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HomeMy WebLinkAbout12698RESOLUTION NO. 12698 A RESOLUTION APPROVING A CONTRACT TO BUY AND SELL REAL ESTATE BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND SDL PROPERTIES, LLC RELATING TO THE PROPERTY LOCATED AT 130 CENTRAL MAIN STREET, PUEBLO, COLORADO, COMMONLY KNOWN AS THE OLD POLICE BUILDING, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Contract to Buy and Sell Real Estate (“Contract”) dated June 10, 2013 between Pueblo, a Municipal Corporation, and SDL Properties, LLC relating to the property located at 130 Central Main Street, Pueblo, Colorado, commonly known as the Old Police Building, 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 and deliver the Contract and the 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 the same. INTRODUCED: June 10, 2013 BY: Ami Nawrocki Background Paper for Proposed RESOLUTION DATE: June 10, 2013 AGENDA ITEM # Q-3 DEPARTMENT: PLANNING & COMMUNITY DEVELOPMENT JULIE ANN WOODS, AICP/ASLA, DIRECTOR TITLE A RESOLUTION APPROVING A CONTRACT TO BUY AND SELL REAL ESTATE BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND SDL PROPERTIES, LLC RELATING TO THE PROPERTY LOCATED AT 130 CENTRAL MAIN STREET, PUEBLO, COLORADO, COMMONLY KNOWN AS THE OLD POLICE BUILDING, AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE SAME ISSUE Should the City Council approve the sale of the “Old Police Building,” located at 130 Central Main Street, to SDL Properties, LLC? RECOMMENDATION Approval of the Resolution. BACKGROUND The City of Pueblo solicited qualification and cost-based proposals from private sector developers to purchase and redevelop a parcel of property commonly referred to as the “Old Police Building” property, located at 130 Central Main Street, Pueblo, Colorado on December 5, 2012 with an Addendum published on December 14, 2012. SDL Properties, LLC, was the only development team to submit a Proposal Response contemplating redevelopment of 130 Central Main Street for a mixed use building that will include the following uses: “Brewery/Restaurant, Retail, Professional Office Space, and several luxury apartments.” On March 11, 2013, City Council approved Resolution No. 12610, designating SDL Properties as the preferred developer to enter into an “Exclusive Negotiation Agreement for the Development of the “Old Police Building.” 130 Central Main Street, the “Old Police Building,” is proposed to be sold to SDL Properties for the purchase price of $100,000. The purchase price will be paid by SDL Properties in cash or certified funds at closing. The “Old Police Building” will be developed pursuant to development plans approved by the City of Pueblo and the HARP Authority. FINANCIAL IMPACT There is a positive effect of selling the vacant building "as is" to SDL Properties. Not only will $100,000 be brought to the General Fund, but the building and property become private property upon which property taxes can be assessed. AGREEMENT TO SELL AND PURCHASE THIS AGREEMENT is made the 10th day of June, 2013, between Pueblo, a Municipal Corporation, 200 S. Main Street, Pueblo, CO 81003 hereinafter called the Seller, and SDL Properties, LLC, a Colorado limited liability company, 112 West D Street, Pueblo, CO 81003, hereinafter called the Purchaser. 1. Property Defined. The Seller agrees to sell and convey and the Purchaser agrees to purchase, all that certain plat, piece, or parcel of land, with the buildings, fixtures, personal property and improvements thereon having the legal description of "Portion of Lot 6 and all of Lots 7, 8 and 9, Block 4 Central Pueblo in the former Town of Central Pueblo, now part of the City of Pueblo, according to the recorded Plat of said Town, filed of record on August 13, 1883, in Pueblo County, Colorado" commonly known as the Old Police Building, 130 Central Main Street, Pueblo, CO 81003 (the "Property "). The Property shall be conveyed by Special Warranty Deed ( "Deed ") a form of which, marked as Exhibit A, is attached hereto and incorporated herein by reference. The Property shall be conveyed subject to the conditions listed in Paragraph 5 of this Agreement and the exceptions to the Extended Coverage Policy of title insurance listed in the Title Commitment ( "Permitted Exceptions "). 2. Purchase Price. Purchaser shall pay the total purchase price of One Hundred Thousand Dollars (U.S. $100,000)( the "Purchase Price "). 3. Payment of Purchase Price. The Purchase Price shall be payable in full at Closing in cash, certified funds or immediately available wire transferred funds. 4. Earnest Money. Within ten (10) days after the Effective Date hereof, Purchaser shall deposit with Land Title Guarantee Company (the "Title Company "), having its office at 503 N. Main Street, Pueblo, CO 81003, the sum of Ten Thousand Dollars ($10,000.00) (the "Earnest Money "). The Title Company is hereby instructed to hold the Earnest Money in a non - interest bearing account for the benefit of Seller and Purchaser. The Title Company shall hold and disburse the Earnest Money in accordance with the provisions of this Agreement. 5. The premises are sold and are to be conveyed subject to: (a) Zoning and subdivision regulations and ordinances of the City of Pueblo. (b) Encroachments if any, upon the Property or abutting property. (c) Any statement of facts an accurate survey may show. (d) The Protective Covenants, a copy of which, marked as Exhibit B, is attached hereto and incorporated herein by reference and the Construction Covenants, a copy of which, marked as Exhibit C, is attached hereto and incorporated herein by reference. 