the principal balance would be $1,100,000. As previously approved, $800,000 of the $1,430,000 proceeds from the sale of the Base Line and "H" site will go into the General Fund, with the remaining $630,000 to go to the Fire Department to cover relocation expenses not reimbursed by Caltrans. The $400,000 down payment is to be Staff Report - Continued made from the $630,000, with the balance of $230,000 to be used for additional improvements to the new site, if needed. Additional improvements have not been identified at this time. As proposed, the JPFA will be used to finance the balance of $1,200,000 with tax-exempt seller take-back financing, to be set forth in the agreements and various documents to be submitted for your review and action at a near future date. Title to the building will transfer from the seller to the JPF A upon the close of escrow. The Purchase and Sales Agreement may be signed either directly by the JPF A or signed by the City and then assigned to the JPF A. The JPF A will hold title to the property under the Trust Indenture between the JPF A and the seller. The JPF A will then lease the property to the City under an annual appropriations lease agreement that allows the City to prepay the balance at anytime. Nothing in the lease agreement commits the City to remit lease payments for other than a year- to-year basis pursuant to each annual City budget. The seller will have the benefit of and be secured by a deed of trust on the property as will be owned in fee by the JPF A during the period of the financing. At such time as the City elects to either refinance the property with other tax- exempt bond proceeds or cash payments from the Fire Capital Development Impact Fee ("DIF") accounts, title would then vest in the City after the seller financing had been paid in full. The City Attorney's office is preparing all documents for this transaction and any required legal opinions would be rendered by Lewis Brisbois Bisgaard & Smith LLP who will also make the necessary filings with the State of California and the IRS. This financing is based upon a similar form of financing previously completed by EDA. FINANCIAL IMP ACT: The $400,000 down payment is to be paid from the proceeds of the sale of the Fire Department Maintenance Facility located at Base Line and "H" Streets to Caltrans. Interest only payments will be paid for up to five years in 10 semi-annual payments of $30,000 (total of $300,000). The principal balance of $1,200,000 is to be repaid at the end of five years, unless the City exercises its option to extend for an additional five years upon payment of a $100,000 extension fee to the seller to be applied to reduce the principal balance of the loan as a credit against the principal amount owed. The remaining principal amount of $1,100,000 is then due at the end of the second five-year term after the payment of five additional years of interest only payments. All payments, except the initial down payment, are to be paid under the JPF A financing structure. Staff Report - Continued RECOMMENDATION: Adopt resolution and authorize the preparation of various documents for financing the purchase through the lPF A. Attachments: -Site Map -Resolution and Agreement . C'.l = ~ o o e ~ ~ o e ~ =0 ~ e~ 0"" ~ ~ -0 Ooc >-XN :=00 U~" COc(") '-....... !:::'-... lD CD . CD ::::< ::::< -0 :> -0 U1 :> U1 '" L.. .'" "'= "'-0 "'-::r: '" "- '" -<:: . f-'-'- c c_ 2;::"- ~- ~" e- ". ~~ <;;:;: '0 ~- lll1~ -, ., Ii, cc@ . ::. ' ~ A d " : ., ~ - -, ~ - ,8 ~- ;:: ~ ' (i'III!I.t """"- @ '~~ I~ ,; , -'-,:, '?'~~I, '.., --. k "-~ - -'''-, -........., ',...','-jj', -,_ ___ 1)___ '. 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'" :; " ) , , ~ " ------ ----~ - ,--- - @ ~ JO ~ :l.aallS 'OOOO-09-C:U-9B~O - 6002:-eOOl ''r/':J 'OU!pJEUJElS ues 'a 'i'-' <" '" " I J; :t: f , ..J I " 0 1 @ I III ;:~ ~- "':; --- ~ ~ e ~ ~o -u a.~o oce ::::Ea....=Q ~ ~=o -........,1:; 0- ~ ~= ~ ~ = ~~ ~oe ~oo ""=~ o u ~ '" ... ~ .... 3=" "~ ~ "~ .:=-: ~~ ::; ;; ~ o ~ o ~ 1 t(Q)~l1 RESOLUTION NO. 2 RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY ESTABLISHING THE FAIR MARKET VALUE OF THAT CERTAIN PARCEL OF REAL PROPERTY LOCATED AT 120 SOUTH "D" STREET, SAN BERNARDINO, COMMONLY KNOWN AS ASSESSOR'S PARCEL NUMBER 0134-122-60, RELATIVE TO THE RELOCATION OF THE FIRE DEPARTMENT'S MAINTENANCE FACILITY, AUTHORIZING SAID PURCHASE AND AUTHORIZING AND DIRECTING THE EXECUTION OF A PURCHASE AND SALES AGREEMENT. 3 4 5 6 7 8 9 10 WHEREAS, the San Bernardino Joint Powers Financing Authority ("JPFA") desires to acquire that certain parcel of real property located 120 South "D" Street, San 11 12 Bernardino, being a portion of real property commonly known as Assessor's Parcel Number 0134-122-60, and more fully described in Exhibit "I" attached hereto and made a 13 14 15 part hereof, relative to the relocation of the Fire Department's maintenance facility; and WHEREAS, Tim J. Burgess is the record owner of said real property to be 16 acquired; and 17 WHEREAS, an appraisal has been prepared by Smothers Appraisal, a California 18 19 general certified appraiser in the amount of $1 ,500,000.00; and WHEREAS, the Economic Development Agency, on behalf of the JPF A, has 20 21 22 23 reviewed the appraiser's determination of the fair market value of the land and his report thereon; and WHEREAS, the Economic Development Agency, on behalf of the JPF A, and the 24 25 26 property owner have negotiated the amount of $1,600,000.00 as the purchase price of said real property, which includes $200,000 in additional building improvements to be 27 completed prior to the close of escrow. 28 NOW, THEREFORE, THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: .