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HomeMy WebLinkAbout11190RESOLUTION NO. 11190 A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND PUEBLO DEVELOPMENT FOUNDATION RELATING TO THE LEASE AND OPTION AGREEMENT FOR LOT 6, PUEBLO MEMORIAL AIRPORT INDUSTRIAL PARK SUBDIVISION, THIRD FILING, PUEBLO COUNTY, COLORADO AND ALL IMPROVEMENTS THEREON, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 _ The Agreement dated as of December 31, 2007 between the City of Pueblo and Pueblo Development Foundation relating to the Lease And Option Agreement for Lot 6, Pueblo Memorial Airport Industrial Park Subdivision, Third Filing, Pueblo County, Colorado and improvements thereon, a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. SECTION 2 The President of the City Council is authorized to execute the Agreement in the name of the City of Pueblo and the City Clerk is directed to affix the seal of the City thereto and attest same. INTRODUCED December 31, 2007 ATTESTED BY -P� APPROVED: �aow ESID NTof City Council CITY CLERK Randy Thurston Councilperson Res IIIg0 • ME Background Paper for Proposed RESOLUTION AGENDA ITEM # 2 DATE: December 31, 2007 DEPARTMENT: Law Department TITLE RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND PUEBLO DEVELOPMENT FOUNDATION RELATING TO THE LEASE AND OPTION AGREEMENT FOR LOT6, PUEBLO MEMORIALAIRPORT INDUSTRIAL PARK SUBDIVISION, THIRD FILING, PUEBLO COUNTY, COLORADO AND ALL IMPROVEMENTS THEREON, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME ISSUE Should the City Council approve the Resolution and Agreement? Approve the Resolution and Agreement. BACKGROUND The land and building previously leased to Takeshiba Technologies, Inc. ( "Takeshiba ") has been leased by Pueblo Development Foundation ( "PDF ") to the State of Colorado, acting by and through the Department of Personnel Administration, Division of Contract Services, Integrated Document Solutions ( "State ") under Lease and Option Agreement dated June 5, 2007 ( "State Lease "). Takeshiba has been unable to commence its manufacturing activities and PDF has terminated its Lease with Takeshiba. The State Lease is for a term of 20 years commending upon substantial completion of approximately $1.5 million modifications and improvements installed and paid for by PDF. Substantial completion occurred on or about December 12, 2007. Basic rent payable by the State, subject to annual appropriation, is $22,242 per month for three (3) years and $26,167 per month for 17 years. State is granted an option to purchase the leased premises at a purchase price of $3,042,000 during the first three years, and thereafter for the market value of the leased premises. City has advanced for the Takeshiba transaction out of the one -half cent sales and use tax revenues $1,688,000, as follows: $1,050,000 - remodeling; $502,000 - construction of shell building, and $138,000 - FAA Deed of Release. PDF has spent $1,715,000 as follows: $165,000 - remodeling for Takeshiba, and $1,550,000 remodeling under the State Lease. The City and PDF will divide the basic rent and purchase price received under the State Lease as follows: 50% to City, 50% to PDF. The 2004 Agreements between the City, PDF and Takeshiba are being terminated. PDF will secure the performance and payment of 50% of rent and purchase price by a deed of trust on the property. FINANCIAL IMPACT See Background. -2- AGREEMENT THIS AGREEMENT entered into as of December 31, 2007, between the City of Pueblo, a municipal corporation ( "City ") and Pueblo Development Foundation, a Colorado nonprofit corporation ( "Foundation "), WITNESSETH: WHEREAS, City and Foundation entered in to an Agreement dated September 13, 2004 relating to Takeshiba Technologies, Inc. ( "Takeshiba ") ( "2004 Agreement "), and WHEREAS, Takeshiba has been unable to commence its manufacturing activities and has terminated its arrangements with the City and Foundation, and WHEREAS, Takeshiba leased from Foundation Lot 6, Pueblo Memorial Airport Industrial Park Subdivision, Third Filing, Pueblo County, Colorado, consisting of a building containing approximately 27,650 square feet (`Building ") located on approximately 6.02 acres of land ( "Land ") (collectively the Building and Land are referred to herein as the "Property"), and WHEREAS, Foundation has represented and warranted to the City that Foundation has terminated its lease with Takeshiba, and WHEREAS, Foundation has entered into a twenty (20) year Lease and Option Agreement dated June 5, 2007 for the Property with the State of Colorado, acting by and through the Department of Personnel and Administration, Division of Central Services, Integrated Document Solutions ( "State ") ( "State Lease "), and WHEREAS, pursuant to the State Lease, Foundation