1 (e) Covenants, reservations, rights of way, easements and restrictions of record, if any. Subparagraphs (a) through (e) above shall be listed as Permitted Exceptions attached to the Deed. Purchaser acknowledges that, at Closing, it shall accept the Property subject to those items contained in subparagraphs (a) through (e) together with other Permitted Exceptions, which provisions shall survive the Closing and shall not be merged with the Deed. 6. Commitment for Title Insurance. Seller shall obtain from the Title Company, at Seller's expense, a title insurance commitment (the "Title Commitment ") covering the Property, showing all matters affecting title to the Property and binding the Title Company to issue at Closing an Extended Coverage 1992 ALTA Owner's Form Policy of title insurance, with standard exceptions deleted, in the full amount of the Purchase Price. 7. Closing Time and Place. Closing of the transaction contemplated hereby ( "Closing ") shall be held at the offices of the Title Company, on the date which is twenty (20) days after the approval by the City Council of the Property's Rezoning and Subdivision, or as agreed by Seller and Purchaser. 8. Closing Costs. Seller shall pay the fees of any counsel representing it in connection with this transaction; the premium for the Title Policy (defined in Section 6) to be issued to Purchaser by the Title Company at Closing; and one -half ('/2) of any fees which may be charged by the Title Company. Purchaser shall pay the fees of any counsel representing Purchaser in connection with this transaction; the fees for recording the Deed conveying the Property to Purchaser; any transfer tax, the documentary stamp tax or similar tax which becomes payable by reason of the transfer of the Property and one -half (1/2) of any fees charged by the Title Company. All other costs and expenses incident to this transaction and the Closing thereof shall be paid by the party incurring same. 9. Default by Purchaser. In the event that the Earnest Money is delivered to the Title Company as herein provided and the sale contemplated by this Agreement is not completed as herein provided by reason of any default of Purchaser hereunder, Seller shall be entitled, as its sole remedy, to terminate this Agreement and receive the Earnest Money as liquidated damages for the breach of this Agreement, it being agreed between the parties hereto that the actual damages to the Seller in the event of such breach are impractical to ascertain and the amount of the Earnest Money is a reasonable estimate thereof. 10. Disclaimers. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILTY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER'S WARRANTY OF TITLE TO BE SET FORTH IN THE 2 DEED), ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS." PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO MADE OR FURNISHED BY SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, VERBALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT. PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT. UPON CLOSING, PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER'S INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEY'S FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER AT ANY TIME BY REASON OF OR ARISING OUT OF ANY CONSTRUCTION DEFECTS, PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY. PURCHASER AGREES THAT SHOULD ANY CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL CONDITIONS ON THE PROPERTY BE REQUIRED BY ANY GOVERNMENTAL ENTITY AFTER THE DATE OF CLOSING, SUCH CLEAN -UP, REMOVAL OR REMEDIATION SHALL, AS BETWEEN THE SELLER AND PURCHASER, BE THE RESPONSIBILITY OF AND SHALL BE PERFORMED AT THE SOLE COST AND EXPENSE OF THE PURCHASER. 3 11. Seller and Purchaser agree that the provisions of Paragraph 10 shall survive Closing and the recording of the Deed. 12. All understandings and agreements heretofore had between the parties hereto are merged into this Agreement, which alone fully and completely expresses their agreement, and this Agreement is entered into after full investigation, neither party relying upon any statement or representation, not embodied in this Agreement, made by the other. 13. This Agreement may not be changed or terminated orally. 14. The stipulations in this Agreement are to apply to and bind the heirs, executors, administrators, successors, and assigns of the respective parties. 15. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect. 16. Applicable Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO. SELLER AND PURCHASER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE DISTRICT COURT, PUEBLO COUNTY, STATE OF COLORADO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN THE DISTRICT COURT OF PUEBLO COUNTY, STATE OF COLORADO. PURCHASER AND SELLER AGREE THAT THE PROVISIONS OF THIS PARAGRAPH 16 SHALL SURVIVE THE CLOSING OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND THE RECORDING OF THE DEED HEREUNDER. TO THE EXTENT PERMITTED BY LAW, PURCHASER AND SELLER WAIVE THEIR RIGHTS TO A TRIAL BY JURY. 17. The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Purchaser only and are not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing. 18. The following schedules or exhibits attached hereto shall be deemed to be an integral part of this Agreement: (a) Exhibit A — Form of Special Warranty Deed (b) Exhibit B — Protective Covenants (c) Exhibit C — Construction Covenants 4 19. The section headings appearing in this Agreement are for convenience of reference only and not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection hereof. 20. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto. 21. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof. 22. Purchaser shall not record this Agreement or any short form memorandum of this Agreement. Executed at Pueblo, Colorado, the day and year first above written. PURCH % : r' : SD rop- ' ies, L a Colorado limited liability company / Gary Anzui ;4u - • :: . • • em.er COUNTY OF PUEBLO ) ) ss. STATE OF COLORADO ) The foregoing instrument was acknowledged before me this c ‘7 , day of June, 2013 by Gary Anzuini. Witness my hand and official seal. JJ My Commission Expires: 8k5/Q0/7 1/4 (SEAL) KAREN S. WILLSCN OA £-vt 1 1 NOTARY F'I IC, STATE OF t,C,t OFAG'a Notary Public 7_. __ SELLER: CITY OF PUEBLO, CO A MUNICI' e _ —!,. TIO ► II a ill I I illi °••■.""'" )1111r ouncil President ATTESTED BY: CIT CLERK 5 Exhibit A SPECIAL WARRANTY DEED THIS DEED, made this day of , 2013 between the CITY OF PUEBLO, COLORADO, a Colorado municipal corporation (hereinafter referred to as "Grantor "), and SDL PROPERTIES, LLC, a Colorado limited liability company, whose legal address is 112 West D Street, Pueblo, Colorado 81003 (hereinafter referred to as "Grantee "): WITNESSESTH, that the Grantor, for and in consideration of the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000.00), the receipt and sufficiency of which is hereby acknowledged, has granted, bargained, sold and conveyed, and by these presents does grant, bargain, sell, convey, and confirm, unto the Grantee, its heirs, successors and assigns forever, all the real property, together with improvements, if any, situate, lying and being in Pueblo County, State of Colorado, described on Exhibit A attached hereto and made a part hereof, for all purposes, together with all and singular the rights, benefits, privileges, easements, tenements, hereditaments and appurtenances thereto belonging, or in anywise appertaining, and the reversion and reversions, remainder and remainders, rents, issues and profits thereof, and all the estate, right, title, interest, claim and demand whatsoever of the Grantor, either in law or equity, of, in and to the above bargained premises, with the hereditaments and appurtenances; This conveyance is made subject and subordinate to: (a) the Declaration of Protective Covenants recorded in the records of the Pueblo County Clerk and Recorder on , 2013 at Reception No. marked as Exhibit B, which is attached hereto and is incorporated into this Special Warranty Deed by reference and is made a part hereof for all purposes; and (b) the Construction Covenants, marked as Exhibit C, which is attached hereto and is incorporated into this Special Warranty Deed by reference and is made a part hereof for all purposes. This conveyance is further made subject and subordinate to those encumbrances and exceptions (the "Permitted Exceptions ") set forth on Exhibit D attached hereto and made a part hereof for all purposes. TO HAVE AND TO HOLD the said premises, subject to the covenants identified in paragraphs (a) and (b) above and further subject to the Permitted Exceptions, above bargained and described, with the appurtenances, unto the Grantee, its heirs, successors and assigns forever. The Grantor, for itself, its successors and assigns does covenant and agree that it shall and will WARRANT AND FOREVER DEFEND the above - bargained premises in the quiet and peaceable possession of the Grantee, its heirs, successors and assigns, against all and every person or persons claiming the whole or any part thereof, by, through or under the Grantor. IN WITNESS WHEREOF, The Grantor has caused its corporation name to be hereunto subscribed by its President of City Council and its seal to be hereunto affixed, attested by its City Clerk, the day and year first above written. CITY OF PUEBLO, COLORADO A COLORADO MUNICIPAL CORPORATION By: City Council President STATE OF COLORADO ) ) SS. COUNTY OF PUEBLO ) The foregoing instrument was acknowledged before me on this day of 2013, 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 Exhibit A Legal Description Exhibit B Declaration of Protective Covenants Exhibit C Construction Covenants Exhibit D Permitted Exceptions The premises are sold and are to be conveyed subject to: (a) Zoning and subdivision regulations and ordinances of the City of Pueblo. (b) Encroachments if any, upon the Property or abutting property. (c) Any statement of facts an accurate survey may show. (d) The Declaration of Protective Covenants recorded in the records of the Pueblo County Clerk and Recorder on , 2013 at Reception No. marked as Exhibit B, which is attached hereto and is incorporated into this Special Warranty Deed by reference. (e) The Construction Covenants, marked as Exhibit C, which is attached hereto and is incorporated into this Special Warranty Deed by reference. (f) Covenants, reservations, rights of way, easements and restrictions of record, if any. Exhibit B DECLARATION OF PROTECTIVE COVENANTS, CONDITIONS AND RESTRICTIONS 1. Introduction Pueblo, a Municipal Corporation ( "City ") the declarant, is the owner of the real property described in the attached Exhibit A (hereinafter referred to as the "Subject Property ") and owns substantial real estate adjacent to, and in the vicinity of, land which the City is developing as part of its Historic Arkansas Riverwalk of Pueblo (HARP) Development. It is essential to HARP that the Subject Property be developed and maintained in a manner consistent with the overall HARP Development. Consequently, the following Covenants are hereby placed on the Subject Property: 2. Applicability These covenants, conditions and restrictions are imposed upon the Subject Property and are to run with the land as a servitude in favor of the City. Failure to abide by any of the covenants, conditions and restrictions contained herein would adversely affect the health, safety and welfare of the public in general and the adjacent and nearby property owners in particular. 