HomeMy WebLinkAbout13572RESOLUTION NO. 13572
A RESOLUTION APPROVING (1) AN EMPLOYMENT AGREEMENT
BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND BIG R
HOLDINGS, INC., A COLORADO CORPORATION AND THE PUEBLO
DEVELOPMENT FOUNDATION, A COLORADO NON-PROFIT
CORPORATION; (2) A CONTRACT TO BUY AND SELL REAL ESTATE
RELATING TO 350 KEELER PARKWAY, PUEBLO, CO., BETWEEN
PUEBLO, A MUNICIPAL CORPORATION AND BIG R PROPERTIES,
LLC, A COLORADO LIMITED LIABILITY COMPANY; (3) A CONTRACT
TO BUY AND SELL REAL ESTATE RELATING TO 1 MCDONNELL
DOUGLAS STREET, PUEBLO, CO., BETWEEN PUEBLO, A MUNICIPAL
CORPORATION AND BIG R PROPERTIES, LLC, A COLORADO
LIMITED LIABILITY COMPANY; AND (4) A CONSTRUCTION
MANAGEMENT AGREEMENT BETWEEN PUEBLO, A MUNICIPAL
CORPORATION AND THE PUEBLO DEVELOPMENT FOUNDATION, A
COLORADO NON-PROFIT CORPORATION RELATING TO A JOB
CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE
PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID
AGREEMENTS; TRANSFERRING SEVEN MILLION DOLLARS
($7,000,000.00) FROM THE 1992-2021 SALES AND USE TAX CAPITAL
IMPROVEMENT PROJECTS FUND AND GRANTING BIG R HOLDINGS,
INC., A COLORADO CORPORATION, A VARIANCE FROM THE
CRITERIA AND STANDARDS ESTABLISHED BY SECTION 14-4-85.3
OF THE PUEBLO MUNICIPAL CODE
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The City Council finds and determines that the expenditure of $7 million for a job creating
capital improvement project with Big R Holdings, Inc., a Colorado corporation (“Company”) and
Big R Properties, LLC, a Colorado limited liability company (“Properties”) described in the
attached agreements is for a public purpose and in furtherance of a municipal function and will
create employment opportunities justifying the expenditure of public funds.
SECTION 2.
The City Council further finds that the incentives hereby granted to the Company and
Properties seemingly fail to meet the criteria and standards established by Section 14-4-85 of the
Pueblo Municipal Code (PMC). However, the City Council further finds and concludes that PMC
Sec. 14-4-85.3(c) of the Criteria Ordinance provides that City Council “may grant a variance” of
these requirements “if the City Council determines in its sole discretion that the project will create
employment for new employees justifying the expenditure of funds.”
SECTION 3.
The City Council further finds and concludes that good cause exists to grant the Company
and Properties a variance from the criteria and standards established by Section 14-4-85 of the
Pueblo Municipal Code for three reasons. First, the addition of 33 employees to the Pueblo
workforce at salaries and benefits averaging over $64,000, which far exceeds the average salary
in Pueblo County, will boost the local economy. Second, the sale of 1 McDonnell Douglas Street
(former Boeing Building) to the Company will relieve the City of significant projected maintenance
expenses in the future. Third, it is anticipated that Properties will make monthly “interest only”
payments on the promissory note of approximately $32,000 per month. At the end of the ten year
term of the promissory note, the City will have received approximately $2.1 million in interest
payments which can be deposited in the City’s Capital Building Fund.
SECTION 4.
The following agreements, all dated November 28, 2016, between the City, the Company,
Properties, the Pueblo Development Foundation (“PDF”), copies of which are attached hereto
and incorporated herein by this reference, having been approved as to form by the City Attorney,
are hereby approved:
a. employment Agreement;
b. Contract to Purchase 350 Keeler Parkway, Pueblo, CO;
c. Contract to Sell 1 McDonnell Douglas Street, Pueblo, CO; and
d. Construction Management Agreement.
The President of the City Council is authorized to execute and deliver said agreements in
the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest
same.
SECTION 5.
Funds in the aggregate amount of $7 million are hereby authorized to be transferred,
expended and made available out of the 1992-2021 Sales and Use Tax Capital Improvement
Projects Fund for the sole purpose of the job creating capital improvement project authorized
herein and in the manner described in the attached agreements. The funds hereby authorized to
be transferred and expended shall be released, disbursed and paid by the City’s Director of
Finance as specified in the attached agreements.
SECTION 6.
The officers and staff of the City are directed and authorized to perform any and all acts
consistent with the intent of this Resolution and the attached agreements which are necessary or
desirable to effectuate the transactions described therein.
