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HomeMy WebLinkAboutagenda.council.regular.20040126CITY COUNCIL AGENDA January 26, 2004 5:00 P.M. I) Call to Order II) Roll Call Ill) Scheduled Public Appearances IV) Citizens Comments & Petitions (Time for any citizen to address Council on issues NOT on the agenda. Please limit your comments to 3 minutes) v) Special Orders of the Day a) Mayor's Comments b) Councilmembers' Comments c) City Manager's Comments d) Board Reports vi) Consent Calendar (These matters may be adopted together by a single motion) a) Resolution #4, 2004 - Saab Contract b) Minutes-January 12, 2004 vii) First Reading of Ordinances a) Ordinance #2, 2004 - Fees Public Hearings a) Ordinance #51,2003 - Definition of Demolition & RMF RePlacement b) Ordinance #1,2004-7th and Hopkins Annexation ~ c) Resolution #90, 2003 - Knollwood Annexation continue to 3/22/04 ix) x) Action Items a) Resolution #5, 2004 - Zupancis and Recycle Lease ~ b) Resolution #6, 2004 - Pre-Annexation Agreement - Little Ajax c) Resolution #7, 2004 - Purchase of VisitOr Center~ Executive Session Adjournment Next Regular Meeting February 9, 2004 COUNCIL SCHEDULES A 15 MINUTE DINNER BREAK APPROXIMATELY 7 P.M. TO: FROM: THRU: THRU: DATE: RE: Mayor and Council Richard Pryor John Worcester Steve Bar~vick January, 19. 2004 ' Police Patrol Car Contract MEMORANDUM SUMMARY: A new contract for services has been ageed upon with Saab USA for the provismn of seven vehicles for use as police patrol cars. Funding has already been appropriated for these vehicles £or 2004. The contract requires review and approval by the Mayor and City Council. Please see attachment "A". PREVIOUS COUNCIL ACTION: Previous councils have approved similar contracts for many years, for similar services. BACKGROUND/DISCUSSION: In April 2003 Saab USA informed the Aspen Police Department that they were no Ionger willing · to offer subsidized vehicles to the City of Aspen. Months of negotiations have resulted in the new contract, which allows for the retention of these vehicles for a maximum of two years, an operational advantage to the police department. This contract also gives the police department the flexibility to explore other vehicular options. FINANCIAL IMPLICATIONS: Increased lease costs associated with this new contract have already been addressed by council through a previous supplemental funding request for 2004. RECOMMENDATION: I recommend the approval of the contract, for previously listed reasons. ALTERNATIVES: There are currently no alternatives to this service. A consequence o£rejecting this contracl would be to leave the police department without patrol cars: During 2004. the police department and other city staffwiII be looking at competitive altematives for the police fleet. CITY MANAGER COM?IENTS: ~ ' ?2 RESOLUTION NO. ¢ Series of 2004 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING A CONTRACT FOR LEASE OF MOTOR VEHICLES FOR USE AS POLICE PATROL CARS, BETWEEN THE CITY OF ASPEN AND SAAB CARS USE, INC., AND AUTHORIZING THE MAYOR OR CITY MANAGER TO EXECUTE SAID AGREEMENT ON BEHALF OF THE CITY OF ·ASPEN, COLORADO. WHEREAS, there has been submitted to the City Council a Contract for the lease of seven vehicles for use as police patrol cars, between the City of Aspen and SAAB CARS, USA, Inc., a trne and accurate copy of which is attached hereto as Exhibit "A"; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ASPEN, COLOILADO: That the City Cmmcil of the City of Aspen hereby approves that Contract for the lease of seven vehicles for use as police patrol cars between the City of Aspen and SAAB CARS, USA, Inc., a copy of which is anneXed hereto and incorporated herein, and does hereby authorize the Mayor or City Manager to execute said agreement on behalf of the City o f Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the day of ,2004. Helen Kalin Klanderud. Mayor I. Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing ~s a tree and accurate copy of·that resolution adopted by the City Council of the City of Aspen, Colorado, m a meeting held on the day hereinabove stated. Kathryn S. Koch. City Clerk MOTOR VEHICLE LEASE AGREEMENT THIS LEASE AGREEMENT, effective as of the I~[ day of January, 2004, by and between SAAB CARS USA,/NC.. with ~ts principal place of business at 4405-A IntemanonaI Blvd., Norcross. Georgta 30093 ~hereinafter "SAAB"). and the CITY OF ASPEN. COLORADO, with tis pnnctpaI place of business at 130 South Galena Street. Aspen, Colorado 81611 rhereinafter "Aspen") (together, . the "Parties"). WITNE'S SETH: WHEREAS. SAAB is the sole United States ~mporter-distributor of passenger cars (hereinafter "Saabs" or "Saab Cars"5 manufactured by Saab Automobile AB: WHEREAS. Aspen has in the past successfully used Saab Cars in tis police work and wishes to continue the use of such vehicles; WHEREAS. SAAB is willing to lease to Aspen a limited number of Saab Cars for such use under the terms and conditions hereinafter set forth in recognition of the public relations value af havang Saab Cars placed in such service; and WHEREAS Aspen has agreed to lease seven r75 Saab Cars from SAAB on the terms and condittons hereinafter specified. NOW, THEREFORE, tn consideration of the mutual covenants and promtses contained herein. IT IS HEREBY AGREED: 1. Property Covered and Term SAAB hereby leases to Aspen and Aspen hereby leases from SAAB the Saab Cars described in Exhibit "A", attached hereto and incorporated by reference herren. Any changes to the specific Saab Cars to be delivered by SAAB hereunder shall be reflected in writing and executed by the Part/es. Suck wnnng shall be made a part of this Agreement. The lease term under this Agreement shall commence with respect to each such Saab Car as set forth in Exhibit A and shall continue with respect to each such Saab Car for the twelve (12) month per/od specified therein under "Lease l'erm," unless sooner terminated as provided in this agreement. This agreement shall automatically renew for any or ali such Saab Cars for an additional twelve (12~ month period "Renewal Term" unless, at least sixty (60) days prior to the expiration of the Lease Term, either party provides written notice to the other that it shall not renew for any or all such Saab Cars for a second twelve (I2) month renewal term. In no event will this Agreement connnue beyond one Renewal Term and will terminate no later than Decemoer 31, 2005. unless sooner terminated as provided for in this Agreement. It is expressiy understood and agreed that this ~s a contract of leasing only, and that Aspen has by these presents acquires no other right, title, or interest m or to the property described herem. It is also understood and agreed that the Saab Cars. as identified on Exhibit A, are the subject matter of this Agreement. and are therefore subject to the terms and conditions contained in this Agreement, and not any other Motor Vehicle Lease Agreement entered into by the Parties, as amended from time to time. P4 2. Delivery SAAB, at its expense, will deliver the Saab Cars to a designated Saab dealer in Aspen's vicinity (hereinafter "Aspen's Saab Dealer"). on or about the delivery date specified in Schedule A. The Saab Cars will be given a standard pre-delivery inspection and preparation by Aspen's Saab Dealer at SAAB's expense prior to being delivered to Aspen. Aspen shalI be solely responsible, at its expense, for any special preparation of the Saab Cars for police work. It is understood and agreed, however, that SAAB shall incur no liability to Aspen for failure to deliver or delay in delivery of the Saab Cars if the same results from war, fire, labor disputes, accident, acts of God, acts of any government, riots, interruptions of nwcigation, embargoes, blockades or any other causes beyond its control. 3. Rent: Terms of Payment Aspen agrees to pay SAAB for the lease of the Saab Cars hereunder during the term of this Agre4ment rent in the amount of $350.00 per month for bach such vehicle until the expiration of such vehicle's lease term, up to a maximum of twenty-four (24) months per vehicle, plus any applicable sales, use or personal propert~ tax now in force Or hereinafter imposed upon SAAB during the term of this Agreement and any applicable federal excise tax payable by SAAB. SAAB will invoice Aspen therefore monthly, and the terms of payment shall be "Net-30 days." It is understood and agreed that Aspen shall pay alt registration fees, any special license or tax required and any mileage taxes, fuel surtaxes and highway or bridge toils which may result from the operation of the Saab Cars by Aspen. Aspen shalI cause the Saab Cars to be registered in SAAB's name, consistent with provisions of law applicable to SAAB's capacity as Owner and Aspen's capacity as lessee. 4. Painting. Letterin~ and Appearance SAAB shall deli:cer the Saab Cars in standard paint 0nly, and Aspen shall at its expense cause the Saab Cars to be painted and lettered to its specifications. 5, Alterations: Addition of Equipment (a) Aspen may equip the Saab Cars with optional equipment related to its police work; provided, however, that if, in the sole opinion of SAAB, any of such equipment can or does cause or induce excess wear or mechanical problems with the functioning of the Saab Car or any of its components, SAAB's obligation under its warranty to repair such wear or mechanical problems may, in SAAB's discretion, be deemed null and void, unless SAAB has rendered a prior written and/or verbal opinion regarding such equipment as provided in paragraph 5(b) hereinbelow. Prior to returning any vehicle to SAAB, Aspen shall dismount ali such equipment and may retain the same. Failure to dismount any such equipment will cause title thereto to vest in SAAB. All costs incurred by Aspen in connection with installing and removing such equipment shall be borne exclusively by Aspen. (b) Except as provided in Paragraph 5(a) hereof, Aspen shall not make any structural alterations or affix any non-police work related special equipment to the Saab Cars 2 P5 o (c) without the prior written consent of SAAB. Aspen shall be entitled to consult SAAB for a prior opinion on the likelihood of excess wear or mechanical problems resulting from the mounting of any particular piece of optional equipment and SAAB shall be bound by its written opinion in the event of subsequent warranty claims. Aspen understands and agrees there will not be an operational "OnStar" system in the Saab Cars it shall receive hereunder. ~2ovenants~ Representations and Warranties of Aspen Aspen covenants, warrants and represents to SAAB as follows: (a) That the Saab Cars leased hereunder shall not be used or operated: in violation of any applicable provision of law or by any person under the age of 18 or who is not qualified and duly licensed as a driver; (ii) by any person other than the persons employed by Aspen who are subject to Aspen's exclusive direction and control: (iii) by any person while under the influence of any lntoxmants or drags; (iv) in excess of applicable speed limits (except in the usual course of police business. including police training), or m a reckless or abusive manner, or m any race or speed contest: (v) outside the scope of the driver's employment and the usual course of Aspen's police business in accordance with the established policies of the City Council: (b) That, subject to the terms of this Agreement. the Saab Cars will at ali times during this Agreement be operated under Aspen's exclusive dominion and control in accordance with the terms of this Agreement; (c~ That Aspen will file or ass~s~ SAAB in filing any and all returns or reports required by any governmental body as a result of the leasing, use or operation of the Saab Cars hereunder: (d) That Aspen will assume 'and pay for all normal operating expenses associated with the use and operation of the Saab Cars including, but not limited to, fuel. lubricants. Tires, antifreeze, chains and any and all eqmpmem required by Aspen's use of the Saab Cars; Acknowledgments of Aspen Aspen acknowledges and agrees: (a) That the Saab Cars are the sole and exclusive property of SAAB and must be returned ro SAAB or its designee at the expiration of the Lease Term: (b) That it has inspected the Saab Cars m the presence of SAAB's agent and that they are received by Aspen in good condition mechanically and otherwise: 3 (c) Neither Aspen nor the drivers of the Saab Cars shall in. any event be or be deemed the agent, servant or employee of SAAB in any manner or for any purpose whatsoever; That on the expiration of the Lease Term for each Saab Car, or sooner where otherwise provided hereunder, Aspen, at its own expense, will deliver each Saab Car to the Saab dealer designated by SAAB in good condition, normal wear and tear excepted and in accordance ;vith Section 10 (c) below. (e) Aspen shall provide at its own cost and expense all non-warranty labor required at its own cost and expense, all non-warranty labor required to perform normal maintenance services in accordance with the maintenance instructions set forth in the applicable Service Manual and to purchase all spare parts required for normal maintenance services as aforesaid at the prices therefore established by SAAB. Normal maintenance shall mean ail service required by the Service Manual to keep the Saab Cars in proper operating condition, and shall not include such services and/or spare parts as may be required as a result of defects in mater/al and worknmnship in the Saab Car or in any component part thereof which are covered by SAAB's standard vehicle warranty, which is the only warranty given with respect to the Saab Cars. In accordance with such warranty, SAAB will furnish the local dealer with all spare parts required to remedy any defects in material and workmanship covered by the warranty and shall reimburse the local dealer for labor provided by it to remedy such defects at its standard rate. Aspen understands that given the unique use of the Saab Cars as police vehicles, the tires of the Saab Cars may experience heavier than normal wear and tear, and thus require replacement sooner than would be expected under normal use. The tires of the Saab Cars are not covered, directly or indirectly, under the Saab Cars USA, Inc. Limited Warranty or any other warranty of SAAB. 8. Experimental Data: Inspections (a) SAAB may send an employee to Aspen periodically during the term of this Agreement to inspect the Saab Cars in order to evaluate their use in Aspen's police work. Aspen shall fully cooperate with such employee and shall permit him to inspect the Saab Cars at Aspen's premises during normal business hours, and shall endeavor to provide him with such information regarding the Saab Cars as he may reasonably request. (h) Aspen shall provide SAAB with such information with respect to the Saab Cars as may be compiled by it through its cost control system or otherwise, including, but not 1/m/ted to, information With respect to mileage, maintenance costs, and fuel consumption, and details of any instances of faulty operation or mechanical problems. Aspen shall provide ~such information on a monthly basis, if requested by SAAB. 9. Insurance Aspen shall arrange for ali Saab Cars leased hereunder to be covered from the date this Agreement commences by the auto liability and comprehensive and collision insurar/ce policy or policies which presently cover other motor vehicles owned or leased by Aspen, as said policy or policies may be modified or replaced during the term of this Agreement. SAAB shall be a named insured under such auto liability policy or policies and loss payee under such comprehensive and collision policy or policies. It is agreed that the liability insurance shall have limits of not less than a $300,000.00 primary liability insurance with a $1,000,000.00 excess blanket coverage for combined limits of liability for bodily injury 4 P? and damages ro property, resulting from any one accident, and that such comprehensive and collision ~nsurance shall insure the Saab Cars for their actual cash value. Aspen shall arrange for such insurance policy or policies to provide that the coverage thereunder shall not be cancelled or altered so as not to conform to the requirements of this Agreement without ten (10) days prior written nonce ro SAAB. Aspen shall deliver to SAAB comemporaneously with the execution of this Agreement and thereafter upon renewal of the required insurance, a certificate of msurance evidencing Aspen's compliance with the insurance requirements detailed above. 10. Hold Harmless Aspen, within its legal abili .ty to do so under the Constitution of the State of Colorado and its home-rule charter and without in any way or manner intending to waive or waiving the defenses or limitations on damages as to non-part/es ro this Agreement provided for under the Colorado Governmental Immunity Act. the Colorado Constitunon. its home-rule charter or under common law or the laws of the United States or the State of Colorado. shall indemnify and hold harmless SAAB against any and ail of the following: (a) all damages which are reduced to final judgment m a court of competent jurisdiction and involve any negligent act or om~sston by Aspen, its agents, officers, or employees, m connection with the performance of this lease agreement arising out of the use or operation of the Saab Cars by Aspen. (M All Ioss. damage, cost and expenses resulting from Aspen's violation of any term of this Agreement or breach of Aspen's violation of any term of this Agreement or breach of Aspen's warranties as expressed hereto (c) Ail loss or damage to the Saab Cars during the lease period, not arising out of any negligence on the part of SAAB. its agents, servants and employees, and in accordance with Schedule B - General Guidelines for Vehicle Evaluation On Surrender of Vehicle. attached hereto and incorporated by reference herein~ (d) The value of all nres. tools, standard equipment and accessories originally provided by SAAB that are lost or stolen from the Saab .Cars. All costs of collection or repossession recurred in connection with the collection of any amounts payable by Aspen to SAAB under the provisions of thts Agreement, through an attorney or collection agency, whether collected by suit or other,vise. Aspen's failure to pay all charges when due may result, at SAAB's option, in a termination of this Agreement pursuant to the provtstons of Paragraph I 1 hereof, provided however, that SAAB shall provide Aspen with written notice of such failure and a thirty (30) day period ~n which to remedy the same (0 All damages to property resulting from the aperat~on of the Saab Cars off a public road. Any loss or damage anstng out of a labor dispute. (h) Any fines, forfeitures, seizures and penalties arising out of the use or operation of the Saab Cars by Aspen m violation of any applicable provision of law P8 11. Termination; R~coverv of Saab Cars (a) In the event of any violation or default by Aspen with respect to any of the terms of this Agreement. SAAB may terminate this Agreement by giving thirty (30) days written notice thereof to Aspen by registered mail, return receipt requested, during which period Aspen may cure said default In the event Aspen continues in default after said thirty (30) day period in which to cure, SAAB may recover the Saab Cars ~vherever they may be located. (b) Upon the exp~ranon or termination of this Agreement for any reason. Aspen shall make the Saab Cars available for pickup by the local dealer, free and clear of ali liens and encumbrances caused by or arising out of any act or omission of Aspen. (c) Aspen shall be responsible for reconditioning expenses caused by other than normal wear and tear. Certain examples are more fully described in Exhibit B. 12. Holding Over In the event that Aspen shalI, with the written consent of SAAB. at any time retain possession of. any Saab Cars beyond the expiration or term/nation of the lease term therefor, then Aspen shall hold said Saab Cars upon the same terms and conditions as are set forth in this Agreement, but no such retention of possession or "holding over" shall operate to renew this Agreement or to extend the lease term hereunder without the prior written consent of SA>LB. 13. Miscellaneous (a) Aspen agrees to complete a nonce of loss for any accident, loss of or damage to any of the Saab Cars and forward a copy of the notice within five (5) working days of the occurrence to Saab Cars USA, Inc., 4405-A International Blvd., Norcross, Georgia 30093, Atto: Risk Manager. (b) Aspen shall not sublet or relet any of the vehicles used hereunder or assign this Agreement nor any of its fights or obliganons hereunder. lc) This Agreement shall be binding upon and shall operate for the benefit of the parties hereto and their legal representanves, successors and assigns. (d) This Agreement shall be governed by and construed ~n accordance with the laws of the State of Colorado. (e) This Agreement shall consnmte the entire agreement, and shall supersede any and all prior agreements, between the pames with respect to the subject matter hereot; and may not be changed, amended or modified except by an instrument in ~witing signed by both of the Parties. (0 The waiver by either Party of a breach of any prows~on of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or any other prowsion of this Agreement. (g) Notices to be gtven to the Part/es to this Agreement shall be zonsidered to be given if personally delivered or if deposited in the United States MaiI to the parties by registered or certified mail at the addresses indicated below, or such other addresses as may be substituted upon written nonce by the parties or their successors or assigns: CITY OFASPEN City Manager I30 South Galena Street Aspen. CO8161l SAAB CARS USA. INC '~z~05-A International Blvd. Norcross, GA 30093 Attention: Alan J. Lowemhal. General Counsel IN WITNESS WHEREOF, the parties have duly executed this Agreement the day and year first written above. PO Attest: SAAB CARS USA, INC By: Kenneth F. Adams Vice President & Chief Financial Officer Attest: CITY OF ASPEN. COLORADO By: Mayor PlO EXHIBIT "A" LEASED VEHICLES Pll EXHIBIT "B" GENERAL GUIDELINES FOR VEHICLE EVALUATION ON SURRENDER OF VEHICLE EXTERIOR PAINTED SURFACE EACH VEHICLE WILL BE RETURNED TO SAAB IN GOOD MECHANICAL AND OPERATIONAl_ CONDITION TOWN OF ASPEN. UPON REQUEST WILL FURNISH DOCUMENTATION THAT RECOMMENDED MAINTENANCE SERVICES HAVE BEEN COMPLETED AT THE APPROPRIATE MILEAGE INTERVALS. THE VEHICLE WILL HAVE NO DENTS 1N THE BODY EXCEPT WHAT IS KNOYVN AS NORMAL WEAR. ANY DEFECT LARGER THAN ONE (1") INCH IN DIAMETER WILL BE CONSDERED NOT NORMAL WEAR AND WILL BE REPAIR_ED BY TOWN OF ASPEN OR CHARGED FOR IT AT rile T1ME OF SIGN-OFF. IF A CHIP OR NICK DOES NOT REQUIRE METAL WORK OR FILLING, IT IS NOT CHARGEABLE. MOLDINGS MOLDINGS OF BRIGHT METAL. LIKE BUMPERS. SERVE A PROTECTIVE FUNCTION. THEY CATCH THE IMPACT OF OBJECTS THAT OTHERWISE WOULD DAMAGE THE SHEET METAL AND PAINT. DAMAGE TO MOLDINGS. THEREFORE. ARE NORMAL WEAR AND TEAR SINCE THE MOLDING HAS MERELY TAKEN ABUSE IT WAS DESIGNED TO TAKE. TOWN OF ASPEN WILL PAY ONLY FOR DAMAGE OR DEFACEMENT CREATED BY SEVERE hMPACT. THE APPEARANCE OF THE DENT OR SCKAPE WILL GIVE A DEFINITE INDICAT.ION OF HOW THE DA~MAGE WAS DONE. FOR EXAMPLE, THE OPENED DOOR OF A CAR PARKED ALONGSDE MAY MAKE A VERTICAL DENT TO THE MOLDING. THIS DENT IS FUNCTIONAL THE MOLDING HAS PROTECTED THE EXPENSIVE PARTS OF THE BODY IN A NOR~MAL DRIVING SITUATION. SEVERE IMPACT, AS 1N MINOR OR MAJOR COLLISION, USUALLY TAKES THE FORM OF HORIZONTAL DEFACEMENT OF THE MOLDING. TOWN OF ASPEN IS THEN CHARGEABLE FOR COST OF REPAIRS OR REPLACEMENT. CARS WHICH DO NOT HAVE MOLDINGS TO PROTECT THE SHEET METAL ALSO RECEIVE DAMAGE IN THE FORM OF. VERTICAL DENTS IN THE SHEET METAL ITSELF TOWN OF ASPEN IS CHARGEABLE FOR COST OF REPAIRS OR REPLACEMENT DUE SUCH DAMAGE. GRILLES DAMAGE TO A FRONT GRILL FALLS INTO FOUR CATEGORIES: SEVERE DAMAGE THAT IS BEYOND REPAIR: LESSER DAMAGE THAT MAY BE REPAIRED MINOR BLEMISHES THAT ARE NORMAL WEAR AND TEAR: AND, CRACKS OR METAL FAILUR_E CAUSED BY DEFECT IN CONSTRUCTION OF THE AUTOMOBILE. TOWN OF ASPEN WILL PAY FOR REPLACEMENT OF A GRILLE IN CATEGORY 1 AND PAY THE CHARGES NECESSARY TO REPAIR A GRILLE IN CATEGORY 2 BUT WILL ASSUME NO RESPONSIBILITY FOR ITEMS IN CATEGORIES 3 AND 4. 9 P12 NICKS FROM FLYiNG STONES, ETC. ENCOUNTER.ED BY THE FRONT END GRILLE OF A MOVING CAR ARE NORMAL WEAR AND TEAR. FAILURE OF A DEFECTIVE GRILLE USUALLY IS MANIFESTED BY A BREAK OR BENDING OF THE MATERIAL . iN ABSENCE OF ANY SIGN OF IMPACT. IF DEFACEMENT OF THE GRILLE IS SUCH THAT IT SERIOUSLY DETRACTS FROM THE SALEABILITY OF THE CAR. REPLACEMENT IS CHARGEABLE TO TOYVN OF ASPEN. WHEEL COVERS WHEEL COVERS. TRIM KINGS AND HUBCAPS SUFFER MINOR DAMAGE IN THE ORDINARY COURSE OF DRIVING. ONLY THE MORE SERIOUS DENTS, BENDS AND SCRAPES CAUSED BY SDESWB?ES ARE CHARGEABLE TO TOWN OF ASPEN. MINOR DENTS AND SCAPES ARE CONSDERED NORMAL WEAR AND TEAR. CAtLPETING. UPHOLSTERY AND INTERIORS SOILED UPHOLSTERY IS NOT CHARGEABLE TO TOWN OF ASPEN SINCE 1T CAN BE CLEANED, BUT STAiNED UPHOLSTERY WHICH CANNOT BE CLEANED IS CHARGEABLE. CIGARETTE BURNS AND SiNGES CONSTITUTE ABUSE ),2ND ARE CHARGEABLE TO TOYVN OF ASPEN. RIFS AND TEARS OF UNSIGHTLY SIZE AtLE CHARGEABLE, BUT NOT SMALL TEARS OR SEAM SEPARATIONS. THE SAME APPLIES TO DOOR PANELS A~ND iNTERIOR TRIM. [N THE HEADLINING, RIPS OVER ONE (I") INCH IN LENGTH AKE CHARGEABLE. MINOR TEARS ARE NOT. TRIANGULAR SHAPED TEARS ARE CHARGEABLE. FRONT FLOOR MATS AT THE HEEL POSITION CAUSED BY A PERSON'S SHOE WHEREIN THEY WERE DEPRESSING THE ACCELERATOR. WEAR IN THIS AREA CAN BE CLASSIFIED AS NORMAL WEAR AND TEAR. TOWN OF ASPEN WOULD NOT BE CHARGED. WHEELS AND T1RES TIRE RIMS MAY BE BENT OR SC1LKPED TO A VARYING DEGREE. TOWN OF ASPEN HAS AN OBLIGATION TO REPAIJR OR REPLACE DAMAGED RIMS DEPENDING ON THE DEGREE OF DAMAGE. IF THE ROLLBACK OF THE RIM IS NOT TOO SEVERE. IT MAY BE STRAIGHTENED OUT. BUT BADLY SCRAPED WHEELS MUST BE REPLACED. TIRES. iNCLUDING SPARE. MUST BE IN GOOD CONDITION WITH AT LEAST ONE- EIGHTH, 1/8) OF AN INCH OF TREAD REMAINING ACROSS THE FACE OF THE TIRE. REPLACED TllLES MUST BE OF MATCHiNG BRAND AND TREAD DESIGN. AND OF A BRAND AND QUALITY COMPARABLE TO THOSE ORIGINALLY SUPPLIED. WINDSHIELDS 10 P13 THE UNDERSTANDING WITH SAAB CALLS FOR KEPLACEMENT OF BROKEN OR DAMAGED GLASS OR EQUIVALENT CHARGEBACKS. HOWEVER. CRACKS MAY BE CAUSED BY STRESS IN THE GLASS OR IN THE FRAME HOLDING IT IS A PRODUCT DEFECT COVERED BY WA1LRANTY AND THE TOWN OF ASPEN WOULD NOT BE CHARGED IN THIS CASE. ANY STARS OR BULLS-EYES THAT CANNOT BE REPAIRED WITH THE AID OF THE NOVUS KIT (METHOD OF REPAI~R), TOWN OF ASPEN WILL BE CHARGED FOR OR WILL HAVE TO REPLACE THE WINDSHIELD. STRESS CRACKS, SMALL CH/EPS ON THE PASSENGER SIDE NEAR THE BOTTOM OF THE WINDSHIELD AND MINOR CHEPS IN THE DRIVER'S LINE OF VISION ARE NOT CHARGEABLE TO TOWN OF ASPEN. BUMPERS BUMPERS HAVE A PROTECTIVE FUNCTION WHICH SUBJECTS THEM TO FREQUENT 12MPACTS OF MORE OR LESS SEVERITY. AS IN PARKING MANEUVER. A BUMPER IN PERJ?ECT CONDITION IS SELDOM FOUND ON A USED CAR. THE TYPES OF DAMAGE ARE DIVIDED INTO FIVE CATEGORIES: MINOR DEFACEMENT ~ SMALL NICKS. DENTS A_ND SCRATCHES. THESE ARE NORMAL WEAR AND TEAR NOT CHARGEABLE TO TOWN OF ASPEN. INTERMEDIATE DEFACEMENT LARGER SCRATCHES AND SCP,2kPES THROUGH THE BUMPER COVER USUALLY ARE CORRECTABLE BY A USED CAR DEALER THROUGH RECONDITIONING. MINOR SCRAPES AND SCRATCHES TO BUMPER ENDS ARE NORMAL AND NOT CHARGEABLE TO TOWN OF ASPEN AS LONG AS THE METAL INDENTATION IS MINI2V[AL TWIST - OR MINOR RISES AND DEPRESSIONS CAN BE STRAIGHTENED. TOWN OF ASPEN IS CHARGEABLE FOR THE COST OF THE STRAIGHTENING ONLY. MULTEPLE DENTS - A SERIES OF DENTS ACROSS THE LEADING SURFACE WHICH MAKES THE BUMPER UNSIGHTLY. THE BUMPER MUST BE REPLACED, CHARGED TO TOWN OF ASPEN. A SINGLE DENT LARGER THAN ONE AND ONE-HALF (I ~/2") INCHES ALSO MAKES A REPLACEMENT CHARGEABLE. SERIOUS DEFACEMENT A COMBINATION OF VARIOUS DAMAGES DESCRIBED ABOVE OR SINGLE SEVERE COLLISION DENT. REPLACEMENT BUMPER IS CHARGEABLE TO TOWN OF ASPEN. 