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HomeMy WebLinkAbout10921RESOLUTION NO. 10921 A RESOLUTION APPROVING A CONTRACT TO BUY AND SELL REAL ESTATE BETWEEN PUEBLO AND THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO RELATING TO LOTS 3 AND 4, BLOCK 1, HISTORIC ARKANSAS RIVERWALK PROJECT, FILING ONE, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO. that: SECTION 1 The Contract To Buy and Sell Real Estate dated January 22, 2007 between Pueblo and The Urban Renewal Authority of Pueblo, Colorado and the Special Warranty Deeds and Promissory Note relating to Lots 3 and 4, Block 1, Historic Arkansas Riverwalk Project, Filing One, Pueblo County, Colorado, copies of which are attached hereto, having been approved as to for by the City Attorney, are hereby approved. SECTION 2 The President of the City Council is authorized to execute and deliver the Contract and Special Warranty Deed in the name of the City and the City Clerk is authorized and directed to affix the seal of the City thereto and attest same. BY Randy Thurston Councilperson APPROVED: a President of Cit Council ATTESTED BY: CITY CLERK INTRODUCED January 22 2007 PCsp /0921 D �I D 0 �I D Background Paper for Proposed RESOLUTION AGENDA ITEM # / J DATE: January 22, 2007 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING A CONTRACT TO BUY AND SELL REAL ESTATE BETWEEN PUEBLO AND THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO RELATING TO LOTS 3 AND 4, BLOCK 1, HISTORIC ARKANSAS RIVERWALK PROJECT, FILING ONE, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME ISSUE Should City Council approve the sale of Lots 3 and 4, Block 1, Historic Arkansas Riverwalk Project, Filing One? RECOMMENDATION Approve the sale. BACKGROUND Lots 3 and 4, Block 1, Historic Arkansas Riverwalk Project, Filing One, ( "Lots ") are proposed to be sold to the Urban Renewal Authority for a purchase price of $207,983 based on $18.00 per square foot. The purchase price when paid will be deposited in the private land sale fund established by the Intergovernmental Agreement creating the HARP Authority to be used for development and maintenance of HARP as determined by the City Council. The purchase price will be paid by the Urban Renewal Authority executing its promissory note for $207,983 payable $40,000 in 4 annual installments and one annual installment of $47,983 starting August 1, 2007. The Lots will be developed pursuant to development plans approved by the HARP Authority and redevelopment agreements between the Urban Renewal Authority and the developer. FINANCIAL IMPACT See Background. CONTRACT TO BUY AND SELL REAL ESTATE THIS CONTRACT entered into as of January 22 2007 between City of Pueblo, a Municipal Corporation (the "Seller ") and the Urban Renewal Authority of Pueblo, Colorado, a body corporate and politic of the State of Colorado (the "Buyer "), WITNESSETH: Recitals A. Seller is the owner of certain land located in Pueblo County, Colorado. B. Buyer is desirous of purchasing the land from Seller. C. Seller is willing to sell the land to Buyer upon the terms and conditions hereinafter set forth. Agreement NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants contained herein, Seller and Buyer agree as follows: 1. Pro e . Seller agrees to sell and Buyer agrees to purchase the unimproved land legally described as Lots 3 and 4, Block 1, Historic Arkansas Riverwalk Project, Filing One, City of Pueblo, County of Pueblo, State of Colorado (the "Property ") on the terms and conditions set forth in this Contract. 2. Purchase Price and Terms The purchase price of the Property shall be $207,983.00 and shall be paid by delivery of the Promissory Note attached hereto as Exhibit A duly executed by Buyer on Closing Date contemporaneously with Buyer's receipt of the Special Warranty Deed described in paragraph 6 hereof. 3. Evidence of Title Buyer shall at its expense obtain title insurance and satisfy itself as to the condition of title to the Property. If Buyer is not satisfied with the condition of title, Buyer may terminate this Contract by written notice given to Seller within thirty (30) days from date hereof. 4. Inspection Buyer or any designee, shall have the right to have inspection of the physical condition of the Property at Buyer's expense. Buyer is responsible for and shall pay for any damage which occurs to the Property as a result of such inspection. If Buyer is not satisfied with the physical condition of the Property, Buyer may terminate this Contract by written notice given to Seller within thirty (30) days from date hereof. 5. Date of Closing Closing shall take place within forty-five (45) days after the date of this Contract. The date of Closing and the hour and place of Closing shall be as designated by Seller ( "Closing Date "). 6. Transfer of Title Subject to delivery of Exhibit A, and compliance by Buyer with the other terms and provisions hereof, Seller shall execute and deliver to Buyer the Special Warranty Deed attached hereto conveying title to the Property to Buyer subject to the restrictions, reservations, covenants, easements, and conditions contained in the Special Warranty Deed. Lots 3 and 4 comprising the Property are planned to be developed by different developers, therefore each Lot will be conveyed to Buyer by separate Special Warranty Deed in substantially the form as the Special Warranty Deed attached hereto. Condition of the Property Buyer warrants, agrees and acknowledges that: (a) Other than the warranty of title contained in the Special Warranty Deed, Seller has not made and hereby disclaims any warranty or representation, express or implied, with respect to the Property or any aspect, portion or component of the Property, including, but not limited to: (i) the condition, nature, quantity, or quality of the Property, including, but not limited to, the quality of soils on or under the Property; (ii) the fitness of the Property for any particular use; (iii) the presence or suspected presence of hazardous materials on, in, under or about the Property; (iv) the financial benefits, income, expenses, profits or losses to be achieved, derived or incurred as a result of the ownership, operation, leasing, renovating, or management of the Property; or (v) compliance with existing or proposed governmental laws or regulations applicable to the Property, or the further development or changing use thereof, including environmental laws and laws or regulations relating to zoning, land use, subdivision or buildings, or the existence of any approvals or authorizations of any kind or nature of or from any governmental authority. (b) In entering into this Contract, Buyer has not relied on any representation, statement, or warranty of Seller, other than the warranty of title contained in the Special Warranty Deed, or anyone acting for or on behalf of Seller, and all matters concerning the Property have been or will be independently verified by Buyer. If Buyer purchases the Property, Buyer agrees that it shall have relied entirely on its own investigation, examination and inspection of the Property and all matters pertaining thereto; Buyer is purchasing the Property "AS IS, WHERE IS" "WITH ALL ITS FAULTS" in its condition on the Closing Date. 8. Closine Costs, Documents and Services Buyer and Seller shall sign and complete all customary or required documents at or before Closing. Fees for real estate closing services, if any, shall be paid at Closing by Buyer. 9. Prorations General taxes for the year of Closing, if any, based on the taxes for the calendar year immediately preceding Closing, assessments, water, sewer, utility charges and other usual and customary items shall be prorated to date of Closing. 10. Possession Possession of the Property shall be delivered "AS IS, WHERE IS, WITH ALL ITS FAULTS" to Buyer by Seller on Closing Date. 11. Time of Essence/Remedies Time is of the essence hereof. If any obligation is not performed there shall be the following remedies: (a) If Buyer is in Default Seller shall have the right to specific performance but not to damages. -2- (b) If Seller is in Default Buyer shall have the right to specific performance but not to damages. (c) Costs and Expenses Anything to the contrary herein notwithstanding, in the event of litigation arising out of this Contract, the court shall award to the prevailing party all reasonable costs and expenses, including attorney fees. Venue and jurisdiction for any such litigation shall exclusively be in the Colorado District Court for Pueblo County, Colorado. 12. Representations and Warranties of Seller The Seller represents and warrants to Buyer as follows: (a) Seller has full power, capacity and authority to execute and deliver this Contract and all other documents required to be executed and delivered by Seller under this Contract and to perform its obligations hereunder. (b) This Contract has been, duly authorized, executed and delivered by Seller and constitutes, the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with its terms. 13. Representations and Warranties of Buyer Buyer represents, warrants and covenants as follows: (a) Buyer has full power, capacity and authority to execute and deliver this Contract and all other documents required to be executed and delivered by Buyer under this Contract and to perform its obligations hereunder. (b) This Contract has been duly authorized, executed and delivered by Buyer and constitutes the legal, valid and binding obligations of Buyer, enforceable against Buyer in accordance with its terms. 