3. Use of Subject Property The Subject Property shall be used only for the uses permitted by right, without waiver or variance, under the HARP 2 Zone District, as defined by the zoning ordinances of the City of Pueblo. The Subject Property is located adjacent to a public project known as HARP. Owners and occupants understand and agree 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 Subject Property and/or annoy or inconvenience owners and users of the Subject Property. Owners and occupants 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 waive any and all claims of nuisance or interference with the use and enjoyment of the Subject 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 Subject 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 Subject Property shall be underground, except for customary surface devices for access or control. 1 5. Architectural Control 5.1 Rezoning and Resubdividing. The Subject Property may be rezoned or resubdivided but only after receiving the express, written approval of the City. 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 City Director of Planning and Community Development, the HARP Authority, and the City Planning and Zoning Commission, 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 Subject Property and construction site. All such submittals must be approved by the City and HARP Authority pursuant to 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 Director of Planning and 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 City Planning and Zoning Commission 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 Subject Property which changes the external appearance to the Subject 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 Subject 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 Subject 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 Subject Property to any party. HARP Authority's 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 Subject 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 Subject 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 Subject Property pursuant to section 6.3 of these Covenants. 2 5.4 Changes. No substantial change in or to any plat, special area plan, master plan, plans and specifications or document relating to the Subject Property shall be made unless approved by the City and the HARP Authority. 5.5 Names and Logos. Neither the names "HARP" or "Historic Arkansas Riverwalk of Pueblo" nor any derivatives thereof, nor the logos associated with such names may be used in any way in connection with the Subject Property, any use, or any promotion of it, unless HARP Authority has given its prior written approval to such use. 5.6 Approval Procedures. These Covenants require the owners and occupants of the Subject Property to obtain the City Planning and Zoning Commission's 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 2 Zone District and the specific provisions of these Covenants. If either the City Planning and Zoning Commission or HARP Authority does not approve, the respective body 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 City Planning and Zoning Commission's or the HARP Authority's objections. If the City Planning and Zoning Commission or HARP Authority fails to act on any submission or resubmission within such forty -five (45) day period after receipt thereof, the respective body shall be deemed to have approved the submission or resubmission. The time periods referred to above shall begin on the date the City Planning and Zoning Commission or HARP Authority receives any submission or resubmission. Requests for approval shall be submitted subject to Section 12, below. 6. Maintenance of Improvements 6.1 Obligation to Maintain Improvements. All Improvements constructed on the Subject 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 Subject Property in first class condition, including painting as required, maintaining in good condition and repair all landscaping, walks, streets and parking facilities on the Subject Property, keeping vehicular and pedestrian areas free from accumulations of snow and ice, keeping the Subject Property free of trash and debris, and keeping all signs and lighting on the Subject Property clean and functional. At all times, but particularly during construction, the Subject 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 Subject 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 3 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 Subject 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 Subject 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 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 Subject 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 Subject 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 perform maintenance or repairs pursuant to section 6.2 above, the City will submit to the owner or the tenant of the Subject 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 Subject 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 Subject 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 Subject 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 4 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 Subject Property shall pay the then current amount per square foot per year, as set by the HARP Authority, for each square foot of gross building area under roof in each building located on the Subject 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 Subject Property ( "Commencement Date "). Monthly payments of 1 /12th the total annual 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 date of the first payment Commencement Date. Thereafter (beginning with the start of the third year), the common area maintenance charge shall be annually increased by 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. 