SECTION 7.
This Resolution shall become effective immediately upon final passage.
INTRODUCED: November 28, 2016
BY: Robert Schilling
City Clerk’s Office Item # Q-1
Background Paper for Proposed
Resolution
COUNCIL MEETING DATE: November 28, 2016
TO: President Stephen G. Nawrocki and Members of City Council
CC: Sam Azad, City Manager
VIA: Gina Dutcher, City Clerk
FROM: Daniel C. Kogovsek, City Attorney
SUBJECT: A RESOLUTION APPROVING (1) AN EMPLOYMENT AGREEMENT BETWEEN
PUEBLO, A MUNICIPAL CORPORATION AND BIG R HOLDINGS, INC., A
COLORADO CORPORATION AND THE PUEBLO DEVELOPMENT
FOUNDATION, A COLORADO NON-PROFIT CORPORATION; (2) A
CONTRACT TO BUY AND SELL REAL ESTATE RELATING TO 350 KEELER
PARKWAY, PUEBLO, CO, BETWEEN PUEBLO, A MUNICIPAL CORPORATION
AND BIG R PROPERTIES, LLC, A COLORADO LIMITED LIABILITY COMPANY;
(3) A CONTRACT TO BUY AND SELL REAL ESTATE RELATING TO 1
MCDONNELL DOUGLAS STREET, PUEBLO, CO, BETWEEN PUEBLO, A
MUNICIPAL CORPORATION AND BIG R PROPERTIES, LLC, A COLORADO
LIMITED LIABILITY COMPANY; AND (4) A CONSTRUCTION MANAGEMENT
AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND THE
PUEBLO DEVELOPMENT FOUNDATION, A COLORADO NON-PROFIT
CORPORATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT
PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO
EXECUTE SAID AGREEMENTS; TRANSFERRING SEVEN MILLION DOLLARS
($7,000,000.00) FROM THE 1992-2021 SALES AND USE TAX CAPITAL
IMPROVEMENT PROJECTS FUND AND GRANTING BIG R HOLDINGS, INC., A
COLORADO CORPORATION, A VARIANCE FROM THE CRITERIA AND
STANDARDS ESTABLISHED BY SECTION 14-4-85.3 OF THE PUEBLO
MUNICIPAL CODE
SUMMARY:
Attached is a Resolution approving and authorizing the President of City Council to sign the
following four (4) agreements:
employment Agreement between the City of Pueblo and Big R Holdings, Inc., a Colorado
corporation (the “Company”) and Pueblo Development Foundation, a Colorado non-profit
corporation (“PDF”);
Contract for the City to purchase 350 Keeler Parkway, Pueblo, Colorado from Big R
Properties, LLC (“Big R Properties”) for $3 million;
Contract for the City to sell 1 McDonnell Douglas Street to Big R Properties for $4,800,000;
Construction Management Agreement between the City of Pueblo and PDF.
PREVIOUS COUNCIL ACTION:
In 2009, City Council granted the Company economic incentives in the amount of $564,000 in
exchange for the creation of 40 full-time primary jobs at a distribution center and office building
located at 350 Keeler Parkway in the Pueblo Airport Industrial Park. In 2013, City Council granted
the Company an additional $600,000 in exchange for the creation of 40 additional full-time primary
jobs at 350 Keeler Parkway. The 2013 employment Agreement, which obligates the Company to
employ 70 full-time employees through December 31, 2024 remains in full force and effect.
BACKGROUND:
The Company wishes to expand and relocate its distribution center and business administrative
offices from 350 Keeler Parkway to 1 McDonnell Douglas Street (the former “Boeing Building”) in
the Airport Industrial Park. The proposed employment Agreement provides that after a three-year
“ramp up” interval, the Company will hire 33 new full-time employees whose annual compensation
shall average at least $51,452 not including benefits and at least $64,315 including benefits.
FINANCIAL IMPLICATIONS:
Under the proposed Resolution, the City will transfer $7 million from the 1992-2021 Sales and
Use Tax Capital Improvement Projects Fund, as follows:
$3 million for the purchase of 350 Keeler Parkway. This property has been appraised at
$3 million. The Keeler property will be made available for lease or purchase by future
employers who wish to bring primary jobs to Pueblo County.
Up to $4 million to be disbursed to PDF, for the benefit of Company, for the actual costs
and expenses of remodeling and renovating 1 McDonnell Douglas Street, including the
cost of design and engineering services and construction of the renovations to the
building.
