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HomeMy WebLinkAboutresolution.council.119-00 RF_SOLUTION NO. ~ Series of 2000 A RESOLUTION OF THE CITY OF ASPEN, COLORADO, AUTHORIZING THE CITY MANAGER TO EXECUTE, ON BEHALF OF THE CITY OF ASPEN, A WAIVER OF A RIGHT OF FIRT REFUSAL TO PURCHASE PROPERTY OWNED BY DRACO, INC. WHEREAS, there has been submitted to the City Council a request that the City of Aspen waive its right of first refusal to purchase the Draco Property as described in the appended exhibit; 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 waive its rights as contained in that certain Right of First Refusal for the Draco Property. NOW, WHEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF TI-IE CITY OF ASPEN, COLORADO, that the City manager is hereby authorized to waive any rights the City may have to exercise its rights of first refusal as set forth in that certain "Right of First Refusal" document, a copy of which is appended hereto as Exhibit "A". Dated: <5~ ,2000. I, Katl~n S~. Koch, duly appointed and acting City Clerk do certify that the foregoing is a tree and'ab'curate copy of that resolution adopted by the City Council of the City of Aspen, at h meeting held~ ~ ,2000. ColOrado, Kathryn S. I~hl ~i~fClefk WAIVER AND TERMINATION OF RIGHT OF FIRST REFUSAL Tlqlg AGREEMENT for Waiver and Termination of Right of First Refusal is made this day of .., 2000, by and between the City of Aspen, Colorado. a Colorado municipal corporation, (the "City") and Draco, Inc.. a Colorado corporation, ("Draco"). RECITALS A. By instrument dated November 21, 1989 and recorded in Book 608 at Page 264 of the records of Pitkin County, Colorado. Draco granted to the City of Aspen a right of first refusal relating to the property described in Exhibit "A" attached hereto (the "Right of First Refusal"). B. Draco has proposed the construction of an affordable housing project on a portion of the property described in Exhibit "A". C. Draco has requested that the City release, waive and terminate its Right of First Refusal with the effect that the same shall henceforth be. for 'all purposes, null, void and of no further force and effect. D. By its Resolution No. 119, the City, acting by and through its City Council. has authorized the City Manager of the City waive the Right of First Refusal with the effect that the same shall henceforth, for 'all purposes, be null, void and of no force and effect. NOW, Tg'b2REFORE, the City and Draco hereby agree: I. That the Right of First Refusal recorded in Book 608 at Page 264 of the records of Pitldn County, Colorado, is hereby waived by the City, the property which is the subject thereof, shall for all purposes be released therefrom, and the Right of First Refusal shall for all purposes be henceforth null, void and of no further force and effect. 2. This agreement shall be binding upon the parties hereto, their respective successors and assigns. 3. It shall be a condition of the release of the Right of First Refusal herein contained that the affordable housing project proposed by Draco and approved by the City of Aspen pursuant to Ordinanc~ , Series of 2000, be constructed as approved; and in the event it shall not be constructed, this Waiver and termination may be withdrawn by the City in which event the Right of First Refusal shall be reinstated. I1~ WrrNE$~ ~. OF, the parties hereto have executed this waiver and agreement on the {~' day of ~ ,2000. CITY OF ASPEN. COLORADO St~'phen H. Barwick, City Manager DRACO, INC~~ /, r~-b'. Sto~e Davis, President STATE OF COLORADO COUNTY OF PITY, IN j~ss. The foregoing instrument was acknowledged before me on the ~ day of~, 2000, by Stephen H. Barwick, as City Manager of the City of Aspen. WITNESS MY HAND AND OFFICIAL SEAL. 55' STATE OF COLORADO COUNTY OF PITKIN j~ss. The foregoing instrument was acknowledged before me on the day of , 2000, by D. Stone Davis, as President of Draco, Inc. WITNESS MY HAND AND OFFICIAL SEAL. My commission expires: [s ll Notary Public A parcel of land located in Section 7, Township l0 South, ~ange 84 ~est of ~he 6th P.M., said parcel being mDre particularly described as follows: Beginning at a point on ~e easUerly right-of-way lane of MIL1. ~n tJ~e Townsite of ;~wpen, C~un,~y of ~'itki~, Skate of Colcrado,~ ~ence' ~he Northwest corner of Lot, A,, B~I~ck 86 Of sa~d~ TOw~si.te:-o~ AS!:e. n bears S ~4"50'49" W a d~s,~ance of I63~,68 feet,, the tEue .p0~int of beg£r~ir~,;~' thence N 14"5~'4~''r 5 a~g.~ ~d~ easte~I~: righ~,-of~wayj I~'e. a~'~fI~ stree=, a distance o~ 7~ .~$U f.eat,· t~en'c~, s: ~3. 3~7..~8 E, a ~s =ance of 77.81 Eeet; ~ze. 4'5..~E..E~ ~q~:~9~..~.~c. of~"~]-e~e: ~ ~e .!e'f~, said cu~e ~'~ a, ~,i~; a~;' :5j~.,00.~ a ~D~ral. ~l~e of,-5~3;~'g6.' ] ~'"' c~rd ~ich ~a~$~ S~ 49:7T~1~0~;~'~ E: a% 'a~'~'a~c~ 6~: Q%3~79 feet; theuce S 75"G9'11" S a d:~E~=e, of .,13'~0'~,'r ~eh~e~ s 1t~50"4F' w. a distance of 50.26 Ee~= ~ e.