14. Notices Any notice required or permitted to be given or delivered under this Contract shall be in writing and shall be given: (a) If to Seller, by personal delivery, or by the United States Postal Service, by registered or certified mail, postage prepaid, addressed to: City Manager City of Pueblo 1 City Hall Place Pueblo, Colorado 81003 (b) If to Buyer, by personal delivery, or by the United States Postal Service, by registered or certified mail, postage prepaid, addressed to: -3- Urban Renewal Authority of Pueblo, Colorado 211 E. "D" Street Pueblo, Colorado 81003 Attention: Mike Tedesco , or to such other address or person as any party may from time to time specify in a writing delivered to the other party in the manner provided in this paragraph. Notices given hereunder shall be deemed given, in the case of personal delivery, on the date delivered, in the case of delivery by mail, on the second business day after delivery to the United States Postal Service. 15. Assignment This Contract shall not be assignable by Buyer without Seller's City Council's prior written consent which may be arbitrarily withheld. Except as so restricted, this Contract shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. 16. Modification No subsequent modification of any of the terms of this Contract shall be valid or binding upon the parties or enforceable unless made in writing and signed by the parties. 17. Entire Contract This Contract constitutes the entire contract and agreement between the parties relating to the subject matter hereof, and any prior statements, representations or agreements pertaining thereto, whether oral or written, have been merged and integrated into this Contract. 18. Cations The captions in this Contract are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Contract or any of the provisions hereof. 19. Validi . If any provision of this Contract shall be held to be invalid or unenforceable, the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Contract. 20. Applicable Law This Contract will be construed and enforced in accordance with the laws of the State of Colorado (without giving effect to its choice of law principles). 21. Interpretation Whenever the context so requires, the singular number shall include the plural and the plural the singular, and the use of any gender shall include all genders. 22. Survival of Representation Except for the representations of Seller contained in paragraph 12 which shall survive the Closing of the transaction contemplated hereby, no other representations or warranties of Seller, if any, in this Contract shall survive the Closing of the transaction contemplated hereby. The representations, warranties, covenants and agreements of Buyer in this Contract are and shall be construed to be covenants running with the Property, shall survive the Closing of the transaction contemplated hereby, may be enforced by Seller after Closing Date, and shall not be merged or be deemed to be merged into the Special Warranty Deed. -4- 23. Counterparts This Contract may be executed in one or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one agreement. 24. Third Parties Buyer and Seller are the only parties to this Contract and are the only parties entitled to enforce this Contract. Nothing contained in this Contract nor any provision hereof is intended to give or shall be construed to give or confer, directly or indirectly, or otherwise, upon any third party any right, remedy or benefit hereunder. IN WITNESS WHEREOF, the parties have signed this Contract as of the day and year first above written. SELLER PUEBLO, A MUNICIPAL CORPORATION By �- PrAtzt6nt of the City Council Attest: City rk Approved as to form: City Attome BUYER URBAN RENEWAL AUTHORITY OF PUEBLO, ORADO N e: (5 *Y (__ (LLO At st: Name [.e 77A co Title: !fX- _ , c , ;V--O C -a-1 City Attorney GiCITMRA \HARP Lots 3 & 4 wpd ��� TAX INCREMENT SPECIAL FUND PROMISSORY NOTE U.S. $207,983.00 Pueblo, Colorado .2007 FOR VALUE RECEIVED, the undersigned (Borrower) promise(s) to pay to Pueblo, a Municipal Corporation or order (Note Holder), the principal sum of Two Hundred Seven Thousand Nine Hundred Eighty -Three and No /100 U.S. Dollars ($207,983.00), without interest. Principal shall be payable at the office of Note Holder's Director of Finance, I City Hall Place, Pueblo, Colorado 81003, or such other place as the Note Holder may designate, in four (4) successive annual payments of Forty Thousand and No /100 U.S. Dollars ($40,000.00), due on the first day of each August, beginning August 1, 2007 and one (1) payment of Forty -Seven Thousand Nine Hundred Eighty -Three and No /100 U.S. Dollars ($47,983.00) due on August 1, 2011. Such payments shall continue until the entire indebtedness evidenced by this Note is fully paid; provided, however, if not sooner paid, the entire principal amount outstanding shall be due and payable on August 1, 2011. Payments hereunder shall be made exclusively from (1) that portion of property tax increment revenues allocated and paid to the Borrower pursuant to the provisions of Section 31 -25- ] 07(9)(a)(II), C.R. S., and derived from the boundaries of the Urban Renewal Plan for the Phase One Urban Renewal Project for Downtown Pueblo as such boundaries existed on February 15, 2005, and (2) any other property or sales tax increment revenues available and paid to the Authority that are not encumbered or pledged to payment of bonds or other obligations of the Borrower as of the date of this Note unless such revenues have been released from such obligation or pledge. Specifically, the obligations of the Borrower under this Note shall be subordinate to and shall not encumber any revenues pledged to payment of the Urban Renewal Authority of Pueblo, Colorado, Refunding Revenue Bonds (Phase One Urban Renewal Project) Series 2005, in the aggregate principal amount of $7,310,000 and the Urban Renewal Authority of Pueblo, Colorado, Revenue Bonds (Expanded Urban Renewal Project) Series 2006, in the aggregate principal amount of $9,500,000; except to the extent that such revenues may have been released from any such pledge and returned to the Borrower pursuant to the respective Indentures governing such bonds. If any payment required by this Note is not paid when due, the entire principal amount outstanding and accrued interest thereon shall at once become due and payable at the option of the Note Holder upon thirty (30) days prior written notice given to Borrower by Note Holder. The Note Holder shall be entitled to collect all reasonable costs and expense of collection and /or suit, including, but not limited to reasonable attorneys' fees. Borrower may prepay the principal amount outstanding under this Note, in whole or in part, at any time without penalty. Any partial prepayment shall be applied against the principal amount outstanding and shall not postpone the due date of any subsequent payments or change the amount of such payments. Presentment, notice of dishonor, and protest are hereby waived by Borrower and all other EXHIBIT "A" makers, sureties, guarantors and endorsers hereof. This Note shall be the joint and several obligation of Borrower and all other makers, sureties, guarantors and endorsers, and their heirs, personal representatives, successors and assigns. URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO Name: Title: Borrower's Address: 211 E. "D" Street Pueblo, Colorado 81003 -2- SPECIAL WARRANTY DEED THIS DEED, made this day of , 2007 by and between Pueblo, a Municipal Corporation (herein "Grantor ") and the Urban Renewal Authority of Pueblo, Colorado, a body corporate and politic of the State of Colorado (herein "Grantee "), WITNESSETH: That Grantor for and in consideration of the sum of $10.00 and other good and valuable consideration to Grantor in hand paid by the Grantee, the receipt and sufficiency whereof is hereby confessed and acknowledged, has granted, bargained, sold and conveyed, and by these presents does grant, bargain, sell, convey and confirm unto the Grantee, its successors and assigns forever, all the real property legally described as Lot 3, Block 1, Historic Arkansas Riverwalk Project, Filing One, City of Pueblo, County of Pueblo, State of Colorado (herein 'Property), with all its appurtenances, and warrant title to the same against all and every person claiming the whole or any part thereof, by, through or under the Grantor, subject to easements, rights of way, covenants, restrictions and reservations of record and easements for existing utilities, sanitary sewer, water, irrigation and natural gas lines on, over or under the Property and to the covenants, conditions, and restrictions set forth and contained in the Construction Covenants and Protective Covenants attached hereto and incorporated herein as if set out herein in full which are and shall be construed to be covenants running with the land and binding upon the Grantee, its successors and assigns and inuring to the benefit of the Grantor, its successors and assigns. Invalidation of any one of the foregoing covenants, conditions, restrictions or reservations by judgment or court"order or otherwise shall not affect any of the other of said covenants, reservations, restrictions or conditions which shall