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HomeMy WebLinkAboutresolution.council.128-19 RESOLUTION #128 (Series of 2019) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING AN AGREEMENT BETWEEN THE CITY OF ASPEN AND CENTENNIAL-ASPEN II LIMITED PARTNERSHIP AUTHORIZING THE CITY MANAGER TO EXECUTE SAID CONTRACT ON BEHALF OF THE CITY OF ASPEN, COLORADO. WHEREAS, there has been submitted to the City Council an agreement between the City of Aspen and Centennial-Aspen II Limited Partnership, a true and accurate copy of which is attached hereto as "Exhibit A"; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, That the City Council of the City of Aspen hereby approves the agreement between the City of Aspen and Centennial-Aspen II Limited Partnership, a copy of which is annexed hereto and incorporated herein, and does hereby authorize the City Manager to execute said contract on behalf of the City of Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 12th day of November, 2019. T�9� Torre, Mayor I, Linda Manning, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held November 12, 2019. Linda Manning, C' y Clerk PURCHASE AGREEMENT This PURCHASE AGREEMENT(the"Agreement")is made this 13th day 65 vem !!019(the "Effective Date"), by and between CENTENNIAL-ASPEN II LIMITED PARTNERSHIP, a Colorado limited partnership("Owner")and the CITY OF ASPEN,a Colorado home rule municipal corporation("City"). RECITALS A. Owner owns in fee simple certain real property known as 100 Luke Short Ct,Aspen, Colorado 81611 and more particularly described on Exhibit A (the"Property"); B. The Property is encumbered by certain affordable housing covenants,conditions and restrictions agreed to by World Class Housing, Inc., Owner's predecessor in interest, for the benefit of the Board of County Commissioners of Pitkin County, Colorado ("County"); and C. The City wishes to purchase the right to impose certain affordable housing covenants,conditions and restrictions on the Property as substantially set forth in the form attached as Exhibit B (the "Deed Restriction")that will run to the benefit of the City commencing upon the expiration of the existing covenants,conditions and restrictions for the benefit the County. NOW THEREFORE,Owner and City agree as follows: 1) Purchase and Sale. Owner agrees to sell, and the City agrees to purchase, pursuant to the provisions of this Agreement, the right to impose the affordable housing covenants, conditions and restrictions set forth in the Deed Restriction. 2) Purchase Price. The purchase price for the Deed Restriction shall be TEN MILLION AND NO/100 DOLLARS($10,000,000.00)(the"Purchase Price"). 3) Payment of Purchase Price. At Closing(as defined in Section 5),the City shall deposit into escrow with an escrow agent to be detennined("Escrow Agent"),in cash or other immediately available funds,an amount equal to the Purchase Price. 4) Deed Restriction. On or prior to the Closing Date (as defined in Section 5), Owner shall deposit with the Escrow Agent an original of the Deed Restriction duly executed and notarized on behalf of Owner(the"Executed Deed Restriction"). 5) Closin . The"Closing Date"(or"Closing")shall be the date that the Executed Deed Restriction is recorded in the official property records of Pitkin County, Colorado, and shall occur on the same day as the PSA Closing(as defined below). However, in no event shall the Closing occur prior to adoption of the Approval Resolution (as defined below). The sale contemplated by this Agreement shall be consummated as follows: a) Owner shall cause to be deposited with the Escrow Agent,for recordation and delivery to City upon Closing,the Executed Deed Restriction,together with any additional documents as may be reasonably required by the Escrow Agent to consummate the Closing, including, without 1 limitation,a signed counterpart of a settlement statement of the parties' respective credits and debits for closing expenses (the"Settlement Statement"); and b) City shall deliver or cause to be delivered to the Escrow Agent,payment of the Purchase Price and any additional documents as may be reasonably required by the Escrow Agent to consummate the Closing,including,without limitation,a signed counterpart of the Settlement Statement. 6) Recording Order. At the Closing, the Executed Deed Restriction shall be recorded prior to the deed of conveyance by which title to the Property is transferred to the Buyer(as defined below) as part of PSA Closing, and Owner shall cause such Buyer to accept conveyance of title to the Property subject to the Executed Deed Restriction. 