~z~= on ~e'~u~. l:ine a~ a ~rcei of 1~ des~ib~ in ~k 3~6 at: P~e 922~: Of~ ~, .Ee~=~;s. Of. ~e ~erk ~ Re~rder, Pitkin ~y, ~Sd~:. ~:~.N~',:75~0'9~,~':?'' N ~6~g" ~i~.~.uth line a distance of ~'I~. lfg' f~.' ~;~.3~, ~h~:~'f; ~f~i' EXHIBIT A OATES, KNEZEVICH & GARDENSWARTZ, P.C. Au ust 4,200o i¢1 John Worcester, City Attorney --'~ City of Aspen HAND DELIVERED ~: '.:? .... ,;,~z~ 130 S. Galena Street Aspen, CO 81611 Re: Draco, Inc. - Affordable Housing Project/Right of First Refusal Held by the City of Aspen Recorded in Book 608 at Page 264 of the Records of Pitkin County, Colorado Dear John: I appreciate your assistance in the August 10~ meeting with Tom Smith and Stone Davis to go over the Deed Restriction issues on the Draco Affordable Housing Project. I will be submitting revised language for the Condominium Declaration based upon our conversation. The purpose of this letter is, however, to address the Right of First Refusal, which the City of Aspen holds. As you are aware, I had written you earlie, r in the Summer requesting that you ask the City Council to waive the Right of First Refusal on the Draco s property. At the August 10t~ meeting, you asked me to give you reasons why the City should waive this right. By way of background, the Right of First Refusal was granted eleven (11) years ago in connection with the original approval of the Draco property. The idea behind it was that in order to effect the development of the parking garage, certain accommodations needed to be made by Draco for the benefit of the City and by the City, for the benefit of Draco. At that time, Draco agreed, at the City's request, that ffthe Draco property was ever sold that the City would have the first right to obtain it. At that time, the Cap's Auto Parts store was located in the building, and it was thought that a sale of the Draco property might include Cap's Auto as a going concern. Draco owned and operated the Cap's Auto business. That is the reason that the language is drafted the way it is. I seem to recall that the City's thought was that the Draco property could be incorporated in the development of the City's Rio Grande property fi, as and when that occurred. Subsequent to that time, the old Cap's Auto metal shell building has been removed and the Community Bank Building has been constructed. The Draco property is currently occupied by the Bank on the first floor, with offices on the second floor utilized by a law finn and by the Bank. The basement contains the Bank's storage. There are no housing units in the Bank building. Draco has sold the auto parts business. John Worcester, City Attorney August 14, 2000 Page Two At the time the Right of First Refusal was granted in 1989, it was never contemplated that there would be potential for further development of the Draco property. At that time, the affordable housing issues that we have today, although of concern, were not at the forefront. Therefore, the notion of there being a right of first refusal relating to the sale of the property and components such as will occur with the affordable housing condominium units was not taken into consideration either by Draco or by the City. At this point in time, Draco is proposing to build an affordable housing project which will permit the purchase of individual condominium units to be sold at free market values to local employers who will, in mm, rent the units within the condominium project on a deed restricted basis as provided in the land use approval for the project. We have already circulated and obtained contracts on several of the units and would expect commitments on others in the very near future. Draco is anxious to sell the units because that takes the risk out of going forward with the project. If the units are not sold prior to the time that Draco may break ground, Draco will need to make a gut check to determine if the project is feasible to construct and sell. Obviously Draco wishes to proceed with the least possible amount of risk. The sale of the units to employers could very easily include the City of Aspen as a buyer. I am enclosing herewith a price list of the available units together with a map showing the unit locations in the building, and present it for the City's consideration. It would seem to us. however, that the City might do better in its own projects in terms of providing affordable housing forits employees. This may not be the case and, if not, please contact Stone to discuss the purchase of units with the appropriate person in the City.. The existence of a right of first refusal in the City is problematic to Draco inasmuch as it, in and of itself, may have a chilling effect on the saleability of the units. In the sales contracts which we have already, we have not disclosed the existence of the right of first refusal, having assumed (perhaps wrongfully, but innocently), that