HomeMy WebLinkAboutordinance.council.039-88 ORDINANCE NO. 39
(Series of 1988)
AN ORDINANCE APPROVING THAT MODIFICATION/SETTLEMENT AGREEMENT
CONCERNING THE PURCHASE AND SALE OF CASTLE RIDGE APARTMENTS
BETWEEN THE CITY OF ASPEN AND CASTLE RIDGE ASSOCIATES, LTD.,
AND AUTHORIZING AND DIRECTING THE MAYOR TO EXECUTE SAID AGREEMENT
AND ALL NECESSARY DOCUMENTS ATTENDANT THERETO ON BEHALF OF THE
CITY OF ASPEN
WHEREAS, pursuant to Ordinance No. 33 (Series of 1982), the
City entered into that "Agreement of Purchase and Sale of the
Castle Ridge Apartments" dated August 20, 1982 (hereinafter
"Sale Agreement"), between the City of Aspen and Castle Ridge
ASsociates, Ltd., which agreement is incorporated herein by this
reference; and
WHEREAS, pursuant to the Sale Agreement, the City of Aspen
conveyed to Castle Ridge Associates, Ltd. those eight (8)
buildings and improvements comprising eighty (80) apartment
units, commonly referred to as the "Castle Ridge Apartments", as
more particularly described in the Sale Agreement; and
WHEREAS, as partial consideration for the purchase of Castle
Ridge Apartments, Castle Ridge Associates, Ltd. executed its
promissory note in the amount of Four Million Dollars
($4,000,000.00) which note is secured by a lien of a first deed
of trust; and
WHEREAS, in accordance with Section 8.1(i) of the Sale
Agreement, Castle Ridge Associates, Ltd. entered into a ground
lease for the land underlying the Castle Ridge Apartments on a
net, net basis at an annual rental of Thirty Thousand Dollars
($30,000.00), payable to the City of Aspen, for a term coincident
with the term of the promissory note. Said lease contains an
option to purchase the fee simple title to the land from the City
of Aspen for One Hundred Fifty Thousand Dollars ($150,000.00) at
the expiration of the lease term; and
WHEREAS, in accordance with Section 8.1(ii) of the Sale
Agreement, Castle Ridge Associates, Ltd., at closing, executed
that deed restriction dated August 20, 1982, obligating Castle
Ridge Associates, Ltd., as owner of the Castle Ridge Apartments,
to rent or sell the units in accordance with the employee housing
qualifications and guidelines as promulgated by the City, which
deed restriction is recorded in Book 431, Page 351, of the Pitkin
County records; and
WHEREAS, due to revisions in the federal tax laws and other
unanticipated misfortunes in connection therewith encountered by
Castle Ridge Associates, Ltd., and the mutual concern for
maintaining reasonable employee housing rental rates, the City
Council and Castle Ridge Associates, Ltd. are desirous of
amending and restating the Purchase and Sale Agreement and
related documents to assure that Castle Ridge Apartments remains
as a viable employee housing project; and
WHEREAS, to assure the Castle Ridge Apartment project
remains as a viable employee project, the City Council and Castle
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Ridge Associates, Ltd. desire to restructure the original
promissory note, original deed of trust, original land lease,
original deed restrictions, and to the extent consistent there-
with, modify the Sale Agreement accordingly, together with other
assurances required by City, all as set forth in that "Modifica-
tion/Settlement Agreement concerning the Purchase and Sale of
Castle Ridge Apartments" attached hereto and incorporated herein
by this reference, which agreement contains provisions for the
following:
- The original promissory note in the principal amount of
Four Million Dollars ($4,000,000.00), which has a
current principal balance of Three Million Nine Hundred
Twenty Thousand Seven Hundred Thirty-four Dollars
- ($3,920,734.00), with accrued interest and principal
payments thereon due as of November 1, 1988, in the sum
of One Hundred Seventy-two Thousand Four Hundred
Twenty-seven Dollars and 89/100 ($172,427.89) (which
sum shall be paid at closing), shall be cancelled and
replaced by a substitute promissory note in the amount
of Three Million Seven Hundred Six Thousand Eight
Hundred Forty-three Dollars and 90/100 ($3,706,843.90),
which note shall be secured by a lien of an amended
deed of trust. The substitute note shall provide for
semi-annual payments of principal and interest, with
the remaining principal balance of Eight Hundred
Sixteen Thousand Nine Hundred Thirty-nine Dollars
($816,939.00) and accrued interest on or before
November 1, 2000. Said note shall provide that, at the
option of Castle Ridge Associates, Ltd., it may pay off
said principal balance in full on or before November 1,
2000, or deliver to City its promissory note providing
for semi-annual payments of principal and interest over
a period of five (5) years, commencing May 1, 2001, at
an interest rate of nine percent (9%), said note and
all accrued interest to be fully paid on or before
November 1, 2005.