7) Costs. Each party shall be responsible for one-half(1/2) of the Escrow Agent's fees. The City will pay the recording fee for recording the Executed Deed Restriction. 8) Conditions Precedent to Closing. Notwithstanding anything in this Agreement to the contrary, each party's obligation to complete Closing under this Agreement is contingent upon the following conditions being satisfied as of the Closing Date. If any of the following conditions precedent set forth in this Section 7 is not satisfied as of the Closing Date, either party shall be entitled to terminate this Agreement. a) Injunctions. There shall be no effective injunction or restraining order of any nature issued by a court of competent jurisdiction which shall direct that this Agreement or the transaction contemplated herein not be consummated. b) City Challenges. There shall be no pending voter-initiated measure, referendum or legal challenge to the"Approval Resolution"(as defined below). c) Purchase Agreement. The City acknowledges that Owner is in negotiations with a third party ("Buyer")to sell the Property encumbered by the Deed Restriction. The City acknowledges that Owner has a loan on the Property and that entering into the Deed Restriction without lender's consent would be a violation of Owner's loan agreement. Owner's obligation to consummate the transaction contemplated by this Agreement is expressly contingent upon the closing of the transaction between Owner and Buyer(the"PSA Closing")and the satisfaction of Owner's existing loan in connection with the PSA Closing. Owner shall use commercially reasonable efforts to consummate such transaction within ninety (90) days of the Effective Date(the"PSA Deadline"). If Owner is unable to close such transaction on or prior to 4:00 p.m. Mountain Time on the PSA Deadline and promptly notifies City of such failure, this Agreement shall automatically terminate without any further action from any party and thereafter neither City nor Owner shall have any further rights or obligations hereunder. 9) Remedies for an Event of Default. a) City's Remedies Upon Default of Owner. In the event of default by Owner under this Agreement, the City shall be entitled, as its exclusive remedy, either to (i) elect to terminate this Agreement by written notice to Owner or (ii) enforce specific performance of Owner's 2 obligations. City shall be deemed to have elected to terminate this Agreement if City fails to file suit for specific performance against Owner in a court having jurisdiction in the county and state in which the Property is located, on or before the date that is 60 days following the date upon which the Closing was to have occurred. b) Owner's Remedies Upon Default of City. In the event of default by City under this Agreement, Owner shall be entitled, as its exclusive remedy to (i) terminate this Agreement or (ii) enforce specific performance of City's obligations. Owner shall be deemed to have elected to terminate this Agreement if Owner fails to file suit for specific perfornanee against City in a court having jurisdiction in the county and state in which the Property is located, on or before the date that is 60 days following the date upon which the Closing was to have occurred. 10)City Approval Condition. The City shall have until thirty (30) days after the Effective Date of this Agreement to negotiate with the Owner the final terms of the Deed Restriction and perform such due diligence as it deems appropriate. Either party may terminate this agreement,at its sole subjective discretion, by providing written notice of termination to the other party pursuant to paragraph 11. f),below,within such 30-day period. If notice of termination is not received by the other party prior to the end of such 30-day period,then this Agreement will continue in full force and effect and the parties shall proceed with the Closing subject to other express terms of this Agreement. 11)General Provisions. a) Amendments: Waiver. This Agreement may be amended or modified only by a written instrument executed by the party or parties asserted to be bound thereby. Except as otherwise expressly provided herein,no waiver of any provision of this Agreement shall be valid unless given in writing and duly executed by the party to be charged therewith. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition. b) Counterpails and Execution by Electronic Communication. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Delivery of an executed copy of this Agreement by facsimile, telecopy, e-mail, or other means of electronic communication producing a printed copy will be deemed to be an execution and delivery of this Agreement on the date of such corrununication by the party so delivering such a copy. c) Entire Agreement: Exhibits. This Agreement, together with all the Exhibits attached hereto and specifically incorporated herein(which are hereby incorporated into this Agreement as if set forth in full), constitutes the entire agreement between the parties with respect to the purchase and sale of the Property and supersedes all prior and contemporaneous agreements and understandings between the parties hereto relating to the subject matter hereof. Each party acknowledges and agrees that except for the specific representations, warranties, and covenants contained in this Agreement, the other party and its agents have not made any representations,warranties, or covenants to it. 3 d) Time is of the Essence. Owner and City hereby acknowledge and agree that time is strictly of the essence with respect to each and every term,condition,obligation,and provision hereof. e) Due Authorization. Owner and City each represents and warrants to the other party that: (a) the individual signing this Agreement on such party's behalf has full right,power and lawful authority to execute and deliver this Agreement, with no other individual needing to join in the execution hereof in order for this Amendment to be binding on such party: and(b) such party has full right,power and lawful authority to execute,deliver and perform its obligations under this Agreement, in the manner and upon the terms contained herein. f) Notices. All written notices required to be given shall be deemed given upon hand delivery or email to the person or entity to whom directed at its address shown herein,or at such other address as shall be given by notice pursuant to this paragraph. Copies of such notices shall be directed to the following addresses: TO CITY: City Manager 130 S. Galena St. Aspen, CO 81612 Email: Sara.Ott@cityofaspen.com With a copy to: Aspen City Attorney 130 South Galena Street Aspen,Colorado 81611 Email: Jim.True@cityofaspen.com TO OWNER: World Class Housing, Inc., a Delaware corporation Sam W. Brown,Jr., President Email: samwbrown(a)rnac.com With copy to: J.Bart Johnson Waas Campbell Rivera Johnson&Velaquez 420 East Main Street, Suite210 Aspen, CO 81611 Email: johnson@i4crlegal.com 4 Owner and the City have executed this Agreement under seal on the date stated above. CENTENNIAL-ASPEN II LIMITED PARTNERSHIP, a Colorado limited partnership By: Centennial-Aspen,a Limited Partnership, a Colorado limited partnership, its General Partner By: World Class Housing,Inc., a Delaware corporation, its General Partner By: Sam W. Brown,Jr., President ATTEST: THE CITY OF ASPEN, a Colorado home rule municipal corporation N e: Linda Mannine Name: Sara Ott Its: City Clerk Its: Citv Manaeer APPROVED AS TO FORM. By: e: James R. True, Esq. Its: City Attorney 5 EXHIBIT A Legal Description of the Property LOT 3 , THE CENTENNIAL CONDOMINIUM SUBDIVISION AND CONDOMINIUM PLAT, ACCORDING TO THE SECOND AMENDED PLAT OF THE CENTENNIAL CONDOMINIUM SUBDIVISION AND CONDOMINIUM PLAT, RECORDED JUNE 3, 1985 IN PLAT BOOK 17 AT PAGE 30. TOGETHER WITH THOSE EASEMENTS WHICH ARE A BENEFIT TO ABOVE SAID LOT 3, AS SET FORTH IN THE CONDOMINIUM DECLARATION FOR CENTENNIAL CONDOMINIUMS RECORDED OCTOBER 3 , 1984 IN BOOK 474 AT PAGE 479 AS AMENDED JANUARY 25, 1985 IN BOOK 480 AT PAGE 510 AND MARCH 7, 1985 IN BOOK 482 AT PAGE 455 . TOGETHER WITH THOSE EASEMENTS WHICH ARE A BENEFIT TO ABOVE SAID LOT 3, AS SET FORTH IN PERMANENT EASEMENT RECORDED JANUARY 13, 1986 IN BOOK 503 AT PAGE 253 . TOGETHER WITH THE AIRSPACE AS SET FORTH IN PARTIAL RELEASE OF EASEMENT RECORDED FEBRUARY 12 , 1986 IN BOOK 505 AT PAGE 225. TOGETHER WITH THOSE EASEMENTS WHICH ARE A BENEFIT TO ABOVE SAID LOT 3, AS SET FORTH IN PARKING AGREEMENT, LEASE, AND EASEMENT RECORDED APRIL 4 , 1986 IN BOOK 508 AT PAGE 380 . TOGETHER WITH THAT CERTAIN LEASEHOLD ESTATE FOR PARKING SPACES, AS CREATED BY PARKING AGREEMENT, LEASE, AND EASEMENT RECORDED APRIL 4, 1986 IN BOOK 508 AT PAGE 380, FOR A TERM ENDING APRIL 4, 2084 . Exhibit A EXHIBIT