# , l.p 1 RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY ESTABLISHING THE FAIR MARKET VALUE OF THAT CERTAIN PARCEL OF REAL PROPERTY LOCATED AT 120 SOUTH "D" STREET, SAN BERNARDINO, COMMONLY KNOWN AS ASSESSOR'S PARCEL NUMBER 0134-122-60, RELATIVE TO THE RELOCATION OF THE FIRE DEPARTMENT'S MAINTENANCE FACILITY, AUTHORIZING SAID PURCHASE AND AUTHORIZING AND DIRECTING THE EXECUTION OF A PURCHASE AND SALES AGREEMENT. 2 3 4 5 SECTION 1. That said parcel of real property owned by Tim J. Burgess, as 6 7 8 9 10 11 12 13 14 described in said Exhibit "1 ", is hereby determined to have a fair market value of $1.600.000.00 based on the report by said appraiser and as further negotiated by the Economic Development Agency, on behalf of the JPFA, and the property owner. SECTION 2. The purchase of said real property, as described herein, in the amount of $1,600,000.00, is hereby approved. SECTION 3. That the Chairperson of the JPFA is hereby directed and authorized to execute on behalf of said JPF A, a Purchase and Sales Agreement, a copy of which is 15 attached hereto as said Exhibit "1," and incorporated herein by this reference, for the 16 purchase of certain real property generally located at 120 South "D" Street, and more fully 17 described therein. 18 19 SECTION 4. Said Agreement shall be null and void if either party fails to execute 2 0 the Agreement within ninety (90) days of the date of adoption of this Resolution. 21 / / 22 / / 23 24 25 26 27 28 2 1 RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY ESTABLISHING THE FAIR MARKET VALUE OF THAT CERTAIN PARCEL OF REAL PROPERTY LOCATED AT 120 SOUTH "D~ STREET, SAN BERNARDINO, COMMONLY KNOWN AS ASSESSOR'S PARCEL NUMBER 0134-122-60, RELATIVE TO THE RELOCATION OF THE FIRE DEPARTMENT'S MAINTENANCE FACILITY, AUTHORIZING SAID PURCHASE AND AUTHORIZING AND DIRECTING THE EXECUTION OF A PURCHASE AND SALES AGREEMENT. 2 3 4 5 6 I HEREBY CERTIFY that the foregoing resolution was duly adopted by the San Bernardino Joint Powers Financing Authority at a meeting 7 8 thereof held on the , 2009, by the following day of 9 vote, to wit: 10 Board Members: AYES NAYS ABSTAIN ABSENT 11 12 13 ESTRADA BAXTER 14 15 BRINKER SHORETT 16 17 18 KELLEY JOHNSON 19 20 21 MCCAMMACK Rachel G. Clark, Secretary 22 23 The foregoing resolution is hereby approved this _ day of 2009. 24 25 26 PATRICK J. MORRIS, Chairperson San Bernardino Joint Powers Financing Authority 27 28 3 EXHIBIT "1" AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY This AGREEMENT dated this day of ,20_ is made and entered into by and between THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, organized and existing under the laws of the State of California, hereinafter called "Buyer", and Tim J. Burgess, a single man" hereinafter called "Seller" (sometimes jointly referred to herein as the "Parties"). WITNESSES THAT: IT IS AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS: I. Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller that certain real property, herein called "the Property," generally located at 120 South "D" Street, situated in the City of San Bernardino, County of San Bernardino, State of California, described in Exhibit "A" and shown on a plat as Exhibit "B", both attached hereto and incorporated by this reference, upon the terms and conditions herein set forth. 2. The total purchase price for the fee interest shall be the sum of one million six hundred thousand dollars ($1,600,000) plus costs as such costs are specifically set forth herein. The purchase price is based upon an appraisal of the fair market value ofthe Property. The appraisal made no attempt to assign value to any lesser interest in the Property, including any leasehold estate. The purchase price, therefore, is the total price for the Property without distinction or separation for various interests that may be held in the Property. Seller shall be responsible for any apportionment or allocation of the purchase price if required for separately held interests that may exist. 3. Except as otherwise expressly provided herein, all costs of preliminary title report, Phase I Environmental Study and Report, and report on tax and lien payment status shall be paid by Buyer. Buyer shall have 45 days following opening of escrow to approve or disapprove any contingency items. Seller shall pay for remediation of any disapproved items. Upon failure of Seller to effect a timely cure Buyer may in the exercise of its sole discretion elect to terminate and cancel this Agreement by notice to the Seller. Thereafter, Buyer shall in no manner be further obligated by the terms of this Agreement. 4. Escrow a. Escrow shall be opened with Chicago Title Company, San Bernardino office. The escrow fee shall be paid by contribution in equal sum from the Buyer and the Seller. Seller shall pay for a CL T A policy and all transfer tax. The Buyer shall pay for an AL T A Title policy if such shall be required. Buyer shall pay the recording fees. All other escrow charges shall be divided between the Seller and the Buyer in the customary manner for a transaction of this type. I b. Escrow instructions shall include the requirement for the completion of the rehabilitation to the building and certification of good working order described in Exhibit "c" attached hereto and incorporated by this reference. c. Prior to close of escrow Buyer shall deposit therein $400,000. Additionally, Buyer shall cause to be deposited the Promissory Note in the principal sum of one million two hundred thousand dollars ($1,200,000), and Trust Indenture in form as agreed by the Parties. d. Seller shall deposit an executed Grant Deed for the Property, 