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 Subject Property and foreclose on such lien as provided above in Section 6.3. 6.5 Vendor Agreement. In the event the owner of the Subject Property wishes to use outdoor dining space, or other uses which are acceptable to the HARP Authority, on the HARP 5 property, abutting or adjacent to the Subject 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 Subject Property. 7. Use of Riverwalk Facilities Any use of HARP property and /or facilities adjacent to the Subject Property for commercial or private functions shall be subject to a separate lease /vendor agreement with the HARP Authority. 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 Subject 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 Subject 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 12 below. 10. Amendment These Covenants may be amended at any time by an instrument executed by City and the then current owners of at least 50 percent of the Subject Property. These Covenants may also be amended with respect to any portion of the Subject Property, but less than all of the Subject Property, by a written instrument executed by all owners of the portion of the Subject Property affected and by City, which instrument contains the legal description of the portion of the 6 Subject 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 recording of same 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 Subject Property and the City, is filed of record with the Pueblo County Clerk and Recorder. 12. Successors and Assigns 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 Subject 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, One City Hall Place, Pueblo, CO 81003, with a copy to City Attorney, 501 N. Main Street, #203, Pueblo, CO 81003, and Executive Director, HARP Authority, 125 Riverwalk Place, Pueblo, CO 81003. PUEBLO, A MUNICIPAL CORPORATION By: City Council President STATE OF COLORADO ) ) SS. COUNTY OF PUEBLO ) 7 The foregoing instrument was acknowledged before me on this day of 2013, 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 8 Exhibit C CONSTRUCTION COVENANTS 1. Introduction Pueblo, a Municipal Corporation ( "City "), is the owner of the real property described in the attached Exhibit A (hereinafter referred to as the "Subject Property ") and 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 "Subject Property ") be timely developed in a manner consistent with the overall HARP Development. Consequently, these Covenants are hereby placed on the Subject Property. 2. Applicability These Covenants apply to SDL Properties, LLC, a Colorado limited liability company ( "Buyer "), to all of the Subject Property and to any individual or entity having any interest in the Subject Property after the date of the attached Deed. These Covenants supplement the Protective Covenants that are also attached to the Deed, the terms of which are also binding upon Buyer and subsequent owners, occupants or others with an interest in the Subject Property. 3. Time to Commence Rehabilitation 3.1 Rehabilitation. 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, rehabilitation shall have commenced on the Subject Property. Commencement of rehabilitation is defined as building permits having been obtained from the Pueblo Regional Building Department and work having been commenced for permanent improvements that have been approved by the City's Department of Public Works, the City's Department of Planning and Community Development and the HARP Authority. All building permits and rehabilitation shall be according to development plans that have been approved by City's Department of Public Works, the City's Department of Planning and Community Development 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 rehabilitation work has been commenced. 3.2 Acknowledgment of Compliance. All building permits and rehabilitation shall be in accordance with development plans which have been approved by the City Planning and Zoning Commission, City Council and the HARP Authority as required by the Protective Covenants. After commencement of rehabilitation 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 rehabilitation has been so commenced and releasing City's right to repurchase the Subject Property pursuant to Section 6.1 below on account of failure to commence rehabilitation. 1 4. Completion of Rehabilitation Rehabilitation of the improvements, once commenced, shall be diligently pursued. Rehabilitation will commence as soon as possible after closing. After rehabilitation has commenced, if no substantial rehabilitation 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 Subject Property, together with all improvements located on it. City shall also have the right to repurchase all of the Subject Property, including improvements, if any building on the Subject Property on which rehabilitation has commenced has not been substantially completed within one year after commencement of rehabilitation. 