remain in full force and effect. Grantor shall have the right to enforce the restrictions, covenants and conditions hereof by injunction or other lawful procedure and to recover damages, costs, expenses, including reasonable attorney fees, resulting from any violation thereof or arising out of their enforcement. URBAN RENEWAL AUTHORITY [SEAL] OF PUEBLO, COLORADO ATTEST: By Executive Secretary Name: Title: [SEAL] ATTEST: City Clerk COUNTY OF PUEBLO STATE OF COLORADO ss. PUEBLO, A MUNICIPAL CORPORATION President of the City Council The foregoing instrument was acknowledged before me this day of 2007 by as and as of the Pueblo Urban Renewal Authority of Pueblo, Colorado, a body corporate and politic of the State of Colorado. Witness my hand and official seal. My commission expires: [SEAL] COUNTY OF PUEBLO ) ) ss. STATE OF COLORADO ) Notary Public The foregoing instrument was acknowledged before me this day of , 2007 by as President ofthe City Council, and Gina Dutcher as City Clerk of Pueblo, Colorado, a Municipal Corporation. Witness my hand and official seal. My commission expires: [SEAL] Notary Public G: \CRriIIRAViARp Lots 3 & mspeciil Warremy Deed wpd —2— EXHIBIT H CONSTRUCTION COVENANTS 1. Introduction Pueblo, a Municipal Corporation ( "City "), owns substantial real estate adjacent to, and in the vicinity of, the land being conveyed by the deed to which these Construction Covenants (the "Covenants ") are attached and made a part of (the "Deed "), which land City anticipates developing as part of its Historic Arkansas Riverwalk of Pueblo development (such land owned by City is referred to as the "HARP Development"). It is essential to the HARP Development that the land being conveyed by the attached Deed (the "Property") be timely developed in a manner consistent with the overall HARP Development. Consequently, these Covenants are hereby placed on the Property. 2. Applicability These Covenants apply to the Urban Renewal Authority of Pueblo, Colorado ( "Buyer "), to all of the Property and to any individual or entity having any interest in the Property after the date of the attached Deed. These Covenants supplement the Protective Covenants that are also attached to this Deed, the terms of which are also binding upon Buyer and subsequent owners, occupants or others with an interest in the Property. 3. Time to Commence Construction 3.1 Construction Within eight (8) months after the date of this Deed, or such later date as City may designate by instrument filed for record in the office of the Pueblo County Clerk and Recorder, construction shall have commenced on the Property. Commencement of construction is defined as building permits having been obtained from the Pueblo Regional Building Department and foundations having been poured for permanent improvements that have been approved by the City's Department of Public works and the HARP Authority. All building permits and construction shall be according to development plans that have been approved by City's Department of Public Works and the HARP Authority as required by the Protective Covenants. Buyer will promptly notify City and the HARP Authority when it obtains the required building permits and when the foundations have been poured. 3.2 Acknowledement of Compliance All building permits and construction shall be in accordance with development plans which have been approved by the Architectural Review Board, City Council and the HARP Authority as required by the Protective Covenants. After commencement of construction as required by Section 3.1 above, and if requested by Buyer, City shall execute and deliver a writing duly signed and acknowledged stating that construction has been so commenced and releasing City's right to repurchase the Property pursuant to Section 6.1 below on account of failure to commence construction. 4. Completion of Construction Construction of the improvements, once commenced, shall be diligently pursued. Construction will commence as soon as possible after closing. After construction has commenced, if no substantial construction is performed on uncompleted improvements for a period of six consecutive months (unless such delay is caused by one or more of the events listed in Section 5 below), then City shall have the right to repurchase all of the Property, together with all improvements located on it. City shall also have the right to repurchase all of the Property, including improvements, if any building on the Property on which construction has commenced has not been substantially completed within one year after commencement of construction. A building shall be deemed substantially completed if the Pueblo Regional Building Department has issued a certificate of occupancy for the building. The repurchase shall be on the terms provided in Section 6 below. 5. Unavoidable Delays In the event the obligation to obtain building permits, commence construction or complete construction in accordance with the provisions of Sections 3 and 4 shall be unavoidably delayed by fire, flood, drought or other act of God; strikes or material shortages; war or national emergency; governmental impositions, including building permit moratoria and utility moratoria (but not including failure to obtain governmental approvals of development plans); or other similar cause beyond the reasonable control of Buyer, then the period of time prescribed for performance of such obligations shall be extended for periods equivalent to the periods of such unavoidable delays, provided that within 30 days of the occurrence of such unavoidable delay City shall have received notice of the cause thereof, and that at the end of each such period of unavoidable delay City shall have received notice of the period by which times for performance of such obligations are required to be extended. 6. Repurchase Failure to comply with the provisions of either Section 3 or Section 4 shall be an event of default under these Covenants. An event of default shall, in addition to any other remedy it may have, entitle City to repurchase the Property from Buyer as follows: 6.1 Before Construction Commences If construction has not been commenced on the Property, the "Repurchase Price" shall be for Lot 3 - $99,371.00, and for Lot 4 - $108,612.00, Block 1, Historic Arkansas Riverwalk Project, Filing One. 6.2 After Construction has Commenced If construction has commenced on the Property, the Repurchase Price shall be the amount determined by Section 6.1 plus Buyer's "Direct Costs." "Direct Costs" are the actual direct costs of labor and materials incorporated into the improvements located on the Property, exclusive of any compensation for architects, engineers, executives, office or supervisory employees of Buyer, and exclusive of construction loan interest and Buyers general overhead. Upon City's delivery of a Notice of Default as provided in Section 6.3 below, Buyer will, within 30 days after such Notice of Default, give City an accounting 0 of Direct Costs, together with such documents as City may request substantiating this accounting (such as bills, invoices, construction loan draw requests, copies of checks, and similar documents and verifications). 6.3 Notice of Default If City believes Buyer is in default of its obligations to commence or complete construction under Section 3 or Section 4 above, it shall, within 30 days after it believes such default occurred, deliver to Buyer a notice stating the default (the "Notice of Default"), together with a request for an accounting of Buyer's Direct Costs, as specified in Section 6.2 above. Failure of City to give the Notice of Default shall terminate City's repurchase rights under this Section 6 on account of that specific default. If Buyer believes it is not in default, it shall, within 5 calendar days after receipt of the Notice of Default, deliver to City a notice stating why it believes it is not in default, and if no such -notice is delivered, it shall be conclusively presumed that Buyer is in default as specified in the Notice of Default. 6.4 Notice of Exercise If City has delivered the Notice of Default required by Section 6.3, and if Buyer is in default as specified in that Notice, then City shall have the right to repurchase the Property and the improvements located thereon by delivering to Buyer a notice stating City intends to repurchase (this notice is called "Exercise'). If City has not Exercised on or before: (a) sixty days after the Notice of Default was delivered if the default occurred prior to commencement of construction, or (b) sixty days after the accounting of Direct Costs (together with supporting documents) was delivered to City pursuant to Section 6.2 if the default occurred after commencement of construction, then City's right to repurchase contained in this Section 6 on account of the matters specified in the Notice of Default shall terminate. 