5. Title to the fee interest in the Property shall be delivered free and clear of all liens, encumbrances, conditions, restrictions, easements, rights of possession, and leasehold interests excepting only such matters of title specifically waived in writing by the Buyer. Seller shall provide Buyer with a Release of Lien or Consent to Easement from each holder of a mortgage and/or deed of trust that is a lien against the Property. The balance ofthe unpaid principal and interest due on any note or notes secured by mortgages, deeds of trust, or other lien on the subject property, up to and including the amount to be paid Seller under the terms of this Agreement, shall be deducted from the purchase price and paid to the persons or entities entitled thereto, ifthey so require. In such event, prepayment penalties, if any, together with trustee's fees and recording costs will be paid by Seller. Seller shall provide Buyer with a Consent to Easement from each Lessee having a leasehold interest in the property, or from any other party claiming to have an interest in the property. Those matters of title specifically waived by the Buyer are as follows: (a) Current property taxes, including general and special taxes and assessments collected therewith, which shall be allocated pursuant to applicable sections of the Revenue and Taxation Code; (b) The lien of supplemental taxes, if any, assessed pursuant to the provisions of chapter 3.5 (commencing with Section 75) of the Revenue and Taxation Code of the State of California; (c) Such other matters affecting title to or use of the Property which are approved in writing by Buyer. 6. Taxes, assessments, penalties, interest charges, delinquency charges, and municipal service charges of every kind levied upon or assessed against the Property, except as otherwise expressly set forth herein or arising from the subj ect fee interest being acquired, shall be paid by Seller. 7. For the purpose of conveying the herein described fee interest to Buyer, Seller shall execute, acknowledge, and deliver to Buyer a Grant Deed for recordation, in accordance with this Agreement. 2 8. a. Seller hereby states that, to the best of Seller's knowledge, during the period of Seller's ownership of the Property, there have been no known underground storage tanks or related equipment nor known existence, disposal, storage, releases or threatened releases of hazardous materials, substances or hazardous wastes on, from or under the Property. Seller further represents that Seller has knowledge of underground storage tanks and related equipment , that was properly permitted, removed and inspected, but no knowledge of the existence, disposal, release, or threatened release of hazardous materials, substances or hazardous wastes, on, from, or under the Property which may have occurred prior to Seller taking title to the Property. b. The term "hazardous materials" when used in this Agreement shall mean any hazardous waste or hazardous substance as defined in any federal, state, or local statute, ordinance, rule, or regulation applicable to the property, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (Title 42 United States Code sections 9601-9675), the Resource Conservation and Recovery Act (Title 42 United States Code sections 6901-6992k), the Carpenter-Presley-Tanner Hazardous Substance Account Act (Health and Safety Code sections 25300-25395.15), the Hazardous Waste Control Law (Health and Safety Code sections 25100-25250.25, and any state and federal underground tank laws, rules and regulations. "Hazardous materials' shall also include asbestos or asbestos-containing materials, radon gas, and petroleum or petroleum fractions, whether or not defined as a hazardous waste or hazardous substance in any such statute, ordinance, rule, or regulation. c. The acquisition price of the Property being acquired in this transaction reflects the negotiated value for the Property without the presence of contamination. If prior to the close of escrow the Buyer is placed on notice by the Seller or any other source of information that leads it reasonably to conclude that any hydrocarbonous substance or any hazardous substance or material, asbestos or asbestos-bearing material or other environmental condition is present and which renders the Property subject to legal requirements for investigation, corrective or remedial action on, in or under the Property, Buyer shall notify Seller in writing of the same within 10 calendar days. Buyer may within 20 calendar days after such notice, in the exercise of its sole discretion elect to terminate and cancel this Agreement by notice to the Seller and to Chicago Title. Thereafter, Buyer shall in no manner be further obligated by the terms of this Agreement. Buyer may otherwise elect to continue this Agreement or to continue this Agreement as modified by executed written agreement of the Parties. Failure to provide notice to Seller as provided herein shall constitute an election to continue the Agreement. If the notice of the presence of the hydrocarbonous substance, etc., is received after the close of escrow, Buyer may cause the condition to be corrected or remedied, or may pursue any other options as exist, in accordance with applicable law. Consistent with the definitions set forth hereinabove, as used in this paragraph, "any hazardous substance or material, asbestos or asbestos-bearing material or other environmental condition" shall be as determined under federal, state or local law then in effect. 