has agreed to construct additional space and remodel the Building for a cost estimate of $1,550,000.00, and WHEREAS, Foundation expended $165,000.00 in remodeling the Building and for other expenses, in furtherance of the Takeshiba transaction, and WHEREAS, under the State Lease rent, subject to annual appropriation, is $22,241.67 per month for three (3) years and $26,166.67 per month for seventeen (17) years and the State is granted an option to purchase at a purchase price of $3,042,000.00 during the first three (3) years of the initial term of the State Lease and thereafter for its market value, and WHEREAS, City has advanced out of the 1992 to 2011 Sales and use Tax Capital Improvement Projects Fund $1,688,000.00 for constructing the Building, obtaining an FAA Deed of Release, and improving the Land, and WHEREAS, City and Foundation desire to set forth their respective rights and interest in and to the Property and all rents and payments therefrom including purchase price (herein "Lease Payments "). NOW, THEREFORE, in consideration of the foregoing and mutual covenants herein contained, City and Foundation agree as follows: City does hereby approve and ratify Foundation entering into the State Lease. 2. Fifty (50 %) of all Lease Payments received by Foundation under the State Lease (except Additional Rent computed in accordance with Paragraph 30.A of the State Lease) shall be held in trust by Foundation for the benefit of the City and, immediately after receipt thereof, Foundation shall deliver and pay to the City its fifty percent (50 %) share of all Lease Payments. 3. Foundation shall not lease, sell, encumber, or otherwise transfer the Property except as provided and set forth in the State Lease. 4. Foundation shall perform all covenants and conditions on the part of the Lessor to be performed under the State Lease, and shall enforce all covenants and conditions on the part of the Lessee to be performed under the Lease. Foundation shall given written notice to City of any of Lessee's defaults under the State Lease. Foundation's obligation under this Agreement shall be secured by a first deed of trust on the Property and Foundation shall execute and deliver to City its deed of trust in form and content approved by the City Attorney. 5. The 2004 Agreement is hereby terminated and City and Foundation are released from all future obligations thereunder. City shall cause the Deed of Trust securing Foundation's performance of the 2004 Agreement to be released of record. 6. The September 13, 2004 Agreement between the City and Takeshiba is hereby terminated. 7. City does hereby consent to the use of the Property for office and warehouse purposes. The President of the City Council is authorized to execute in the name of the City an instrument approved by the City Attorney waiving and/or modifying any Protective Covenant contained in the Special Warranty Deed recorded September 22, 2004 at Reception No. 1585970 conveying title to the Property from the City to Foundation which conflicts with such use of the Property. 8. If any provision of this Agreement is declared by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the other provisions of this Agreement which shall remain in full force and effect. 9. The provisions of this Agreement are and will be for the benefit of City and Foundation only and not for the benefit of any third party, and accordingly, no third party shall have any right or remedy hereunder or the right to enforce any provision of the Agreement. 10. This Agreement shall be binding up and inure to the benefit of the City and Foundation and their respective successors and assigns, provided Foundation may not assign this Agreement or any of its rights hereunder without the prior written consent of City. Executed at Pueblo, Colorado, the day and year first above written. PUEBLO, A MUNICIPAL CORPORATION By Pesi nt of t e City Council Attest: = �City :. rk .. Approved as to form: PUEBLO DEVELOPMENT FOUNDATION President Attest: Secretary City Attoi Gi rpv&TekeshibaM37 .grwment(City &PDF -Dee 07). wpd 17 TD 01/31/2008 03:48:50 PM Gilbert Ortiz Clerk Pueblo County, Co mill N1«M Nit 11111 DEED OF TRUST THIS DEED OF, , TRUST, Dated December 31, 2007 , between Pudbslo']Development Foundation, a Colorado nonprofit corporation the grantor herein, whose address is 301 N. Main Street, Pueblo, CO 81003 of the *County of Pueblo and State of Colorado, and the PUBLIC TRUSTEE of the County or City and County in which the property described below is situated, in the State of Colorado, Witness: The grantor, to secure a promissory note or notes, hereinafter referred to in the singular, dated t��t rouucpc>xa rpaeaxac � rkMM, payable to the order of the City of Pueblo the beneficiary herein, whose