6.5 Closine Closing of the repurchase shall be at a time and place selected by City, but in no event later than 30 days after Exercise. At closing: (a) Buyer shall deliver an updated title commitment and its general warranty deed transferring title to the Property (including all improvements and appurtenant easements, if any), to City. This general warranty deed shall be subject only to the matters set forth in the Deed and existing on the date of the Deed to which these Covenants are attached, exclusive of any such matters that arose from Buyer's activity with respect to the Property. Within 10 days after the closing, Buyer shall, at its expense, deliver to City a title insurance policy issued by Transnation Title Insurance Company ("Title Company'), insuring marketable tide to the Property in City in the amount of the Repurchase Price. The title policy shall be subject only to 3 the same exceptions included in Buyers deed. The standard printed exceptions contained in Title Company's title policies shall be deleted. (b) City shall pay the Repurchase Price to the following persons in the following order: (1) persons lawfully claiming mechanic's liens pursuant to section 38 -22 -101 etseq, C.R.S. (2) persons having a valid mortgage, deed of trust lien, or security interest on the Property or Improvements or any part thereof. (3) Buyer (c) The Repurchase Price shall be adjusted for real property taxes prorated to the date of the closing of the repurchase based on the most recently available assessment and mill levy. 6.6 Continuation of Right If City fails to give a Notice of Default or to Exercise, and, consequently, City's right to repurchase on account of that default expires, such expiration shall not affect City's right to repurchase arising from subsequent events of default under the provisions of these Covenants. 7. Land Beneficed These Covenants shall run with and burden the property and are for the benefit of City and all land owned by City in the HARP Development. These Covenants shall be enforceable only by City and its specific assigns pursuant to Section 11.2 below. 8. Release of Covenants Upon completion of the improvements described in Section 3.1 above in .compliance with these Covenants and the Protective Covenants, and if requested by Buyer, City shall, within 10 days, execute and record with the Pueblo County Clerk and Recorder an acknowledged written instrument referring to these Covenants and stating that the Covenants are released. Upon recording such instrument, these Covenants shall automatically terminate. Termination of the Covenants shall not terminate or otherwise affect the Protective Covenants. 9. Protection 9.1 Protection of Persons and Property The Buyer shall take reasonable precautions for safety of, and shall provide reasonable protection to prevent damage, injury or loss, caused by or resulting from Buyer's construction activities on the Property and in or near the HARP Development to: F1 (a) Employees on the Property and for all members of the public at or near the HARP Development including persons near City Hall or within the HARP Development; (b) Property (including, without limitation, the HARP Development and the Site Improvements) at or adjacent to the Property, including party walls and common components. The Buyer shall comply with all safety laws and regulations and building codes and shall provide reasonable safeguards for safety and protection, including posting danger signs and other warnings notifying employees and members of the public of construction hazards. The Buyer shall promptly remedy physical damage to the Property and the HARP Development caused in whole or in part by the Buyer, its contractors and subcontractors or anyone employed directly or indirectly by any of them, or by anyone for whose acts they may be liable and for which the Buyer is responsible, except for damage or loss attributable to the negligent acts or omissions of the City or its contractors or subcontractors or anyone directly or indirectly employed by the City. 10. Insurance Prior to Completion of Construction At all times while the Buyer is engaged in preliminary work on the Property or the HARP Development and during the period from the Commencement of Construction until Completion of Construction, the Buyer shall carry and, upon request, will provide the City and the HARP Authority with proof of payment of premiums and certificates of insurance as follows: (a) Builder's risk insurance (with a deductible not to exceed $25,000) in an amount equal to 100% of the replacement value of the buildings being constructed at the date of Completion of Construction. If a building is damaged or destroyed by fire or other casualty prior to completion of construction, Buyer shall proceed forthwith to repair, reconstruct and restore the damaged building to substantially the same condition or value as existed prior to the damage or destruction, and the Owner, or whoever receives the proceeds, shall apply the proceeds of any insurance relating to such damage or destruction to the payment or reimbursement of the cost of such repairs, reconstruction and restoration. (b) comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations, and contractual liability insurance), automobile and umbrella liability insurance with a combined single limit for both bodily injury and property damage of not less than $3,000,000, naming the City and the HARP Authority as additional insureds. Such insurance shall carry a deductible in an amount not to exceed_ $2,500 per claim for property damage and $2,500 per claim for employee benefits. 5 (c) workers' compensation insurance, with statutory coverage, including the amount of deductible permitted by statute. The policies of insurance required under subparagraphs (a) through (c) above shall be reasonably satisfactory to the City and the HARP Authority, placed with financially sound and reputable insurers, require the insurer to give at least thirty (30) days advance written notice to the City and the HARP Authority as additional insureds, specifying that the insurance shall be treated as primary insurance in each case. 11. Assigns 11.1 Buyer's Assigns Any reference to Buyer in these Covenants shall also refer to any successors or assigns of Buyer, or subsequent owners, occupants or others having any interest in the Property. 11.2 Citds Assigns .City may assign its rights and authority hereunder by an express written assignment referring to these Covenants, duly recorded. Any reference in these Covenants to City shall also mean any such assigns. 12. Term These Covenants, and any amendments hereto, shall remain in effect until January 1, 2010, unless sooner released pursuant to Section 8 above. 13. Notices Any notice or other document or materials required or permitted to be delivered under these Covenants shall be in writing and shall be deemed properly delivered upon receipt by the party to whom the same are to be delivered. Notices shall be addressed as follows: If to City, to Pueblo City Manager, Once City Hall Place, Pueblo, Colorado 81003, with a, with a copy to Thomas E. Jagger, City Attorney, 501 N. Main Street, #127, Pueblo, Colorado 81003 -3124, and Steve Arveschoug, Executive Director, HARP Authority, 200 West 1" Street, Suite 303, Pueblo, Colorado 81003. If to Buyer, to Urban Renewal Authority of Pueblo, Attention: Executive Director, 211 East "D° Street, Pueblo, Colorado, 81003, with a copy to Paul C. Benedetti, P.O. Box 3138, Boulder, Colorado 80307. Either party may, by notice properly delivered, change the persons named and address to which subsequent notices shall be delivered. CITY: PUEBLO, A MUNICIPAL CORPORATION STATE OF COLORADO) ) SS. COUNTY OF PUEBLO ) The foregoing instrument was acknowledged before me on January , 2007, by Pueblo, a Municipal Corporation, by as President of the City Council of Pueblo, a municipal corporation. Witness my official hand and seal. My Commission Expires: Notary Public 7 SPECIAL WARRANTY DEED THIS DEED, made this day of , 2007 by and between Pueblo, a Municipal Corporation (herein "Grantor ") and the Urban Renewal Authority of Pueblo, Colorado, a body corporate and politic of the State of Colorado (herein "Grantee "), WITNESSETH: That Grantor for and in consideration of the sum of $10.00 and other good and valuable consideration to Grantor in hand paid by the Grantee, the receipt and sufficiency whereof is hereby confessed and acknowledged, has granted, bargained, sold and conveyed, and by these presents does grant, bargain, sell, convey and confirm unto the Grantee, its successors and assigns forever, all the real property legally described as Lot 4, Block 1, Historic Arkansas Riverwalk Project, Filing One, City of Pueblo, County of Pueblo, State of Colorado (herein 'Property), with all its appurtenances, and warrant title to the same against all and every person claiming the whole or any part thereof, by, through or under the Grantor, subject to easements, rights of way, covenants, restrictions and reservations of record and easements for existing utilities, sanitary sewer, water, irrigation and natural gas lines on, over or under the Property and to the covenants, conditions, and restrictions set forth and contained in the Construction Covenants and Protective Covenants attached hereto and incorporated herein as if set out herein in full which are and shall be construed to be covenants running with the land and binding upon the Grantee, its successors and assigns and inuring to the benefit of the Grantor, its successors and assigns. Invalidation of any one of the foregoing covenants, conditions, restrictions or reservations by judgment or court order or otherwise shall not affect any of the other of said covenants, reservations, restrictions or conditions which shall remain in full force and effect. Grantor shall have the right to enforce the restrictions, covenants and conditions