3 d. Seller agrees that it shall within 24 hours or receipt of such notice place Buyer on notice of the presence of any infonnation Seller has received regarding the presence or absence relative to the Property of hydrocarbonous substance or any hazardous substance or material, asbestos or asbestos-bearing material or other enviromnental condition as those terms are used herein. e. The representations and promises made in this paragraph are intended to, and shall survive the execution, delivery and recordation of the deed referenced in paragraph number? 9. Buyer warrants to Seller that Buyer has not used the services ofa real estate broker. Seller shall be responsible at Seller's sole expense for real estate brokerage fees or commissions, if any. 10. Seller and Buyer shall, upon request by the other, execute, acknowledge, and deliver such documents or take such action as may be necessary or convenient to carry out the spirit and intent of this Agreement. II. Time is of the essence in this Agreement. 12. In the event that Seller is unable to convey to Buyer the Property as herein provided within 90 days ofthe date ofthis Agreement, then Buyer, at its option, may terminate and cancel this Agreement and, in such event, Buyer shall in no manner be further obligated by the terms of this Agreement. 13. If suit should be brought for any sum due or the enforcement or declaration of any right or obligation hereunder, by either party, the prevailing party shall be entitled to all costs incurred in connection with such action, including reasonable attorney's fees. 14. Any notice which either party mayor is required to give shall be in writing and given by personal delivery or mailing same by certified mail, return receipt requested, postage prepaid, to the other party at the address shown below or at such other place as may be designated by the parties from time to time, and any notice so mailed shall be deemed received on the third day after mailing. Buyer's address: San Bernardino Joint Powers Financing Authority 201 North "E" Street, Third Floor San Bernardino, CA 92418 Attn: Executive Director 4 Seller's address: Tim J. Burgess 1625 Iowa Ave Riverside, CA 92507 15. This Agreement is subject to final approval of the Mayor and Common Council of the City of San Bernardino. 16. Seller represents, warrants and covenants to Buyer as of the date of this Agreement and as of the date of the recording of the Grant Deed transferring the Property to the Buyer (the "Closing"), as follows: a. No Condemnation. To the best of the Seller's knowledge, there are no pending or threatened condemnations or similar proceedings affecting the Property, or any portion thereof, nor does the Seller have any knowledge that any such action is contemplated. b. No Proceedings. To the best of the Seller's knowledge, there are no legal actions, suits, or other legal or administrative proceedings, including condemnation cases, pending or threatened against or affecting the Property. Seller has not received and is not aware of any notice from any public buyer or entity with respect to any current or future proceeding against or basis for any future proceeding against or affecting the Property or any part of the Property, or concerning any existing or potential, past, present or future hazardous materials at the Property. c. No Violation of Law. Seller represents and warrants that, to the best of the Seller's knowledge, as of the date of this Agreement and as of the Closing, the Property is not in violation of any law, ordinance or regulation of any governmental authority including those relating to the environmental conditions on, under or about the Property, including, but not limited to, soil and groundwater conditions. d. Clear Title. Seller represents and warrants that Seller is the owner of the Property and has marketable and insurable fee simple title to the Property free of restrictions, leases, liens and other encumbrances, except for the exceptions permitted pursuant to paragraph 4, above. During the term of this Agreement, Seller shall not conveyor accept any offer to convey the Property or any portion of the Property nor shall Seller encumber or permit encumbrance of the Property in any way nor grant any property, contract or occupancy right relating to the Property or any portion thereof without the prior written consent of Buyer, which may be withheld in Buyer's sole and absolute discretion. 5 e. Contracts. Seller hereby covenants, represents, and warrants that at the Closing, there will be no contracts, licenses, commitments, or undertakings concerning maintenance, operation, or repair of the Property or equipment on the Property, or the performance of services on the Property, including payment for such services performed prior to Closing, or the use of the Property or any part of it, by which Buyer would become obligated or liable to any person. If any person or entity makes a lawful claim for payment for services performed prior to Closing (other than services provided to Buyer), Seller will be obligated to payor cause to be paid such claim prior to Closing, subject to Seller's right to contest the validity of such claim. If any such claim for services performed prior to Closing (other than services provided to Buyer) is made after the Closing, Seller shall indemnify, defend, and hold Buyer harmless from any and all claims, demand, or liability. This duty of defense and indenmification shall survive the Closing. f. No Default. Seller hereby covenants, represents, and warrants that, to the best of Seller's knowledge and belief, Seller has received no notice of any default under any contract, transaction, agreement, encumbrance, or instrument pertaining to the Property, which has remained uncured as of the date of this Agreement. The obligation to notify Buyer of notices of default shall extend to the Closing. 