1I P14 MISSING ITEMS CONTROL KNOBS, DOOR HANDLES, DASH LOCKS, AND RADIO ANTENNAS MUST BE ORIGINAL EQUIPMENT PARTS. OFF-BRAND REPLACEMENTS WILL BE CHARGED AS MISSING PARTS. AT THE TIME SAAB ACCEPTS RETURN CUSTODY, TOWN OF ASPEN AND- SAAB SHALL JOINTLY SIGN AND DATE A USED VEHICLE 1LECEIPT AND CONDITION REPORT. I2 P15 TO: FROM: DATE: RE: Memorandum The Oi~ ol'll'men OitY II~me't's Office Mayor and Members of Council John P. Worcester January 26, 2003 Ordinance No. ~'~- Increase Certain Municipal Fees Attached for your consideration is an ordinance that, if approved, would increase certain municipal fees. These changes would constitute amendments to the fee ordinance passed by City Council at the end of last year. The proposed changes in this ordinance are as follows: Municipal Golf Course Added a 20 punch pass for fractional ownership residents of $650.00 and a 20 punch pass for fractional ownership unit owners of $1500.00. Lewis Ice Arena Fees for "For Profit" organizations renting entire Aspen Ice Garden Facility: $200.00/hour Fees as a "General Rental" for the enti~'e Aspen Ice Garden Facility: $180.00/hour. Fees for "Adult Non-Profit" organization for entire Aspen Ice Garden Facility: $150.00/hour. Fees for Youth Non-Profit Organization" for entire Aspen Ice Garden Facility: $140.00/hour. Skate sharpening: $5.00 Pick-up hockey: $12.00/session for pass holder and $14.00/session for non-pass holder. Free Style Sessions: $7.00 Skating classes: $11.00/class for pass holder and $14.00/class for non-pass holders. P16 Free style lessons: $9.00 per lesson Locker rentals: $200.00/year $130.00/season $25.00/month $15.00/hockey schooI- per week Police Department Fees Previous changes to the towing fee did not include rare increases by row company. The new fees would increase from $80.00 ro $90.00 for rowing and $96.00 ro $110.00 for towing to the impound lot. CITY MANAGER'S COMMENT: JPW-0I/21/2004-G: john\word\memos\tEes04-amd.doc ORDINANCE NO. ~ Series of 2004 Ah- ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, AMENDING THE MUNICIPAL CODE OF THE CITY OF ASPEN TO INCREASE CERTAIN MUNICIPAL FEES. WHEREAS, the City Council has adopted a policy of requiring consumers and users of the miscellaneous City of Aspen programs and services to pay fees that fairly approximate the costs of providing such programs and services; and WI-IEREAS, the City Council has determined that certain fees currently in effect do nor raise revenues sufficient to pay for the attendant costs o£providing said programs and services. NOW, THEREFOR.E, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF ASPEN, COLORADO: Section I. That Section 2.12.010 of the Murficipal Code of the City of Aspen, Colorado, which section sets forth certain user fees for the Aspen Municipal golf Course, is hereby amended ro read as follows: 2.12.10 Aspen Municipal Golf Course User Fees. Season Pass (County Resident - living or working) (No Restrictions) $ 780.00 Includes 2 vouchers valid for discounted golf opening day to June I and October I to close Season Pass (Non-City Resident) $1,500.00 ACRA Season Pass (County Resident - living or working) (No Restrictions) 720.00 Includes 2 vouchers valid for discounted golf opening day to June I and October I to close Stand By Local Piay Rate (County Resident - living or working) 50.00 P17 P18 Junior Pass 100.00 20 Punch Pass (County Resident - living or working) (No Restrictions) 18 Hole Green Fee 9 Hole Green Fee Jr. Green Fee 18 Hole Off Season Green Fees (Opening day until May !5 and Labor Day to close) 20 Punch Pass (Fractional O~vnership Resident) (Owner Only/Transferable with Spouse) 20 Punch Pass (Fractional Ownership Unit) (Transferable in Unit) Section 2. 375.00 $90.00 (6:30- I:00PM) $65.00 (1:00-3:30 PM) $45.00 (3:30-End of Day) $45.00 $25.00 (9 or 18 holes) $45.00 650.00 1500.00 That Section 2.12.020 of the Municipal Code of the City of Aspen, Colorado, which section sets forth certain user fees for the Lewis Ice Arena and Aspen Ice Garden, is hereby amended to read as follows: Section 2.12.020 Lewis Ice Arena and Aspen !ce Garden Type of Ice 2004 Rate/Pass Holder For Profid Ent/ze Facility General Rental Adult Non-Profit Lewis Ice Arena: $300/hour Aspen Ice Garden: $200/hour Lewis Ice Arena: $200/hour Aspen Ice Garden: $180/hour Lewis Ice Arena: $170/hour Aspen ][ce Garden: $150/hour Non-Pass Holder Youth Non-Profi! Skate Sharpening Pick-up Hockey Free Style Sessions Skating Classes Locker RentaI Lewis Ice Arena: $155/hour Aspen Ice Garden: S [40/hour $5.00 512.00 $9.00 $11.00/class' $200.00 year $130.00/season $25.00/month $ I5.00/hockey school week $14.00/session $14.00/class P19 Section 3. That Section 2.12.050 of the Municipal Code of the City of Aspen, Colorado, which section sets forth a Miscellaneous Fee Schedule, is hereby amended to read as follows: Section 2.12.050 Aspen Police Department Fees. (a) Law enforcement records: Accident reports, per search Per copied page Case .reports and coroner repons, per search Per copied page Arrest history and background checks, per search Certification/notarization Microfilm copy, per search Per copied page Photograph cop~es, per 4" x 5" Per 5" x 7" Per 8" x 10" Communications logging, search per hour Per cassette tape $ 6.00 1.00 6.00 1.00 6.00 5.00 10.00 2.00 5.00 I0.00 [5.00 25.00 5.00 (b) Aspen Police Department: Alarm User permit fee 71.00 First false alarm per year Second false alarm per year Third & Fourth false alarm per year 73.00 109.00 153.00 P20 Al1 bank alarms Late fees Central alarm license fee Vehicle inspection Certified VIN inspection Off-duty security, per officer, per hour Notary fees, per acknowledgement Towing fee [including processing fee) Towing fee (to ~mpound lot) Public notary (Police Department) (d) Dog vaccination and license fees: Annual dog tag fees Transfer fee Replacement tag 302.00 11.00 271.00 15.50 20.00 78.00 2.00 90.00 110.00 2.00 13.50 13.50 3.00 This ordinance shall not have any effect on existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances amended as herein provided, and the same shall be construed and concluded under such prior ordinances. Section 4. If any section, subsection, sentence, clause, phrase or portion of ttfis 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 remairdng portions hereo£ A public hearing on the ordinance.shalI be held on the day of ,2004. 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 day of ,2004. Helen Kalin Klanderud. Mayor ATTEST: P21 Kathryn S. Koch. City Clerk FINALLY adopted, passed and approved th/s ATTEST: day of ,2004 Helen Kalin Klandemd, Mayor Kathryn S. Koch, City Clerk JPW- I/21/04-G:) ohn\word/ords/fces04.amended.doc TO: THRU: FROM: RE: DATE: V|IIS MEMORANDUM Mayor Klandernd and Aspen City Council John Worcester, City Attorney /-~ . Julie Ann Woods. Commnnity Development Director Chris Bendon. Senior Long Range Planner(l I/~ City of Aspen Resident Multi-Family Housing Replacement Program Second Reading of Ordinance No. 51. Series of 2003 January 26.2004 SUMMARY: The Housin~o Replacemenl Program (existing code) requires the developmem of affordable units, upon demolition of'multi-family housing, equal ro 50% of the bedrooms and net livable space of the original development. The affordable replacement units must be built on-site. This requiremem significantly impacts redevelopment projects and results in developers avoiding the affordable housing requiremems by "remodeling" these buildings. The Planning and Zoning Commission reviewed the policy in detail when workin~ on the Infill Code Amendments and believes the City should no longer focus on the demolition/reconstruction process but rather allow the replication of a project's nnit/bedroom mix withom an affordable housing requirement. This comes after several ~remodeling" projects in which the resulting product is essentially a building with no public goals being achieved through the partial retention of the previous building. P&Z's recommended policy permits total demolition and replacement of multi-family buildings as long as the same number of units and bedrooms are redeveloped (and in the same configuration - each one-bedroom replaced with a one-bedroom each two bedroom with a two bedroom, etc.). The new building, and units, could expand to the allowable zoning for the property. Affordable housing mitigation requiremems would only be implemented if the exact unit/bedroom mix was not replicated. City Council revie~ved this recommended policy and expressed concerns about requiring no affordable housing if a project significantly expanded its Floor Area through redevelopment. (For example: a project comprised of six 400-square foot one-bedroom apartments being replaced with six 2,000-square foot apartments.) Council asked staff to research and develop this further to require some level of affordable housing mitigation while permitting modest increases in unit size. Staff has detailed a few options for Council's consideration. P24 OPTIONS: 1. Replacement with a limit on unit stze increases. City Council expressed ]merest in permitting 100% replacement with a limitation on the size increase of each unit. A maximum increase of 30% was mentioned at the previous meeting. This would permit a small unit. say a 500 square-foot unit, to increase to 650 square feet - still a relatively small unit by today's standards. Existing Unit Size 400 500 600 700 800 900 1000 20% 30% 40% 50% Expansion Expansion Expansion Expansion 480 520 560 600 600 650 700 750 720 780 840 900 840 910 980 1050 960 1040 1120 1200 1080 1170 1260 1350 1200 1300 1400 1500 Staff also suggests incorporating the minimum unit sizes specified in the Affordable Housing Guidelines. This would permit very small units to expand to the minimums specified in the Guidelines. regardless of the 30% expansion limitation. The Guidelines specify a range of minimum unit sizes according to the Category designation, as follows: Unit Type Studio 1 Bedroom 2 Bedroom 3 Bedroom Categories Categories Categories Category I &2 3&4 5&6 7 400 500 600 700 600 700 800 900 850 950 1.000 1.100 1.000 1 200 1.300 1 400 The replacement units will not be deed restricted, but because the minimum sizes vary by Category in the Housing Ouidelines, the ordinance would need to specify a Category or a set of minimum sizes. With this scenario, expanding anits beyond the 30% allowance would effect the full mitigation requirement - 50% of the original bedrooms, units, and net livable area. 2. Rephtcement with an Incremental Affordable Housing Requirement. This option provides an ability to expand unit sizes with a proportionate affordable housing mitigation requirement. A replacement project with no increase iri unit sizes would incur no mitigation requirements. A project with modest expansions would incur a P25 modest mitigation requirement. A project with substantial expansions would incur. substantial mitigation requirements. A simple way to institute this policy would be to require mitigation equal to the percentage increase in unit sizes. Expand the units by 10% and provide 10% mitigation. Expand the units by 40% and provide 40% mitigation, and so forth. The mitigation requirement would be capped at 50% - the current standard for replacement. This option could also involve an exemption for units being redeveloped to meet the minimum size standards of the Housing Guidelines. Again. a minimum sxze for each type of unit should be specified. 3. Combination of Above Two Options. The City could permit a modest expansion of units that would not trigger any affordable housing reqmremems. Expansion beyond the alloxvance would then trigger mitigation requirements commensurate ~vitn the percentage of expansmn. For example: If the expansion allowance was established at 30%, projects demolishing and expanding units below this figure Would not be required to include mitigation units. Ifa project expanded units by 35%_ t~en the City would require mitigation at a 35% rate. Sztmmary Net Livable Area Expansion 0% 10% 22% 34% 42% 50% Option #1 Option #2 Option #3 3/[iti~. ation Miti,gation 3/litigation 0% 0% 0% 0% 10% 0% 0% 22% 0% 50% 34% 34% 50% 42% 42°, o 50% 50% 50°, ;~ Staff is seeking Council's direction on these options and ~s prepared to amend the ordinance accordingly. Attached. Exhibits A. is alternate text for the ordinance to implement the options above. Other options may require additional staff work to be presented at a later date. Staff recommends City Council review the above options, amend the ordinance to implement option #2. and adopt Ordinance No. 51, Series of 2003. STAFF RECOMMENDATION: Staff believes option #2 - affordable housing mitigation equal to the extent of expansion - should be the preferred option. One of the problems with the current ordinance is the severe penalty of miscalculating a redevelopment plan - There is a P26 significant financial difference between a free-market project and one in which half the units are affOrdable housing. This incremental option should reduce the severity of not exactly replicating unit sizes. Staff also believes expansion to the minimnms in the Housing Guidelines should be exempt. Not permitting (without penalty) expansions to the minimums may be perceived as a double standm'd~ Plus, some of these units may become buy-down opporttmities in ~e furore and should be of proper size. Staff recommends adoption of Ordinance No.51, Series of 2003. with amendment implement option #2. CITY MANAGER'S COMMENTS: RECOMMENDED MOTION: "I move to approve Ordinance No. 51, Series of 2003, as amended ,detail amendments)." ATTACHMENTS: A - Amendment options 4 P27 ORDINANCE NO. 51 (SERIES OF 2003'} AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ASPEN APPROVING AMENDMENTS TO THE RESIDENT MULTI-FAMILY HOUSING REPLACEMENT PROGRAM. CHAPTER 26.530 OF THE CITY OF ASPEN LAND USE CODE OF THE CITY OF ASPEN MUNICIPAL CODE. WHEREAS. the City Cotmcil and the Plarming and Zoning Commission of the City of Aspen directed the Director of the Community Development Department to propose amendments to the Land Use Code related to the Infill Report. a report developed by a city-commissioned advisory group, the Infill Advisory Group, pursuant to sections 26.208 and 26.2 I2; and, WHEREAS, the pttrpose of the Infill Program is to implement many of the action items identified in the 2000 Aspen Area Community Plan. Barriers ro hrfill Development (a report commissioned by the City of Aspen in 2000), recommendations of the Infill Repor~ (a report produced by the Infill Advisory Group in January, 2002), and the Recommendations of the Economic Sustainability Committee la joint project between the City of Aspen, the Aspen Chamber Resort Association. and the Aspen Institute Community Forum concluded in September. 2002] that call for: · intensification of land uses ;vithin the traditional toxvnsite. · fbcusing of growth towards already developed areas and away from undeveloped areas surrounding the city. · revisions to, or elimination of identified barriers to successful infilI development such as the costs of development exactions, growth management penalties for redeveloping buildings, and the Ieng:h and uncertainty of approval processes. · balance bet;veen the commumry and the resort aspects of Aspen. · sustainability of the local social and economic conditions. · The creanon of a developmem environment in which private sector motivation is leveraged to address community goals: and, WHEREAS, the amendments requested relate to Chapter 26.530, Resident Multi-Family Housing Replacement Program, of the Land Use Code, Title 26 of the Aspen Municipal Code; and. WHEREAS. pursuant to Section 26.310. applications to amend the text of Title 26 of the Municipal Code shall be reviewed and recommended for approval, approval with conditions, or denial by the Community Development Director and then by the Planning and Zoning Commission at a public hearing. Final action shall be by City Council after rewewing and considering these recommendations; and, Ordinance No. 51 Page Series of 2003 P28 WHEREAS. the Community Development Director recommended approval of the proposed amendments, as described herein; and. WHEREAS. the Planning and Zoning Commission opened the public hearing to consider the proposed amendments ro the above noted Chapters and Sections on September 3. 2002, continued to September 17. 2002. continued ro September 24, 2002. continued to October 1. 2002. continued to October 8, 2002, continued to October 15. 2002. continued to October 22, 2002, continued ro October 29. 2002. continued ro November 5, 2002, continued to November 12. 2002. continued to November I9. 2002, continued ro November 26. 2002, continued ro December 10. 2002. and continued to December 17, 2002. took and considered public testimony ar each of the aforementioned hearing dates and the recommendation of the Community Developmem Director and recommended, by a five to one (5-1) vote, City Council adopt the proposed amendments to the land use code by amending the text of the above noted Chapters and Sections of the Land Use Code. as described hereto; and, WHEREAS. the Aspen City Council has reviewed and considered the recommended ch~mges ro the Land Use Code under the applicable ?rowsions of the Manicipal Code as identified herein, has reviewed and considered the recommendation of the Community Development Director, the Planning and Zoning Commission. and has taken and considered public comment ar a public hearing; and, WHEREAS, the City Council finds that the proposed rexr amendments ro the Land Use Code meets or exceeds all applicable standards and that the approval of the proposal is consistent with the goals and elements of the Aspen Area Community,' Plan; and, WHEREAS. the City Council finds that this Ordinance furthers and is necessary for the promotion of public health, safety, and welfare. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN. COLORADO as follows: Section 1: Chapter 26.530. Resident Multi-Family Housing Replacement Program. which Chapter shall regulate the redevelopment of multi-fanaily buildings, shall read as follows: Chapter 26.530 RESIDENT MULTI-FAMILY REPLACEMENT PROGRAM Sections: 26.530.010 Purpose and intent. 26.530.020 Application of Title. 26.530.030 Certificate of compliance/exemption. 26.530.040 Housing replacement requirements. Ordinance No. 51 Series of 2003. Page 2 P29 26.530.050 26.530.060 26.530.070 Resale restrictions. Enforcement. Appeals 26.530.010 Purpose and Intent. The City of Aspen's neighborhoods have traditionally been comprised of a mix of housing types, including tho~e affordable by its working residents. However, because of Aspen's attractiveness as a resort environment, and because of the physical constraints of the upper Roaring Fork Valley, there is constant pressure for the redevelopment of dwellings currently providing resident housing for tourist and second home use. Such redevelopment results in the displacement of individuals and families who are an integral pan of the Aspen work force. Given the extremely high cost of and demand for market-rate housing, resident housing opportunities for displaced working residents, which are now minimal, will continue to decrease. Preservation of the housing inventory and provision of dispersed housing opportunities in Aspen have been long-standing planning goals of the commumty. Achievement of these goals will serve to promote a socially and economically balanced community, limit the number of individuals who face a long and sometimes dangerous commme on State Highway 82, reduce the air pollution effects of commuting and prevent exclusion of ~vorking residents from the city's neighborhoods. In the Aspen Area Community Plan the city has established a goal that affordable housing for worldng residents be provided by both the public and private sectors. The city, through its housing designee, has provided affordable housing both within and adjacent to the city limits. The private sector has also provided affordable housing through the GMQS process. Nevertheless. as a result of the replacement of resident housing with second homes and tourist accommodations, and the steady increase in the size of the workforce required to assttre the continued viability of Aspen area businesses and Aspen's tourist based economy, the city has found it necessary, in concert wi'th other regulations, ro adopt limitations on the demolition of existing multi-family housing in order to m~nimize the displacement of working residents, to insure that the private sect6r maintains its role in the provision of resident housing, and to prevent a housing shortfall from occurring. 26.530.020 Application of Chapter. This Chapter shall apply to the demolition of any resident multi-family housing ("RMF housing"), as defined herein, in the City of Aspen. excluding any parcel consolidated as a Specially Planned Area (SPA3. For the purposes of this Chapter. demolition of a RMF Housing Unit shall include any development action which constitutes Demolition, as defined, and also any action which penetrates demising wails or floors between RMF Housing Units or which converts a RMF Unit to a non-residential use, independent of whether or not such action is undertaken to combine or rebuild the units or for any other purpose. Ordinance No. 51 Page 3 Series 0f2003. P30 No owner shall cause the demolition of any RMF housing unit withom first obtaining a certificate of compliance or a certificate of exemption in accordance ~vith the provisions of this Chapter. The Community Development Department shall not issue a permit for the demolition of any multi-family dwelling unit unless the owner has obtained either a certificate of compliance or a certificate of exemption issued in accordance with this Chal: ter. A certificate of compliance or a certificate of exemption shall only be issued by the Community Development Director if the applicant has complied with the provisions of this Chapter. Any RMF housing unit which is ordered to be demolished by any public agency, including the city, as a resnlt of damage caused by civil commotion or natural disaster shall not be subject to the terms of this Chapter. The City Council, at their discretion, may exempt non-profit agencies or organizations from the provisions of this Chapter. 26.530.030 Certificate of compliance/exemption. Any applicant, prior to applying for a buildin~o permit from the Community Development Department for the purpose of demolishing any multi-fm~ily dwelling unit, must first obtain a certificate of compliance or a certificate of exemption from the requirements of this Chapter. A. Certificate of Compliance. In order to obtain a certificate of compliance, the oxvner shall: 1. Submit to the Community Development Director a statement, certified by the City of Aspen Zoning Officer. declaring the nnmber of RMF housing units, bedrooms, and the net residential area to be affected by demolition. 2. Where required, secure necessary land use approvals and development orders for the project to be developed on the site of the demolished building or on such other [ocation as may be approved. 3. Execute a housing replacement agreement With the City.of Aspen setting forth the terms and conditions upon which any replacement housing required by this Chapter shall be developed, which agreement shall be in a form acceptable to the City Attorney. The agreement shall burden the property and be recorded in the records of the Clerk and Recorder of Pitkin County. The obligation to provide replacement housing as set forth in the agreement shall be secured by a bond, letter of credit, or other security acceptable to the City. B. Certificate of exemption. In order to obtain a certificate of exemption, the owner must submit a statement certifying that the dwelling unit(s) is exempt from the provisions of this Section, the basis upon xvhich exemption is claimed, and such additional documentation as may be required by the Commnnity Development Director in order to establish the exemption. If the Community Development Director is satisfied that the dwelling unit is exempt from the provisions of this Title, a certificate of exemption shall be issued. Ordinance No. 51 Page 4 Series of 2003. P31 C Procedure. A Certificate of Compliance or Certificate of Exemption shall be obtained prior to the submission of a building permit. Form of Certificate. A ,Certificate of Compliance or Exemption shall be in a form approved by the Community Development Director. The Certificate shall constitute a Development Order issued pursuant to Section 26.304.070, Development Orders. 26.530.040 Housing Replacement Requirements. Ao One-Hundred Percent Replacement. In the event of the demolition of free-market resident multi-family housing, the owner sh~l have the option ro construct replacement housing consisting of no less than one-hundred (100/percent of the number of units and one-hundred (100~ percent of the number of bedrooms demolished. The units shall be replaced with like-type units (i.e. each one-bedroom unit is replaced with a one-bedroom unit. each two-bedroom unit is replaced with a txvo-bedroom unit, etc.). Studio units may be replaced with either studio or one-bedroom units. When this one-hundred (100~ percent standard is accomplished, the replacement housing shall not be required to be deed restricted as affordable housing. In the event of the demolition of resident multi-family housing deed restricted as affordable housing, the owner shall be required ro construct replacement housing consisting of no less than one-hundred (100) percent of the number of units and one- hundred (100) percent of the number of bedrooms, and one-hundred (10Oj percent of the square footage of net residential area demolished. The replacement housing shall be deed restricted as affordable housing in a like manner as prior to demolition and in accordance with the requirements of the Aspen/Pitkin Cotmty Housing Authority. The. Aspen City Council may waive these exac~ replacement requirements for projects furthering the community's affordable housing goals. Fifty Percent Replacement. In the event of the demolition of freezmarket resident multi- family housing and replacement of less than one-hundred (I 00) percent of the number of previous units and bedrooms as described above, the owner shall be required ro consmlct replacement housing consisting of no less than fifty (50~ percent of the number of units, fifty (50) percem of the number of bedrooms, and fifty (50) percent of the square footage of net residential area demolished. The replacement housing meeting this requirement shall be deed restricted as affordable housing in accordance w/th the requirements of section 26.530.050, Resale Restrictions (belows. The remaining units replaced on-site shall not be required to be deed restricted as affordable housing. C. Location of Replacement Housing. Multi-family replacement units shall be developed on the same site on which demolition has occtm'ed, unless the owner shall demonstrate and the City Co[mcil determines that replacement of the units on-site would be incompatible with adopted neighborhood plans or would be an inappropriate planning Ordinance No. 51 Page 5 Series of 2003. P32 solution due to the site's physical constraints. When either of the above circumstances result, tlxe owner shalI replace the maximum number of units on-site which the City Council determines that the site can accommodate and may replace the remaining units off-site_ at a location determined acceptable to City Council. When replacement units are proposed ro be built off-site, the owner shall be required to obtain a developmem order approving the ofl'-site development prior to ~ssuance of a Certificate of Compliance for the original parcel. Replacement units may be redeveloped on a separate parcel which is parr of a multi- parcel Plarmed Unit Development that includes the original parcel. In this case. the location of redevelopmem units, both free-market and affordable_ shall be determined by the City through adoption of a Final PUD Plan, pursuant to Chapter 26 445. Do Cash-in-Lieu Payment. When the owner's affordable housing replacement requirement of this section involves a ~action of a unit. cash in lieu may be provided to meet the fi'actional requirement only. The amount of a cash-in-lieu shalI be determined by the AsperdPitkin County Housin~o Authority according to the applicable Affordable Housing Guidelines. Timing and Quality of Replacement Units. Any replacement units required to be deed restricted as affordable housing shall be issued a Certificate of Occupancy, according to the Building Department. and be available for occupancy ar the same rime as, or prior to. any redeveloped free-market units, regardless of whether the replacement units are built on-site or off-site. Replacement units required to be deed restricted as affordable housing shall contain fixtures, finish, and amenities required by the Affordable Housing Guidelines of the Aspen/Pitkin County Housing Authority. Growth Management Replacement Credits. The existing number of free-market residential units, prior to demolition, may be replaced exempt from growth management. The redevelopment credits shall not be transferable separate from the property unless permitted as described above in subparagraph C Free-market residential units in excess of those originally on the parcel shall be sub)ecl to growth management, Chapter 26.470 The affordable residential units required to be developed shall be exempt from growth management, provided the units conform to the reqmremems of this Chapter. Additional affordable dwelling units shall be subject to groxvth management, Chapter 26.470. 26.530.050 Resale/Rental Restrictions. Replacement umts required to be deed restricted as affordable housing shall be "for-sale units" arid shall be deed restricted in a form and substance consistent with the Aftbrdable Housing Guidelines established by the Aspen/Pitkin County Housing Authority. Such deed-restricted units may only be sold in complimace with the current Affordable Housing Guidelines established by the Aspen/Pitkin Cotlnty Housing Authority. The owner may be entitled to select purchasers, subject to the a~brementioned qualifications, with approval from the Aspen/Pitldn County Housing Authority. Ordinance No. 51 Page 6 Series of 2003. P33 Replacement units required to be deed restricted as affordable housing shall be allowed to be rental units if a legal instrument, in a form acceptable to the City Attorney, shall guarantee their permanem ~xffordability in accordance with the Aspen/Pitkin County Affordable Housing Guidelines. No resale or rental restrictions shall apply to free-market replacement units. 26.530.060 Enforcement. Any person ~vho violates any provision of this Chapter including violation of any provision of deed restriction executed for the benetit of the City of Aspen or the AspergPitkin Co~mty Housing Authority shall be liable to the criminal and/or civil penalties and remedies set forth Section 26.104.040. 26.530.070 Appeals. An applicant aggrieved by a decision of the Con-wnunity Development Director in the administration of this Section may appeal such decision ro the Aspen City Council m accordance with the appeal procedures set forth ar Chapter 26.316. An applicant aggrieved by a determination made by the City Council, pursuant to this Section. may appeal the decision to a court of competent jurisdiction. Section 2: This Ordinance shall nor effect any existing litigation and shall not operate as an abatement of any action or proceeding no~v pending under or by virtue of the ordinances repealed or amended as herein provided, and the same shall be conducted md concluded under such prior ordinances. Section 3: If any section, subsection, sentence, clause, phrase, or portion of this Ordinance ~s 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 was held on the 27th day of October. 