- At closing, Castle Ridge Associates, Ltd. shall
deliver to City an annuity in the amount of Two
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Hundred Four Thousand Eight Hundred Ninety-eight
Dollars ($204,898.00), providing for aggregate payments
to the City of Aspen in an amount of Three Hundred
Thirty-five Thousand Sixty-three Dollars ($335,063.00)
over a period from November 1, 1988, until November 1,
2000.
- At closing, Castle Ridge Associates, Ltd., shall
deliver to City a zero coupon U.S. Treasury note in the
amount of One Hundred Fifty Thousand Dollars
($150,000.00), which shall mature on November 15, 2000,
and shall bear interest at a rate of 8.842%, at the end
of which time, City shall convey marketable fee simple
title to the land underlying the Castle Ridge Apart-
ments by special warranty deed.
- The revision of the Declaration of Covenants, Restric-
tions and Conditions for the Castle Ridge Apartments,
as provided in the substitute declaration the form of
which is to be appended to the agreement, which
Substitute Declaration shall provide that for a period
of six (6) years beginning July 1, 1989, up to and
including June 30, 1995, annual rental increases shall
be five percent (5%) plus actual annual increases in
operating expenses during the prior year; and commenc-
ing in the seventh year and continuing thereafter
during the entire period of the restrictive covenants,
annual increases of rent shall be two and one-half
percent (2 1/2%) plus actual annual rental increases in
operating expenses during the prior year above the
gross rents for the prior year; in addition to other
changes;
- For the provision of a replacement reserve account to
be applied directly to the Castle Ridge project for the
purposes of extraordinary maintenance, repair and
replacement of personal property, including, but not
limited to, roof repair and roof replacement, appli-
ances, carpeting and landscaping;
WHEREAS, the City Council desires to approve that Modifica-
tion/Settlement Agreement concerning the purchase and sale of
Castle Ridge Apartments attached hereto and authorize and direct
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the Mayor to execute such documents as may be necessary to
consummate the transactions contemplated therein.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF ASPEN, COLORADO:
Section 1
That "Modification/Settlement Agreement Concerning the
Purchase and Sale of Castle Ridge Apartments", between the City
of Aspen, Colorado, and Castle Ridge Associates, Ltd., a copy of
which is attached hereto and incorporated herein by this
reference, be and the same is hereby approved, and the Mayor is
hereby authorized and directed to execute said agreement and such
documents as may be necessary to consummate the transactions
contemplated therein, subject to said documents being approved as
to form by the City Attorney and the City Manager.
Section 2
That Ordinance No. 32 (Series of 1982) is hereby amended to
the extent necessary to consummate the transaction contemplated
by the annexed Modification/Settlement Agreement.
Section 3
If any section, subsection, sentence, clause, phrase or
portion of this ordinance is for any reason held invalid or
unconstitutional in a court of competent jurisdiction, such
portion shall be deemed a separate, distinct and independent
provision and shall not affect the validity of the remaining
portions thereof.
Section 4
A public hearing on the ordinance shall be held on the ~
day of ~~ , 1988, in the City Council
Chambers, Aspen City Hall, Aspen, Colorado.
INTRODUCED, READ AND ORDERED PUBLISHED as provided by law by
the City Council of the City of Aspen on the /OV~ day of
~ , 1988.
William L. Stlrling, M~yor
ATTEST:
Kathryn ~S~./Koch, City dferk
FINALLY adopted, passed and approved this =~~day of
~ , 1988.
~~'m~% ~~or
ATTEST:
Kathryn ~ Koch, City Clerk