the City would not be interested in maintaining the right of first refusal on the units in the affordable housing project. The existence of the right of first refusal may also be a problem from the standpoint of purchasers either presently contracted or who may be interested in the units in the future given that they may consider their ability to resell the units to be adversely affected by virtue of the right of first refusal. It would seem to be a better solution, given the deed restriction on the Draco property that the free transfer of the units to employers within the community be permitted without the assertion of a right by the City m purchase the units and preclude or trump a private employer now or in the future from buying the sallie. As to the Bank building on Parcel 1. Draco would like to see the restriction lifted inasmuch as with the changed conditions, we do not believe that the reasons for having the right of first refusal in the first place apply any longer. The Draco property has been redeveloped and now consists of several rental units in that building. The right of first refusal does provide for the potential purchase of the bUSiness activities which occur on the property. As we discussed in the August 10t~ meeting, no one is certain if that would apply m the requirement that the City acquire as well in the event of a sale, the bank and law firm and any such assertion might be bordering on the ridiculous. Therefore, the real question is does the City want to have a right of first refusal on the commercial building or portions of the same when condominiurnized in John Worcester, City Attorney August 1,~, 2000 Page Two the event that Draco should decide to sell the same. We would hope they would not and would be willing to waive the fight of first refusal as an accommodation for the provision of affordable housing. John, I would be more than happy to meet with you and Stone at any time and we would be happy to present our case to the City Council. It is somewhat imperative that we get this particular issue resolved given the on-going marketing efforts to sell the units and the need to deal with the same from the standpoint of our contract and project documentation. Finally, I have enclosed the Master Deed Restriction and Quit Claim Deed with revisions per the August l0b meeting. Very truly yours, Leonard M. Oates LMO/dw Encs. UNIT # PRICE Comments 101 290,~00 2BD, 2Bath, 1st floor, North living room Sold 102 196.000 1 BR 1Bath 1st Floor North living room 201 191,000 1BR 1 Bath. 2nd floor, North facing ? 202 198.000 1BR I Bath, 2nd floor, North facing ? 203 196,000 1BR 1 Bath, 2nd floor, south facing 301 282,000 2BR 2Bath. 3rd floor North Facing Sold 302 282,000 2BR 2 Bath, 3rd floor South facing Sold Sold = verbal commitment ? = Tentative verbal commitment , F;. ',,'-4-. -- RIGHT OF FIRST RE~8,AL ,~. ~ CD Granted this date las~ below signed by Dra¢ot Colorado corporation d/b/a Cap~s Auto Supply, whose address ,10 North Mill Street, Aspen, Colorado Aspen, Colorado, a home rule olty, whose address is c/o City Manager, 130 Sou~h Galena follows: 1. Draco, Inc. is the .fe,e title described in ~he attached this reference, 2. The City of Aspen is adJoini~lg the brace ~roper~y. ~. For consideration of Ten Dollars ($10.00), ~he receipt and sufficiency of whic/~ is hereby acknowledged by Draco~s siena=ute below, the other good and valuable consideration, Draco hereby gran~s to the City of Aspen a Right of First Refusal to purchase the Prate Proper~y aa described o~ Exhibit "A" and al/ after-de,ired real property adjoi.ning that r~al property under the following terms and a. Draco, Inc. shall send written notice of its receipt of a bona fide offer to. purghase ~his proper~y and the terms and conditions =hereof (lnclu~,ing~ without limitation, the documents sett/.ng out ~he o~fer) to t~e City ~f Aspen by cer- tified mail, re~urn receipt requested, to the address recited above. b. The City of Aspen shall have sixty (60) days from the da~e of proper mailing of Draco'a notice to ~uplicate the noticed offer and then a reasonable time theFeafter, at the mu=ual consent of Draco and the ¢i~¥, =o close the purchase transaction. c. The City acknowledges =hat the Cap fa Pro~erty i~clude~ an on-going commercia! operation and ~hat a~ offer ~caived may be for real prope~y, improvements a~d business 4. The City of Aspen shall be responsible for recording this documen~ in the =eel estate records of ~i~kin County, Cole~ redo. 5. This right shall be a covenant running with the land and shall he binding on ~he heirs, successors and assigns of the parties hero~o. A~pen, PiPkin C~,, Colorado.' DRACO, INC., a Colorado ~,,.,, ....... &~ .. · co~ora~on d/b/~ Cap ~ s AvCo ,~'~,~0. I,~?'~' / -- · ' / -~ ~,. ........ ~.~., ~ /). ~. Suppl~ / ' County of Pit~n ) ~ day of ~, l~g, b~ D. S~one ~vx;/~ ~S't,~ ~-~ ~SS ~ ~ ~ OFf.AL .