17. Page numbering references in this Agreement do not apply to exhibits or other attachments. Diagrams, maps and/or drawings attached to this agreement, if any, are provided for illustrative purposes only. In the event of conflict with a written description, the written description shall control. 18. This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors, representatives, and assigns. 19. This Agreement represents the entire and integrated agreement between Seller and Buyer and supersedes all prior negotiations, representations, or agreements, either written or oral. This Agreement may be amended only by written instrument signed by Seller and Buyer /I /I 6 The undersigned represent and warrant they are duly authorized to execute this Agreement and to bind the parties. Dated: SELLER TlM J. BURGESS. By: TlM J. BURGESS BUYER SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, Organized and existing under the laws of the State of California By: Chairperson Approved as to Form: By: Agency Counsel 7 EXHIBIT" A" LEGAL DESCRIPTION Property Address: 120 South "D" Street APN : 0136-122-60 THAT PORTlON OF LOTS 1,2 AND 3, BLOCK "D", THE PEPPERS, IN THE ClTY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 17 OF MAPS, PAGE 8, RECORDS OF SAID COUNTY, AND THAT PORTlON OF D STREET, VACATED BY RESOLUTlON 9848, RECORDED MAY 29, 1969 IN BOOK 7241. PAGE 713, OR DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF LOT 1, BLOCK "D" OF THE PEPPERS, SUBDIVISION, SAID POINT ALSO BEING IN THE EAST LINE OF STODDARD AVENUE, (VACATED BY RESOLUTION 8506, RECORDED JANUARY 27, 1967 IN BOOK 6764. PAGE 380, OFFICIAL RECORDS) 60.00 FEET WIDE; THENCE SOUTH 164.91 FEET ALONG THE EAST LINE OF SAID VACATED STODDARD AVENUE; THENCE NORTH 890 59' 21" EAST 282.78 FEET TO A POINT ON A TANGENT CURVE CONCAVE TO THE NORTH WITH A RADIUS OF 20.00 FEET AND A RADIAL BEARING OF NORTH 000 39" WEST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 640 59' 21", AN ARC DISTANCE OF 22.69 FEET TO A TANGENT LINE; THENCE NORTH 250 00' 00" EAST, 71.88 FEET ALONG SAID TANGENT LINE TO A POINT ON A TANGENT CURVE CONCAVE TO THE WEST WITH A RADIUS OF 208.75 FEET AND A RADIAL BEARING OF NORTH 65000' 00" WEST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 250 00' 00", AN ARC DISTANCE OF 91.08 FEET TO A POINT ON THE SOUTH LINE OF THE ATCHINSON, TOPEKA AND SANTA FE RAILROAD 50.00 FEET WIDE; THENCE SOUTH 890 59' 25" WEST 350.83 FEET ALONG SAID SOUTH LINE OF RAILROAD RIGHT OF WAY TO THE POINT OF BEGINNING. CONTAINS 54.409.2 SQUARE FEET, MORE OR LESS. 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CLU.<t EXHIBIT "c" REHABILITATION AND CERTIFICATION REQUIREMENTS Prior to close of escrow, Buyer shall provide satisfactory proof of the following 1. Building Rehabilitation a. rewire of building with 230 amp power b. install new heat and air in office portion of building c. replace and paint fascia board on office portion of building d. paint north exterior wall of warehouse building e. paint walls and replace carpet in office building f. move wall, replace door and replace plumbing fixtures in front restroom to be ADA compliant g. replace plumbing fixture in rear restroom and install 3 '6" door h. repair and replace damaged ceiling tiles in office building 1. install 15' x 60' truck wash area at west end of warehouse building including City Water Department approved clarifier plumbed to City sewer. J. Slurry coat south parking lot k. Remove pole sign II. Certify in good condition: a. all indoor and exterior lights and light fixtures b. roll-up doors, man doors and locking mechanisms. c. Chain link fencing and rolling gates m. Warranty roof is free of leaks for 3 years from close of escrow. 8 AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY This AGREEMENT dated this day of , 20 is made and entered into by and between THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, organized and existing under the laws of the State of California, hereinafter called "Buyer", and Tim J. Burgess, a single man" hereinafter called "Seller" (sometimes jointly referred to herein as the "Parties"). WITNESSES THAT: IT IS AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS: I. Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller that certain real property, herein called "the Property," generally located at 120 South "D" Street, situated in the City of San Bernardino, County of San Bernardino, State of California, described in Exhibit "A" and shown on a plat as Exhibit "B", both attached hereto and incorporated by this reference, upon the terms and conditions herein set forth. 2. The total purchase price for the fee interest shall be the sum of one million six hundred thousand dollars ($1,600,000) plus costs as such costs are specifically set forth herein. The purchase price is based upon an appraisal of the fair market value ofthe Property. The appraisal made no attempt to assign value to any lesser interest in the Property, including any leasehold estate. The purchase price, therefore, is the total price for the Property without distinction or separation for various interests that may be held in the Property. Seller shall be responsible for any apportionment or allocation ofthe purchase price if required for separately held interests that may exist. 3. Except as otherwise expressly provided herein, all costs of preliminary title report, Phase I Environmental Study and Report, and report on tax and lien payment status shall be paid by Buyer. Buyer shall have 45 days following opening of escrow to approve or disapprove any contingency items. Seller shall pay for remediation of any disapproved items. Upon failure of Seller to effect a timely cure Buyer may in the exercise of its sole discretion elect to terminate and cancel this Agreement by notice to the Seller. Thereafter, Buyer shall in no manner be further obligated by the terms of this Agreement. 