2003, at 5:00 p.m. in the City Council Chambers. Aspen City Hail, Aspen Colorado. fi~een (15) days prior to xvhich hearing a public notice of the same was published in a newspaper of general circulation within the City of Aspen. Ordinance No. 51 Page 7 Series of 2003 P34 INTRODUCED, READ AND ORDERED PUBLISHED as provided by law, by the City Council of the City of Aspen on the 14th day of October, 2003. Attest: Kathryn S. Koch. City Clerk Helen K. Klanderud. Mayor FINALLY. adopted, passed and approved this Attest: day of ,2004. Kathryn S. Koch, City Clerk Approved as to form: Helen K. Klanderud. Mayor City Attorney Ordinance No. 51 Page 8 Series of 2003. P35 .Exhibit A Option #1 (Text to be added to the pending ordinance! 26.530.040 Housing Replacement Requirements. One-Hundred Percent Replacement. In the event of the demolition of free- market resident multi-family housing, the owner shall have the option to construct replacement housing consisting of no less than one-hundred (100) percent of the number of units and one-hundred (100~ pemem of the number of bedrooms demolished. ]?he traits shall be replaced with like-type units (i.e. each one- bedroom trait is replaced with a one-bedroom unit, each two-bedroom Lmit is replaced with a two-bedroom unit, etc.). Studio units may be replaced with either studio or one-bedroom units. A pro[ect's total net livable area maF be expanded by no more than thirty (301 percent of the original net livable size or to achieve the minimum net livable size standards stated in the Aspen/Pitkin County Affordable ttottsing Guidelines for Cate,gorF X units. When this one-hundred (100) percem standard is accomplished, the replacement housing shall not be required_ to be deed restricted as affordable housing. (X - City Council will need to specify a Category or state a set of unit slze minimums for implementation.) P36 Option//2 26.530.040 A. Housing RePlacement Requirements. One-Hundred Percent Replacement - No Expansion. In the event of the demolition of free-market resident multi-family housing, the owner shall have the option to construct replacement housing consisting of no less than one-hundred (I00) percent of the number of units and one-hundred (100) percent of the number of bedrooms demolished. The units shall be replaced xvith like-type units (i.e. each one-bedroom unit is replaced with a one-bedroom unit, each two-bedroom unit is replaced with a two-bedroom unit, etc.). Studio traits may be replaced ~vith either studio or one-bedroom units. Individual units may be expanded to no more than the minimum net livable size standards stated in the Aspen/Pitkin Countv Affordable Honsin.g Guidelines for Cate.gory X units. When this one-hundred (I00) percent stunda~d is accomplished, the replacement housing shall not be required to be deed restricted as affordable housing. One-Hundred Percent Replacement - Unit Expansion. In the event of the demolition of free-market resident multi-family housing, the c>wner shall have the option to construct replacement housing consisting of no less than one-hundred (100) percent of the number of units and one-hundred (100) percent of the number of bedrooms demolished. The units shall be replaced xvith like-type units (i.e. each one-bedroom unit is replaced with a one-bedroom unit, each two-bedroom unit is replaced with a two-bedroom m~it. etc./. Studio units may be replaced ~vith either studio or one-bedroom units. A project's total net livable area ma); be expanded if a portion of the project, commensurate with the percentage of net livable space expansion, is deed restricted according to the Aspen/Pitkin County Affordable Housing Guidelines. The required amount of nnits, bedrooms, and net livable area to be deed restricted as affordable housing shall be no less than the percentage of the project's net livable space expansion over the existing development. No more than 50% of the original project's nnits, bedrooms, and net livable area shall be required to be replaced as affordable housing. A project both increasing and decreasing individual units sizes for which no aggregate expansion of the project's net livable area occurs shall incur no affordable housing requirement. (For example: a project replicating an existing unit/bedroom mix for which the aggregate net livable space is increased by 15 percent shall inclnde affordable housing equal to 15 percent of the original units, bedrooms, and net livable area./ When this exprcasion and replacement percent standard is accomplished, units other than the replacement housing shall not be required to be deed restricted as affordable housing. Ii P37 Option #3 26.530.040 Housing Replacement Requirements. One-Hnndred Percent Replacement - Up to 30% Expansion. In the event of the demolition of free-market resident multi-family housing, the owner shall have the option to construct replacement housing consisting of no less than one-hundred (100) percent of the number of traits and one-hLmdred (I 00) percent of the number of bedrooms demolished. The units shall be replaced with like-type units i.e. each one-bedroom unit is replaced ~vith a one-bedroom unit. each two-bedroom umr is replaced with a two-bedroom unit, etc.]. Studio units may be replaced with either studio or one-bedroom traits. A project's total net livable area may be expanded by no more than thirty (30) percent of the ortginal net livable size or to achieve the minimum net livable size standards stated in the Aspen/YPitkin County Affordable Hoasing Guidelines for Category X units. When this one- hundred (I00) percent standard is accomplished with no more than a 30% expansion or to achieve the minimum trait size standards of the Aspen/Pitkin CotmtF Affordable Honsing Guidelines, the replacement housing shall not be required to be deed restricted as affordable housing. One-Hundred Percent Replacement - More than 30% Expansion. In the event of the demolition of free-market resident multi-family housing, the owner shall have the option to construct replacement housing consisting of no less than one- hundred (100) percent of the munber of units and one-htmdred (100) percent of the number of bedrooms demolished. The units shall be replaced with like-type units i.e. each one-bedroom unit is replaced with a one-bedroom unit, each two- bedroom unit is replaced Mth a two-bedroom unit. etc.). Studio units may be replaced with either studio or one-bedroom units. A project's total net livable area may be expanded bk' more titan 30% if a portion of the project, commensurate with the percentoge of net livable space expansion, is deed restricted according to the Aspen/PitMn County Affordable Hoasin? Gnidelines. The reqnired amount of units, bedrooms, and net livable area to deed restricted as affordable honsing shall be no less than the percentage of iht, pro[ect's net livable space expansion over the e,risting development. No mort, than 50% of the original project's units, bedrooms, and net livable area shall be required to be replaced as affordable housing. (For example: a project replicating an existing unit/bedroom mix for which the a~ere~ate net livabh, space is increased bk' 35 percent shall include af£ordable housing equal to 35 percent of the original ttnits, bedrooms, and net livable area.! When this expansion and replacement percent standard is accomplished, units other than the replacement housing shall not be required to be deed restricted as affordable housing. January 26, 2004 Aspen City Council Aspen, CO 81611 Dear council members: I have read the rewritten ordinance regarding RMF and agree with staffon focusing on Public Goals, which in the past some developers have avoided by remodeling, etc. I have pointed out at past meetings and my recent letter to council, that most of the larger projects have already been developed (re: Pines, Ulk, Galena Lotts) leaving the Kitzbuhl and our project, Park Avenue Apartments remaining. Park Avenue Apartments is a very unique property in that is has not fit into these standardized equations and therefore has never been developed or improved. The 50% replacement has stopped us in the past and will in the future. · Any redevelopment of this size will be a PUD. However, as for the last 30 years, we won't even get there if50% is required. One suggestion, either lower the 50% to 30% cap, or allow a 30% increase of what exists now and then impose mitigation on any additional increases, as suggested in Option 1. We would still be building employee housing as part of our project. We do not want~to keep a few old walls standing and build a monster. We want to work with onr eommuni~ild/aehieve common goals. Sincerely'//~//t~ gJ John Werning Park Avenue Apartments P39 Memorandum TO: FROM: DATE: RE: Mayor and Members of Council John P. Worcester January 26, 2004 Seventh Street & Hopkins Annexation - Ordinance No. and Second Reading - Public Hearing Attached for your consideration and review is a proposed ordinance wh/ch, if adopted, would annex a portion of Hopkins Ave. and Seventh Street to the City of Aspen. This matter is before you for second reading of the ordinance and a public hearing. The petition for annexation was filed with the City Clerk on August 19, 2003. On September 22, 2003, City Council adopted a resolution finding substantial compliance with Section 31-12-107(1), C.R.S. A public hearing was held on October 27, 2003, at ~vhich time Council determined that the proposed annexation was xn compliance with § ~ 31-12-104 and 31-12-105, C.R.S. City staff will be present at the public hearing to answer any questions you mi~dat have on the proposed annexation and potential impacts the annexation will have on City operations. The decision ro annex property to the City is a legislative, act and is ehtirely within your discretionary powers. You may annex, or not, for any reason, or no reason at all. ACTION REQUIRED: A Motion to approve Ordinance No. [ ~ Series of 2004 City Manager Community Development Director P40 oRDINANCE NO. 1 (Series of 2004) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING THE ANNEXATION OF CERTAIN TERRITORY TO THE CITY OF ASPEN, COLORADO, TO BE KNOWN AND DESIGNATED AS THE "SEVENTH STREET & HOPKINS" ANNEXATION. WHEREAS, on August 19, 2003, Jack Hatfield, Chairperson of the Board of County Commissioners for Pitkin County, on behalf of the Board of County Commissioners of Pitldn County, the owner of the property proposed to be annexed did file with the City Clerk of the City of Aspen a Petition for Annexation of territory to the City of Aspen; and YVHEREAS, the petition, including accompanying copies of an annexation map, has been reviewed by the City Attorney's Office and the City Engineer and found by them to contain the information prescribed and set forth in §31-I2-107, C.R.S.; and WI-IEREAS, the owners of one hundred percent (100%) of the area proposed to be annexed, exclusive of streets and alleys, have consented in writing to the annexation; and WHEREAS, the City Council, by resolution (Number 89, Series of 2003) at its regular meeting on September 22, 2003, did find and determine said Petition for Annexation to be in substantial compliance with the provisions of §31-12-107, C.R.S.; and WHEREAS, the City CounciI, by resolution (Number 99, Series of 2003) at its regular meeting on October 27, 2003, did find and determine, following a public heating, said Petition for Annexation to be in substantial compliance with § § 31 - 12-104 and. 31412-105, C.R.S.; and WHEREAS, the City Council does hereby find and determine that approval of the annexation of said territory to be in the City's best interest; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO: Section 1. That the tract of land described in the Petition for Annexation, commonly referred to as the "Seventh Street & Hopkins" annexation, and as shown on the annexation map, is hereby annexed to the City of Aspen, Colorado. Section 2. The City Clerk of the City of Aspen is hereby directed as follows: (a) To file one copy of the annexation map with the original of th/s annexation ordinance in the office of the City Clerk of the City of Aspen. (b) To certify and file two copies of this annexation ordinance and of the annexation map with the Clerk and Recorder of the County of Pitkin, State of Colorado. (c) To request the Clerk and Recorder of Pitkin County to file one certified copy of this annexation ordinance and of the annexation map with the Division of Local Govemmem of the Department of Local Affairs, State of Colorado. Section 3. The City Engineer of the City of Aspen is hereby directed to amend the Official Map of the City of Aspen to reflect the boundary changes adopted pursuant ro this annexation ordinance. Section 4. That 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 iurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall nor affect the validity of the remaining portions thereof.. Section 5. That this ordinance shall not have any effect on existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances amended as herein provided, and the same shall be construed and concluded under such prior ordinances. P41 P42 A public hearing on the ordinance shall be held on the City Council chambers, Aspen City Hall, Aspen, Colorado. day of ,2004, in the INTRODUCED, READ AND ORDERED PUBLISHED as provided by la~v by the City Council of the City of Aspen on the day of ,2004. ATTEST: Helen I<2alin Klanderud, Mayor Kathryn S. Koch. City Clerk FINALLY adopted, passed and approved this ,2004. day of ATTEST: Helen Kalin Klandemd. Mayor Kathryn S. Koch, City Clerk JPW-O1/O6/2oO4-G:\jokn\word\ords\Seven~hS~.doc P43 TO: THROUGH: FROM: DATE: RE: MEMORANDUM Mayor and City Council Steve Barwick, City Manager Randy L. Ready, ~s~t.~City Manager January 21, 2004 Resolution No. ~ Lease Agreement for Recycle/Snowmelter Parcel Zupancis Parcel and P45 SUMMARY: Attached is a resolution and lease agreement to follow up on Ordinance No. 18, Series of 2003 in which City Council granted final land use approvals and a development order for the Obermeyer Place COWOP Project on April 14, 2003. Section 6 of the Ordinance approves the temporary use of 540 East Main Street (the Zupancis property) and a portion of the Recycle/Snowmelter Center Parcel adjacent to Rio Grande Park for use by the businesses displaced by the construction activity at Obermeyer Place and for use by project management operations. The intent of this lease agreement is to fairly compensate the City for its property assets, while attempting to keep the local small businesses viable during the construction period and then ensunng that they will be par~ of Obermeyer Place when the project is complete. Since final land use approval, staff has been working closely with representatives of the Obermeyer Redevelopment Company on site plans, lease terms and conditions. Your approval of this item will authorize the City Manager to sign the lease agreement between the Obermeyer Redevelopment Company and the City for the Zupancis property and a portion of the Recycle/Snowmelt Center parcel. The terms and conditions of the proposed lease are detailed in the attached lease document and summarized below. PREVIOUS COUNCIL ACTION AND BACKGROUND: City Council deemed the Obermeyer Place project eligible for the COWOP land use process on March 1 I, 2002, via Council Resolution21, Series of 2002~ The COWOP TaskForee Team established by City Council met fifteen times and guided the project to its final profile. Between March 2002 and February 2003 the project went through 25 iterations of site planning, use programming, and architecture. The COWOP Task Force Team completed its work on February 26, 2003 with a project that the Team unanimously approved as representing a balance of interests that met the requests of the developer, current business tenants, adjacent property owners and the community. P46 City Council granted final land use approval and a development order in Ordinance No. 18, Series of 2003 on April 14, 2003. Unique to this project, the ordinance approved the temporary use of two City properties--the 540 East Main property (former Zupancis property) and a'portion of the Recycle/Snowmelter Center parcel on the north side of Rio Grande Place, adjacent to Rio Grande Park. Inclusion of the temporary use authorization in the COWOP ordinance allows the terms of the temporary use for business relocation purposes to exceed the standard 6-month maximum timeframe for temporary uses: "The time period for the temporary use of these propertiek for said purposes may be extended by the Community Development Director for a time period agreeable to both parties." City Council and staff commended the development team for committing to provide temporary locations for current business tenants at the Obermeyer Place site in order to maintain their viability during the construction period. Most of the tenants are proposed to be accommodated in the existing non-historic structures 'on the Zupancis property and in temporary structures on both leased properties. Other businesses are temporarily relocating to sites in the Aspen Airport Business Center. The temporary use section of the ordinance concludes with the City's support and appreciation for "the applicant's attempts to temporarily relocate Project businesses during the process of construction in order to sustain their livelihood." The City purchased the former Zupancis property at 540 E. Main Street on August 14, 2002 for $3 million. Beginning in December 2002, the Aspen Fire Protection District [AFPD) began a Headquarters Station Steering Committee process that conducted 14 meetings between December 2002 and August 2003. At a meeting with City Council on September 29, 2003, the AFPD announced that it is interested in the Zupancis site as a prospective location for a new headquarters station, noting that "a Hopkins site remodel or a Zupancis site station is necessary." The AFPD requested additional time to consider headquarters site locations, to get a better sense of which location the public prefers, and to get more information from the City about the financial implications of a site decision. During recent conversations with AFPD Chief Darryl Grob, Chief Grob indicated that the Fire District is continuing its site selection process and has no objection to a temporary lease of the Zupancls property during the Obermeyer Place construction period. DISCUSSION: Upon final land use approval for the Obermeyer Place project, staff began meeting with representatives of the Obermeyer Redevelopment Co. to discuss tenant needs, alternative site plans for the Ie'ase parcels, and prospective lease terms and conditions for the temporary locations of 13 small businesses currently located on the Obermeyer Place site. The Zupancis site is proposed to be kne~vn as the Hunter & Main Small Business Park, and would be the temporary home for approximately 11 local small businesses now operating at Rio Grande Place. Two other local businesses would operate at the Recycling Center site next to Rio Grande Park, and would not interfere with recycling or snowmelter operations throughout the duration of the lease. The two sites would be the temporary home for more than half of the 23 small, service-commercial businesses now operating along Rio Grande Place. The temporary 2 P47 relocation plan calls for the businesses to operate at the two properties from spring 2004 through late spring 2006, during the construction period for the Obermeyer Place redevelopment Project. The Obermeyer Redevelopment Co. would transport and install modular structures to the two sites, as well as providing utilities and parking spaces ro meet City codes. Tenants would also use the existing home and garages at the Zupancis property. As part of the effort, Obermeyer Redevelopment Co. has committed to maintaining rents at their cur:em levels through the temporary relocation period, and has committed to one month of rent- free operation to defray tenant relocation costs. By spring 2006, rents for the Obermeyer tenants will have been frozen for three years. The proposed terms of this lease acknowledge the substantial costs for the developer to lease the modular structures, as Well as the cost of installing the utilities and the necessary advertising campaign to be conducted by the developer on behalf of the relocated businesses. The businesses that are expected to be relocating to the Zupancis site are: Aspen Painting; Best Friends, a pet grooming service; Mittel Europa; Aspen Custom Glass Co.; Alternative Interiors; Red Canyon Auto Body offices; H&R Block; Goldberg & Goldberg Accounting; and Regan Management Services. The businesses relocating to the Recycling Center property are the Ski Service Center and Board Werks, the Power Shade Model Shop, and temporary project management offices for the contractor and developer. Other temporary business locations are being finalized, including other sites in the downtown area. Some temporary sites, primarily for storage, will be located at the Aspen Airport Business Center, and some tenams are arrar_ging their own temporary locations. Tim Belinski, Manager of the Obermeyer Redevelopmem Co. will be present at the January 26 Council meeting to further discuss business relocation plans and respond to Council questions. The most significant proposed lease terms and conditions are as follows: Leased Parcels. Exhibit A of the lease agreement indicates the locations of the proposed leased premises. The Iease would encompass the Zupancis parcel at 540 E. Main Street except for the three historically designated structures at the north end of the parcel, and the Recycle/Snowrnelter Center parcel on the east side of Rio Grande Park except for the area to be used for access, operations and maintenance of the City's snowmelter site and the County es relocated Recycle Center site. The recycle dumpsters would be relocated to the northern edge of the parcel and access would be maintained throughout the term of the lease. · Initial Improvements. Obermeyer Would make the necessary initial improvements to both parcels to allow the temporary relocation of the business tenants. Such P48 improvements.would include modifications to the existing Zupancis house and garages and installation of six temporary buildings on the Zupancis parcel and four temporary buildings on the Recycle/Snowmelter Center parcel. The size and placement of the temporary buildings is indicated on the site plans in Exhibit A. Obermeyer would be responsible for all utility connections, lighting, site grading, signage, maintenance, snow removal, security, and on-site parking for both properties, in accordance with the Municipal Code. In addition, Obermeyer would need to obtain approval from the Historic Preservation Commission for the proposed changes to the Zupancis parcel. SnoWmelter and Recycle Center Operations. Obermeyer has agreed to extend the operation of the snowmelter throughout the term o£this lease. Access to and operation of the relocated Recycle Center are also required by the terms of this lease. · Subleases. Obermeyer would maintain base rents per square foot for all of its tenants at current rates. Each tenant would receive one rent-free month to help defray relocation expenses. Term. The term of this lease agreement is intended to cover the Obermeyer Place construction period--from now tmtiI late spring 2006. June 30, 2006 would be the end of the base term of the lease. Obermeyer would have the right to one three-month lease extension (until September 30, 2006), if needed due to construction completion delays. Any additional extensions or subtenant holdovers xvould only be granted with the express written consent of the City. Rents and Compensation, At the beginning of lease negotiations staff consulted ~vith an appraiser and commercial real estate broker to try to determine an appropriate lease rate for the properties to be leased. It became readily apparent that there are few, if any upvalley lease arrangements like this one. Lease rates for finished office 'space in the City-owned Red Brick, Yellow Brick and ACRA office spaces are currently between $16-$17 per square foot. However, with the exception of the 1300 square foot existing Zupancis house, the portions of the Zupancis and Recycle/Snowmelter Center parcels being leased are raw, unimproved property. Similar ground leases downvalley are going for less than $12 per square foot. The appraiser's judgment of the market lease value of the Zupancis prope.rty would be the owner's carrying cost. In this case, the carrying cost of the City's $3 million investment would be about $120,000 a year at 4% interest. Staff acknowledges Obermeyer's commitment to maintain tenant base rents per square foot at the existing level throughout the construction perio4 and to pro¥ide each tenant with one rent-free month to help defray relocation costs. In addition, Obermeyer will bear the substantial costs of leasing and installing temporary structures, extending utilities, making site improvements and funding an advertising campaign on behalf of its tenants. In light of these factors and in an effort to receive fair compensation for the leased City assets, staff recommends an alternative iease rate approach. 