hereof by injunction or other lawful procedure and to recover damages, costs, expenses, including reasonable attorney fees, resulting from any violation thereof or arising out of their enforcement. URBAN RENEWAL AUTHORITY [SEAL] OF PUEBLO, COLORADO ATTEST: By Executive Secretary Name: Title: [SEAL] PUEBLO, A MUNICIPAL CORPORATION ATTEST: City Clerk COUNTY OF PUEBLO ) ss. STATE OF COLORADO ) President of the City Council The foregoing instrument was acknowledged before me this day of 2007by as and as of the Pueblo Urban Renewal Authority of Pueblo, Colorado, abody corporate andpolitic of the State of Colorado. Witness my hand and official seal. My commission expires: [SEAL] COUNTY OF PUEBLO ) ) ss. STATE OF COLORADO ) Im Notary Public The foregoing instrument was acknowledged before me this day of , 2007 by as President of the City Council, and Gina Dutcher as City Clerk of Pueblo, Colorado, a Municipal Corporation. Witness my hand and official seal. My commission expires: [SEAL] Notary Public GdCIIYWR ARP Lots 3 & 41Spwial Warranty Deed - Lot 4 wpd ,'2' EXHIBIT' H CONSTRUCTION COVENANTS 1. Introduction Pueblo, a Municipal Corporation ( "City"), owns substantial real estate adjacent to, and in the vicinity of, the land being conveyed by the deed to which these Construction Covenants (the "Covenants ") are attached and made a part of (the "Deed "), which land City anticipates developing as part of its Historic .Arkansas Riverwalk of Pueblo development (such land owned by City is referred to as the "HARP Development'). It is essential to the HARP Development that the land being conveyed by the attached Deed (the "Property) be timely developed in a manner consistent with the overall HARP Development Consequently, these Covenants are hereby placed on the Property. 2. Apphcability These Covenants apply to the Urban Renewal Authority of Pueblo, Colorado ( "Buyer "), to A of the Property and to any individual or entity having any interest in the Property after the date of the attached Deed. These Covenants supplement the Protective Covenants that are also attached to this Deed, the terms of which are also binding upon Buyer and subsequent owners, occupants or others with an interest in the Property. 3. Time to Commence Construction 3.1 Construction Within eight (8) months after the date of this Deed, or such later date as City may designate by instrument filed for record in the office of the Pueblo County Clerk and Recorder, construction shall have commenced on the Property. Commencement of construction is defined as building permits having been obtained from the Pueblo Regional Building Department and foundations having been poured for permanent improvements that have been approved by the City's Department of Public works and the HARP Authority. All building pemrits and construction shall be according to development plans that have been approved by City's Department of Public Works and the HARP Authority as required by the Protective Covenants. Buyer will promptly notify City and the HARP Authority when it obtains the required building permits and when the foundations have been poured. 3.2 Acknowledgment of Compliance All building permits and construction shall be in accordance with development plans which have been approved by the Architectural Review Board, City Council and the HARP Authority as required by the Protective Covenants. After commencement of construction as required by Section 3.1 above, and if requested by Buyer, City shall execute and deliver a writing duly signed and acknowledged stating that construction has been so commenced and releasing City's right to repurchase the Property pursuant to Section 6.1 below on account of failure to commence construction. 4. Completion of Construction Construction of the improvements, once commenced, shall be diligently pursued. Construction will commence as soon as possible after closing. After construction has commenced, if no substantial construction is performed on uncompleted improvements for a period of six consecutive months (unless such delay is caused by one or more of the events listed in Section 5 below), then City shall have the right to repurchase all of the Property, together with all improvements located on it. City shall also have the right to repurchase all of the Property, including improvements, if any building on the Property on which construction has commenced has not been substantially completed within one year after commencement of construction. A building shall be deemed substantially completed if the Pueblo Regional Building Department has issued a certificate of occupancy for the building. The repurchase shall be on the terms provided in Section 6 below. 5. Unavoidable Delays In the event the obligation to obtain building permits, commence construction or complete construction in accordance with the provisions of Sections 3 and 4 shall be unavoidably delayed by fire, flood, drought or other act of God; strikes or material shortages; war or national emergency; governmental impositions, including building permit moratoria and utility moratoria (but not including failure to obtain governmental approvals of development plans); or other similar cause beyond the reasonable control of Buyer, then the period of time prescribed for performance of such obligations shall be extended for periods equivalent to the periods of such unavoidable delays, provided that within 30 days of the occurrence of such unavoidable delay City shall have received notice of the cause thereof, and that at the end of each such period of unavoidable delay City shall have received notice of the period by which times for performance of such obligations are required to be extended. 6. Repurchase Failure to comply with the provisions of either Section 3 or Section 4 shaIl.be an event of default under these Covenants. An event of default shall, in addition to any other remedy it may have, entitle City to repurchase the Property from Buyer as follows: 6.1 Before Construction Commences If construction has not been commenced on the Property, the "Repurchase Price" shall be for Lot 3 - $99,371.00, and for Lot 4 - $108,612.00, Block 1, Historic Arkansas Riverwalk Project, Filing One. 6.2 After Construction has Commenced If construction has commenced on the Property, the Repurchase Price shall be the amount determined by Section 6.1 plus Buyers "Direct Costs." "Direct Costs" are the actual direct costs of labor and materials incorporated into the improvements located on the Property, exclusive of any compensation for architects, engineers, executives, office or supervisory employees of Buyer, and exclusive of construction loan interest and Buyers general overhead. Upon City's delivery of a Notice of Default as provided in Section 6.3 below, Buyer will, within 30 days after such Notice of Default, give City an accounting 2 of Direct Costs, together with such documents as City may request substantiating this accounting (such as bills, invoices, construction loan draw requests, copies of checks, and similar documents and verifications). 6.3 Notice of Default If City believes Buyer is in default of its obligations to commence or complete construction under Section 3 or Section 4 above, it shall, within 30 days after it believes such default occurred, deliver to Buyer a notice stating the default (the "Notice of Default"), together with a request for an accounting of Buyer's Direct Costs, as specified in Section 6.2 above. Failure of City to give the Notice of Default shall terminate City s repurchase rights under this Section 6 on account of that specific default. If Buyer believes it is not in default, it shall, within 5 calendar days after receipt of the Notice of Default, deliver to City a notice stating why it believes it is not in default, and if no such notice is delivered, it shall be conclusively presumed that Buyer is in default as specified in the Notice of Default. 6.4 Notice of Exercise If City has delivered the Notice of Default required by Section 6,3, and if Buyer is in default as specified in that Notice, then City shall have the right to repurchase the Property and the improvements located thereon by delivering to Buyer a notice stating City intends to repurchase (this notice is called "Exercise "). If City has not Exercised on or before: (a) sixty days after the Notice of Default was delivered if the default occurred Prior to commencement of construction, or (b) sixty days after the accounting of Direct Costs (together with supporting documents) was delivered to City pursuant to Section 6.2 if the default occurred after commencement of construction, then City's right to repurchase contained in this Section 6 on account of the matters specified in the Notice of Default shall terrinate. 