4. Escrow a. Escrow shall be opened with Chicago Title Company, San Bernardino office. The escrow fee shall be paid by contribution in equal sum from the Buyer and the Seller. Seller shall pay for a CLTA policy and all transfer tax. The Buyer shall pay for an AL T A Title policy if such shall be required. Buyer shall pay the recording fees. All other escrow charges shall be divided between the Seller and the Buyer in the customary manner for a transaction of this type. 1 b. Escrow instructions shall include the requirement for the completion of the rehabilitation to the building and certification of good working order described in Exhibit "C" attached hereto and incorporated by this reference. c. Prior to close of escrow Buyer shall deposit therein $400,000. Additionally, Buyer shall cause to be deposited the Promissory Note in the principal sum of one million two hundred thousand dollars ($1,200,000), and Trust Indenture in form as agreed by the Parties. d. Seller shall deposit an executed Grant Deed for the Property, 5. Title to the fee interest in the Property shall be delivered free and clear of all liens, encumbrances, conditions, restrictions, easements, rights of possession, and leasehold interests excepting only such matters oftitle specifically waived in writing by the Buyer. Seller shall provide Buyer with a Release of Lien or Consent to Easement from each holder of a mortgage and/or deed of trust that is a lien against the Property. The balance of the unpaid principal and interest due on any note or notes secured by mortgages, deeds of trust, or other lien on the subject property, up to and including the amount to be paid Seller under the terms of this Agreement, shall be deducted from the purchase price and paid to the persons or entities entitled thereto, ifthey so require. In such event, prepayment penalties, if any, together with trustee's fees and recording costs will be paid by Seller. Seller shall provide Buyer with a Consent to Easement from each Lessee having a leasehold interest in the property, or from any other party claiming to have an interest in the property. Those matters of title specifically waived by the Buyer are as follows: (a) Current property taxes, including general and special taxes and assessments collected therewith, which shall be allocated pursuant to applicable sections of the Revenue and Taxation Code; (b) The lien of supplemental taxes, if any, assessed pursuant to the provisions of chapter 3.5 (commencing with Section 75) of the Revenue and Taxation Code of the State of Cali fomi a; (c) Such other matters affecting title to or use of the Property which are approved in writing by Buyer. 6. Taxes, assessments, penalties, interest charges, delinquency charges, and municipal service charges of every kind levied upon or assessed against the Property, except as otherwise expressly set forth herein or arising from the subject fee interest being acquired, shall be paid by Seller. 7. For the purpose of conveying the herein described fee interest to Buyer, Seller shall execute, acknowledge, and deliver to Buyer a Grant Deed for recordation, in accordance with this Agreement. 2 8. a. Seller hereby states that, to the best of Seller's knowledge, during the period of Seller's ownership of the Property, there have been no known underground storage tanks or related equipment nor known existence, disposal, storage, releases or threatened releases of hazardous materials, substances or hazardous wastes on, from or under the Property. Seller further represents that Seller has knowledge of underground storage tanks and related equipment , that was properly permitted, removed and inspected, but no knowledge of the existence, disposal, release, or threatened release of hazardous materials, substances or hazardous wastes, on, from, or under the Property which may have occurred prior to Seller taking title to the Property. b. The term "hazardous materials" when used in this Agreement shall mean any hazardous waste or hazardous substance as defined in any federal, state, or local statute, ordinance, rule, or regulation applicable to the property, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (Title 42 United States Code sections 9601-9675), the Resource Conservation and Recovery Act (Title 42 United States Code sections 690l-6992k), the Carpenter-Presley-Tanner Hazardous Substance Account Act (Health and Safety Code sections 25300-25395.15), the Hazardous Waste Control Law (Health and Safety Code sections 25100-25250.25, and any state and federal underground tank laws, rules and regulations. "Hazardous materials" shall also include asbestos or asbestos-containing materials, radon gas, and petroleum or petroleum fractions, whether or not defined as a hazardous waste or hazardous substance in any such statute, ordinance, rule, or regulation. c. The acquisition price of the Property being acquired in this transaction reflects the negotiated value for the Property without the presence of contamination. If prior to the close of escrow the Buyer is placed on notice by the Seller or any other source of information that leads it reasonably to conclude that any hydrocarbonous substance or any hazardous substance or material, asbestos or asbestos-bearing material or other environmental condition is present and which renders the Property subject to legal requirements for investigation, corrective or remedial