4 P49 A financial scenario that results in lease payments to the City equaling the carrying costs of the Zupancis parcel/5120,000, year at 4% interest') AND completion of quality permanent improvements to the Recycle Center area does not appear to be viable. Instead, the proposed terms of this lease provide for permanent improvements to Recycle Center estimated to cost about $475.000 including the estimated $125.D00 cost of the actuai structure that will house the recycling cemer operations. Acceptance of the permanent ~mprovements would authorize Obermeyer to include the use of the $125,000 committed in Ordinance 18 to go toward the improvements of the recycling facility. Staff finds that the approximately $350,000 net value of the permanent improvements to the Recycle Center and landscaping as part of the overali Rio Grande Master Plan provides appropriate compensation to the City. In addition to the value of the proposed permanent improvements, the current lease terms require Obermeyer to maintain continued operation of the City's snowmelter facility for the duration of the lease. Ordinance 18 originally called for removal of the snowmelter after the 2003~2004 winter season. Th/s concession on the part of the developer will result in savings to the City's General Fund of approximately $I00,000 per year in additional snow hauling costs during the winters of 2004-2005 and 2005-2006. Permanent Improvements. In lieu of conventional rent payments during the base term of this lease, staff and Obermeyer have developed a scope of work on and adjacent to the Recycle Center to be completed by the developer no later than nine months following the date of expiration of the lease. The permanent improvements are detailed in Exhibit B attached to the lease. The intent of the permanent ~mprovements is to provide fair compensation to the City primarily in the form of design, engineering, and construction of a new Recycle Center inclusive of site improvements, landscaping, and a building to cover the recycle center operations. The City would have review and approval rights for ail permanent improvements. The County would have review and approval rights for the functional design of the Recycle Center facilities. In addition to the specific Recycle Center improvements, other permanent improvements (not including other right of way and Obermeyer Place site improvements required by ordinance and City Code) include: Removal and relocation of the City's snowmelter equipment Grading, drainage and paving of the site Utility extensions to the north side of Rio Grande Place A contribution of $ I0,000 to go toward the construction of the storm water interceptor device to be constructed in the vicinity Detached sidewalk and curb from the Eagles Club to the western driveway of Recycle Center P50 Landscaping and irrigation of the .Recycle Center and adjacent parkway per City Parks Department specifications Donation of surplus excavated boulders to the City FINANCIAL IMPLICATIONS: The City purchased the former Zupancis property at 540 E. Main Street on August 14, 2002 for $3 million with money borrowed from the Housing Fund, with an agreement that the City would take possession of the property in August 2003. During the 2004 budget process, Council agreed that the Housing Fund needs to be repaid the $3 million purchase price plus interes:~ by August 2004. Th6 term of this lease--through June 2006, with a possible 3- month extension--does not impede the City from continuing negotiations with the Fire District about the long-term ownership and use of the Zupancis parcel. The City Administrative Services Director and City Manager will recorflmend the source(s) of repayment of the housing funds from other City resources by the August 2004 deadline. As discussed above, the terms of this lease provide for permanent improvements to the Recycle Center estimated to cost about $475,000 including the cost of the actual structure that will house the recycling center operations. The 1n~kind work would utilize the $125,000 committed by Obermeyer in Ordinance i8 to go to~vard the improvement of the recycling facility. Staff from the City's Parks, Utilities, Asset Management, Engineering, Manager's Office and Community Ddvelopment Departments find that the approximately $350,000 net value of the permanent improvements as part of the overall Rio Grande Master Plan provides appropriate compensation to the City, along with assurance of the timely completion of quality improvements to the area. The alternative of traditional lease payments instead of permanent improvements would require the City to complete the identified improvements as part of the Parks; Utilities and General Fund Asset Management Budgeting and Planning process. City budget availability and timeliness of the permanent improvements cannot be assured, given competing budget priorities. Staff finds that requiring the developer to complete the scope of work identified as permanent improvements is a prudent and optimal means of assuring delivery of a quality product in the most-timely fashion, benefiting from the developer's mobilization at the site and extremely high interest in making permanent aesthetic improvements to the area. In this case, the developer is proceeding with a project that has been deemed to have significant public interest and benefit in retaining the 39,000 square feet of service-commerciaI space. In addition, Obermeyer has a very significant incentive to improve the parkside neighborhood in a very timely mariner for the 21 free market units included in the development. On top of the value of the proposed permanent improvements, the current lease terms require Obermeyer to maintain continued operation of the City's snowmelter facility for the duration of the lease. Ordinance 18 originally called for removal of the snowmelter after the 2003-2004 winter season. This concession on the part of the developer will result in savings to the City's General P51 Fund of approximately $100,000 per year in additional snow hauling costs during the winters of 2004-2005 and 2005-2006. RECOMMENDATION: Staffrecommends approval of the attached resolution, granting the City Manager the authority to execute the Land Lease Agreement between the City and the Obermeyer Redevelopment Company. ALTERNATIVES: Council may direct staffand the developer to renegotiate certain terms or conditions in the Land Lease, consistent with the temporary use approval and all parties' commitment to relocating the current business tenants in a way that preserves their viability during the construction process. PROPOSED MOTION: I move to approve Resolution No. ~, Series of 2004, approving a Land Lease Agreement between the Obermeyer Redevelopment Company and the City of Aspen for the lease of the Zupancis Parcel and a portion of the Recycle/Snowmelter Center Parcel. RESOLUTION NO, Series of 2004 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN. COLORADO. APPROVING A LA_ND LEASE AGREEMENT BETWEEN THE OBERMEYER REDEVELOPMENT COMPANY AND THE CITY OF ASPEN. COLORADO FOR THE LEASE OF TWO (2) PARCELS REFERRED TO AS THE "ZUPANCIS PARCEL" AND A PORTION OF THE "RECYCLE/SNOWMELTER CENTER PARCEL." AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID AGREEMENT ON BEHALF OF THE CITY OF ASPEN. COLORADO. WHEREAS, there has been submitted to the City Council a lease a~eemem between the Obermeyer Redevelopment Company and the City of Aspen, a true and accurate copy of which is attached hereto as Exhibit ..... A, P53 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 that lease agreement between the Obermeyer Redevelopment Company and the City of Aspen. a cop3 of which ~s annexed hereto and incorporated herein, and does hereby authorize the City Manager of the City of Aspen to execute said agreement on behalf of the'City of Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the __ day of ,2004. Helen Kalin Klanderud, Mayor I, Kathryn S. Koch, 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 on the day hereinabove stated. Kathryn S. Koch, City Clerk P55 LAND LEASE AGREEMENT THIS LAND LEASE AGREEMENT (hereinafter "Agreement") is entered into b~ and between THE CITY OF ASPEN COLORADO Lessor ~hereinafter "Lessor" or "the City"), and Obermeyer Redevelopment Company. Lessee (hereinafter "Lessee" or "Obermeyer"), to be effective on the date on which the parties actually affix their signatures hereto. WITNESSETH: WHEREAS, the City owns the two parcels subject to this Agreement (hereinafter "Zupancis Parcel" and "Recycle/Snowmelter Center Parcel", togethdr called "Leased Parcels"), located ir{ Aspen. Colorado; and WHEREAS, Oberrneyer Redevelopment Company, the Lessee, is a Colorado S-Corporation authorized to do business in the State of Colorado and primarily engaged in the business of developing real estate: and WHEREAS. the City has the rights, title and interest in and to the real property and public. facilities on the Leased Parcels, together with the rights, licenses, and privileges hereinafter granted: and WHEREAS. the City has full power and authority to enter into this Agreement in respect thereof: and WHEREAS, the City of Aspen granted a development order for the Obenneyer Place COWOP Project as evidenced by the City of Aspen Ordinance No. 18. Series 2003, specifically approving the temporary use of the Lease Parcels; and WHEREAS, Lessee desires to lease certain property with the intent of installing certain small business operations in temporary and existing structures on site, along with construction-related operations thereon upon the terms and conditions hereinafter stated. NOW, THEREFORE, in consideration of the mutual covenants set forth herein the parties agree as follows: SECTION I LEASED PARCELS A. Leased Parcels: Included Areas Lessor hereby leases unto Lessee, for the term and upon the rentals, fees, charges and conditions hereinafter stated, two parcels ofland. The Zupan'cis Parcel is located at 540 East Main Street. The Recycle/Snowmelt Center Parcel is located adjacent to Rio Grande Place on the eastern side of Rio Grande Park. Both parcels are described on Exhibit A attached hereto and incorporated herein by this reference ~collectively referred to herein as "Leased Parcels"). B. Lease Parcels: Excluded Areas I. Snowmelter Operational Area. The area within the Recycle/Snowmelt Center Parcel devoted to the operations, traffic circulation, and maintenance of the City's snow dumping and snow melting operations is specifically excluded ~'rom the definition of Leased Parcels for the purposes of this Agreement. 2 Recycle Operational Area. The area within the relocated Recycle/Snowmelt Center Parcel devoted to the operations, traffic circulation, and maintenance of the Pitkin County recycle operations is specifically excluded from the definition of Lease Parcels for purposes of this Agreement Page 1 of 17 P56 · SECTION II INITIAL IMPROVEMENTS, USE OF PREMISES AND FINAL IMPROVEMENTS A. Initial Improvements Description. Lessee, at its sole expense, shall be responsible for cofistruction of the following "Initial Improvements" on the Leased Premises: Any and all such changes shall comply with the City's Building Department requirements. Relating to both the Zupancis Parcel and the Recycle/Snowmelt Center Parcel: a.) To accommodate the temporary relocation ora number of small businesses included in the Obermeyer Place project, project management, and for construction-related activities. Lessee shall install temporary buildings and structures of varying sizes and dimensions on both sites. Ail such temporary structures shall be limited in height to 25' from existing grade la height that is less than that allowed by current zoning). Structures shall be skirted and may be interconnected with adjoining pathways and decking to allow for pedestrian access. b. Utilities necessary for such stated uses may be extended and upgraded for service to the Leased Parcels Such upgrade, including potential realignment or relocation of services, shall be the responsibility of Obermeyer and shall be performed in conjunction with the applicable agencies and ali such work shall be performed in accordance with applicable building code requiremgms. c.) Exterior lighting shall be added to the existing and added s~ructures in accordance with City of Aspen lighting requirements and with sensitivity to Concept 600 Building residents. d.) Lessee shall site grade as appropriate to accommodate such changes and may add a road base topping surface in areas that are appropriate for traffic circulation and parking for the two parcels. In addition, existing sidewalks may be repaired and a concrete surface may be added to the site tc allow for a covered storage facility not to exceed 100 s.f. Relating solely to the Zupancis Parcel: e.) The existing one-story house structure on the Zupancis Parcel on East Main Street and the two existing garages to the north of the house shall be modified to accommodate smalI business operations. Such modifications may include the removal of internal walls, replacement of current roofs to accommodate higher interior heights inside the garages up to 12 feet. and other such changes in accordance with current zomng. The existing buildings may be painted and window awnings ma3 be added. The existing fence along East Main Street may be removed. f.) Clearing of brush and ground vegetation may be necessary to allow pedestrian access, traffic circulation, and parking within the site. Any such changes shall be performed in accordance with City Municipal Code. g.) Public stgnage in the form of a general business directory within the site. individual business signs, and directional signs shall be installed in accordance with the City's sign code provisions. h.) Under no event shall the three historically designated structures located on the northern end of the Zupancis parcel be disturbed or removed by Lessee. Such structures shall be either fenced or otherwise secured by Lessee to ensure they are undisturbed during the term of this Agreement. Page 2 of 17 P57 i.) All exterior changes to the Zupancis structures shall be subject to review and ~pproval of the City's Historic Preservation Officer and/or the Historic Preservation Commission. as applicable. Relating solely to the Recycle/Snowmelt Center Parcel: j.) The continuous dirt berm located along the north and east edges of the Recycle/Snowmelt Center Parcel shall be partially removed to provide additional traffic circulation and parking for the site. Such berm may be reshaped and regraded to a height not to exceed 5 feet from existing grade. Once reshaped, the berm shall be revegetated and maintained with appropriate ground cover plant materials for the duration of this lease. Obermeyer shall, upon termination of this Agreement. work cooperatively with the Cit3 to either leave the berm as modified or re-establish the dirt berm to its substantiall3 former condition, inclusive of its original height and its former state of landscape vegetation. k.) The dirt berm located adjacent to Rio Grande Place alonfl the southern edge of the Recycle/Snowmelt Center Parcel shall be removed entirely in order to provide additional traffic circulation and parking for the site. I.) A 6' tall protection and screening fence made of wood shall be installed alongside the current sidewalk, between the two existing entry points to the Recycle/Snowm~lt Center Parcel in accordance with Building Department regulations. m.) Public signage in the form ora general business directory within the site, individual business signs, and directional signs shall be installed in accordance with the City's sign code provisions. Title to such improvements shall remain with Obermeyer until expiration or other termination of this Agreement, as provided for in Section XII!, below. Such Initial Improvements contained in this Section II shall be completed during the term of this Agreement B. Permanent Improvements Description. Lessee, at its sole expense, shall be responsible for construction of the "Permanent Improvements" described in Exhibit B herein. Any and ali such changes shall comply with the City's Building Department requirements and ail other relevant provisions of the Aspen Municipal Code. C. Cooperation With Existing Uses Adjoining the Recycle/Snowmelt Center Parcel I. Snowmelt Operations. Obermeyer agrees to work in good faith with the City to ensure the snowmelt operations remain accessible for their operations continuously through the term of this Agreement. 2. Recycle Operations. Obermeyer understands the importance of the continued use by the public of the Pitkin County recycling program and shall work with the County to ensure the operations remain accessible to the public through the term of this Agreement. The recycle dumpsters shall be relocated to the northern edge of the parcel and the traffic circulation and access to the area shall be routed to a one-way route. Obermeyer shall install accompanying signage within the Recycle/Snowmelt Center Parcel to assist the public with directional and way-finding questions. D. Authorized Uses 1. Small Business Operations. It is understood by both parties that Obermeyer shall sublease spaces on the Leased Premises to a number of the small businesses currently located within the Obermeyer Place project boundary. Such operations, on both the Zupancis Parcel and the Recycle/Snowmelt Center Parcel, shall occupy either current non-historic structures or temporary job trailers. Page 3 of 17 P58 2. Proiect Management Operations. It is understood by both parties that Obermeyer shall manage the Obermeyer Place construction project, the tenant relocation work, and the continuing sales and Ieasing operations for the project from a location within the Recycle/Snowmelt Center Parcel. E. Unauthorized Uses 1. Equipment, Construction Vehicle Stora~;e, Portable Restrooms. Obermeyer shall not store on the Zupancis Parcel any construction equipment or cmistruction vehicles or any portable restrooms that may be visible from any point along East Main Street. 2. Non-residential Property. Obermeyer shall not permit anyone tc reside on the Leased Parcels. F. Sublease/Use/License/Storage Agreemems Obermeyer may rent out portions of the Leased Parcels and enter into agreements with third parties to use the Leased ParceLs. The base rents per square foot of the subleases shall not exceed current lease rares for the tenants currently located on the Obermeyer Place site. In addition, each tenant shall receive one rent-free month ro defray relocation costs. SECTION III TERM A. Base Term The initial term of this Agreement is for a 15eriod of time beginning on the date of execution and ending June 30, 2006 ~"Base Term'~. Obermeyer shall have the right ro extend the term for one (1) three month period of time. in accordance with Subsections B and C, below. During the Base Term and extension term, lease rates shall be in accordance with the provisions of Section IV, Subsection B, below. B. Options to Extend I. Extension Option. Obermeyer shall have the right ro extend the Base Term of this Agreement for one (I) three-month period of time, as follows: From July 1, 2006 through September 30, 2006 In the event of unforeseen exigent circumstances, at Obermeyer's request and with the written approval of the City, additional three-month extension(s) may be granted. Such extensions may be exercised so long as Obermeyer is not in default under terms of this Agreement 2. Option Exercise. Lessee shall notify Lessor in writing of its intention ro exercise the option fcr each extension term no later than ninety (90) days prior tc the otherwise expiry date of the then current term. 3. Title Conveyance and Surrender of Possession. Upon the ending of the Base Term or upon ending of the last and final exercised Extension Options, Obermeyer shall peacefully surrender possession of the Leased Parcels and remove all personal property, inclusive of all temporary structures and any constructed buildings or occupied structures that were not included within the Leased Parcels prior to occupancy under this Agreement, without further requirement of notice by the City or opportunity to cure by Obermeyer. under terms of Section XII, below, or otherwise. Title to the associated improvements shall vest in the City. C. Lessor's Notice of Failure to Exercise Should Obermeyer fail to exercise an option to extend the term of this Agreement within the time provided, as defined in Subsection B above, Obermeyer shall not be deemed tc have forfeited the option until such time as the City shall give Obermeyer written notice of failure to timely exercise the option. Page 4 of 17 P59 together with notice of a period of five (5) days~ after the date of said notice, within which Obermeyer shall continue to have the right to exercise the option tO extend the relevant term of this Agreement ("Notice of Failure to Exercise"). If Obermeyer shall not have exercised the option, by written notice to the City, within the five (5) day Period provided in the City's Notice of Failure to Exercise, the option shall be forfeited and Obermeyer shall have no further right to extend the relevant term of this Agreement. D. Holdin~ Over Should Obermeyer or any of its subtenants hold over the use of or continue to occupy the Leased Parcels with express written approval of the City after expiration of the Base Term or any extended term, such holding over shall be deemed a month to month tenancy upon the existing conditions andr agreement~ provided for in this Agreement. It is expressly understood that no title to the temporary structures, inclusive of installed structures commonly known as job trailers or any constructed building or structure not included on the Leased Parcels prior to occupancy under this Agreement, shall pass to the City if Obermeyer or any subtenant becomes a hold-over tenant. SECTION IV ,RENTS, FEES AND CHARGES A. Base Term Ground Rent Recognition and compensation to the City of Aspen for the use and occupancy of the Leased Premises by Obermeyer as described in this Agreement shall be made in the form of improvements to the Recycle/Snowmelt Center Parcel, plus certain adjacent areas, herein referred to as the Permanent Improvements denoted in Exhibit B, Section II, and Section V of this Agreement. B. Extension Options Ground Rental Rates I. Date of Execution through June 30, 2006. The rental rates specified in Subsection A, above, shall be the rent charged during the Base Term of this Agreement. 2. July I, 2006 Rental Rate. Begirming July 1, 2006, the first extension period of this Agreement, the rental amounts shall be paid in monthly installments of $4,000 for both parcels, or $1,000 per month for the Recycle/Snowmelter Center parcel and $3,000 for the Zupancls parcel. The monthly rental amounts for each approved successive extension period shall be increased by 1%. C. Payment Dates 1. Monthly Rents. During the Extension Option periods, rent shall be payable in monthly installments beginning on the first day of each month. 2. First Payment of Rents and Prorata Rents. If any partial month rent is due, such rents shall be calculated on a daily basis from the date of execution through to the end Of the month. E. Place of Payment All payments due and payable under this Agreement shall be payable to the order 0fthe City of Aspen, and shall be submitted and/or delivered to the City's Finance Department. F. Delinquent Payments The City reserves the right to charge interest and a late fee, reasonably related to the administrative cost of pr0cessing late payments, as such interest and fee may be instituted by the City and changed from time to time. Page 5 of 17 P60 SECTION v CONSTRUCTION: PROCESS and APPROVAL REQUIREMENTS A. Plans and Specs for Initial Improvements and Permanent Improvements 1. Site Plan, Construction Plans. Obermeyer shall submit a preliminary site plan to the City for review. Upon written approval of the preliminary plan by the City or its designee, Obermeyer shall submit construction plans and associated permit applications to the City's Building Department as applicable. All construction, development, and remodeling of improvements on the Leased Parcels, both Initial Improvements and Permanent Improvements, shall be built or installed in conformance with City codes and requirements in effect at the time of construction. Plans and specifications for construction, prepared by registered architects and engineers, must be approved in advance of construction by the City Building Department. Construction shalI be in accordance with the plans so approved Under no event shall Obermeyer be responsible for the reined:at:oh of any pre-existing building code violations or environmental hazardous conditions. SECTION VI MAINTENANCE. SECURITY AND PARKING A. Maintenance Obermeyer shall maintain improvements on the Leased Parcels at its own expense. Lessee shall repair all damage tc the Leased Parcels caused by its operations and/or by its employees, customers_ guests, contractors, agents and :nv:tees. B. Snow Removal Obermeyer shali provide snow removal service on the Zupancis Parcel and the leased portion of the Recycle/Snowmelter Center, including the adjacent sidewalks along Main Street and Rio Grande Place. The City shall provide snow removal service on the non-leased portion of the Recycle/Snowmelt Center Parcel. C. Security Security of the Leased Parcels shall be the reslfonsibility of the Lessee. Nothing in this Agreement shalI be construed to impose security obligations upon the City or Pitkin County. The City shall not be liable for any loss or damages suffered by Obermeyer or its subtenants from use of and operation upon the Leased Premises. D. Parkina This lease includes the use of the parallel parking spaces on the noah side of Rio Grande Place between the easterly and westerly entrances to Recycle/Sngwmelter Center for proj ect-related parking. Obermeyer may also designate and use additional parking spaces on the Zupancis property and within the leased portion of the Recycle/Snowmelter Center. The non-leased portion of the Recycle/Snowmelter Center parcel shall remain clear ofparked vehicles at ail times. On-street parking regulations and parking garage fees will apply elsewhere: Lessee shall actively encourage carpooling and transit use by employees, tenants, customers and construction contractors to minimize the impact of vehicular traffic and parking at the construction site and on the leased premises. Page 6 of 17 P61 SECTION VII UTILITIES A. Utility Improvements to Water System and Sewer System. Oberme3 er shall install a temporary system of water and sewer Mines and connectors in order to facilitate connection to the existing utilities for the intended temporary use of the Leased Parcels. The City will collect tap fees for the temporary buildings and then refund them once the lines are severed and abandoned. Obermeyer will abandon any utility connections made on both parcels in accordance with applicable standards at the termination of the lease. B. Monthly Service Charges Obermeyer shall be liable for all set up fees, monthly service charges, and any other fees charged by utility providers. SECTION VIII APPURTENANT RIGHTS Obermeyer shall have the rights of ingress to and egress from the Leased Parcels for Obermeyer, its subtenants, employees, customers, guests, contractors, agents and invitees. SECTION IX MORTGAGE OF LEASEHOLD INTERESTS Lessee shail have the right to pledge its leasehold interest as security, solely for the purpose of construction of capital improvements to the Leased Premises under terms of this Agreement. Such a pledge shall be subject to the prior written consent of the City, which consent shall not be unreasonably withheld or delayed. SECTION X LIENS In the event any individuai or entity attempts to assert, or asserts, a mechanic's or materialmen's lien against the Leased Parcels, Lessee shall hold the City l~armless from such claim, including the cost of defense, and shall provide the City with a Release of Lien. SECTION XI INDEMNITY AND INSURANCE A. Indemnification Lessee assumes the risk of loss or damage to the Leased Parcels, including associated improvements and contents, and to vehicles and any other property on the Leased Parcels. whether if from wind storm, fire, earth quake, snow, water mn off, vandalism or any other cause or causes whatsoever. Obermeyer hereby agrees to indemnify and hold harmless the City, its officers, employees, agents, and assigns from and against all claims and damages of any kind, including attorney's fees. brought by anyone, arising out of this Agreement or out of Obermeyer's use and occupancy of and/or operations on the Leased Parcels. other than those resulting from the negligence or willful misconduct on the part of the City, its officers, agents, employees, and assigns. B. Insurance I. Types and Limits. Obermeyer, to the extent that the following coverages apply to its occupancy of and operations on the Leased Parcels, shall furnish and maintain at all times at its own cost and expense: Liability insurance, including premises, products and completed operations, and contractual liability in a reasonable amount, but no less than: Page 7 of 17 P62 Personal Injury: One million dollars per occurrence and in the aggregate, minimum three million dollars; Property Damage: One million dollars per occurrence and in the aggregate, minimum three million dollars; All risks property damage insurance for the replacement costs of the associated improvements; and 2. Additional Insured/Certificates. Insurance coverage shall be written with companies licensed to do business in Colorado and the policy or policies shall be in a form satisfactory to the City and properly filed and approved by the Colorado Department of Insurance. The City'shall be named as an additional insured. The certificate shall provide that the insurance may not be materially changed, altered or canceled by the insurer without first giving ten (I0) days written notice by certified or registered U. S. Mai[, re~urn receipt requested, to the Lessor at its address identified in Section XX, below. Certificate(s) of Insurance documenting the coverage required by this Agreement shall be delivered to the BOCC on the initial and each policy renewal date at the address stated in Section XX, below. 3. Application of Insurance Proceeds. Lessee shall apply insurance proceeds, payable by reason of loss or damage to the pre-existing Zupancis buildings and improvements, first to the restoration of the pre-existing Zupancis buildings and then ~o the improvements on the Leased Parcels. In the event of damage due to an insurable cause, this Agreement shall continue in full force and effect. 4. Worker's Compensation. Lessee shall carry Worker's Compensation Insurance, if required and as required by Colorado law and regulation. Certificate(s) of Insurance documenting such coverage shall be delivered to the City on the initial and each policy renewal date at the address stated in Section XX, . below. The City shall not be pamed as an additional insured. 