B Form of Deed Restriction (see attached) Exhibit B DOCUMENT PREPARED BYAND AFTER RECORDING RETURN TO: Senn Visciano Canges P.C. 1700 Lincoln Street,Suite 4300 Denver,CO 80203 Atm: Jeremy Rothstein,Esq. DEED RESTRICTION This DEED RESTRICTION (the "Agreement") is made this day of ___, 2019 (the "Effective Date"), by and between CENTENNIAL-ASPEN II LIMITED PARTNERSHIP, a Colorado limited partnership("Owner")and the CITY OF ASPEN,a Colorado home rule municipal corporation(the"City"). RECITALS A. Owner owns in fee simple certain real property known as 100 Luke Short Ct,Aspen, Colorado 81611 and more particularly described on Exhibit A(the"Property"); B. The Property is encumbered by certain affordable housing covenants,conditions and restrictions agreed to by World Class Housing, Inc., Owner's predecessor in interest, for the benefit of the Board of County Commissioners of Pitkin County, Colorado (the"County"); and C. Owner and the City wish to impose certain affordable housing covenants, conditions and restrictions on the Property as set forth below that will run to the benefit of the City commencing upon the expiration of the existing covenants, conditions and restrictions for the benefit of the County. NOW THEREFORE,Owner and the City agree that the Property shall be held,transferred, sold,conveyed,or occupied subject to the covenants, conditions and restrictions set forth below: 1) Definitions: a) The term"Centennial Apartments"used herein shall refer to that 148-unit rental apartment complex located on the Property. b) The term Disposition and Development Agreement ("DDA") used herein shall refer to that certain agreement dated May 10, 1983 encumbering the Property for the benefit of the County and all its various amendments (including, without limitation, the incorporated Rent Resolution No. 84-32 recorded in the real property records of the Clerk and Recorder of Pitkin County, Colorado (the "Records) at Book 465 and Page 348) between County and Owner and its various predecessors(together, "Centennial")for development and subsequent use of the Centennial Apartments. 1 c) The term "Deed Restriction" used herein shall refer to any duly recorded restrictions, covenants, or similar devices contained in or affecting agreements, deeds or similar instruments conveying.or affecting the Property or any portion thereof. d) The term "Urban Index" used herein shall refer to the Consumer Price Index - All Urban Consumers (CPI-U), U.S. City Average, All Items (1982-84=100) compiled by the United States Department of Labor, Bureau of Labor Statistics. By way of identification,the parties agree that the CPI-U index number for August 2019 is 256.558. If at the time of computation of rental increases as provided below the Urban Index as defined is not then being currently published, Centennial (and/or its then successor-in-interest) and the City shall agree on a substitute index which has historically approximated the Urban Index as defined. The parties further agree that the methodology they will use for calculating index changes in the Urban Index is that described in the instruction sheet from the Bureau of Labor Statistics, U.S. Department of Labor,which reads as follows: CALCULATING INDEX CHANGES Movements of the indexes from one month to another are usually expressed as percent changes rather than changes in index points, because index point changes are affected by the level of the index in relation to its base period while percent changes are not. The example in the accompanying box illustrates the computation of index point and percent changes. Percent changes for 3-month and 6-month period are expressed as annual rates and are computed according to the standard formula for compound growth rates. These data indicate what the percent change would be if the current rate were maintained for a 12- month period. INDEX POINT CHANGE CPI 315.5 Less previous index 303.5 Equals index point change 12.0 PERCENT CHANGE Index Point difference 12.0 Divided by the previous index 303.5 Equals 0.040 Results multiplied by one hundred 0.040 x 100 2 Equals percent change 4.0 e) The term "Guidelines" used herein shall refer to the published Aspen/Pitkin County Affordable Housing Guidelines,however described and as amended from time to time before or after the Effective Date (as defined below) of this Agreement. The term Guidelines shall include,without limitation,any existing or future recorded resolution,ordinance,or enactment of the(i)the City of Aspen,Colorado or its city Council;(ii)the Aspen/Pitkin County Housing Authority or its Board of Directors; (iii) or any successor or assignee of such governmental entities or their governing bodies replacing,amending,or serving a purpose or function similar to that of the Guidelines as presently constituted. 