6.5 Cosine Closing of the repurchase shall be at a time and place selected by City, but in no event later than 30 days after Exercise. At closing: (a) Buyer shall deliver an updated title commitment and its general warranty deed transferring tide to the Property (including all improvements and appurtenant easements, if any), to City. This general warranty deed shall be subject only to the matters set forth in the Deed and existing on the date of the Deed to which these Covenants are attached, exclusive of any such matters that arose from Buyer's activity with respect to the Property. Within 10 days after the closing, Buyer shall, at its expense, deliver to City a title insurance policy issued by Transnation Title Insurance Company ('"Title Company "), insuring marketable title to the Property in City in the amount of the Repurchase Price. The title policy shall be subject only to 3 the same exceptions included in Buyer's deed. The standard printed exceptions contained in Title Company's title policies shall be deleted. (b) City shall pay the Repurchase Price to the following persons in the following order: (1) persons lawfully claiming mechanic's liens pursuant to section 38 -22 -101 et seq., C.R.S. (2) persons having a valid mortgage, deed of trust lien, or security interest on the Property or Improvements or any part thereof. (3) Buyer (c) The Repurchase Price shall be adjusted for real property taxes prorated to the date of the closing of the repurchase based on the most recently available assessment and mill levy. 6.6 Continuation of Right If City fails to give a Notice of Default or to Exercise, and, consequently, City's right to repurchase on account of that default expires, such expiration shall not affect City's right to repurchase arising from subsequent events of default under the provisions of these Covenants. 7. Land Benefitted These Covenants shall run with and burden the property and are for the benefit of City and all land owned by City in the HARP Development. These Covenants shall be enforceable only by City and its specific assigns pursuant to Section 11.2 below. 8. Release of Covenants Upon completion of the improvements described in Section 3.1 above in compliance with these Covenants and the Protective Covenants, and if requested by Buyer, City shall, within 10 days, execute and record with the Pueblo County Clerk and Recorder an acknowledged written instrument referring to these Covenants and stating that the Covenants are released. Upon recording such instrument, these Covenants shall automatically terminate. Termination of the Covenants shall not terminate or otherwise affect the Protective Covenants. 9. Protection 9.1 Protection of Persons and Prooerty The Buyer shall take reasonable precautions for safety of, and shall provide reasonable protection to prevent damage, injury or loss, caused by or resulting from Buyer's construction activities on the Property and in or near the HARP Development to: 4 (a) Employees on the Property and for all members of the public at or near the HARP Development including persons near City Hall or within the HARP Development; (b) Property (including, without limitation, the HARP Development and the Site Improvements) at or adjacent to the Property, including party walls and common components. The Buyer shall comply with all safety laws and regulations and building codes and shall provide reasonable safeguards for safety and protection, including posting danger signs and other warnings notifying employees and members of the public of construction hazards. The Buyer shall promptly remedy physical damage to the Property and the HARP Development caused in whole or in part by the Buyer, its contractors and subcontractors or anyone employed directly or indirectly by any of them, or by anyone for whose acts they may be liable and for which the Buyer is responsible, except for damage or loss attributable to the negligent acts or omissions of the City or its contractors or subcontractors or anyone directly or indirectly employed by the City. 10. Insurance Prior to Completion of Construction At all times while the Buyer is engaged in preliminary work on the Property or the HARP Development and during the period from the Commencement of Construction until Completion of Construction, the Buyer shall carry and, upon request, will provide the City and the HARP Authority with proof of payment of premiums and certificates of insurance as follows: (a) Builder's risk insurance (with a deductible not to exceed $25,000) in an amount equal to 100% of the replacement value of the buildings being constructed at the date of Completion of Construction. If a building is damaged or destroyed by fire or other casualty prior to completion of construction, Buyer shall proceed forthwith to repair, reconstruct and restore the damaged building to substantially the same condition or value as existed prior to the damage or destruction, and the Owner, or whoever receives the proceeds, shall apply the proceeds of any insurance relating to such damage or destruction to the payment or reimbursement of the cost of such repairs, reconstruction and restoration. (b) comprehensive general liability insurance (including operations, contingent Lability, operations of subcontractors, completed operations, and contractual liability insurance), automobile and umbrella liability insurance with a combined single limit for both bodily injury and property damage of not less than $3,000,000, naming the City and the HARP Authority as additional insureds. Such insurance shall carry a deductible in an amount not to exceed $2,500 per claim for property damage and $2,500 per claim for employee benefits. 5 (c) workers' compensation insurance, with statutory coverage, including the amount of deductible permitted by statute. The policies of insurance required under subparagraphs (a) through (c) above shall be reasonably satisfactory to the City and the HARP Authority, placed with financially sound and reputable insurers, require the insurer to give at least thirty (30) days advance written notice to the City and the HARP Authority as additional insureds, specifying that the insurance shall be treated as primary insurance in each case. 11. As_ signs 11.1 Buyers Assigns Any reference to Buyer in these Covenants shall also refer to any successors or assigns of Buyer, or subsequent owners, occupants or others having any interest in the Property. 11.2 City's Assigns City may assign its rights and authority hereunder by an express written assignment referring to these Covenants, duly recorded. Any reference in these Covenants to City shall also mean any such assigns. 12. Term These Covenants, and any amendments hereto, shall remain in effect until January 1, 2010, unless sooner released pursuant to Section 8 above. 13. Notices Any notice or other document or materials required or permitted to be delivered under these Covenants shall be in writing and shall be deemed properly delivered upori. receipt by the party to whom the same are to be delivered. Notices shall be addressed as follows: If to City, to Pueblo City Manager, Once City Hall Place, Pueblo, Colorado 81003, with a, with a copy to Thomas E. Jagger, City Attorney, 501 N. Main Street, #127, Pueblo, Colorado 81003 -3124, and Steve Arveschoug, Executive Director, HARP Authority, 200 West V Street, Suite 303, Pueblo, Colorado 81003. If to Buyer, to Urban Renewal Authority of Pueblo, Attention: Executive Director, 211 East "D" Street, Pueblo, Colorado, 81003, with a copy to Paul C. Benedetti, P.O. Box 3138, Boulder, Colorado 80307. Either party may, by notice properly delivered, change the persons named and address to which subsequent notices shall be delivered. CI'T'Y: PUEBLO, A MUNICIPAL CORPORATION STATE OF COLORADO) ) SS. COUNTY OF PUEBLO ) The foregoing instrument was acknowledged before me on January ,2007, by Pueblo, a Municipal Corporation, by as President of the City Council of Pueblo, a municipal corporation. Witness my official hand and seal. My Commission Expires: Notary Public 7 EXHIBIT I PROTECTIVE COVENANTS 1. Introduction Pueblo, a Municipal Corporation ( "City") owns substantial real estate adjacent to, and in the vicinity of, the land being conveyed by the deed (the "Deed ") to which these Covenants are attached and made a part of, which the City is developing as part of its Historic Arkansas Riverwalk of Pueblo (HARP) Development. It is essential to HARP that the land being conveyed by this Deed (the "Property") be developed and maintained in a manner consistent with the overall HARP Development. Consequently, the following Covenants are hereby placed on the Property: 2. Applicabili ty These Covenants apply to the Urban Renewal Authority of Pueblo, Colorado ( "Owner "), to all of the Property and to any individual or entity having any interest in the Property after the date of the Deed and are deemed to be covenants running with the Property. These Covenants supplement the Construction Covenants that are also attached to the Deed, the terms of which are also binding upon the Owner and subsequent owner, occupants or others with an interest in the Property. 3. Use of Property The Property shall be used only for the uses permitted by right, without waiver or variance, under the HARP 1 Zone District, as deemed by the zoning ordinances of the City of Pueblo. The Property is located adjacent to a public project known as HARP. Owner understands and agrees that the use of HARP and activities conducted thereon by City, HARP Authority and the public may interfere with the use and enjoyment of the Property and/or annoy or inconvenience owners and users of the Property. Owner shall not complain about any lawful activities conducted on HARP or the lawful use of HARP by the City, HARP Authority or the public and waives any and all claims of nuisance or interference with the use and enjoyment of the Property arising out of, or resulting, directly or indirectly, from any such lawful use or activity. Owner shall not undertake or perform any activity on, or use the Property in a manner which will limit or interfere with the reasonable use and enjoyment of HARP by the City, HARP Authority or the public. 