5. Lessee's Tenants. Each of Lessee's tenants that occupy space within the Leased Parcels shall be provided with a copy of this Land Lease Agreement evidenced by attaching a copy thereof to the tenants' lease agreement with Lessee. SECTION XII REMEDIES FOLLOWING DEFAULT A. Lessee's Monetar~ Default and Lack of Insurance In the event of breach by Obermeyer of the monetary or insurance covenants of this Agreement, contained in Sections IV and XI, above, in addition to any other rights to which the City may be entitled by law, the City may elect to give Obermeyer twenty (20) days written notice requiring payment of the rent and/or other fees and charges, as required under provision of Section IV, above, then due and owing and/or proof of insurance, as required under provisions of Section XI, above, or in the alternative, surrender of possession of the Leased Premises. Said notice shall be delivered to Lessee by way ofU. S. registered mail, return receipt requested, at the address specified in Section XX, below. Where Obermeyer's default results from failure to provide proof of insurance and Obermeyer is proceeding with necessary diligence to obtain such proof of insurance, Obermeyer shall be entitled to an extension of said twenty (20) day cure period, not to exceed however an additional twenty (20) days in which to obtain the required Certificates of Insurance and provide proof of insurance to the City. If such a default remains uncorrected after the twenty day cure period or an extension thereof with regard to proof of insurance, the City, at its option, may terminate this Agreement and enter and repossess the Leased Premises and all improvements, with or without process of law, and without liability for trespass or forcible entry and without prejudice to any other remedies to which the City may be entitled. In such event, Obermeyer agrees to peacefully surrender the Leased Premises to the City, as required by Section XIII, below. Page 8 of 17 B. Lessee's Non- Monetary Default and Abandohment by Lessee In the event of default by Obermeyer in the performance of its convents, agreements, and obligations hereunder, other than those described in Subsection A, above, or in the event of abandonment by Obermeyer of its operations on the Leased Pamels. in addition to any other rigf~ts to which the City may be entitled by law, the City may elect to give Obermeyer thirty (30) day written notice requiring remedy of the stated default or, in the alternative, surrender of possession of the Leased Parcels. Said notice shall be delivered to Lessee by way ofU. S. registered mail. remm receipt requested, at the address specified in Section XX. below. In the event of any default hereunder by Obermeyer, other than abandonment, where Obermeyer ~s proceeding with necessary diligence to effectuate a remedy, Obermeyer shall be entitled to an extension of such thirty (30) day period, not to exceed however an additional thirty (30J days in which to remedy the default. If such default or abandonment remains uncorrected a~er the thirty day cure period or an extension thereof, the City, at its option, may terminate this Agreement and enter and retake possession of the Leased Premises and ali improvements, with or without process of law, and without liability for trespass or forcible entry and without prejudice to any other remedies to which the City may be entitled. In such event, Obermeyer agrees ro peacefully surrender the Leased Premises to the City, as required by Section XIII, below. C. Waiver of Statutory Notice by Lessee In the event of termination of this Agreement. as detailed in Subsections A and B, above, Obermeyer waives the receipt of any notice to quit or other notice which may otherwise be required by Colorado statute. D. Waiver No failure to strictly enforce the terms of this Agreement shall be deemed a waiver by either party unless such waiver is in writing and executed by the parry against whom enforcement of the waiver is sought. No waiver by either parry of any failure of a party to comply with any term or condition of this Agreement shall be construed to be a waiver of any other failure by such party to comply with the same or any other term or condition of this Agreement. SECTION XIII SURRENDER OF POSSESSION AND TITLE TO IMPROVEMENTS Upon expiration of the Base Term, or any extension thereof, or or. her termination of this Agreement, Lessee's right to use and occupy the Leased Parcels and all improvement shall cease and Lessee shall surrender the Leased Parcels and its rights and privileges under the provisions of this Agreement to the City. Obermeyer shall Ieave the Leased Parcels and permanent improvements in good and serviceable condition, except for normal wear and tear: remove all personal property; vacate the premises without unreasonable delay; and execute and deliver to the City a quit claim deed bill ofsale or other appropriate document of conveyance transferring to the City all rignt, title and interest to the remaining ~mprovements, described in Section II, above, free and clear of liens and encumbrances. SECTION XIV COMPLIANCE WITH LAWS, RULES AND REGULATIONS The right to use and occupy the Leased Parcels shall be exercised in conformity with the statutes. ordinances, codes, rules and regulations pertinent to Lessee's tenancy as such may be promulgated from time to time by the City, Pitkin County, the State' of Colorado, and the federal government. P63 Page 9 of 17 P64 Without limiting the generality of the covenants contained in this Section XIV. Obermeyer specifically agrees to pay all levied property taxes and taxes levied upon its personal proper~y and the improvements to the Leased Parcels. SECTION XV INSPECTION OF LEASED PREMISES The City or its desigxqee shall have the right to enter the Leased Parcels at any reasonable time and, except in the event of emergency, upon reasonable notice for inspection in the exercise of its governmental or police powers and. specifically, to investigate compliance with the terms of this Agreement. SECTION XVI ASSIGNMENT A. Consent This Agreement shall not be assigned by Obermeyer without the prior written consent of the City. The consent of the City shall not be unreasonably withheld. Lessee shall not convey an interest in improvements independentl3 from asstgnment of this Agreement. Notwithstanding the foregoing, Obermeyer does have and shat1 have at ail times the unrestricted right to sublease space on the Leased Parcels; any such sublease shall be subject to the provisions of this Agreement. B. Terms and Condition The terms and conditions of this Agreement shall be incorporated into any document affecting an assignment of this Agreement and Obermeyer shall provide the City a cop), of the assignment document. C. Subsidiary This Section shall not apply to the assignment by Lessee of this Agreement to a separate legal entity wholly owned and controlled by Obermeyer for the purpose of business operations under this Agreement, in accordance with Section II, above. Upon such assignment the successor entit3 shall be bound by the terms of this Agreement and no approval shall be required from the Cig, for such assignment. The City shall be notified by Obermeyer of the existence of such successor entity and shall be provided by Obermeyer with a copy of the document assigning this Agreement to Obermeyer's successor entity and with notice of the identity of the responsible party and contact information. SECTION XVII QUIET ENJOYMENT BY LESSEE Upon payment of the rents, fees, and charges provided herein and upon observation of al1 covenants, warranties, agreements, and conditions of this Agreement, Obermeyer shall have the right m exclusive possession and enjoyment of the Leased Premises during the Base Term and any extension term of this Agreement. Obermeyer recognizes that fee simple title to the Leased Parcels is vested in the City. Obermeyer agrees that nothing herein shall give Obermeyer any ownership or option to own the Leased Parcels. SECTION XVIII CONSTRUCTION INCONVENIENCES A. Construction by City of Aspen Obermeyer recognizes that during the Base Term and any extension of this Agreement it may be necessary for the City to engage in construction, maintenance and repair for the benefit of the existing adjacent snow melting and recycle operations. Such activity may temporarily inconvemence or interrupt Page 10 of 17 P65 Obermeyer's operations and will require accommodation; however, the City shall make reasonable efforts to minimize such inconvenience or interruptions. B. No Liability Obermeyer agrees that no liability shall attach to the City its officers, agents, employees, contractors, subcontractors and representatives by reason of such inconvenience, interruption, relocation. or replacement. Obermeyer waives any right to claim damages for such, provided, however, that this waiver shall not be construed as a waiver of any claim for physical damage to the personal property of Obermeyer resulting from negligence or willful misconduct. SECTION XIX BINDING UPON SUCCESSORS AND ASSIGNS All of the covenants, conditions, and agreements contained in this Agreement shall be binding upon and inure to the benefit of the respective parties as well as their successors in interest of any kind. including assigns. SECTION XX NOTICE Every notice or other communication required by this Agreement shall be delivered in writing to the addresses stated below, unless a new address is provided by written notice of one parry to the other. Such notice of a change of address or oft he identity of the contact person shall not require formal amendment of this Agreement. Lessee: Obermeyer Redevelopment Company ATTN: Timothy W. Belinski 115 AABC Aspen, CO 81611 cc: Thomas J. Todd, Esq. Holland & Hart, LLP 600 East Main Street Aspen, CO 81611-1953 Lessor: City of Aspen ATTN: CITY MANAGER and CITY ATTORNEY 130 S. Galena Street Aspen, CO 81611 SECTION XXI HEADINGS AND NUMBERING The Section headings and numbering system used herein are for convenience in referencing and are not intended to define or limit the scope of any pr6vision of this Agreement. Page 11 of 17 P66 SECTION XXII PARTIAL INVALIDITY If any of the terms, covenants, conditions, or provisions of this Agreement shall for any reason be held to be invalid or unenforceable, the remainder of the Agreement shall not be affected thereby and each remaining term, covenant, condition and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law unless the invalidity of a provision defeats the purpose of this Agreement. SECTION XXIII AMENDMENT All amendments to this Agreement must be made in writing executed with the same formality as this Agreement, except as detailed in Section XX, regarding change of notification information. No oral amendment shall be of any force or effect whatsoever. SECTION XXIV MATERIALS AND ENVIRONMENTAL ISSUES A. City Representations and Responsibilities The City has no actual notice of or knowledge of any form of environmental degradation to the Leased Parcels; however, the City makes no covenants or warranties, express or implied, regarding the lack of environmental degradation. Should the City become aware of the possible presence on the Leased Parcels of hazardous material, i.e., a substance regulated by any governmental authority or agency having jurisdiction over environmental or health risks~ materials handling, or wastes, including but not limited to, the State of Colorado, Pitkin County, United States Environmental Protection Agency, the City shall investigate such conditiori as soon as is reasonably possible. Correction of such condition, if required by the authorized agency, shall be in accordance with pertinent statutory and regulatory law. Obermeyer shall not be responsible for the cbst of investigation or correction unless such is required due to Obermeyer's or its employee's, contractor's, subcontractor's, agent's or assignee's use and occupancy of and/or operations on the Leased Premises. B. Limitations on Obermeyer's Use of Hazardous Materials Obermeyer shall not generate, use, handle~ store, or dispose of or permit the Leased Parcels to be used to g~nerate, use, handle, store, or dispose of hazardous materials. No use of the Leased Parcels that requires additional fire protection or environmental regulation shall be permitted without advance approval by the City. SECTION XXV ATTORNEY'S FEES Should this Agreement become the subject of litigation to resolve a claim of default in performance by the City or Obermeyer, the prevailing party, in addition to such other relief as may be granted, shall be entitled to attorney fees, expenses, and court costs. All right~ concerning fees and costs shall survive termination of this Agreement. SECTION XXVI CONTROLLING LAW This Agreement shall be governed by the laws of the State of Colorado and venue of for all actions shall be in Pitkin County, Colorado. Page 12 of 17 P67 SECTION XXVII RECORDING Upon execution by ali parties, this Agreement shall oe recorded in the records of the City of Aspen Clerk and Recorder. IN WITNESS WHEREOF, the parties hereto have set their hands and seals this January 2004. ATTEST: City Clerk LESSOR: City of Aspen. Colorado City Manager LESSEE: Obermeyer Redevelopment Company, By:. Timothy W. Belinski (Title) Manager day of STATE OF COLORADO ) COUNTY OF ) The foregoing instrument was acknowledged before me on this __ day of 2004, by (Title) and authorized agent or officer of Obermeyer Redevelopment Company. Witness my hand and official seal. My commission expires: NOTARY PUBLIC Page 13 of 17 P68 LAND LEASE AGREEMENT EXHIBIT A Page 14 of I7 2 } Exhibit A ¢~gn 1 or2) P69 Land Lease Agreement between THE CITY OF ASPEN COLOR_ADO and Obermeyer Redevelopment Company Zupaneis Parcel shown for illustrative purposes only. Note that the site engineering and design work shown herein, including the Iocation of temporary structures, is hereby deemed tentative and preliminary. Le~ed Premises for the Zupancis Parcel shall be deemed approximately 16,500sf thr purposes of the Agreement I 6Tw,~Stgc. ' I AC U \\ Exhibit A (page 2 of 2) Land Lease Agreement between THE CITY OF ASPEN COLOKADO and Obermeyer Redevelopment Company Recycle / Snowmelt Center Parcel shown for illustrative purposes only. Note that the site engineering and design work shown herein, including the location of temgnrary structures, is hereby deemed tentative and preliminary. Leased Premises for the Recycle/Snowmelt Center Parcel shall be deemed approximately 3,600sf for purposes of the Agreement x, \ /11 / i P73 LAND LEASE AGREEMENT PERMANENT IMPROVEMENTS EXHIBIT B This Exhibit B is an accompanying and inte~al document to the Land Lease Agreement between the City of Aspen and Obermeyer Redevelopment Company. Permanent Improvements: General Obermeyer Redevelopment Company accepts the responsibility for the scope of work items denoted herein. The site for which such Permanent Improvements are to be constructed shall be known as "Recycle Center", which is an area separately defined from "Recycle/Snowmelt Center Parcel" within the Agreement. Such improvements arise from the construction of the Obermeyer Place project and the public-privare partnership integral to the development of the site, however, the Agreement and the Permanent Improvemems described herein are separate and independent transactions and shall De restricted to the terms and prowsions described herein. Permanent Improvements: Site Location For purposes of this Exhibit and for the purpose of delineating the scope of work encompassed by the Permanent Improvements, Recycle Center encompasses the land to the north side of Rio Grande Place. from the north edge of the entry to the Eagles Club parking lot to the westerly entry to the current Recycle/Snowmelt Center Parcel. From the Eagles Club parking lot entry extending to the eastern entry to the current Recycle/Snowmelt Center Parcel. Permanent Improvements shall generally encompass the sidewalk ama only. The Recycle Center Permanent Improvements shall continue from the eastern entry to the western entry, and shall extend to the north to the area currently encompassing the snowmek equipment and the perimeter landscape berm. Permanent Improvements shall extend northerly to the current Rio Grande Trail pedestrian walkway although they shall not extend to the area intended for an expanded skate park. Any expansion or reconfiguration of the skate park is excluded from Obermeyer's scope of work. Permanent Improvemems: Scope of Work Obermeyer Redevelopment Company shall provide the following: Architectural and landscape design, engineering, and construction of the Recycle Center. inclusive of site improvements and a building to cover the recycle center operations (see item #12. below). It is understood that the Recycle Center building shall be a non-heated, open garage-type structure consisting of three walls and an open side facing to the north with a size large enough to house six recycling dumpsters. The overall design shall be as low in height as possible, shall be efficient in size in order to provide the Rio Grande Park area to expand if possible, shalI operate as a daytime only operation, shall shield and minimize visibility of and reduce the current level afnoise from the dumpsters and loading areas from the Rio Grande Place and from the Obermeyer Place project, shall accommodate adequate traffic circulation according to final.design plans, including drop-offand temporary parking for people using the Recycle Center. shall provide improved access to the recycle dumpsters by individuals using the service, and shall accommodate the operations of Pitkin County Resource Recovery ~n a Page 15 of 17 P74 9. 11 form largely consistent with current operations. The City of Aspen shall be allowed to comment on and approve the proposed aesthetic improvements with the understanding that the final design shall shield and minimize visibility of the dumpsters and loading areas from the Obermeyer Place project (per Ordinance no. 18, Series 2003). The site design will utilize the City's Rio Grande Master Plan in effect as of January 1, 2005 as the guide for site improvements to the Recycle Center area. Demolition and site preparation, including the removal of the.current snowmelt equipment, effluent piping, utility lines and meters, and the transportation of the equipment for storage to a site to be designated by the City within twenty miles of the current location. Grading and on site drainage improvements, including asphalt paving and parking curb stops. Asphalt shall be designed and constructed using 8" c'ompacted backfill with a minimum of 95% modified proctor density, followed by hot bituminous paving a minimum of 5" thick, placed in two lifts per the City's standard shallow utility trench details. Utilities extended to the north side of Rio Grande Place, in conjunction with a single street cur. including the following services: a. Extension of domestic water to the Recycle Center, capped. The City shall pay any corresponding water tap fee. b. Natural gas serwce re-routed from snowmelt equipment, capped. c. Electrical service to accommodate the electrical specifications provided by the City and configured for the current amount and mix of uses on the south side of Rio Grande PIace~ d. Storm drains, including inletJoutlet of typical storm sewer pipe and tie-in to storm system. Any related storm water fee or sewer fee shall be paid by City. Payment to the City of $10,000 to go towards construction of the storm water interceptor device or other such storm sewer system tmprovements in the vicinit3 of the Recycle Center. Payment to be made upon commencement of permanent ~mprovemems to the Recycle Center Street speed hump along Rio Grande Place in one location n~ar the Recycle Center. New sidewalk and curb (detached. non-dyed concrete) from Eagles Club entry to western emry of Recycle Center. Provide ADA handicap access raml: for the western emry of the Recycle Center street crossing. None of the pavement or hardscape shall be snowmelted Landscaping the Recycle Center, including shrubbery (30 count) along the perimeter berm common to the Oklahoma Flats residential neighborhood and at entry points to Recycle Center. Broad leaf trees (4" caliper) along street at 20' intervals, planted between curb and sidewalk. Sod instal[ed between sidewalk and curb. Irrigation to all new landscaptng as needed. The City of Aspen will review and approve the landscape plan to ensure it meets the site requirements in terms of design before completion of the landscape plan in this area The landscape contractor will coordinate with the City of Aspen before commencing landscaping activities to ensure that irrigation connebtions and utilities are clearly identified and located Steel pipe bollards (6") at utilities stub up areas. Paint parking space in Recycle Center, street crossings, and bollards. Electrical service to the Recycle Center shall include two electrical out[ets (110V). four sidewalk light fixtures along Rio Grande Place. and the installation of an emergency 9-I-l call station. There shall be no site lighting for the Recycle Center. which shall remain a daytime only operation. City Ordinance No. 18, Series 2003. Section 12, calls for the cessation and removal of the mechanical snow melter equipment. Obermeyer shall perform this work at Obermeyer's expense. Such work shall be performed at Obermeyer's discretion after providing 30-day written notice to the City, and shall occur no sooner than March 31. 2006. thereby saving the Page 16 of 17 P75 I2. 13. City the estimated $100,000/year in snow hauling costs during the winters of 2004-2005 and 2005-2006. Upon occupancy ora residentiaI unit ar Obermeyer Place, use of the snow melter will be restricted to daylight hours. Per Cit~ Ordinance No. 18, Series 2003. Section 13, the Obermeyer Place project was required ro pay the City the sum of $125,000 toward the improvement of the recycling facility ("Recycle Center Funds"j, either as improvements to the current location or as improvements to an alternative location. Insofar as the City accepts the terms and provisions of this Agreement. such requirement imposed by the City by way of the Ordinance shall be deemed satisfied and fulfilled by Obermeyer Place Holding Company as developer of the Obermeyer Place project. The Permanent Improvements described herein shall sncompass the use of the Recycle Center Funds plus other funds deemed compensation for Base Term Ground Rents (per Section IV of the Agreement). It is understood that Obermeyer and the City shall work in unison toward an acceptable design of the Recycle Center, specifically providing for a signature approval of said design by the City of Aspen Parks Department and the Pitkin County Public Works Department. When Obermeyer begins the mass excavation of the site, both Obermeyer and the Parks Department will create a plan for efficiently handling boulders such that the Parks Department shall have the first right to accept all boulders excavated from Obermeyer Place that are nor needed by Obermeyer. As such boulders are excavated from the Obermeyer Place site, Obermeyer will relocate them to a designated receiving area north of Recycle Center, wa a City-approved access route. Permanent Improvements: Timin~ Permanent Improvements shall be completed no later than nine months following the vacation of the Recycle/Snowmelt Center Parcel as described in Section III, paragraph B, of the Agreement. Page 17 of 17 TO: City Council From: Ed Sadler Subject: Kaplan/Gluck Annexation Date: January 20, 2004 Summary: As you are aware, the 0riginal proposal for the Kaplan/Gluck Parcel proposed to the city that the property be developed with both Free Market and Affordable Housing mtits. Concern from the public and council about building in this area for a variety of reasons ranging from views, trail concerns, density and land stability resulted in the City discussing other options with the developers. Those negotiations resulted in a new proposal, which is embodied in the attached agreement. This proposal now addresses two major uses for the property which include open space and affordable housing should the City choose to exercise it's options as specified. Previous Council Action: Council has disposed of the original proposal at a previous council meeting. Council set forth criteria for a new proposal and those criteria are addressed for the most part in this attached annexation. Background: In negotiating the KaplardGluck Annexation and the desire of the City Council to participate in the project on two fronts (both open space and affordable housing), the staff was given certain parameters to meet in negotiations. The City was willing to put approximately $4.7 million into the project, with $1.3 million coming from Open space and the remainder coming from the City's Affordable Housing Funds. Tax credits were to be sought by the developer for the open space portion of the project and the City was to be credited with this money towards its purchase price. The City would agree to spend $72,128 per bedroom based upon 47 total bedrooms. The City further wanted the project to meet similar standards to those used for the Parcel D project and therefore was to obtain 130 "green building points" and meet the City's standards for affordable housing projects. Discussion: It would appear from the proposed annexation that all of these criteria have been met with two exceptions. The first exception is the square footage requirements of the City's affordable housing requirements. Keeping in mind the Council's desire for livability, the standards adopted by the City for square footage of various units is higher than the minimunas required by the Housing Guidelines. The Housing Office Guidelines are merely minimums and the City felf that it should provide for more than just the minimums. The proposal in the annexation does propose to meet the Housing Office minimums, but may not meet the City's minimums for it's own projects. Second, the agreement carries no mention of credit to the City's purchase price for tax credits received potentially by the developer. This may be for legal reasons, and it may also be the reason for the Open Space purchase being divided into two parts ($1,275,000 and $25,000) for a total of $1,300,000. This may be a better question for the developers legal counsel. Either wayjif Council still wishes to address the issue of potential tax credits it has yet to be addressed. Finally, this agreement carries with it the option for the developer to withdraw if the proposal for the affordable housing portion is significantly changed through the approval process or to renegotiate the subsidy amount. Financial implications: The total cost to the City to participate in this project for both affordable housing and open space is just under $4,700,000. Open Space would be paying $1,300,000 if its options are exercised and the affordable ltousing program would contribute up to $3,390,016 for 47 bedrooms and 17 units, or about $200,000 per unit. The current Long Range Plans for both funds indicate that there are sufficient funds to enter this agreement. Options: The City council may choose notto participate in this project and spend its funds on other projects. Faced with this, the developer would most probably return his planning efforts into projects similar to his original proposal. Recommendation: If Council believes that this is a prudent use of both of these funds, I recommend that Council approve this agreement. RESOLUTION NO. ~> Series of 2004 A RESOLUTION OF THE CITY OF ASPEN, COLORADO, AUTHORIZING THE CITY MANAGER TO EXECUTE, ON BEHALF OF THE CITY OF ASPEN, A PRE-ANNEXATION AGREEMENT BETWEEN THE CITY OF ASPEN AND BURTON B. KAPLAN, PETER L. GLUCK AND ASPEN GK, LLC, RELATING TO PROPERTY LOCATED IN PITKIN COUNTY ADJACENT TO THE CITY OF ASPEN. WHEREAS, there has been submitted to the City Council a proposed Pm-Annexation Agreement between the City of Aspen, Burton B. Kaplan, Peter L. Gluck, and Aspen GK, LLC. relating to certain property described in Exhibit A appended hereto; and WHEREAS, after due deliberation and consideration the City Council has determined that it is in the best interest of the City of Aspen to approve said Pm-Annexation Agreement and authorize the City Manager to execute same on behalf of the City of Aspen. NOW, WHEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO. that the City manager is hereby authorized to execute on behalf of the City of Aspen the Pre-Annexation Agreement in substantially the form as appended hereto as Exhibit A. Dated: ,2004. Helen Kalin Klandemd, Mayor I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing xs a tree and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held ., 2004. Kathryn S. Koch, City Clerk JPW-0~/21/2004-G: \ j ohn~word\ resos\kaplan-pre- ar~exation- reso. doc PRE-ANNEXATION AGREEMENT REGARDING THE KAPLAN PARCEL, THE GLUCK PARCEL AND THE ASPEN GK PARCEL THIS PRE-ANNEXATION AGREEMENT ("Agreement") is entered into and made on , 2004, by and between the City of Aspen, a Colorado home role municipal corporation (the "City"), whose address is 130 South Galena Street, Aspen, Colorado 81611; Burton B. Kaplan ("Kaplan"), owner of an approximately 45,058 square foot parcel located in unincorporated Pitkin County, Colorado, legally described on Exhibit "A" attached hereto (the "Kaplan Parcel"); Peter L. Gluck ("Gluck"), owner of an approximately 1637 square foot parcel located in unincorporated Pitkin County, Colorado, legally described on Exhibit "B" attached hereto (the "Gluck Parcel"); and Aspen GK, LLC ("Aspen GK"), owner of an approximately 8,213 square foot parcel located within the City, legally described on Exhibit "C" attached hereto (the "Aspen GK Parcel"; and collectively with the Kaplan Parcel and the Gluck Parcel, the "Existing Development Parcels"). Kaplan, Gluck and Aspen GK are hereinafter collectively referred to as the "Landowners". The address of the Landowners is c/o Peter L. Gluck and Partners, Architects, 646 West 131st at 12th Avenue, New York, New York 10027. This Agreement shall become effective following execution by Landowners and upon approval by the City Council of the City of Aspen ("City Council") evidenced by a duly approved resolution and by the execution of the Agreement by either the City Manager, Mayor, or Mayor Pro-Tem. RECITALS AND REPRESENTATIONS WHEREAS, the City and Landowners desire to emer into this Pre-Annexation Agreement, referred to herein as the "Agreement" for the convenience of the parties; and WHEREAS, Kaplan represents that he is the sole owner of the Kaplan Parcel and Gluck represents that he is the sole owner of the Gluck Parcel (the Kaplan Parcel and Gluck Parcel are hereinafter collectively referred to as the "Property Proposed to be Annexed"); and WHEREAS, the Property Proposed to be Annexed is more than one sixth (1/6) contiguous with the existing City boundaries and is otherwise eligible to be annexed into the municipal boundaries of the City ~n accordance with the Colorado Municipal Annexation Act of 1965. as amended, C.R.S. Sections 31-12-101, e~ sea.; and WHEREAS, the City and Landowners believe tha! it is in the best interests of the citizens of the City and Landowners that the development of the Property Proposed to be Annexed and the use and development of the Aspen GK Parcel be cooperatively planned by the parties together with the Property Proposed to be Annexed; and WHEREAS, the development plan described in this Agreement and the rights granted to the Landowners hereby will assist in the creation of affordable housing, open space and a reduction in free-market residential density below that which would otherwise be likely to be developed on the Existing Development Parcels, thus fulfilling high priority goals of the City; and WHEREAS, the Landowners and the City desire to annex the Property Proposed to be Annexed into the municipal boundaries of the City on condition that all of the terms and conditions of this Agreement are met; and WHEREAS, the Landowners desire to submit the joint development proposals and applications described herein to the City's Community DevelOpment Department for processing pursuant to the City of Aspen's Land Use Code (the "Land Use Code"); and WHEREAS, the parties hereto desire to condition the annexation proposed herein and the execution of the development plan as described herein on the granting of all requisite land use approvals, following public input and comment, consistent with the Land Use Code; and WHEREAS, the City, as a home role municipality of the State of Colorado, is authorized to enter into this Agreemem pursuant to C.R.S. Section 31-12-121; and WHEREAS, Kaplan and Gluck are, in accordance with C.R.S. Section 31-12-102, legally capable of submitting a Petition to Annex in a form substantially the same as Exhibit "D" appended hereto. NOW, THEREFORE, in consideration of the mutual covenants contained herein. IT IS AGREED AS FOLLOWS: SECTION 1 THE DEVELOPMENT PLAN. (a) The parties agree that the following description of the proposed land use for the Existing Development Parcels ("The Development Plan") constitutes the desired result of this Agreement as it sets forth the best land use for the Property Proposed to be Annexed in combination with the Aspen GK Parcel and is in the best interest of the City. The parties believe that the Development Plan as set forth herein ~s consistent with the Land Use Code and the Aspen Area Community Plan. (b) The Development Plan anticipates and it is of the essence of this Agreement that the development rights and restrictions set forth below in this Agreement shall be applied for by Landowners (and by the City, where applicable) to the City's 2 Community Development Department pursuant to and consistent with the standards and procedures set forth in the Land Use Code. (c) In the event that by December 31, 2004, or such later date as may be mutually agreed upon by the parties hereto, the City Council does not approve the Phase One Land-Use Application described below in Section 2 with terms and conditions consistent with this Agreement and other conditions reasonably acceptable to Landowners, this Pre-annexation Agreement shall be deemed null and void. (d) The establishment of a Development Plan for the Existing Development Parcels shall occur in two phases, described below. SECTION 2 THE PHASE ONE DEVELOPMENT PLAN. (a) No later than six months following execution of this Agreement by the parties, the Landowners shall, in order to establish a basis for finalizing the annexation of the Property Proposed to be Annexed, submit a land-use application under the relevant provisions of the Land-Use Code (the "Phase One Land-Use Application"). It is presently anticipated that the phase One Land-Use Application Will include (1) a request to adjust the boundaries of the Existing Development Parcels from the current boundaries, which are depicted on Exhibit "E" attached hereto (the "Current Boundary Map"), to the proposed boundaries depicted on Exhibit "F" attached hereto (the "Adjusted Boundary Map"); and (2) a request to zone the Property Proposed to be Annexed to R-15. (b) Upon the City's approval of the Phase One Land-Use Application on terms acceptable to the Landowners, the annexation of the Property Proposed to be Annexed shall be completed contemporaneously therewith. SECTION 3 PHASE ONE DEVELOPMENT PARCELS. (a) Upon approval of the Phase One Land-Use Application by the City, the boundaries of the Existing Development Parcels will be adjusted from those depicted on the Current Boundary Map to those depicted on the Adjusted Boundary Map (the "Adjusted Development Parcels"). The Adjusted Development Parcels consist of three lots, identified as Lot One, Lot Two and Lot Three on Exhibit "F" attached hereto (b) The exact size of the Adjusted Development Parcels and the location of the access to Lot Three shall be established during the review procedure for the Phase One Land-Use Application. 