action on, in or under the Property, Buyer shall notify Seller in writing of the same within 10 calendar days. Buyer may within 20 calendar days after such notice, in the exercise of its sole discretion elect to terminate and cancel this Agreement by notice to the Seller and to Chicago Title. Thereafter, Buyer shall in no manner be further obligated by the terms of this Agreement. Buyer may otherwise elect to continue this Agreement or to continue this Agreement as modified by executed written agreement of the Parties. Failure to provide notice to Seller as provided herein shall constitute an election to continue the Agreement. If the notice of the presence of the hydrocarbonous substance, etc., is received after the close of escrow, Buyer may cause the condition to be corrected or remedied, or may pursue any other options as exist, in accordance with applicable law. Consistent with the definitions set forth hereinabove, as used in this paragraph, "any hazardous substance or material, asbestos or asbestos-bearing material or other environmental condition" shall be as determined under federal, state or local law then in effect. 3 d. Seller agrees that it shall within 24 hours or receipt of such notice place Buyer on notice ofthe presence of any information Seller has received regarding the presence or absence relative to the Property of hydro carbo no us substance or any hazardous substance or material, asbestos or asbestos-bearing material or other environmental condition as those terms are used herein. e. The representations and promises made in this paragraph are intended to, and shall survive the execution, delivery and recordation of the deed referenced in paragraph number 7. 9. Buyer warrants to Seller that Buyer has not used the services ofa real estate broker. Seller shall be responsible at Seller's sole expense for real estate brokerage fees or commissions, if any. 10. Seller and Buyer shall, upon request by the other, execute, acknowledge, and deliver such documents or take such action as may be necessary or convenient to carry out the spirit and intent of this Agreement. II. Time is of the essence in this Agreement. 12. In the event that Seller is unable to convey to Buyer the Property as herein provided within 90 days ofthe date ofthis Agreement, then Buyer, at its option, may terminate and cancel this Agreement and, in such event, Buyer shall in no manner be further obligated by the terms of this Agreement. 13. If suit should be brought for any sum due or the enforcement or declaration of any right or obligation hereunder, by either party, the prevailing party shall be entitled to all costs incurred in connection with such action, including reasonable attorney's fees. 14. Any notice which either party mayor is required to give shall be in writing and given by personal delivery or mailing same by certified mail, retum receipt requested, postage prepaid, to the other party at the address shown below or at such other place as may be designated by the parties from time to time, and any notice so mailed shall be deemed received on the third day after mailing. Buyer's address; San Bernardino Joint Powers Financing Authority 201 North "En Street, Third Floor San Bernardino, CA 92418 Attn: Executive Director 4 Seller's address: Tim J. Burgess 1625 Iowa Ave Riverside, CA 92507 15. This Agreement is subject to final approval of the Mayor and Common Council of the City of San Bernardino. 16. Seller represents, warrants and covenants to Buyer as of the date of this Agreement and as of the date of the recording of the Grant Deed transferring the Property to the Buyer (the "Closing"), as follows: a. No Condemnation. To the best of the Seller's knowledge, there are no pending or threatened condemnations or similar proceedings affecting the Property, or any portion thereof, nor does the Seller have any knowledge that any such action is contemplated. b. No Proceedings. To the best of the Seller's knowledge, there are no legal actions, suits, or other legal or administrative proceedings, including condemnation cases, pending or threatened against or affecting the Property. Seller has not received and is not aware of any notice from any public buyer or entity with respect to any current or future proceeding against or basis for any future proceeding against or affecting the Property or any part of the Property, or concerning any existing or potential, past, present or future hazardous materials at the Property. c. No Violation of Law. Seller represents and warrants that, to the best of the Seller's knowledge, as of the date of this Agreement and as of the Closing, the Property is not in violation of any law, ordinance or regulation of any governmental authority including those relating to the enviromnental conditions on, under or about the Property, including, but not limited to, soil and groundwater conditions. d. Clear Title. Seller represents and warrants that Seller is the owner of the Property and has marketable and insurable fee simple title to the Property free of restrictions, leases, liens and other encumbrances, except for the exceptions permitted pursuant to paragraph 4, above. During the term of this Agreement, Seller shall not conveyor accept any offer to convey the Property or any portion of the Property nor shall Seller encumber or permit encumbrance of the Property in any way nor grant any property, contract or occupancy right relating to the Property or any portion thereof without the prior written consent of Buyer, which may be withheld in Buyer's sole and absolute discretion. 