4. Underground Utilities All telephone and power lines and lines for transmission of electronic signals installed upon the Property after the date of this Deed shall be underground, except for customary surface devices for access or control. 5. Architectural Control 5.1 Rezoning and Resubdividing The Property shall neither be rezoned nor resubdivided while these covenants are in effect 5.2 Construction Documents Before any building permit is obtained or any work is commenced on any Improvement (as defined below), there shall be delivered to the Assistant City Manager for Community Development, the HARP Authority, the Architectural Review Board final plans and specifications for any Improvement, including, as applicable, elevations, site plans, grading and drainage plans, landscaping plans, outline specifications, samples of exterior materials, and exterior colors, proposed signing and site lighting, construction access to the Property and construction site. All such submittals must be approved by the HARP Authority and the Architectural Review Board pursuant to Section 17 -5 -52 of the Pueblo Municipal Code before a building permit is issued and construction begins on any Improvement. Construction schedules shall also be delivered to the HARP Authority and the City Assistant Manager for Community Development for informational purposes before construction begins on any Improvement. All Improvements shall be constructed substantially in accordance with plans and specifications approved by the HARP Authority and the Architectural Review Board pursuant to these Covenants. As used in these covenants, "Improvement" shall mean any object, thing or activity of any kind installed, located or occurring on the Property which changes the external appearance to the Property, from its external appearance as it existed immediately prior to the installation, location or occurrence of the object, thing or activity. Improvements include, but are not limited to, all buildings, structures, landscaping and lawns, exterior walkways, parking areas, drives and truck loading areas, signs, fences, poles, walls, utility lines, lighting, excavations, grading, berms, drainage facilities, repairs, alterations, painting and all other things or objects of any type or kind installed or constructed on the Property. 5.3 Common Use Documents All documents either attempting to establish condominiums or other forms of common use or ownership, or regulating use or maintenance of any portions of the Property, shall be submitted to and approved in writing by the HARP Authority and the City Land Use Administration before their being recorded, and prior to the sale or rental of any Improvement on the Property to any party. HARP Authority and the City's review of these documents is for the limited purpose of ensuring that adequate provisions are made for first class maintenance of the Property and all Improvements thereon, for controlling and approving any exterior changes or modifications to Improvements, for establishing of enforceable covenants that prescribe standards for use of the Property and all Improvements thereon including, but not limited to the use of balconies, garages, parking areas and landscaping areas, and for adequate assessment procedures to fund the implementation of the documents, including the reimbursement of charges assessable against the Property pursuant to section 6.3 of these Covenants. 5.4 Changes No substantial change in or to any plat, special area plan, master plan, plans and specifications or document relating to the Property shall be made unless approved by the City of Pueblo and the HARP Authority. 5.5 Names and Logos Neither the names "HARP" or "Historic Arkansas Riverwalk of Pueblo ", or any derivatives thereof, nor the logos associated with such names may be used in any way in connection with the Property, any use, or any promotion of it, unless HARP Authority has given its prior written approval to such use. 2 5.6 Approval Procedures These Covenants require the owners and occupants of the Property to obtain the HARP Architectural Review Board and the HARP Authority's approval of various plans, information, documents, writings and materials delivered to City and HARP pursuant to this Section 5. The City will not withhold its approval if it reasonably determines such items contemplate architecturally integrated and high quality Improvements consistent with the aesthetic and functional standards of the HARP Development, the HARP -1 Zone District and the specific provisions of these Covenants. If either the Architectural Review Board or HARP Authority does not approve, it shall, within forty-five days after submission, deliver notice stating its reasons for disapproval to the party desiring the approval, who may then deliver a resubmission to eliminate the Architectural Review Board or the HARP Authority's objections. If the Architectural Review Board or HARP Authority fails to act on any submission or resubmission within such forty -five (45) day period after receipt thereof, it shall be deemed to have approved. The time periods referred to above shall begin on the date the HARP Authority receives any submission or resubmission. Requests for approval shall be submitted as provided in Section 12, below. 6. Maintenance of Improvements 6.1 Obligation to Maintain Improvements All Improvements constructed on the Property shall be maintained, or caused to be maintained, by the owner thereof in first -class condition. Such maintenance shall include, but not necessarily be limited to, repairing any structural damage to or defects in Improvements, keeping the exteriors of any Improvements on the Property in first class condition, including painting as required, maintaining in good condition and repair all landscaping, walks, streets and parking facilities on the Property, keeping vehicular and pedestrian areas free from accumulations of snow and ice, keeping the Property free of trash and debris, and keeping all signs and lighting on the Property clean and functional. At all times, but particularly during construction, the Property owner shall control noxious weeds and fugitive dust in accordance with applicable governmental requirements and shall keep adjacent sidewalks, streets and roads free from accumulations of mud, dirt and debris originating on the Property. The owner of Improvements shall maintain at all times at its cost and in full force and effect "all risk" casualty insurance (including without limitation flood and earthquake coverage to the extent reasonably available), for not less than 100% of the replacement value of the Improvements. In the event of damage thereto or destruction thereof, the owner of the Improvements shall proceed forthwith to repair, reconstruct, and restore the damaged or destroyed portions of such Improvements to substantially the same condition and value as existed prior to such damage or destruction, applying for such purposes all the proceeds of such casualty insurance to the payment or reimbursement of the costs of such repairs, reconstruction and restoration. 6.2 City's Right to Maintain Improvements If City, in good faith, reasonably determines any portion of the Property or the Improvements located thereon are not being maintained or repaired in the manner specified in Section 6.1 above, City shall give the owner thereof, or the person occupying the portion of the Property involved, a written notice specifying the maintenance or repairs which City determines is required under these Covenants. If the maintenance or repairs specified in such notice is not satisfactorily performed within thirty days 3 after delivery of such notice, or within such longer time as City reasonably determines is required to perform such maintenance or repair, City shall thereafter have the right, but not the obligation, to perform such maintenance or repair and to enter any of the Property and perform any acts reasonably necessary to complete such maintenance or repairs. City shall not be liable for any losses, costs or damages to any tenant or owner of the Property on account of its performance of such maintenance or repairs, except for any such loss, cost or damage caused by City's gross negligence or willful misconduct. City may delegate its maintenance rights hereunder to the HARP Authority. 