3 SECTION 4 ZONING OF PROPERTY PROPOSED FOR ANNEXATION. The Landowners shall include as part of the Phase One Land-Use Application a request to zone the Property Proposed to be Annexed. It is anticipated that, subject to all applicable processes and approvals, the Kaplan Parcel and the Gluck Parcel shall, at the time of annexation, initially be zoned R-15 by the City. Zoning of the Aspen GK Parcel shall remain R-15, as said parcel is currently zoned. SECTION 5 LANDOWNERS' PHASE ONE DEVELOPMENT RIGHTS. (a) Free Market Lots. Landowners shall have the right to reconfigure the boundaries of the Existing Development Parcels into the three (3) free-market Adjusted Development Parcels for single family residential lots as shown on the Adjusted Boundary Map (or with different boundaries as approved by the Landowners in connection with the City's review and approval of the Phase One Land Use Application). (b) Free Market Lots - FAR. In the event that single-family residences are later developed on any of the three (3) free~ market Adjusted Development Parcels as provided in Section 6 (a) or Section 9 (b) below, the allowable floor area shall be determined as provided in Subsection 26.710.D.10 of the Land Use Code, Dimensional Requirements for the R-15 Zone District, in existence as of December 1, 2003 based on the total size of the Adjusted Development Parcel in question and shall be measured by using the City's floor area regulations for square footage inclusions and exclusions as described in Subsection 26.575.020.A of the Land Use Code in existence as of December 1, 2003, a copy of which is attached hereto as Exhibit "G" - Floor Area Calculation Method. In the event that a program for the use of Transferrable Development Rights ("TDR's") is adopted by the City that allows for the use of TDR's in the vicinity of the Adjusted Development Parcels, the Landowners shall be eligible to apply for additional floor area under said TDR program. (c) Free Market Lots - Sizes and Other Development Criteria. The lot sizes, building envelopes, areas of potential disturbance during construction activity and other development criteria for each of the three (3) Adjusted Development Parcels shall be determined through the Phase One Land-Use Application review process contemplated herein. 4 (d) Free Market Lots - Accessory Dwelling Units. An Accessory Dwelling Unit (ADU) in conformance with the provisions of Sec. __ of the Land-Use Code in effect as of December 1, 2003 shall be permitted, but not required, on each of the Adjusted Development Parcels. The ADU's shall be subject to the occupancy requirements and allowances of the City's ADU regulations in effect on December 1, 2003, a copy of which is attached hereto as Exhibit "H" - ADURegulations. SECTION 6 CITY OPTION TO PURCHASE EASEMENT/LOT THREE. (a) For a period of six months following the recording of the Phase One Recorded Documents, the City shall have an option to purchase a conservation easement on Lot Three (the "CE Option") consistent with subparagraph (b) below, and the terms of which shall insure that Lot Three's use is limited solely for passive open space and such other purposes as may be mutually acceptable to the City and the Landowners, and which shall allow the City, at its expense, to construct and maintain trails within trail easements in locations mutually acceptable to the City and the Landowners. In order to exercise the CE Option, the City must deliver written notice of exemise to the Landowners within such six-month period (the "CE Option Period"). If the City exercises the CE Option, the City's purchase price shall be $1,275,000.00 and the City shall be required to close on the purchase, in cash, within 60 days after the City's written notice to the Landowners of the exercise of the CE Option (the '*CE Closing Period"). During the CE Option Period, the Landowners agree to not attempt to obtain a building permit to construct a free-market residence on Lot Three or to install utilities or a motorized accessway to serve Lot Three. In the event, however, that the City does not timely exercise its option to purchase Lot Three within the CE Option Period or if the City timely exercises the CE Option but fails to close within the CE Closing Period, the CE Option shall automatically and irrevocably terminate and the Landowners shall have the right tO develop a free-market residence and permitted accessory structures on Lot Three according to the terms of the approvals documented in the Phase One Recorded Documents. (b) The City agrees that if the CE Option is exercised and the closing occurs, then prior to the completion of Landowners' Phase Two Development Plan review process described below, the City will rezone Lot Three from the R~15 zone district to the OS-Open Space zone district. Further, the City shall place a conservation easement in a form acceptable to the Landowners for the benefit of the City and the Aspen Valley Land Trust or other similar organization that prohibits future residential development on Lot Three. The conservation easement shall protect passive open space values and provide trail access through and across Lot Three in conjunction with trails on other adjacent properties. (c) If the City closes on the purchase' of the conservation easement after exercise of the CE Option, for a period of four months following the recording of the conservation easement, the City shall have an option to purchase the fee interest in Lot Three (the "Purchase Option"). In order to exercise the Purchase Option, the City must deliver written notice of exercise to the Landowners within such three-month period (the "Purchase Option Period"). If the City exercises the Purchase Option, the City's purchase price shall be $25,000.00 and the City shall be required to close on the purchase, in cash, within 60 days after the City's written notice to the Landowners of the exemise of the Purchase Option (the "Purchase Closing Period"). In the event, however, that the City does not timely exercise its option to purchase Lot Three within the Purchase Option Period or if the City timely exercises the Purchase Option but fails to close within the Purchase Closing Period, the Purchase Option shall automatically and irrevocably terminate. SECTION 7 NO FURTHER SUBDIVISION. After approx/al of the Phase One Land Use Application, no further subdivision of the Adjusted Development Parcels shall be permitted; provided, however, that this restriction shall not apply to the extent necessary for the Landowners to develop a condominium or planned community affordable housing project on Lot One and Lot Two, as described in this Agreement. SECTION 8 SCHEDULE FOR ANNEXATION. a. Upon execution by the parties of this Agreement, Landowners shall, at their cost, prepare an annexation map of the Property Proposed to be Annexed. b. Upon completion of the annexation map, Landowners shall execute the Petition to Annex appended hereto as Exhibit "D". Said petition shall be conditional upon the terms and conditions of this Agreement. c. The City shall prepare, at its cost, all requisite documents and applications necessary to annex the Property Proposed to be Annexed. d. Landowners shall prepare, at their cost, the Phase One Land-Use Application (conditional upon annexation). e. The City shall initiate, at/ts cost, review of the annexation and the Phase One Land- Use Application in accordance with the City's Land Use Code. f. Upon the granting of the requisite land use approvals for the Phase One Land-Use Application by the City Council, evidenced by the adoption of an appropriate Ordinance (conditional upon annexation of the Property Proposed for Annexation) that is consistent with the Development Plan, the City shall aunex the Property Proposed to be Annexed into the municipal boundaries of the City. g. Landowners and the City shall execute at the conclusion of the Appeal Period (as defined at Section 14(n), below) following the date of annexation, the Phase One Recorded Documents which incorporate the terms and conditions of the Development Plan as finally approved by the issuance of a Development Order. The Phase One Recorded Documents shall include the City's standard terms and conditions relating to plats, wastewater and surface drainage, utility connections, trash and recycling removal, snow removal, fire sprinklers, sidewalk and trail construction and maintenance, driveway, curb and gutter improvemems, street lighting, excavation plans, parking and staging areas, street construction, and maintenance, stream bank disturbance mitigation, dust control measures, setbacks, as-built drawings, fireplaces and woodstoves, residential design standards, survey monumentation and restrictions, exterior lighting, school land dedication fees (if any), park dedication fees (if any), landscaping improvements, financial security for public improvements and landscaping (if any), and other similar matters normally and routinely included in similar agreements, except to the extent tha! such matters are specifically addressed otherwise in this Agreement, the Development Order or the zoning for the Adjusted Development Parcels. SECTION 9 THE PHASE TWO LAN-D-USE APPLICATION. (a) Within six months of the recording of the Phase One Recorded Documents, the Landowners shall prepare, file and process, at their own expense, an application to rezone Lot One and Lot Two as generally depicted in Exhibit "E" from R-15 to AH/PUD and to request PUD and subdivision approval (the "Phase Two Land-Use Application") for an affordable housing project for the two lots (the "AH Project"). The architectural program for the AH Project shall include a total of sixteen for-sale (category 4) units intended to be comprised of(i) fifteen 3-bedroom units, each approximately 1,200 square feet in size, and (ii) one 2-bedroom unit approximately 950 square feet in size; provided, however, that the final mix of units and the sizes of the units shall be determined during the City's review of the Phase Two Land Use Application. In addition, the precise siting of the buildings and other improvements within Lot One and Lot Two shall be determined during the City's review of the Phase Two Land-Use Application. The Landowners agree to not seek to obtain a building permit to construct free-market residences on Lot One or Lot Two or to install utilities to s~we the two lots until after final City action on the Phase Two Land-Use Application or withdrawal of said application by Landowners. (b) Landowners reserve the right to unilaterally withdraw the Phase Two Application, in their sole discretion. Upon withdrawal of the Phase Two Land-Use Application, Landowners may proceed with development of the Adjusted Development Parcels in accordance with the Phase One Recorded Documents. (c) The parties agree that upon final approval of the Phase Two Land Use Application 7 acceptable to the Landowners, the Landowners shall be solely responsible for the construction of the buildings, ~mprovements and related utilities for the AH Project. The sale of the affordable housing units (including sales prices) shall be governed by the then- current roles and regulations published by the AsperffPitkin County Affordable Housing Office. (d) The City's obligation in regard to the development of the AH Project shall be limited m paying Landowners a total subsidy (the "Subsidy") of $72,128.00, per bedroom, assuming that at least 47 bedrooms are approved for construction. Without limiting Landowners' rights pursuant to subparagraph (b) above, if fewer than 47 bedrooms are approved or the unit m~x is changed substantially from that described in subparagraph (a) above, Landowners shall have the right to withdraw the Phase Two Land-Use Application unless a different Subsidy amount that is acceptable to the Landowners ~s approved. The Subsidy shall be due and payable after final inspection of the AH Project (but before a certificate of occupancy is issued). (e) Upon final approval of the Phase Two Land Use Application acceptable to the Landowners and payment by the City of the Subsidy, the approvals contained in the Phase One Recorded Documents with regard to Lot One and Lot Two shall automatically terminate (it being understood that the approvals for Lot Three shall be governed by the Phase One Recorded Documents, and, if the City exercises the CE Option. the conservation easement thereon). (f) Landowners shall construct the AH Projec~ substantially ~n accordance with the "Standards for Construction of Future Affordable Housing Projects Built by the City of Aspen", dated November 5, 2002 (copies of which are attached hereto as Exhibit 'T'); provided, however, that unit square footages shall be based on the Aspen/Pitkin County Housing Guidelines approved January 14, 2003 (copies of which are attached hereto as Exhibit "J"). SECTION 10 OTHER PROVISIONS OF THE DEVELOPMENT PLAN. (a) VESTED RIGHTS. All the City's land-use approvals received by Landowners shall vest for a period of ten (10) years or such longer time as may be allowed under any applicable law, regulation or court decision. The vested rights shall last for a period often (10) years after the date the Phase One Recorded Documents are recorded. Such vesting shall apply to all the fights and entitlements set forth in this Agreement and the final development order for the Adjusted Development Parcels. As a condition of the annexation of the Property Proposed to be Annexed, the parties shall enter into a development agreement that sets forth the requisite findings to support this extension of vested rights in accordance with CRS 24-68-104(2). (b) WATER RIGHTS. The Development Parcels shall receive City water. Landowners and the City shall enter into a Water Service Agreement at the time of building permit issuance. (c) GREEN CONSTRUCTION. The parties hereto agree that the construction of either free-market residences or affordable housing units on the Adjusted Development Parcels shall comply with the provisions of any ordinances adopted by the City requiring environmentally appropriate construction (also known as "green" construction) techniques, materials and design, that are generally applicable throughout the City to all residential construction, as the same may exist from time to time. Notwithstanding the foregoing, if the AH Project is approved and constructed, Landowners shall be required to receive a score of at least "130 points" under the Asp en/Pitkin County "Efficient Building Program Checklist". SECTION 11 CITY'S OBLIGATION WITH RESPECT TO ANNEXATION. The City agrees to annex the Property Proposed to be Annexed provided all of the terms and conditions of this Agreement are met. The pa~ies acknowledge that annexation and zoning are subject to the plenary legislative discretion of the City Council and that certain fights of referendum and initiative are reserved unto its citizens. Notwithstanding any language to the contrary contained in this Agreement, no assurances of annexation or zoning have been made or relied upon by the Landowners. SECTION 12 LANDOWNERS' REMEDY FOR DEFAULT BY CITY. a. In the event that any action herein contemplated is not taken by the City, then Landowners' remedies for the breach thereof may include the withdrawal of the annexation petition by Kaplan and Cluck, the right to reimbursement for Landowners' costs and fees, including reasonable attorney fees, incurred in the negotiation, drafting and/or Landowners' performance of this Agreement or in Landowners' performance of any acts required of the City hereunder and all the costs incurred as a result of the City's broach, including, without limitation, the preparation and processing of the development plan, and any attorney fees incurred to perform defense obligations of the City. In such event, all conditional land use approvals that may have been granted by the City and this Agreement shall become null and void. b. To the extent available at law or in equity, in the event of a default in this Agreement by the City, including, without limitation, any default in its obligations after annexation occurs, Landowners shall have the right to either terminate this Agreement and obtain its 9 damages, or pursue specific performance of the City's obligations hereunder. Landowners' "damages'' shall include, without limitation, recovery of Landowner's costs and fees. In the event the breach by the City is its failure to extend utility service and facilities to the Adjusted Development Parcels as and when required by this Agreement or the Water Service Agreement, Landowners' remedies shall include the right to obtain a Court order requiring that the City convey to Landowners, easements over, under and across the City's property and/or along its existing utility facilities where such easements are necessary for Landowners to construct and maintain the utilities that the City failed to provide. Landowners shall have the right to construct such utility facilities reasonably necessary to serve the Adjusted Development Parcels in the event the City does not fulfill its obligations under the Agreement. The foregoing remedy is in addition to all other remedies Landowners may have at law or equity, including the right to damages and the remedies provided for in the Agreement. SECTION 13 CITY'S REMEDY FOR DEFAULT BY LANDOWNERS. In the event that Landowners default in any of their duties as set forth herein, the City shall have the right to withhold or revoke any permits or certificates issued to Landowners pursuant to this Agreement, including but not limited to building permits and certificates of occupancy or by an action for specific performance filed in the Pitkin County District Court. In such event, the prevailing party in any such action shall be entitled to recover all of its costs for enforcement, including reasonable attorney fees. SECTION 14 MISCELLANEOUS (a) Waiver. A waiver by any party to this Agreement of the breach of any term or provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either party. (b) Binding Effect. The parties hereto agree that this Agreement, by its terms, shall be binding upon the successors, heirs, legal representatives, and assigns thereof and shall constitute covenants running with the Existing Development Parcels and Adjusted Development Parcels. In the event that all or part of either the Existing Development Parcels or the Adjusted Development Parcels are sold, transferred, or otherwise conveyed to additional or multiple parties, all owners shall be jointly and severally responsible for all terms, conditions, and obligations set forth in this Agreement. (c) No Third Party Beneficiaries. It is expressly understood and agreed that enforcement of the terms and conditions of this Agreement, and all rights of action relating to such enforcement, shall be strictly reserved to the City and Landowners and nothing contained in this Agreement shall give or allow any such claim or right of action by any other third person on such Agreement. It is the express intention of the City and 10 Landowners that any person other than the City, or Landowners who receives services or benefits under this Agreement shall be deemed to be an incidental beneficiary only. (d) Governing Law. This Agreemem shall be governed by the laws of the State of Colorado. The parties agree and acknowledge thal this Agreement may be enforced at law or in equity as a contractual obligation. This Agreement is intended to provide a contractual relationship between the City and the Landowners to ensure compliance with all rights and reqmrc~nents contained herein. In addition to any other available remedies, it is understood and agreed that the City may withhold or revoke any permits or certificates, including but not limited to building permits and certificates of occupancy, for any lot created within the Development Parcels in the event ora breach of this Agreement by the Landowners. The prevailing parry ~n any litigation between Landowners and the City concerning this Agreement shall be entitled to an award of its attorney fees and costs. (e) Additional Documents. The parties agree ro execute any additional documents or take any additional action that is necessary to carry out this Agreement. (f) Counterparts. This Agreemem may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument. (g) Captions. The captions of the paragraphs are set forth only for the convenience and reference of the parties and are not intended in any way to define, limit or describe the scope or intent of this Agreement. (h) Integration/Amendment. This Agreement represents the entire agreement between the parties and there are no oral or collateral agreements or understandings. Only an instrument in writing signed by the parties may amend this Agreement. (i) Assignment. All or part of the rights, obligations or responsibilities set forth in this Agreement may be assigned by Landowners to an entity in which Landowners or their affiliates have an interest, without requiring the consent of the City. (j) Invalidation. Invalidation of any of the provisions of this Agreement or any paragraph sentence, clause, phrase, or word herein or the application thereof in any given cimumstance shall not affect the validity of any other provision of this Agreement, except that if such invalidation diminishes the rights of Landowners, Landowners may elect to terminate this Agreement and render it null and void. (k) Recording. The City shall record this Agreement with the Clerk and Recorder's Office of Pitkin County. Landowners shall pay the reasonable cost of recordation of this Agreement. The terms, conditions, rights and benefits of this agreement shall run with title to the land. II (1) Exhibits. Unless otherwise stated in this Agreement, exhibits referenced in this Agreement shall be incorporated into this Agreement for all purposes. (m) Annexation. In the event that any person, corporation, special district, municipal or county government, or any other entity or person asserts any claim against the City, its officials, or employees pursuant to the provisions of the Colorado Municipal Annexation Act, C.R.S. § 31-12-101 et seq., or asserts any other claim, based on any theory of law whatsoever, challenging the rezoning and development of the Existing Development Parcels and/or Adjusted Development Parcels, or the approval of the Development Plan as contemplated by this Agreement, the City shall vigorously defend against such an action and may consent to and permit the entry by the court of an order voiding the annexation or reach another means of settlement of claims, provided that no consent'to an order voiding the annexation or settlement which adversely affects Landowners' rights hereunder' or under any development approvals contemplated hereby, shall be entered into without Landowners' written consent. The City's defense of any such action(s) shall also include the vigorous defense, at its sole cost, of the interests of Landowners. If, by reason of such suit, this Agreement is found to be void or unenforceable, then as between the City and Landowners, this Agreement shall become null and void, and if at such time the annexation of the Kaplan and Gluck Parcels has already occurred, the City shall, upon a petition for de-annexation submitted by either Kaplan or Gluck, approve the de-annexation of the relevant parcel. (n) Appeal Period. Any time period established by this Agreement upon one or the other party to take any action shall be suspended until the expiration of any jurisdictional appeal time for the initiation of a judicial challenge to any action taken by the City or the time permitted for the initiation of an initiative or referendum challenge. If the annexation of the Property Proposed to be Annexed, any requisite land use approval, or any action required by the City is challenged by a referendum or initiative, or is subjected to a judicial court proceeding, all provisions of this Agreement, together with the duties and obligations of each party, shall be suspended pending the outcome of the election or court proceeding (including any appeals). If the referendum, initiative, or court challenge results in disconnection of the Property Proposed to be Annexed from the City, the~ this Agreement shall be null and void and of no further effect. If the referendum, initiative, or court challenge fails, then the parties shall continue to be bound by all of the terms and provisions of this Agreement and any other agreements made in connection therewith. (o) Title Matters. Whenever there appears a requirement to dedicate or convey land to the City, the owner of the relevant parcel to be conveyed shall provide a title policy that shall indicate that the property is free and clear of all encumbrances whatsoever which would impair the use of the property as proposed in this Agreement or in any further document. Further, said title policy shall show that the property to be dedicated or conveyed to the City is free and clear of all encumbrances which would 12 make said dedications or conveyances unacceptable to the City as the City, in its sole discretion, determines. Should such title policy reflect encumbrances that may impair the use of the property as proposed or which would make the dedications or conveyances unacceptable, the City may take whatever action or seek whatever remedies it deems advisable, including without limitation disconnection from the City of all or a portion of the Property Proposed to be Annexed, if already annexed into the City, withholding of any development reviews, or declaring this Agreement null and void. Provided, however, the City shall not have any right to seek damages against Landowners.~ CITY OF ASPEN, a munmipal corporation ATTEST: APPROVED AS TO FORM: City Clerk City Attorney By: LANDOWNERS BURTON B. KAPLAN ASPEN GK, LLC PETERL. GLUCK By:_ Charles Kaplan Title: STATE OF COLORADO 13 COUNTY OF PITKIN Acknowledged before me this as )ss. day of of the City of Aspen, Colorado. 2003, by My commission expires: Notary STATE OF COLORADO COUNTY OF PITKIN ) ) )SS. Acknowledged before me this day of BURTON B. KAPLAN in his capacitY as owner of the Kaplan Parcel. 2003, by My commission expires: Notary 14 STATE OF COLORADO COUNTY OF PITKIN ) ) )SS. Acknowledged before me this day of PETER L. GLUCK in his capacity as owner of the Gluck Parcel. 