2) Tenn. The terms and conditions of restrictions set forth in Section 4 and Section 5 of this Agreement shall automatically become effective immediately upon the termination of the DDA pursuant to Section 2.01 of the DDA,as amended pursuant to Section 1 of the Third Amendment to the Disposition and Development Agreement recorded in the Records in Book 508 at Page 910 (the"Effective Date")and shall remain in full force and effect in perpetuity. 3) Unit Designations. Commencing on the Effective Date, and for the duration of this Agreement, those 36 units previously categorized or designated as "low-income" or"category 1" units shall be categorized or designated as "category 3" units for all purposes under the Guidelines and the Deed Restrictions and shall not be recategorized or redesignated without the written mutual consent of the owner or owners of the Property and those then holding legal authority to so categorize or designate units under the Guidelines or the Deed Restrictions as applicable. 4) Rental Rates. a) Commencing on the Effective Date, and in each subsequent year for the duration of this Agreement, the maximum monthly rental for each of the 148 rental units in the Centennial Apartments may be increased over the maximum monthly rental permitted for such units during the prior calendar year, whether actually rented at such rate or not during the prior calendar year, by a percentage amount equal to the percentage change in the Urban Index during the twelve months ending on July 31 of the prior calendar year. b) Centennial shall be in compliance with the maximum permitted monthly rental limitations of this Agreement, even if certain individual units in the Centennial Apartments exceed such maximum limitations,so long as the aggregated average monthly rent of all rental units in the Centennial Apartments,taken as a whole,does not exceed such maximum limitations. c) The provisions of this Section 4 supersede and shall govern over any and all conflicting or inconsistent provisions of the Guidelines or any Deed Restrictions pertaining to the maximum monthly rents chargeable for the 148 rental units in the Centennial Apartments or to the previous categorization or designation of the 36 rental units identified in Section 3(b) above as "low-income" or "category l," rather than "moderate-income," or "category 3" units as provided herein 5) Unit Sizes and Number of Bedrooms. Commencing on the Effective Date and for the duration of this Agreement,neither the number of bedrooms contained within the Centennial Apartments nor 3 the unit sizes of any of the 148 rental units within the Centennial Apartments shall be reduced without the consent of the City. 6) Injunctive Relief. In the event of a default,the City shall be entitled to all remedies in law or in equity and by decree to compel performance of any such terms,covenants,or conditions,it being agreed that the remedy at law for any breach of any such term, covenant, or condition is not adequate. 7) Default. In the event the City shall institute any action or proceeding against Owner or any subsequent owner or user of the Property relating to the provisions of this Agreement, the unsuccessful litigant in such action or proceeding shall reimburse the successful litigant for all reasonable costs and expenses incurred in connection with any such action or proceeding and any appeals therefrom,including reasonable attorneys' fees and court costs,to the extent permitted by the terms of any final order,decree,or judgment. 8) Rent Control. Owner and the City stipulate and agree that, in accordance with CRS 38-12- 301(2)(a) and (b),this Agreement constitutes a voluntary agreement and deed restriction to limit rent on the Property and to otherwise provide affordable housing stock. Owner wives any right it may have to claim that this Agreement violates CRS 38-12-301. 