address is 1 City Hall Place, Pueblo, Colorado, 81003 tb9��4P. lf. ffitlYQf60JfOdOQIttRLttlCJtUCFC9f 7tUthCFAC74& 2Q�' P�Oi00H ,70fi441$FdA9�At'�3QOND�>1E does hereby grant and convey unto said Public Trustee the following described property, situate in the County of Pueblo , State of Colorado, to wit: Lot 6, Pueblo Memorial Airport Industrial Park Subdivision, Third Filing, Pueblo County, Colorado *The purpose of this deed of trust is to secure grantor's performance of its obligations under that certain Agreement dated December 31, 2007 between grantor and City of Pueblo (the "Agreement "). Wherever the terms "promissory note," "note," or "indebtedness" are referred to herein, they shall, individually or jointly, be deemed and construed to be the Agreement. also known by street and number as 2 Jetway Court, Pueblo, CO 81001 /contained in the Agreement or TO HAVE AND TO HOLD the same together with all appurtenances, in trust nevertheless, that in case of default in the payment of said note or any part thereof or interest thereon, or in the performance of any covenants hereinafter set forth, then upon the beneficiary (note holder) filing notice of election and demand for sale, said Public Trustee, after advertising notice of said sale weekly, for not less than four weeks, in some newspaper of general circulation in said county, shall sell saidproperty in the manner provided by law in effect at the time of filing said notice and demand, at public auction for cash, at any proper place designated in the notice of sale. Out of the proceeds of said sale said Trustee shall retain or pay first all fees, charges and costs and all moneys advanced for taxes, insurance and assessments, or on any prior encumbrance, with interest thereon, and pay the principal and interest due on said note, rendering the overplus (if any) umo the grantor: and after the expiration of the time of redemption, said Trustee shall execute and deliver to the purchaser a deed to the property sold. The beneficiary may purchase said property or any part thereof at such sale. The grantor covenants that at the time of delivery of these presents, he is seined of said property in fee simple, and that said property is free of encumbrances, except easements, restrictions, covenants and conditions of record. The grantor also covenants that he will keep all buildings insured with acompany approved by the beneficiary for fire and extendedcoverage in an amount equal to the unpaid balance of said note with loss payable to the beneficiary, will deliver a copy of the policy to the beneficiary and will pay all taxes and assessments against said property and amounts due on prior encumbrances. If grantor shall fail to pay insurance premiums, taxes or amounts due on prior encumbrance, the beneficiary may pay the same and all amounts shall become additional indebtedness due hereunder: and in case of foreclosure, he will pay an attorney's fx,20 In a reasonable amount. Should the beneficiary hereunder be made a party to any action affecting this deed of trust or the ti0e to said property, the grantor agrees that all court costs and a reasonable attorney's fee paid by the beneficiary shall become additional indebtedness due hereunder; and the grantor does hereby release and waive all claims in said property as a homestead exemption or other exemption now or hereafter provided by law. Iris agreed that in case of default m payment of said principal or interest or a breach of any ofthe covenants herein, then said principal sum hereby secured and interest thereon may at the option of the beneficiary become due and payable at once, anything in said note to the contrary notwithstanding and possession of said property will thereupon be delivered to the berreficiary, and on failure to deliver such possession the beneficiary shall be entitled to a receiver for said property, who may be appointed by any court of competent jursidiction. whenever used herein the singular number shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders. All of the covenants herein shall be binding upon the respective heirs, personal representatives, successors and assigns of the parties hereto. Executed the day and year first above written. Pueblo D evelopment— Foundation -- - - -- BY ,���•- Robert Root, President STATE OF COLORADO County of Pueblo ss. The foregoing in=strument was acknowledged before me this 3o ,44, day of 1 ROot, as President of Pueblo Development Foundati( a i - c'Ynprofit corporation. d Witness my hand and official seat. s� �,tlff, a�}��jt /• /2dLl • - r rnsP,f[ `;Chaim ,} rvotar Public No. 923B. Rev. tV92i - DEED OF TRUST (Public Trustee) without Due ne Sale Clause �� Bradford Publishing, 1743 W etae St., Deaver, CO 80202 —(303) 292 - 2500 — 2.98 December 31, 2007,