2003, by Notary My commission expires: STATE OF COLORADO COUNTY OF PITKIN )SS. Acknowledged before me this Charles Kaplan in his capacity as liability company. day of 2003, by of Aspen GK, LLC. a Colorado limited My commission expires: Notary 15 LIST OF EXHIBITS A B C D E F G H I Legal description of Kaplan Parcel (proposed to be annexed) Legal description of Gluck Parcel (proposed to be annexed) Legal description of Aspen GK Parcel Petition to Annex - (Standard City of Aspen petition for annexation) Map of Existing Development Parcels (Current Boundary Map) Map of Adjusted Development Parcels (Adjusted Boundary Map) Floor Area Calculation Method ADU Regulations Standards for Construction of Furore Affordable Housing Projects Built by the City of Aspen, dated November 5, 2002 and Aspen/Pitkin County Housing Guidelines approved January 14, 2003 16 To: Mayor and City Council From: Ed Sadler, Assistant City Manager Date: January 20, 2004 RE: Future Visitor Center Purchase Contract Summary: The City of Aspen has expressed a desire to purchase a portion of the building to be built at the NW comer of Galena and Main Streets in the City of Aspen from the potential developer (Millenium Plaza, LLC). The attached contract spells out the details of that purchased based upon successful culmination of the proposed project. The intent of the City purchasing this property is to then enter a long-term contract with ACRA to be utilized by them as a visitor's center. A draft contract has bee~ provided to ACRA and is currently gmng through review by them. The attached contract specifies that the purchase price to be paid is $1,030,000 based upon 3000 sq. ft, and will be reduced accordingly based upon the actual sq. ft finally approved and built. Under no circumstances shall the square footage be less than 2800 as defined in the contract. Previous Council Action: The Council has had previous discussions regarding this project, but has not taken any official actions to date. Background: Currently, ACRA and its main visitor's center is located on Rio Grand Avenue in the existing City Parking Garage. Although this space is close to the downtown area, the desire has been to make the visitors center more visible and therefore more available to the visiting public. Hence when the new project with Millenium Plaza LLC surfaced, the appeal of locating the visitor's center also surfaced based upon discussions through the Civic Center Master Planning Group. The City then entered discussions with the developer and the result is the attached contract and the draft contract that has been delivered to ACRA for their review. Discussion: Should the Council desire to move the existing visitors center from its current location, purchasing a portion of the property in question makes good sense. This is a highly visible location and fits well with many of the recommendations made by the Civic Center Master Plan Committee. The Space provided in this facility appears to meef the foreseeable needs of ACRA. Financial Implications: The City within its current financial plans can meet the financial terms of the contract, especially considering that the rent to be paid by ACRA in it's proposed long term lease will help in making these payments. For a 20 year payoff, yearly expenses (including repayment, debt service, utilities and building expenses) is estimated to be $92,000 yearly. This is Offset by ACRA lease payments of $50,000 yearly, for ne~ expenses of $42,000 yearly from the General Fund. Recommendations: I recommend that you approve this contract with the stipulation that the contract is not signed by either the Mayor or City Manager on your behalf until such time as the City has successfully negotiated a long term lease with ACRA for the property in question. Alternatives: The Council could choose to not approve this contract and ACRA could remain in its current location, or could continue te look for other space to meet its needs, RESOLUTION #7 (Series of 2004) A RESOLUTION APPROVING A CONTRACT TO BUY AND SELL REAL ESTATE BETWEEN THE CITY OF ASPEN. COLORADO, AND MILLENIUM PLAZA LLC, SETTING FORTH THE TERMS AND CONDITIONS REGARDING THE PURCHASE OF A PORTION OF THE BUILDING AT THE NW CORNER OF GALENA AND MAIN STREETS AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID CONTRACT WHEREAS, there has been submitted to the City Council a contract between the City of Aspen, Colorado, and Millenium Plaza LLC, a copy of which contract is annexed hereto and made a part thereof. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO: Section 1 That the City Council of the City of Aspen hereby approves that contract between the City of Aspen, Colorado, and Millenium Plaza LLC., regarding the purchase of a portion of the building at the NW comer of Galena and Main streets, a copy of which is annexed hereto and incorporated herein, and does hereby authorize the City Manager of the City of Aspen to execute said contract on behalf of the City of Aspen. Dated: Helen Kalin Klanderud, Mayor I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy oflhat resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held January 26, 2004. Kathryn S. Koch, City Clerk The printed portions of this form have been approved by the Colorado Real Estate Commission. (CBS 2-9-99) THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL AND TAX OR OTHER COUNSEL BEFORE SIGNING. CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL) (CASH AT CLOSING) Date: January 02, 2004 1. AGREEMENT. Buyer agrees to buy and the undersigned Seller agrees to sell the Property defined below on the terms and conditions set forth in this Contract. 2. DEFINED TERMS. a. Buyer. Buyer, City of Aspen will take title to the real property described below as [] Joint Tenants [] Tenants In Common [] Other b. _Property. The Property is the following legally described reel estate: See Exhibit A attached hereto and incorporated herein by this reference in the ~[~rk~ ~f Citv of Aspen , Colorado, commonly known as No. Street Address City State Zip together with the interests, easements, rights, benefits, improvements and attached fixtures appurtenant thereto, all interest of Seller in vacated streets and alleys adjacent thereto, except as herein excluded. c. Dates and Deadlines. * following date of signature hereof by Buyer and Seller Item No. Reference Event Date or Deadline 1 § 5a Loan Application Deadline 2 _~__ Loan Commitment Deadline 3 ~ Bu~Credit Information Deadline 4 § 5c Disapproval of Buyer's Credit Deadline 5 --_ _j~ 5d Existing Loan Documents Deadline 6 _~ _ O_~b'ectinn to Exlst~oan Deadline 7 § 5d Approval of Loan Transfer Deadline 8 § 6a Appraisal Deadline 9 § 7a Title Deadline 7 days * 10 § 7a Survey Deadline 11 § 7b Document Request Deadline 7 days * 12 § 8a__ TitleObjectionDeadline 14 days * 13 ~ Off-Record Matters Deadline 7 days * 14 § 8b Off-Record Matters Ol~iection Deadline 14 days * 15 ,~ 10 Seller's Property Disclosure Deadline 16 § 10a Inspection Ob, iecfion Deadline 30 days * 17 § 10b Resolution Deadline 35 Days * 18 § 11 Closing Date See Addendum 19 § 16 Possession Date Closing date 20 .{ 16 Possession Time At Closing 21 § 28 Acceptance Deadline Date 3 days 22 Sq 28 Acceptance Deadline Time 5: 00 I? .iq. lq. S. T. rots. The following exhibits, attachments and addenda are a part of this contract: See Addendum attached hereto and incorporated herein by this reference e. Applicability of Terms. A check or similar mark in a box means that such provision is applicable. The abbreviation "N/A" means not applicable. 3. INCLUSIONS AND EXCLUSIONS. a. The Purchase Priceincludes the following items (Inclusions): (1) Fixtures. If attached to the Property on the date of this contract, lighting, heating, plumbing, ventilating, and air conditioning fixtures, inside telephone wiring and connecting blocks/jacks, plants, mirrors, floor cOverings, intercOm systems, sprinkler systems and controls, and (2) Other Inclusions. If on the Property whether at~aPhed 0r not on the date of this contract: storm windows, steers doors, window and porch shades, awnings, blinds, screens, window coverings, curtain rods, drapery rods, storage sheds, and all keys. Check box if included: [] Smoke/Fire Detectors, [] Security Systems; and (3) Trade Fixtures. With respect to trade fixtures, Seller and Buyer agree as follows: b. Instruments of Transfer. The Inclusions are to be conveyed at Closing free and clear of all taxes, liens and encumbrances, except as provided in § 12. Conveyance shall be by bill of sale or other applicable IegaI instrument(s). c. Exclusions. The following attached fixtures are excluded from this sale: PREPARED BY AGENT: x, x CBS 2-9-99, Contract to Buy and Sell Real Estate (Commercial), 6/3/99. Colorado Real Estate Commission ReatFAST® Software,'©2004, Version 6,13. Software Registered to: Patrick D, McAIJister, x Buyer(s) 01/02104 t 6;27:31 Page t of 5 Seller(s) -- Item No. Reference § 4d _ -- ~S 4e 7 PURCHASE PRICE AND TERMS. The Purchase Pi-lee set forth below sh~li be payable in ul s. Dollars by Buyer aS follows: Item Amount Amount Purchase Price Earnest M on..q_q~_ New Loan ~on Balance Seller or Private Fin~ Cash at Closing. TOTAL $ 1,030,000.00 $ 1,030 a. Earnest Money. The Earnest Money set forth in this Section, in the funn of 39od Funds , is part payment ofthe Purchase Price end shall be payable to and held by *±tk±n County 'r±tle, Ina. , in its trust account, on behalf of both Seller and Buyer. The parties authorize deIivery of the Earnest Money deposit to the Closing Company, if any, at or before Closing. b. New Loan. [Omitted-N0tAppliCable] c. Assumption. [Omitted-NotApplicable] d. Seller or Private Financing. [Omitted - Not Applicable] e. Cash atClosing2 All amounts paid by Buyer at Closing including Cash at Closing, plus Buyer's closing costs, shall be in funds which comply with all applicable Colorado laws, which include cash, electronic transfer funds, certified check, savings and loan teller's check and cashier's check (Good Funds). 5. FINANCING CONDITIONS AND OBLiGATiONs. a. LoanApplication. [Omitted-NotApplicable] b. Loan Commitment. [Omitted 2NotApplicable] c. Creditlnfonnation. [Omitted-N0tApplicable] d. Existing Loan RevieTM. [Omitted - Not Applicable] 6. APPRAISAL PROVISIONS. a. AppraisalCondition. This subsection a. [-]Shall ~]ShallNot apply. Buyer shall have the sole option and election to terminate this contract if the Purchase Price exceeds the Property's valuation determined by an appraiser engaged by The contract shatl terminate by Buyer giving Seller written notice of termination and either a copy of such appraisal or written notice fi'om lender which confirms the Property's valuation is less than the Purchase Price, received on or before the Appraisal Deadline (§ 2c). If Seller does not receive such written ootice of termination on or before the ApPraisal Deadline (§ 2c), Buyer waives any right to terminate under this subsection. b. Cost of Appraisal. Cost of any appraisal to be obtained after the date of this contract shall be timely paid by [] Buyer [] Seller. 7. EVIDENCE OF TITLE. a. EvidenceofTitleI Survey. On or before Title Deadline (§ 2c), Seller shall cause to be fumisbed to Buyer, at Seller's expense, a current commitment for owner's title insurance policy in an amount equal to the Purchase Price or if this box is checked, [] An Abstract oftitie certified to a current date. If a title ihsm'ance commitment is fm'nished, it [] Shall [] ShallNot committo delete or insure over the standard exceptions which relate to: (1) parties in possession, (2) unrecorded easements, (3) survey matters, (4) any unrecorded mechanics' liens, (5) gap period (effective date of commitment to date deed is recorded)} and (6) unpaid taxes, assessments and unredeemed tax sales prior to the year of Closing. Any additional premium expense to obtain this additional coverage shall be paid by [] Buyer [] Seller. ,~ xaha~ohht\h~t kb xekhde~ Sx \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ yd, r xt h e\ ~o% ~ ~ikaXn~ ~,rh hr\ok ckrh bn~; ~k~c,a ~i~i~, eke\+; f~ da% ek &.xs h ~v,e~ ~l~a]l kbXekpXa klxl~,y\ q]~\Btl,~e}: \~], S ~lle'r.\ XI~ ~t}e\ 6d~t~ Xe~ 6eXe~ts 'tlM~ h~bt~rk,k \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ ~ha~llk~ 5~eX&~s% 'oh %~ l~t'o~'ex~,ib ~i h~ \'l~h~'irhb~'V~rh~rk 't 6chti b~t, ~r txiiXiba~ eX 6r'~h iw'e} ~tLaXllkDe\r~ ~di ¢ekl by\ B'a~&'%h %1~ b~,f'e~e\Sa, r¥~)kl~b~klt~'e\('§X2*), Seller shall cause the title insurance policy to be delivered to BUyer as soon as practicable at or after Closing. b. Copies of Exceptions. On or before Title Deadline (Ss 2c), Seller, at Seller's expense, shall furnish to Buyer, (1) a copy of any plats, declarations, covenants, conditions and restrictions burdening the Property, and (2) if a title insurence commitment is required to be furnished, and if this boxis checked [] Copies of any Other Documents (or, if illegible, summaries of such documents) listed in the schedule of exceptions (Exceprions). Even if the box is not checked, Seller shall have the obligation to furnish these documents pursuant to this subsection if requested by Buyer eny time on or before the Document Request Deadline (SS 2C). This requirement shall pertain only to documents as sho,vn of record in the office of the clerk and recorder(s). The abs©act or title insurance commitment, together with any copies or summaries of such documents furnished pursuant to this Section, constitute the title documents (Title Documents)2 8. TITLE. a. Title Review. Buyer shall have the right to inspect the Title Documents. Written notice by Buyer of unmerchantabi]ity of title or of any other unsatisfactory title condition shown by the Title Documents shall be signed by or on behalf of Buyer and given to Seller on or before Title ObjectionDendline (§ 2c), or within five (5) calendar days after receipt by Buyer of any Title Document(s) or endorsement(s) adding new Exception(s) to the title commitment together with a copy of the Title Document adding new Exception(s) to title. If Seller does not raceive Buyer's notice by the date(s) specified above, Buyer accepts the condition oftitie as discIosed by the Title Documents as satisfactory. b. Mattersn0tShownbythePublicRecords. Seller Shall deliver to Buyer, on or before Off-RecordMatteesDeadline (§ 2c)tme copies of all lease(s) and survey(s) in Seller's possession pertaining to the Pmper~y and shall disclose to Buyer ail easements, liens or other title matters not shown by the public records of which Seller has actual knowledge. Buyer shall have the right to inspect the Property to determine if any third party(Yes) has eny right in the Property not shown by the public records (such as an unrecorded casement, ura'ecorded lense, or boundary line discrepancy). Written notice of any unsatisfactory condition(s) disclosed by Seller or revealed by such inspection shall be signed ~y or on behalf of Buyer and given to Seller on or before Off-Record Matters Objection Deadline (SS 2c). If Seller does not receive Buyer's notice by said date, Buyer accepts title subject to such rights, if any, of third parties 0fwhich Buyer has actual knowledge. c. Special TaxingDi~tricts. SPECIAL TAXING DISTRICTS MAY BE SUBJECT TO GENERAL OBLIGATION INDEBTEDNESS THAT IS PAID ~Y REVENUES PRODUCED FROM ANNUAL TAX LEViEs ON THE TAXABLE PROPERTY WITHIN SUCH DISTRICTS; PROPERTY OWNERS IN SUCtt DiS~iCTS ~AYBE pLACEI) AT RIS~ FOR iNCREASED MiLL LEVIES AND EXCESSIVE TAX BURDENS TO SUPPORT ~E SggVi~!NG Og SUCH DEg¥ ~HERE CiRCuMSTANCES ARISE RESULTING IN THE INABILITY OF sucH A DisTRICT TO DiSe~XR~ SuC~ il~DEIiTgDNgsS ~iTHOUT SU~?H AN INCREASE IN MILL LEVIES. BUYER SHOULD INVESTIGATE THY DEgT'FI[NXN~iN'G REQUIRE~E~g OFTHE AUTHORIZED GENERAL OBLIGATION INDEBTEDNESS OF SUCH DISTRICTS, EXiSTiNG MILL LEVIES oF suc~ DISTRICT sERvICING SUCH INDEBTEDNESS, AND THE POTENTIAL FOR AN iNCREASE IN SUCH MILL LEVIES. In the event the Property is located within a special taxing district and Buyer desires to terminate this contract as a result, if written notice is received by Seller on or before Off-Record Matters Objection Deadline (§ 2c), this contract shall' then terminate. If Seller does not receive Buyer's notice by such date, Buyer accepts the effect of the P ..... roperty s mclus on tn such spec a tax ng d~stnct(s) and wmves the r ght to so terminate. d. Right to Cure. If Seller receives notice Of unmerchantability of title or any other unsatisfactory title condition(s) or commitment terms as provided in SS 8 a or b above, Seller shall use reasonable effort to correct Said items and bear any nominal expense to correct the same prior to Closing. If such unsatisfactory title condition(s) are not corrected on or before Closing, this contract shall then terminate; provided, however, Buyer may, by va'itten notice received by Seller, on or before Closing, waive objection to such items. PREPARED BY AGENT: ×, x CBS 2-9-99. Contract to Buy and Sell Real Estate (Commercial). ~/3/99. Co~orado Real E,tare Cemmisslon ReaIFAST® Software. ©2004. Version ~.~3. Software Registered o Pa r ck D. McAIlister x Buyer(s) -- 01/02104 q6:07:~ ~ Page 2 of 5 Seller(s} -- e. Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed carefully. Additionally, other matters not reflected in the Title Documents ma) affect the title, ownership cod use of the Property, including without limitation boundary lines and encroachments, area zoning, unrecorded ensemenrs and claims of easements, leases and other unrecorded agreements, and various laws and governmental regulations concerning land use, development and environmental mauers. THE SURFACE ESTATE MAY BE OWNED SEPARATELY FROM THE UNDERLYING MINERAL ESTATE, AND TRANSFER OF THE SURFACE ESTATE DOES ~TO~IENRE~IiENS~s,Y~NECo~UHDEERTMA~i~N~S~FlcE~R~.F~T_HE M1NI~RAL R~HTS: THIRD PARTIES MAy HOLD INTERESTS IN OIL, G AS, RIGHTS TO ENTER u rt~"~dVlAL I~i~I~RG¥ ORWA TER ON OR UNDER THE PROPERTY, WHICH INTERESTS MAY GiVE TH EM t AND USE THE PROPERTY. Such maners maybe exaludedfl.om the title insurcoce policy. Buyeris advisedtotlmel) consult legal counsel with respect to all such marrers as there ere str ~t time limits provided in this COhO'act te.g., Title Objection Deadline [§ 2c] and Off-Record Matters Objection Deadline [SS 2c]). 9. LEAD-BASED PAINT. Unless exempt, if the impmvemeots on the Propert) include one or more residential dwelling(s) for which a building permit was issued prior to January I, 1978, this contract shall be void unleas a completed Lead-Based Paint Disclosure (Sales ~ form is signed by Seller and the required real estate liccosee(s), which must occur prior to the parties signing this contract. 10. PROPERTY DISCLOSURE AND INSPECTION. On or before Seller's Property Disclosure Deadline (§ 2c ~. Seller agrees to provide Buyer with a written disclosure of adverse matters regarding the Proper~y completed by Seller to the best of Seller's current actual knowledge. a. InspectionObiecfionDeadline, Buyer shall have the right to have inspection(s) of the physical condition of the Property eno Inclusions, at Buyer's expense. If rite physical condition of the Propert3 or Inclusions ts unsattsfactory in Buya-'s subjective disc*etlon. Buyer shall. on or before Inspection ObjectionDeadline (§ 2c'l: (1) notify Seller in writing that this contract is lerminared, or (2) provide Seller with a written description of any unsatisfactory physical condition u hich Buyer requires Seller to correct iNotice to Correct). ff written notice is not received by Seller oo or before Inspection Objection Deadline (§ 2cL the physical condition of the Proper~y and Inclusions shall be deemed to be satisfactory to Buyer. b. ResointionDeadline. If a Notice to Correct is received by Seller and if Buyer and Seller have not agreed in writing to a settlement thereof on or before ResolutionDeadline (§ 2c), this contract shall terminate one calendar day following the ResolntionDeadline (SS 2c~, unless before such temfination Seller receives Buyer's written withdrawal of the Notice to Correct e. Damage; Liens; Indemnity. Buyer is responsible for payment for all inspections, surveys, engineering reports or for any other work performed at Buyer's request and shall pay for any damage which occurs to the Property and Inclusions as a result of such activities Buyer shall not permit claims or liens of any kind against the Property for inspections, surveys, engineering reports and for anI other work performed on the Property at Buyer's request. Buyer agrees to indemnify, protect and hold Seller harmless from and against coy liability damage, cost or expense incurred by Seller in connection with an) such inspection, claim: or lien. This indemnity includes Seller's right to recover all costs cod expenses incurred by Seller to enforce this subsection, including Seller's reasonable attorney fees. The provisions of this subsection shall survive the termination of this contract 11. CLOSING. Delivery of deed(si from Seller to Buyer shall be ar Closing (Closing). Closing shall be on the date specified as the Closing Date (§ 2c) or by mutual agreement at an earlier date. The hour and place of Closing shall be as designated by ?±ek±n County T±t let Inc 12. TRANSFER OF TITLE. Subject to tender or payment at Closing as required herein and compllance by Buyer with the other terms and' provisions hereof, Seller shall execute cod deliver a good and sufficient SpecJ_a2~ ~arram:¥ Deed deed to Buyer, at Closing, conveying the Properg free and cleer of all taxes except the general taxes for the year of Closing. Except as provided herein, title shall be conveyed free and clear of all liens, including any governmental liens for special improvements installed as of the date of Buyer's signature hereon, whether assessed or not. Tiff e shall be conveyed subject to: a. those specific Exceptions described b~ refercoce to recorded documents as reflected in the Title Documents accepted by Buyer m accordance with § 8a [Title Review], b distribution utillty easements, c. those specifically described rights of third parties not shown by the public records of which Buyer has actual knowledge and which were accepted by Buyer in accordance with § 8b [Matters Not Shown by the Public Records], and d. inclusion of the Property within any special taxing district, and e. the benefits and burdens of any declaration and party wail agreements, if any, and £. other 13. PAYMENT OF ENCUMBRANCES. Any encumbrance required to be paid shall be paid at or before Closing from the proceeds of this transaction or from any other source. 14. CLOSING COSTS; DOCUMENTS AND SERVICES. Buyer and Seller shall pay, in Good Funds, their respective Closing costs and all other items required to be paid ar Closing, except as otherwise provided herein. Buyer and Seller sha s gn and complete all customary or reasonably required documents at or before Closing Fees for real estate Closing services shall be paid at Closing by [] One-Half by Buyer and One-Half by Seller [] Buyer [] Seller [] Othe~' The local Iransfer tax of J-. 5 % of the Purchase Price shall be paid at Closing by [] Buyer [] Seller. Any sales and use tax that may accrue because of this transaction shall be paid when due by [] Buyer [] Seller. 15. PRORATIONS. The following shall be prorated to Closing Date (§ 2c), except as otherwise provided: a. Taxes. Personal property taxes, if any, and general real estate taxes for the year of Closing, based on [] The Taxes for the Calendar Year Immediately Preceding Closing [] The Most Recent Mill Levy and Most Recent Assessment [] Other S ; b. Rents. Rents based on [] RentsActuallyReceived [] Accrued. ecurity depositsheld by Seller shall be credited to Buyer. Seller shall assign all leases to Buyer and Buyer shall assume such Ieases, c. Other Prorations. Water, sewer chm'ges; and interest on continuing loan(s), if any; and ' d. Final Settlement. Unless Otherwise agreed in writing, these prorations shall be final. 16. POSSESSION. Possession of the Property shall be delivered to Buyer on Possession Date andPoasession Time (§ 2¢), subject to the following lease(s) or tenancy(s): If Seller, afmr Closing, fails to deliver possession as specified, Seller shall be subject to eviction and shall be additionally liable to Buyer for payment ors 100.00 per day from the Possession Date (§ 2c) ontil possession is delivered~ 17. NOT ASSIGNABLE. This contract shall not be assignable by Buyer without Seller's prior written consent. Except as so restricted, this contract shall inure to the benefit of and be binding upon the heirs, personal representatives, successors and assigns of the pallies 18. CONDITION OF, AND DAMAGE TO PROPERTY AND iNCLUsIONS. Except h~ oih~r~'ls~:pr0Vided in this contract, the Property, Inclusions or both shall be delivered in the con diti0n existing as of the date of this contract, ordinery wear and tear excepted. a. Casnaltv;lnsuranec. ~ntheeventthePmperty~r~nc~usi~nssha~bedamagedbyfire~r~thercasualtypri~rt~C~sing~inanam~unt of not more than ten percent of the total Purchase Price, Seller shall be obligated to repair the same before the Closing Date (§ 2c). In the event such damage is not repaired within said time or if the damages exceed such sum, this contract may be terminated at the option of Buyer by delivering to Seller written notice of termination. Should Buyer elect to carry out this contract despite such damage, Buyer shall be entitl_e,d to a credit at Closing for all the insurcoce proceeds resulting from such damage to the Property and I ~clusions payable to Se dr but not the owners association, if any, plus the amount of any deductible provided for in such insurance policy, such credit not to exceed the total Purchase Price. b. Damage; Inclusions; SerVices. Should any Inclusion(s) or service(s) (including systems and components of the Property, e.g. heating, plumbing, etc.) fail or be damaged between the date of this contract and Closing or possession, whichever shall be earlier, then Seller shall be liable for the repair or replacement of such Inclusion(s) or service(s) with a unit of similar size, age and quality, or an equivalent credit, but only to the extent that the maintenance or replacement of such Inclusion(s), service(s) or fixture(s) is not the responsibility of the owners' association, if any, PREPARED BY AGENTi x, x CBS 2-9-99, Contract to Buy and Sell Real Estate (Commercial), 6/3/99. Colorado Real Estate Commission ReatFAST® Software', ©2004, Version 6.13. Software Registered to: Patrick D McAllister, x Buyer(s) -- 01/02/04 16:07:11 Page 3 of 5 SeJler(s) __ less any insurance proceeds received by Buyer covering such repair or replacement. c. Walk-ThroughIVerificationofConditinn. Buyer, upon reasonable notice, shall have the right to walk through the Property prior to Closing to verify that the physical condition of the Property and Inclusions complies with this contract. 19. RECOMMENDATION OF LEGAL AND TAX COUNSEL. B~ signing this document, Buyer and Seller acknowledge that the Selling Company or the Listing Company has advised that this document has important legal consequences and has recommended the examination of title and consultation with legal and tax or other counsel before signing this contract. 20. TIME OF ESSENCE AND REMEDIES, Time is of the essence hereof. If any note or cheek received as Earnest Money hereunder or any other payment due hereunder is not paid} honored or tdndered when due, or if any other obligation hereunder is not performed or waived as herein provided, there shall be the following remedies: a. If Buyer is in Default. [] (1) Specific Performance. Seller may elect to treat this contract as canceled, in which case all payments and things of value received hereunder shall be forfeited and retained on behalf of Seller, and Seller may recover such damages as may be proper, or Seller may elect to treat this contract as being in full force and effect and Seller shall hav~ the right tO specific performance or damages, or both. [] (2) Liquidated Damages. All payments and things of value received hereunder shall be forfeited by Buyer and retained on behalf of Seller and both parties shall thereafter be released from ali obligations hei'eunder, it is agreed that such payments and things of value are LIQUIDATED DAMAGES and (except as provided in subsection c) are SELLER'S SOLE ~ND oNLy REMEDY for Buyer's failure to perform the obligations of this contract. Seller expressly waives the remedies of specific performance and additional damages. b. If Seller is in Default. Buyer may elect to treat this contract as canceled, in which case all payments and things of value received her~nder shalI be retta'ned and Buyer may recover such damages as may be proper, or Buyer may elect to treat this contract as being in full force and effect and Buyer shall have the right to specific performance or damagas, or both. c. Costs and Expenses. In the event of any arbitration or litigation relating to this contract, the arbitrator or court shall asvard to the prevailing parry all reasonable cOStS and expenses, including attorney fees. "gb be/YaXht~\tb ks'ub )n k kh~ ~k hr\ tb h6 &:if ~}o'h}, Me~lh~ib h 'is\ ~ ~ ~xih M~h~ 8h\ ~'~ hp~akle's '~de~ ~,v`ith Xa'hX~h~h~t bix h br's6n\ ~vhb 'h~ l~p~. 'Id, M'sbI~ ~ 't~e\ "b~,rkitr~ \3'Xh'e \ ~51~i &s\ ¢: 1t Ix ~`i fit l~yk t~l~'in't Xa~\ &,c~b.~~ ',rSeXaSakbr\ ~rkk ~,v},l I, %h~ xe~lh ~,lly\ he tXh'~ \do'st\ 8 ~ ~'h Nth ~,i~t !.dh5 ';l~h~ Xnh &lit\ k)'h,\ k hl'e~s\ 'i s\ ~ek& b yk 6r~e\~'~ "t& ~h~e %'th',e~s )~ Xphixsk¢&fi 8rix ~al,! ~b [ ~,! ~ 'ahf 8ak~ l, nkth~"cb ht'~m~,haMl~ 22. EARNEST MONEY DISPUTE; N0twithstafiding any termination of this contract, Buyer and Seller agree that, in the event of any controversy regarding the Earnest Money and things of value held by br6ker or Closing Company (unless mutual written instructions are received by the holder of the Earnest Money and things of value), broker or Closing Company shall not be required to take any action but may await any proceeding, or at broker's or Closing Company's option and sole discretion, may interplead all parties and deposit any moneys or things of value into a court of competent jurisdiction and shall recover court costs and reasonable attorney fees. 23. TERMINATION. in the event this contract is terminated, all payments and things of value received hereunder shall be retained and the parties shall be relieved of all obligations hereunder, subject to § § 10c, 21 and 22. 