9) Severability. All rights provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate then applicable law and shall be limited to the extent necessary to render the remaining covenants valid and enforceable. If any term, provision, covenant or agreement or the application thereof to any person or circumstance shall be held illegal or unenforceable, the validity of the remaining terms, provisions, covenants or agreements or the application of such term,provision,covenant or agreement to persons or circumstances other than those to which it is held invalid or unenforceable shall not be affected. 10)Captions and Capitalized Terms. The captions preceding the text of each article and/or section are included only for convenience of reference. Captions shall be disregarded in the construction and interpretation of this Agreement. Capitalized terms are also selected only for convenience of reference and do not necessarily have any connection to the meaning that might otherwise be attached to such term in a context outside of this Agreement. 11)Time. Time is of the essence of this Agreement. 12)Non-Waiver. The failure of the City to insist upon strict performance of any of the terms, covenants or conditions shall not be deemed a waiver of any rights or remedies which that party may have or at law or equity and shall not be deemed a waiver of any subsequent breach or default in any of such terms, covenants or conditions. 13) Effect of Agreement. This Agreement shall constitute a covenant running with, and shall be appurtenant to the Property and be binding upon and inure to the benefit of the parties which have an interest in the benefited or burdened land and their respective successors and assigns in title. 14)Amendments.This Agreement may be amended by,and only by,a written agreement which shall be deemed effective only when recorded in the Records. No such amendment(i)shall be binding upon the Property unless such amendment is executed by the owner of the Property and the City. 4 15)No Menuer. Notwithstanding that Owner owns the fee simple estate to the Property, it is the express intention of Owner that the obligations declared under this Agreement shall burden and benefit the Property and shall not be extinguished by the operation of the doctrine of merger of estates as a result of such common ownership. Owner and the City have executed this Agreement under seal on the date stated above. [remainder of page intentionally blank] 5 CENTENNIAL-ASPEN II LIMITED PARTNERSHIP, a Colorado limited partnership By: Centennial-Aspen, a Limited Partnership, a Colorado limited partnership, its General Partner By: World Class Housing,Inc., a Delaware corporation, its General Partner By: Sam W. Brown, Jr.,President STATE OF COLORADO ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me on ,2019,by Sam W. Brown,Jr, .as President of World Class Housing,Inc.,a Delaware corporation, on behalf of said corporation. WITNESS my hand and official seal. Notary Public [remainder of page intentionally blank] 6 ATTEST: THE CITY OF ASPEN,. a Colorado home rule municipal corporation By: By: Name: Name: Its: Its: APPROVED AS TO FORM: By: Name:James R. True,Esq. Its: City Attorney STATE OF COLORADO ) )ss. COUNTY OF ) The foregoing instrument was acknowledged before me on , 2019, by as of the City of Aspen, a Colorado home rule municipal corporation, on behalf of said City. WITNESS my hand and official seal. Notary Public 7 EXHIBIT A Legal Description of the Property LOT 3 , THE CENTENNIAL CONDOMINIUM SUBDIVISION AND CONDOMINIUM PLAT, ACCORDING TO THE SECOND AMENDED PLAT OF THE CENTENNIAL CONDOMINIUM SUBDIVISION AND CONDOMINIUM PLAT, RECORDED JUNE 3 , 1985 IN PLAT BOOK 17 AT PAGE 30 . TOGETHER WITH THOSE EASEMENTS WHICH ARE A BENEFIT TO ABOVE SAID LOT 3 , AS SET FORTH IN THE CONDOMINIUM DECLARATION FOR CENTENNIAL CONDOMINIUMS RECORDED OCTOBER 3, 1984 IN BOOK 474 AT PAGE 479 AS AMENDED JANUARY 25, 1985 IN BOOK 480 AT PAGE 510 AND MARCH 7, 1985 IN BOOK 482 AT PAGE 455 . TOGETHER WITH THOSE EASEMENTS WHICH ARE A BENEFIT TO ABOVE SAID LOT 3 , AS SET FORTH IN PERMANENT EASEMENT RECORDED JANUARY 13 , 1986 IN BOOK 503 AT PAGE 253 . TOGETHER WITH THE AIRSPACE AS SET FORTH IN PARTIAL RELEASE OF EASEMENT RECORDED FEBRUARY 12 , 1986 IN BOOK 505 AT PAGE 225 . TOGETHER WITH THOSE EASEMENTS WHICH ARE A BENEFIT TO ABOVE SAID LOT 3 , AS SET FORTH IN PARKING AGREEMENT, LEASE, AND EASEMENT RECORDED APRIL 4, 1986 IN BOOK 508 AT PAGE 380 . TOGETHER WITH THAT CERTAIN LEASEHOLD ESTATE FOR PARKING SPACES, AS CREATED BY PARKING AGREEMENT, LEASE, AND EASEMENT RECORDED APRIL 4 , 1986 IN BOOK 508 AT PAGE 380, FOR A TERM ENDING APRIL 4, 2084 . Exhibit A