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 rehabilitation or complete rehabilitation 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 Subject Property from Buyer as follows: 6.1 Before Rehabilitation Commences. If rehabilitation has not been commenced on the Subject Property, the "Repurchase Price" shall be $100,000. 6.2 After Rehabilitation has Commenced. If rehabilitation has commenced on the Subject 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 Subject Property, exclusive of any compensation for architects, engineers, executives, office or supervisory employees of Buyer, and exclusive of rehabilitation loan interest and Buyer's 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 of Direct Costs, together with such documents as City may request substantiating 2 this accounting (such as bills, invoices, rehabilitation 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 rehabilitation 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 Subject 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 rehabilitation, 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 rehabilitation, 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 Closing. 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 Subject 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 Subject Property. Within 10 days after the closing, Buyer shall, at its expense, deliver to City a title insurance policy issued by Land Title Guarantee Company ( "Title Company "), insuring marketable title to the Subject Property in City in the amount of the Repurchase Price. The title policy shall be subject only to the same exceptions included in the Deed delivered to the Buyer by City. The standard printed exceptions contained in Title Company's title policies shall be deleted. 3 (b) City shall pay the Repurchase Price to the following persons in the following order: persons lawfully claiming mechanic's liens pursuant to section 38 -22 -101 et seq., C.R.S. persons having a valid mortgage, deed of trust lien, or security interest on the Subject Property or Improvements or any part thereof. Buyer (c) The Repurchase Price shall be adjusted for real Subject 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 Subject 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 Construction 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 Construction Covenants and stating that the Construction Covenants are released. Upon recording such instrument, these Construction Covenants shall automatically terminate. Termination of the Construction Covenants shall not terminate or otherwise affect the Protective Covenants. 9. Protection 9.1 Protection of Persons and Subject Property. The Buyer shall take reasonable precautions for the safety of, and shall provide reasonable protection to prevent damage, injury or loss, caused by or resulting from Buyer's rehabilitation activities on the Subject Property and in or near the HARP Development to: (a) Employees on the Subject Property and for all members of the public at or near the HARP Development including persons near City Hall or within the HARP Development; 4 (b) Subject Property (including, without limitation, the HARP Development and the Site Improvements) at or adjacent to the Subject 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 rehabilitation hazards. The Buyer shall promptly remedy physical damage to the Subject 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 Rehabilitation. At all times while the Buyer is engaged in preliminary work on the Subject Property or the HARP Development and during the period from the commencement of rehabilitation until completion of rehabilitation, 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 rehabilitation. If a building is damaged or destroyed by fire or other casualty prior to completion of rehabilitation, 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, rehabilitation 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 Subject 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 Subject Property damage and $2,500 per claim for employee benefits. (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 5 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. All insurance policies required by these Construction Covenants shall contain clauses waiving subrogation rights against the City and the HARP Authority. 11. Assigns 11.1 Buyer's Assigns. Buyer may not assign its rights and authority hereunder unless it receives the express, written consent of the City and the HARP Authority. Any reference to Buyer in these Covenants shall also refer to any approved successors or assigns of Buyer, or subsequent owners, occupants or others having any interest in the Subject 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, 2016, 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, One City Hall Place, Pueblo, CO 81003, with a copy to City Attorney, 501 N. Main Street, #203, Pueblo, CO 81003, and Executive Director, HARP Authority, 125 Riverwalk Place, Pueblo, CO 81003. If to Buyer, to SDL Properties, LLC, 112 West "D" Street, Pueblo, CO 81003. Either party may, by notice properly delivered, change the persons named and address to which subsequent notices shall be delivered. 6 CITY: PUEBLO, A MUNICIPAL CORPORATION By: STATE OF COLORADO ) ) SS. COUNTY OF PUEBLO ) The foregoing instrument was acknowledged before me on this day of 2013, 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 BUYER: SDL Properties, LLC, a Colorado limited liability company Gary Anzuini, Manager and Member COUNTY OF PUEBLO ) ) ss. STATE OF COLORADO ) The foregoing instrument was acknowledged before me this day of June, 2013 by Gary Anzuini. Witness my hand and official seal. My Commission Expires: (SEAL) Notary Public 7