24. ADDITIONAL PROVISIONS. (The language of these additional provisions has not been approved by the Colorado Real Estate Commission.) 25. ENTIRE AGREEMENT; SUBSEQUENT MODIFiCATioN; sURvIVAL. This contract constitutes the entire contract between the parties relating to the subject hereof, and any prior agreements pertaining thereto, whether oral or written, have been merged and integrated into th is contract. No subsequent modification of any of the terms of this contract shall be valid, binding upon the parties, or enforceable unless made in writing and signed by the parties. Any obligation in this contract which, by its terms, is intended to be performed after termination or Closing shall survive the same. 26. FACSIMILE. Signatures []May ~-~MayN~tbeevidencedbyfa~simi~e.D~cumentswith~rigina~signaturessha~Ibepr~videdt~the other party at Closing, or earlier upon request of any party. 27. NOTICE. Except for the notice requesting mediation described in § 21, any notice to Buyer sha 1 be effect ve when received by Buyer blx by~ ~g~lixih~ ~"-~ and any notice to Seller shall be effective when received by Seller o~ 28. NOTICE OF ACCEPTANCE; COUNTERPARTSi Thii proposal shall expire unless accepted in writing, by Buyer and Seller, as evidenced by their signatures below, and the offering party receives notice of acceptance pursuant to § 27 on or before Acceptance Deadline Date and Acceptance Deadline Time (§ 2c). If accepted, this document Shall become a contract between Seller and Buyer. A copy of this document may be executed by each party, separately, and when each party has executed a copy thereof, such copies taken together aball be deemed to be a full and complete contract between the parties. City of Aspen BUYER By: Mayor DATE [NOTE: If this Offer is being countered or rejected, do not sign this document. Refer to § 29] Millenium Plaza, LLC SELLER By: Authorized Representative DATE 29. COUNTER; REJECTION. This offer is [] Countered [] Rejected. Initials on ly of party (Buyer or Seller) who countered or rejected 6ffer END OF CONTRACT INote: Closing Instructions should be signed on or bef0re Title Deadline. BROKERACKNOWLEDGMENTS. The undersigned Broker(s) acknowledges receipt of the Earnest Money deposit Specified in § 4 and, while not a party to the contract, agrees to cooperate upon request with any mediation conducted under § 21 PREPARED BY AGENT: x, x CBS 2-9-99. Contract to Buy and Sell Real Estate (Commercial). 6/3/99. Colorado Real Estate Commission RealFAST® Software. ©2004. Version 6.13. Software Registered to: Patrick D. McAllister. x Page 4 of 5 Selling Company Brokera~;e Relationship The Selllng Company and its licensees have been engaged in this £ransaction as Buyer Agent [] SellerAgentYS'ubagent [] DualAgent [] Transaction-Broker. ListingCompanyBrokerageRelatlonship. The Listing Company and its Iicensees have been engaged in this ~ransaction as [] Seller Agent [] Dual Agent [] Transaction-Broker. BROKERS' COMPENSATION DIS CLOSURE. Selling Company's compensation or :ommission is to be paid by: [] Buyer [] Seller [] Listh~g Company [] Other tTo be completed by Listing Company) Listing Company's compensation or commission is to be paid by [] Buyer [] Seller [] Other Selling Company: By: Signamre Date Listing Company: By: (Name of Company) Signature Listing Company's Address: Listing Company's Telephone No: Listing Company's Fax No: Date PREPARED BY AGENT: x, x CBS 2-9-99, Contract to Buy and Sell Real Estate (Commercial), 6/3/991 Colorado Real Estai~ CommisSi0h RealFAST® Software', ©2004, Version 6.13. Software Registered to: Patrick D. McAIllster, x Buyer(s) -- 01/02/04 16:07:11 Page 5 of 5 Seller(s) -- ADDENDUM TO THAT CERTAIN COMMERCIAL CONTRACT TO BUY AND SEII REAL ESTATE, DATED , BETWEEN CITY OF ASPEN, AS BUYER, AND MILLENIUM PLAZA, LLC., AS SELLER 1. ADDENDUM TO CONTROL This Addendum is entered into simultaneously with the Printed Contract between /he above named parties. This Addendum is supported by the same consideration as expressed in said Printed Contract and the mutual terms, conditions and covenants set forth below. To the extent the provisions contained in this Addendum conflict with provisions contained in the Printed Contract to which this Addendum is attached, the provisions in this Addendum shall control (Unless the context otherwise requires, this Addendum and the Printed Contract to which it is attached may be collectively referred to in both this Addendum and the Printed Contract as the "Contract"). 2. INTEREST BEARING ESCROW ACCOUNT. Buyer's initial Earnest Money deposit in the amount of $51,500.00 shal be deposited with Pitkin County Title, Inc., within 2 days of signature of this Contract by Buyer and Seller. Buyer's earnest money shall be deposited into and maintained in an interest bearing escrow or trust account with all interest accruing thereon to the benefit of Buyer, unless Buyer forfeits the Earnest Money deposit under the terms of th is Contract, in which event it shall belong to the Seller. Buyer shall provide its Federal Employer Identification Number as required. Buyer shall deposit additional earnest money in the amount of $150,000.00 within 2 days of delivery of notice from Seller that Seller will commence finish and tenant improvements as described in Paragraph 5 below within fifteen (15) days. Following delivery of such notice, the total earnest money deposit shall be non refundable. 3. IRC SECTION 1445. Seller warrants that it is not subject to withholding as defined under Internal Revenue Code Section 1445, and will execute an affidavit prior to Closing to this effect. In the event that Seller fails to deliver the affidavit at Closing, or that Seller delivers such affidavit but the Buyer has actual knowledge that such affidavit is false, or receives notice that the affidavit is false from any agent of Seller, the Buyer shall be entitled to withhold from the purchase price a sum equal to ten percent (10%) of the total amount which otherwise should have been realized by the Seller from such sale, which sum will be paid by the Buyer to the United States Treasury pursuant to the requirements of Section 1445 or the Internal Revenue Code and the regulations promulgated thereunder. 4. PROPERTY DESCRIPTION. The Real Property (the "Property") being conveyed under the Contract is described as that Space identified as Uniton Exhibit 1 attached to this Addendum and incorporated herein by this reference.'The terms "Property" and "Unit "are used interchangeably herein. The Property shall contain no more than Three Thousand (3000) Gross Square feet and no less than Two Thousand Eight Hundred (28001 Gross Square feet. For purposes of this Contract, "Gross Square Feet" of the Property shall mean and be deemed to include all square footage from the face of exterior walls to the centerline of the wall of any adjacent unit. The Gross Square Feet will also include a proportionate share of the common space such as the mechanical room or elevator which are also used by other units in the building. For example, if the Property (not including the mechanical room) represents twenty percent (20%) of the total square footage of the building in which the Property is located, and the mechanical room is utilized by all unit owners and is one hundred (100) square feet, then twenty (20) square feet will be included in the Gross Square Feet of the Property. By way of further example, if the amount of units in the building which use the mechanical room is less than one hundred percent (100%) of all units in the building, then the amount of square footage in the mechanical room which will be included as part of the Gross Square Feet of the Property would be calculated as follows: if the units using the mechanical room total 9,000 Gross Square Feet, including the Property, and the Property is 3,000 Gross Square Feet (not including the mechanical room), and the mechanical room is 100 square feet, then the Property represents 33.3% of the total Gross Square Feet in the building using the mechanical room, and 33 square feet would be included as part of the Gross Square Feet of the Property. If the Property as conveyed to Buyer at Closing is less than 3000 Gross Square feet then the purchase price of $1,030,000.00 shall be reduced for every Gross Square foot less than 3000 Gross Square feet by the price per Gross Square foot based upon 3000 Gross Square feet. The price per Gross Square foot at 3000 Gross Square feet is $343.33. By way of example and not limitation: If the property conveyed to Buyer at closing is 2900 Gross Square feet then the purchase price would be $995.666.70 (343.33 x 100 = 34,333.33) (110301000.0'0 ~ihus 34,333.33 = 995.666.70). The entire proposed condominium to be constructed, of Which Unit__ is a part, is referred to herein as the "Project". 5. FINISH AND TENANT IMPROVEMENTS. The P~operty shall be delivered to Buyer as a shell with exterior walls and insulation, basement slab and unfinished ceiling above basement, sheathed floor between garden level and ground level and unfinished ceiling above ground level. Electric, basic telephone, water, sewer and heat shall be roughed in to the exterior walls/basement slab/interior floors/ceilings. Seller shall pay a maximum of $200,000.00 for finish items and tenant improvements ("Finish and Tenant Improvements") which sum shall be included as part of the purchase price. Seller and Buyer shall reach a written agreement on or before February 28, 2004, as to the type, quantity and quality of such finish items and tenant improvements. Construction of agreed upon finish and tenant improvements shall be completed prior to August 31,2006, subject to Paragraphs 7, 8 and 10 below. Seller, through its contractor, shall control construction and installation of the finish items and tenant improvements. 6. CONSTRUCTION. Seller shall cause the improvements to be constructed on the Property in accordance with the Building Plans and Material Specifications in a good and workmanlike manner. Buyer, by way of its signature on this Contract hereby acknowledges receipt of a copy of the attached Building Plans and Material Specifications and Buyer's agreement with the Building Plans and Material Specifications including all schedules included therewith. 7. CLOSING MATTERS. The closing for this transaction shall take place Five (5) days following the later of the date Of approval of the Final inspec{ion by the Aspen/Pitkin County Building Department ("Final Inspection") for fully constructed Unit __ or the date of Final Approval by the City of Aspen of the Condominium Map and recording of same with the clerk and recorder of Pitkin COUntY COlorado. The Condom num DeclaratiOn shall state that the hOurs of operation for the Aspen Chamber Resort Association shall be no longer than from 9!00 AiM. through 7:00 P.M. seven (7) days per week, and shall further provide that such hours shall not be changed absent approval by all owners of 100% of the common elements. At the closing for Unit the Seller agrees to escrow one hundred twenty five percent (125%) of the estimated amount of money necessary to complete Unit per the Building Plans and Mater a Specifications, and per agreement as to FiniSh and Tenant imProvements. This money will be held to ensure the completion of the Punch List described in Paragraph 8 below. All Closing documents shall be in form and substance reasonably satisfactory to both parties, and standard in the Aspen area~ Association dues for the year in which Closing occurs, if any, shall be prorated between Seller and Buyer as of the date of closing. At closing, Seller shall deliver possession of the Unit to Buyer "broom clean" free of any refuse, construction debris, or other materials. Closing shall occur at the offices of Pitkin County Title, Inc. in Aspen, Colorado. 8. ESCROW OF FUNDS FOR PUNCH LIST, For purPoses of this Paragraph 8 the term "punch list" shall mean a list of items to be corrected or completed as required in Paragraph 7 above in regard to construction of the Property in accordance with the scope of this Contract, or as shown on the Building Plans and Material Specifications and/or agreement as to Finish and Tenant Improvements, but not including landscaping. Buyer and Seller shall, as diligently as practical, after Final 2 Inspection by the s~_~/en/Pitkin Building Departme. e.e~, develop a mutually acceptable punch list of items to be corrected or completed in regard to construction of the Property all of which shall be completed, repaired or adjusted as soon as practical and Seller shall use good faith efforts to complete such items. Seller shall escrow an amount equal to 125% of the estimated cost to complete the punch list. In the event the parties cannot agree on the amount of money necessary to complete the construction of Unit Buyer and Seller agree that Bill Poss, the project architect (the "Project Architect") shall determine the appropriate amount f°r the escroW. The Buyer and Seller will split equally the cost of the Project Architect. The Project ArChitect's determination of the escrow amount will be final and binding uPOn Buyer and Seller. The escrowed funds shall be paid to Pitkin County Title, Inc. ("EscrOw Agent"). UPon delivery of bills to the Escrow Agent as unfinished items are completed, accompanied by a written authorization to release funds signed by the Project Architect, the Escrow Agent will deliver the money from the escrow to the Seller. UpOn the completion of the Property Per the Building Plans and Material Specifications and Finish and Tenant Improvements, the receipt of the Final Inspection, and completion of the punch list pursuant to Paragraph 15 below of this Addendum, any monies remaining in escrow will be delivered by Escrow Agent to Seller. All escroW funds shall be invested in a local bank acCeptable to Buyer in an interest bearing money market fund with all interest accruing to Seller, with Seller or Escrow Agent as named beneficiary. The parties shall diligently proceed in good faith and develop an escrow agreement mutually acceptable to both parties to effectuate the foregoing provisions; In the event the parties cannot agree upon a mutually acceptable escrow agreement, such failure to agree shall not be deemed grounds for termination of this Contract. Instead, this Contract shall be deemed to be the escrow agreement between the parties and shall be interpreted in a commercially reasonably manner so as to effect the intent expressed herein. With respect to any landScaping, Seller shall use reasonable effort to complete any landscaping as soon as is reasonably practicable; however, if Seller deems it reasonably necessary, Seller shall have the next growing season after closing in which to complete the landScaping. 9. CONSTRUCTION WARRANTY ASSIGNMENT. Seller shall assign to Buyer the warranties, if any, concerning the ProPerty to the extent they are assignable including, but not limited to, warranties as to any electrical or other mechanical systems and appliances. Se!ler agrees that the construction work is warranted to be reasonably free from defects in materials and/or workmanship for a period of one (1) year immediately following date of substantial completion of construction of the Property. Date of "Substantial Completion" shall mean date of approval of Final Inspection. 10. APPROVALS. This Contract is expressly contingent upon Seller's receipt of all necessary approvals from City of Aspen. Said approvals are as follows: (a) land use approvals which Seller must be granted to build the Project include Historic Preservation Committee and COWOP from the Aspen City Council; (b) all approvals connected with the issuance of all necessary building permits for the Project; (c) after construction, but prior to of the sale and purchase of the Property, final approvals which Seller must be given include condominiumization, final condominium map approval, and Final Inspection. All such approvals shall be processed at the sole expense of Seller, and must be satisfactory to Seller in Seller's sore and absolute discretion. All approvals described above shall be made or given by the appropriate City agency having jurisdiction over the particular approval no later than May 1, 2004 ("Land Use Approval Deadline"). All approvals described in subparagraph (b) above shall be made or given by the appropriate City agency having jurisdiction over the particular approval no later than August 15, 2004 ("Building Permit Approval Deadline"). All approvals described in subparagraph (c) above shall be made or given by the appropriate City agency having jurisdiction over the particular approval no later than August 15, 2006 ("Post Construction Approval Deadline"). In the event Seller does not receive the required approvals described in subparagraphs (a) and (b) above by the Land Use Approval Deadline and/or Building Permit Approval Deadline, as the case may be, then under either scenario or both Seller may terminate this Contract, or in the alternative may extend the Land Use Approval Deadline and/or Building Permit Approval Deadline, as the case may be, for an additional period of time equal to ninety (90) days immediately following expiration of the particular approval deadline described in subparagraphs (a) and (b) above which was not met ("Land Use/Building Permit 90 Day Extension"). Termination shall be accomplished by delivering written notice of termination to the Buyer. Extension shall be accomplished by written notice delivered to Buyer as to extension. Failure of Seller to terminate or extend within 3 days immediately following expiration of the of the particular approval deadline described in subparagraphs (a) and (b) above shall cause this Contract to immediately and automatically terminate. If the Seller exercises its option to extend according to the Land Use/Building Permit 90 Day Extension in a timely fashion with respect to either the Land Use Approval Deadline and/or the Building Permit Approval Deadline, or both, and Seller does not receive all required approvals on or before expiration of the 90 Day Extension, then this Contract shall automatically terminate at 5:00 P.M.M.D.T. on the date of expiration of the Land Use/Building Permit 90 Day Extension. In the event of termination of the Contract under the above described Land Use Approval Deadline and/or the Building Permit Approval Deadline scenario, as the same may be extended or by virtue of automatic termination, Buyer's earnest money, together with all interest earned thereon shall be returned to Buyer. In the event Seller does not receive all the required approvals described in subparagraph (c) above by the Post Construction Approval Deadline, then either party may terminate this Contract or in the alternative both parties may extend the Post Construction Approval Deadline for an additional Period of time equal to ninety (90) days immediately following exp!,ration of the post COnstruction Approva Deadline ("Post Construction 90 Day Extension ). Termination shall be aCcomPlished by delivering written notice of termination to the other party. Extension shall be accomplished by written agreement between the parties as to extension. Failure to terminate or agree to the Post Construction 90 Day Extension within 3 days immediately following expiration of the Post Construction Approval Deadline Shall cause this Contract to immediately and automatically terminate. If the parties agree to the Post Construction 90 Day Extension in a timely fashion but Seller does not receive all required approvals on or before expiration of the Post Construction 90 Day Extension, then this Contract shall automatically terminate at 5:00 P.M. MiD.T. On date of exPiration of the Post Construction 90 Day Extension. If the parties agree to the Post Construction 90 Day Extension and all required approvals are obtained prior to expiration of the Post Construction 90 Day Extension, then Closing shall occur five (5) days immediately after the date that the last of all required approvals is obtained. In the event of termination of the Contract under the above described Post Construction APproval Deadline scenario by either of the parties or by virtue of automatic termination Buyer's earnest money, together with all interest earned thereon shall be returned to Buyer provided; however, that if Seller has delivered notice that Seller is ready to commence construction of Finish and Tenant Improvements as described under Paragraph 2 above of this Addendum then all earnest money plus all interest accrued thereon shall become the property of Seller. Seller shall have the right but not the obligation to file an appeal of any denial of any application for approval which application was required by the City of Aspen for the Project. '1t. REPRESENTATIONS OF SELLER. Seller rePresents and warrantS to Buyer that: (a) Seller is a limited liability partnership duly organized and validly existing under the laws of Colorado; all documents executed by Seller, including, but not limited to, any documents which are to be delivered to Buyer at closing are, and will be, duly authorized; the partner executing the same shall have all requisite power to do so and said documents are the legal, valid and binding obligation o[ Seller and do not violate any provision of any agreement to which Seller may be a party. 4 (b) Seller has no actual knowledge of any action, suit proceeding, claim, or governmental investigation affecting the Property or any portion thereof, pending or threatened before any court, administrative agency or similar forum. (c) Seller will obtain a valid permit issued by the City of Aspen authorizing the construction of the Project in accordance with the Building Plans. 12. FIRE. If the Property is damaged by fire or other casualty prior to Closing and Seller is obligated to repair the same under Paragraph of the Printed Contract before Closing, such repairs shall be done in a manner so that the improvements, as repaired, satisfy the criteria for construction of improvements set forth herein. If Buyer elects to consummate the Closing notwithstanding such damage and such damage is not repaired by Seller, then Buyer shall be entitled to a credit for the insurance proceeds resulting from such damages plus any deductible. 13. ACCESS TO PROPERTY FOR INSPECTION,~. Upon full execution of this Contract, and prior to the date of Closing, Buyer, or Buyer's designated agents, shall be entitled to enter upon the Property for the purpose of making inspection thereof and condUcting such tests and observations as Buyer may deem appropriate. Buyer shall pay when due all fees and expenses incurred in the performance of such tests and observations and shall indemnify, defend, and save Seller harmless from any loss from claims for nonpayment of such charges, and/or claims for damage to property, personal injury, or death. Buyer agrees to provide Seller reasonable notice of such inspections or tests and shall not unreasonably interfere with Seller's use of the Property while conducting such inspections Or tests. The foregoing notwithstanding, any entry onto the Property by Buyer shall not interfere with Construction of the Project. 14. CONDEMNATION. In the event of Condemnation or receipt of notice of condemnation or taking of the Property, or any portion thereof, by governmental authority prior to the date of Closing, Buyer shall have the option to terminate this Contract by delivering written notice to Seller, or Seller's agent, in which event all earnest money or things of value placed hereunder, plus all interest accrued thereon, shall be immediately returned to Buyer. Thereafter, this Contract will be null, void, and of no further force or effect, and the parties hereto shall be relieved of any further duties of performance hereunder. If the Buyer does not elect to terminate this Contract, then Closing hereunder shall be consummated as herein provided without reduction of the purchase price, but all condemnation awards or payments shall be paid or assigned to the Buyer at Closing. In no event shall Seller be under any duty to Buyer to restore the Property following a condemnation. 15. ESCROW AGENT. This Contract shall constitute escrow instructions to the Escrow Agent, or such other reputable escrow agent located in Colorado as Seller may elect. Any other provisions of this Contract to the contrary notwithstanding: (a) all money, documents and other items required hereunder to be paid or delivered by any party to another party shall be deposited on or prior to the date of Closing with Escrow Agent for payment or delivery to such other party; (b) when the Escrow Agent ascertains to its reasonable satisfaction that it is ready and able upon Closing to issue the title insurance policy as provided in the Contract, and when the Escrow Agent holds all funds, documents and other items necessary for Closing, the Escrow Agent shall effect the Closing by causing the deed to be recorded in the office of the Clerk and Recorder of Pitkin County, Colorado, and shall instruct said Clerk and Recorder to mail the deed after recordation to Buyer at its address set forth below; and, (c) upon the Closing, the Escrow Agent shall disburse or deliver all funds, documents and other items deposited and then remaining, in escrow to the party 5 entitled thereto pursuant to this Agreement exception escrowed funds for Punch List Escrow described in Paragraph 8 above. Buyer and Seller agree that the Escrow Agent shall be responsible only for the safekeeping of the funds, documents, and other items deposited in the escrow and for the disposition of same in accordance with this Contract, together with the Performance of any other written instructions executed by Buyer and Seller and accepted by Escrow Agent. 16. SELLER'S WITHHOLDING TAX FOR STATE OF COLORADO. Seller and Buyer agree and acknowledge that C.R.S. Section 39-22-604.5 provides that, in the case of any conveyance of a CoJorado real property interest, the person or party providing closing and settlement services shall be required to withhold an amount equal to two percent (2%) of the sales price or the net proceeds resulting from such conveyance, whichever is less, when the transferor is a non-resident of the State of Colorado. Seller shall be obligated to either comply with the withholding requirements of C.R.S. Section 39-22-604~5, Or provide an affidavit in form and content satisfactory to the person or party providing closing and settlement services which certifies that Seller is not subject to theWithholding requirements. 17. BROKER COMMISSION, BUyer~a~ds Seller each represent and warrant to the other that nO person or entity is entitled to ~)..y.-b'rokerage commission, finder's fee or similar payment for any transaction contemplated by this Contract. Each party indemnifies the other against any claim arising as a result of any Broker making a claim against the other with respect to this transaCtion. 18. MISCELLANEOUS. (a) Time Periods. In computing any time period under this Contract, the day of the act or event from which the designated period begins to run shall not be included. The last day of the period so computed shall be included unless it is a Saturday, Sunday, or legal holiday, in Which event such time period shall automatically be extended to 5:00 p.m., M.S.T. on the first regular business day thereafter. (b) Further Assurances. Each of the parties agrees to execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such further instruments and documents and to do all things and acts as the other party may reasonably require in order to carry out the intentions of this Contract and the transactions contemplated hereby. (c) Entire Agreement. This Contract contains the entire agreement between the parties and supersedes all prior understandings, negotiations and representations, written or oral, not contained herein. It may not be amended or modified except by an agreement in writing signed by both parties hereto. (d) Interpretation. No provision of this Contract shall be construed against or interpreted to the disadvantage of any party by reason of such party having, or being deemed to have requested, drafted, required or structured such provision. (e) Controlling Laws. This Contract shall be construed in accordance with and governed by the laws of the state of Colorado. (f) Attorneys' Fees. In the event of any litigation between Seller and Buyer involving the interpretation and/or enforcement of this Contract or any provision hereof, including post-Closing obligations, representations, and warranties of the Seller hereunder, the prevailing party shall be entitled to an award of its costs and expenses (including reasonable costs and attorneys' fees) incurred therein as a part of the judgment or stipulated settlement entered in such litigation. (g) Notice. Any notice required under the Contract shall be deemed delivered by facsimile transmission (as evidenced by the date of ~he transm ssion confirmation from the sending facsimile machine), hand delivery, Or delivered by 6 overnight courier to the following addresses: If to Buyer: The City of Aspen c/o Steve Barwick, City Manager 130 South Galena Street Aspen, CO 81611 Fax: With a copy to: John Worcester, Esq. Aspen City Attorney 130 South Galena Street Aspen, CO 81611 Fax: If to Seller: Lowell Meyer, Manager Millennium Plaza, LLC P.O. Box 1247 Aspen, CO 81612 Fax: 970-025-9094 With a copy to: Gideon Kaufman, Esq. Kaufman, Peterson & Dishler 315 E. Hyman, Suite 305 Aspen, CO 81612 970-925-1090 The parties hereto have executed this Addendum as of the date under their signatures below. BUYER: SELLER: THE CITY OF ASPEN, a Colorado muniCipal corporation By MILLENNIUM PLAZA, LLC, a Colorado limited liability company Date: Date: C:\clients\Millennium Plaza\meyer add 1-2-04 clean.wpd