6.3 Reimbursement and Lien In the event City elects to perforce maintenance or repairs pursuant to section 6.2 above, the City will submit to the owner or the tenant of the Property upon which or for whose benefit such maintenance or repairs was performed, a written statement of the costs incurred by the City in performing the maintenance or repairs. These costs shall be paid to the City within twenty days after receipt of such notice. If the City's costs have not been paid after expiration of this twenty-day period, the City may thereafter record a lien against the Property for all costs (including reasonable attorneys' fees) incurred by the City in performing the maintenance or repairs and in collecting such costs and foreclosing upon the lien. Such lien shall be junior to all other liens or encumbrances of record with respect to the Property on the date the lien is recorded. The lien and the lien described in Section 6.4 may thereafter be foreclosed upon in the manner provided by Colorado law for foreclosing upon real estate mortgages. This lien shall provide that all sums expended by the City or the HARP Authority in foreclosing the lien and collecting the amounts due City or the HARP Authority (including reasonable attorneys' fees) shall be additional indebtedness secured by such lien. 6.4 Common Area Maintenance Expenses The Owner of the Property shall pay, in the amount set forth below, a common area maintenance charge to the HARP Authority to partially pay for maintaining and promoting the common areas and the public improvements in the HARP Development which shall include, but not be limited to, the cost of: ` gardening and maintaining the landscaping; operating and maintaining the HARP Channel and identification signs; replacing plants and planters; providing seasonal and holiday decorations; painting; lighting; resurfacing; repairing utility service lines in the common areas; clearing and removing snow, trash, rubbish, garbage and other refuse; paying interest on any funds advanced; providing personnel to implement such services and paying for administrative expenses. The HARP Authority will use all funds so collected to provide for the aforedescribed maintenance. To compensate the HARP Authority for providing such maintenance and promoting the common areas, and public improvements in the HARP Development, the Owner of the Property shall pay the amount of $1.09 per square foot per year for each square foot of gross building area under roof in each building located on the Property. Payment of the common area maintenance expenses shall begin on the first day of the month following the month in which a temporary or permanent certificate of occupancy is issued for each building located on the Property ( "Commencement Date "). Monthly payments of 1 /12th the total amount due shall be made on the first day of each month. The common area maintenance charge shall remain the same for two years from the Commencement Date. Thereafter (beginning with the start of the third year), the common area maintenance charge shall be annually increased by the larger of 4 five percent (5 %) or the percentage increase, if any, in the U.S. Consumer Price Index for All Items - Urban Wage Earners and Clerical Workers ( "CPI -W ") (base year 1982 -1984 - 100) (the "Index "). If the Index changes so the first year differs from that used in this Section, the Index shall be converted according to the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics, to the 1982 -84 base. If the Index is discontinued or revised, such other governmental index or computation which replaces it shall be used to obtain substantially the same result as would be obtained if the Index had not been discontinued or revised. The Index published nearest to the first payment of the Common Area maintenance charge shall be the Beginning Index. The Index published nearest the Adjustment Date shall be the Adjustment Index. The Adjustment Date shall be the first day of the third (3rd) year of paying common area maintenance charges and every year thereafter. The base common area maintenance charges shall be adjusted as follows: On each Adjustment Date, the base common area maintenance charge shall be adjusted by multiplying the initial base common area maintenance charge under these Covenants by a fraction, the numerator of which is the applicable Adjustment Index and the denominator of which is the Beginning Index. Notwithstanding anything to the contrary herein, the common area maintenance charge shall be waived for the first year following Commencement Date and shall be fixed for the second and third year following Commencement Date as follows: second year - $0.54 per square foot and third year - $0.81 per square foot. Failure to pay the common area maintenance charge on or before its due date shall cause it to be delinquent. If a charge becomes delinquent, the HARP Authority may place a lien on the Property as provided above in Section 6.3. 6.5 Vendor Agreement. In-the event the owner of the Property wishes to use outdoor dining space, or other uses which are acceptable to the HARP Authority, on the HARP property, abutting or adjacent to the Property a separate vendor agreement with the HARP Authority will be required including, but not limited to, a negotiated lease rate for use of the HARP property and HARP Authority approval of the design and amenities; the cost of the amenities and utilities associated with the use of the HARP property will be the responsibility of the owner of the Property. 7. Use of Riverwalk Facilities Any use of HARP property and/or facilities adjacent to the Property for commercial or private functions shall be subject to a separate lease /vendor agreement with the HARP Authority. 5 8. Remedies Remedies at law may not adequately compensate the City for a violation of these Covenants. Therefore, City shall have the right to obtain from any court of competent jurisdiction injunctive relief against any owner or tenant of any of the Property, or any of their agents, contractors, or assigns, or enjoining any activity which is in violation of these Covenants. The City's right to such injunctive relief shall not be affected by arbitration provisions in contracts executed by such owner, tenant or their agents. The rights and remedies of City shall be in addition to, and not in lieu of, other rights and remedies City may have in the event of a violation of these Covenants. All such rights and remedies shall be cumulative, and the exercise of any one or more of such rights and remedies shall not be deemed an election precluding the exercise of any of the others. All reasonable costs incurred in any dispute or litigation involving enforcement of these Covenants (including expert witness fees and attorneys' fees) shall be awarded as additional damages to the prevailing party, who shall also be entitled to all such additional costs incurred in enforcing or collecting any judgment rendered. Venue for all litigation arising under these Covenants shall be in Pueblo County, Colorado. 9. Land Benefitted These Covenants shall run with and burden the Property and are for the benefit of City and all land owned by City in the HARP Development. These Covenants shall be enforceable only by City and its specific assigns pursuant to Section 11 below. I0. Amendment These Covenants may be amended at any time by any instrument referring to these Covenants executed by City and the then current owners of at least 50 percent of the Property, which instrument is recorded with the Pueblo County Clerk and Recorder. These Covenants may also be amended with respect to any portion of the Property, but less than all of the Property, by a written instrument executed by all owners of the portion of the Property affected and by City, which instrument contains the legal description of the portion of the Property affected by the change. Amendments to these Covenants shall become effective upon their being recorded with the Pueblo County Clerk and Recorder. 11. Term These Covenants, and any amendments hereto, shall remain in effect for a period of 20 years from the date of the Deed and shall automatically be renewed for successive ten year periods unless, prior to the expiration of the initial term or any ten year extensions thereof, an instrument stating that extension is not desired, signed and acknowledged by at least fifty percent of the then owners of the Property and the City, is filed of record with the Pueblo County Clerk and Recorder. 12. Successors and Assiens 0 The City may assign its rights and authority hereunder by an express written assignment referring to these Covenants, duly recorded. Any reference in these Covenants to City shall also mean any successors of the City pursuant to such assignment. If City makes such an assignment, it shall record an instrument in the real property records of Pueblo County, Colorado stating that its rights and authority under these Covenants have been assigned and setting forth the name and address of the assignee. 13. Notices Any notice or other document or materials required or permitted to be delivered under these Covenants shall be in writing and shall be deemed properly delivered upon receipt by the party to whom the same are to be delivered. Notices shall be addressed as follows: If to City, to Pueblo City Manager, Once City Hall Place, Pueblo, Colorado 81003, with a, with a copy to Thomas E. Jagger, City Attorney, 501 N. Main Street, #127, Pueblo, Colorado 81003 -3124, and Steve Arveschoug, Executive Director, HARP Authority, 200 West 1 Street, Suite 303, Pueblo, Colorado 81003. If to Owner, to Urban Renewal Authority of Pueblo, Attention: Executive Director, 211 East "D" Street, Pueblo, Colorado, 81003, with a copy to Paul C. Benedetti, P.O. Box 3138, Boulder, Colorado 80307. Either party may, by notice properly delivered, change the persons and address to which subsequent notices shall be delivered. CITY: PUEBLO, A MUNICIPAL CORPORATION LM STATE OF COLORADO) ) SS. COUNTY OF PUEBLO ) The foregoing instrument was acknowledged before me on January , 2007, by Pueblo, a Municipal Corporation, by _ as President of the City Council of Pueblo, a municipal corporation. Witness my official hand and seal. My Commission Expires: Notary Public