5 e. Contracts. Seller hereby covenants, represents, and warrants that at the Closing, there will be no contracts, licenses, commitments, or undertakings concerning maintenance, operation, or repair of the Property or equipment on the Property, or the performance of services on the Property, including payment for such services performed prior to Closing, or the use of the Property or any part of it, by which Buyer would become obligated or liable to any person. If any person or entity makes a lawful claim for payment for services performed prior to Closing (other than services provided to Buyer), Seller will be obligated to payor cause to be paid such claim prior to Closing, subject to Seller's right to contest the validity of such claim. If any such claim for services performed prior to Closing (other than services provided to Buyer) is made after the Closing, Seller shall indenmify, defend, and hold Buyer harmless from any and all claims, demand, or liability. This duty of defense and indemnification shall survive the Closing. f. No Default. Seller hereby covenants, represents, and warrants that, to the best of Seller's knowledge and belief, Seller has received no notice of any default under any contract, transaction, agreement, encumbrance, or instrument pertaining to the Property, which has remained uncured as of the date of this Agreement. The obligation to notify Buyer of notices of default shall extend to the Closing. 17. Page numbering references in this Agreement do not apply to exhibits or other attachments. Diagrams, maps and/or drawings attached to this agreement, if any, are provided for illustrative purposes only. In the event of conflict with a written description, the written description shall control. 18. This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors, representatives, and assigns. 19. This Agreement represents the entire and integrated agreement between Seller and Buyer and supersedes all prior negotiations, representations, or agreements, either written or oral. This Agreement may be amended only by written instrument signed by Seller and Buyer II II 6 The undersigned represent and warrant they are duly authorized to execute this Agreement and to bind the parties. Dated: SELLER TIM J. BURGESS. By: TIM J. BURGESS BUYER SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, Organized and existing under the laws ofthe State of California By: Chairperson Approved as to Form: B'-:AV~ gen y Counsel 7 EXHIBIT "A" LEGAL DESCRIPTION Property Address: 120 South "D" Street APN : 0136.122.60 THAT PORTION OF LOTS 1,2 AND 3, BLOCK "D", THE PEPPERS, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 17 OF MAPS, PAGE 8, RECORDS OF SAID COUNTY, AND THAT PORTION OF D STREET, VACATED BY RESOLUTION 9848, RECORDED MAY 29, 1969 IN BOOK 7241. PAGE 713, OR DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF LOT 1, BLOCK "D" OF THE PEPPERS, SUBDIVISION, SAID POINT ALSO BEING IN THE EAST LINE OF STODDARD AVENUE, (VACATED BY RESOLUTION 8506, RECORDED JANUARY 27, 1967 IN BOOK 6764, PAGE 380, OFFICIAL RECORDS) 60.00 FEET WIDE; THENCE SOUTH 164.91 FEET ALONG THE EAST LINE OF SAID VACATED STODDARD A VENUE; THENCE NORTH 890 59' 21" EAST 282.78 FEET TO A POINT ON A TANGENT CURVE CONCAVE TO THE NORTH WITH A RADIUS OF 20.00 FEET AND A RADIAL BEARING OF NORTH 000 39" WEST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 640 59' 21", AN ARC DISTANCE OF 22.69 FEET TO A TANGENT LINE; THENCE NORTH 250 00' 00" EAST, 71.88 FEET ALONG SAID TANGENT LINE TO A POINT ON A TANGENT CURVE CONCAVE TO THE WEST WITH A RADIUS OF 208.75 FEET AND A RADIAL BEARING OF NORTH 650 00' 00" WEST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 250 00' 00", AN ARC DISTANCE OF 91.08 FEET TO A POINT ON THE SOUTH LINE OF THE ATCHINSON, TOPEKA AND SANTA FE RAILROAD 50.00 FEET WIDE; THENCE SOUTH 890 59' 25" WEST 350.83 FEET ALONG SAID SOUTH LINE OF RAILROAD RIGHT OF WAY TO THE POINT OF BEGINNING. CONTAINS 54.409.2 SQUARE FEET, MORE OR LESS. b <:> 6 <") ----- ./..:;.:;~ './.8 "Q "--""""'" I/O "- (pejeOeA 'lod) 3nN3^V - m:lVaa01S ~ "- I- W W a:: I- C/) C/) C/) w a:: <.9 Z o () ...J -- () I 1/8 - ~b {ft== 1 ~'.- " 'I ~ ~l;l I I I en ~ I I- @~ rn~+i' o ,^ ' a. VI I- OZ"- 0:::0 ' a.-"- 1-0 "-(ijrn 0-", <(~o wo.... o:::u,,: <(<(e OVlZ ~~O ~u...... ......~ ~~ iii~Vl ~~~ o::lZ~ Z~~ ~::;S~ Vl~O ~OP::: O.....:l~ ~~.....:l ~>~ ......~~ uClP::: ..... <;)~ ,~ ~ "" .s " .$ .sa '" ~ Cl - , ;,:. '"' .c .c ~ " Q) .sa -'" '" <> ~ ~ '-' '-' = CO - - ~ - CO - I >< W W U Z <( Z WI- I-w ~w <(0:: :=<~ w, 0::' _0 u..' >-I 1-1- -:::J Uo o::(f) 00 u..N z~ 01- F<( - 0 ~ 0<.0 :::JWI el-N U<(N <( U ~ oSJ, W>-I") (f)1-~ 0_0 a.--l ouz 0:: <(a. a.u..<( EXHffiIT "C" REHABILITATION AND CERTIFICATION REQUIREMENTS Prior to close of escrow, Buyer shall provide satisfactory proof of the following 1. Building Rehabilitation a. rewire of building with 230 amp power b. install new heat and air in office portion of building c. replace and paint fascia board on office portion of building d. paint north exterior wall of warehouse building e. paint walls and replace carpet in office building f. move wall, replace door and replace plumbing fixtures in front restroom to be ADA compliant g. replace plumbing fixture in rear restroom and install 3'6" door h. repair and replace damaged ceiling tiles in office building 1. install 15' x 60' truck wash area at west end of warehouse building including City Water Department approved clarifier plumbed to City sewer. J. Slurry coat south parking lot k. Remove pole sign II. Certify in good condition: a. all indoor and exterior lights and light fixtures b. roll-up doors, man doors and locking mechanisms. c. Chain link fencing and rolling gates m. Warranty roof is free of leaks for 3 years from close of escrow. 8