1 McDonnell Douglas Street has an appraised value of between $3.5 million and $4 million.
Because of the City’s expenditures in remodeling and renovating the distribution center, at the
closing of the sale of the building to Big R Properties, Big R Properties has agreed to sign and
deliver to the City a promissory note in the principal amount of $6,856,000 with an adjustable
interest rate thereon computed at the “prime rate” of Wells Fargo Bank, N.A. plus one percent.
The promissory note shall obligate Big R Properties to make monthly “interest only” payments for
its ten year term. At the conclusion of the ten year term, the entire principal balance shall be due
and payable by Big R Properties to the City. The interest rate shall be adjusted annually to reflect
changes in the “prime rate” of Wells Fargo Bank, N.A. commencing on the first annual anniversary
date of the promissory note. The promissory note shall be secured by a first priority deed of trust
to 1 McDonnell Douglas Street. The Company’s and Big R Properties’ investment in the project
is $1,840,000 in fixed assets in its relocated distribution facility and $450,000 toward the purchase
of 1 McDonnell Douglas Street, for a total of $2,290,000.
The City’s incentives are more than fifty percent of the total project value, contrary to PMC Sec.
14-4-85.3(b)(2) of the Criteria Ordinance. Similarly the City’s incentives exceed fifty percent of the
Company’s projected annual payroll of 33 new employees contrary to PMC Sec. 14-4-
85.3(b)(2)(a) of the Criteria Ordinance. In addition, PMC Sec. 14-4-85.3(b)(7) anticipates that
interest on loans made by the City shall be calculated by using the “prime rate” of Wells Fargo
Bank, N.A. plus three percent, rather than the prime rate plus one percent provided for in the
attached agreements. However, PMC Sec. 14-4-85.3(c) of the Criteria Ordinance provides that
the City Council “may grant a variance” of these requirements “if the City Council determines in
its sole discretion that the project will create employment for new employees justifying the
expenditure of funds.”
City staff is recommending that City Council grant the Company the requested variances for three
reasons:
1. The addition of 33 new employees to the Pueblo workforce at salaries and benefits
averaging more than $64,000, will boost the local economy. This far exceeds the
average salary in Pueblo County.
2. The sale of 1 McDonnell Douglas Street (the former Boeing Building) will relieve
the City of significant maintenance expenses in the future;
3. It is anticipated that Big R Properties will make monthly “interest only” payments
on the promissory note of approximately $32,000 per month. At the end of the ten
year term of the promissory note, the City will have received approximately $2.1
million in interest payments which can be deposited in the City’s Capital Building
Fund.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Resolution.
STAKEHOLDER PROCESS:
Not applicable to this Resolution.
ALTERNATIVES:
If this Resolution is not approved, the Company will not expand its distribution operations and
administrative offices at the Airport Industrial Park.
RECOMMENDATION:
The Pueblo Economic Development Corporation recommends approval of this Resolution.
Attachments:
Proposed Resolution, employment Agreement; Contract to Buy 350 Keeler
Parkway; Contract to Sell 1 McDonnell Douglas Street; and Construction Management
Agreement
AGREEMENT
THIS AGREEMENT("2016 Agreement") entered into as of November 28, 2016
between Pueblo, a municipal corporation (the "City") and Big R Holdings, Inc., a Colorado
corporation (the "Company") and Pueblo Development Foundation, a Colorado nonprofit
corporation ("PDF"). The City and Company and PDF may be individually referred to herein as
"Party" or collectively referred to as"Parties."
WHEREAS, the City granted the Company economic incentives to open and operate a
distribution center and administrative offices at the Pueblo Memorial Airport Industrial Park
pursuant to an agreement dated December 23, 2013 ("2013 Agreement");and
WHEREAS, the Parties desire that the 2013 Agreement remain in full force and effect
according to its terms and conditions;and
WHEREAS, Company has expressed a willingness to expand and relocate its distribution
center and its business administration offices within the Pueblo Memorial Airport Industrial Park
and in furtherance thereof has through the Pueblo Economic Development Corporation made
application for additional funds from the City, and
WHEREAS, in connection with its application, the Company has committed that (i)
either it or Properties shall invest not less than One Million Eight Hundred Forty Thousand
Dollars ($1,840,000) in fixed assets and other investment in a relocated distribution facility and
administrative offices within the Pueblo Memorial Airport Industrial Park and (ii) the Company
shall provide the employment described in Section 4 of this Agreement.
WHEREAS, the City has approved such application and will make additional funds
available to Company subject to and upon the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained
herein, and other good and valuable consideration,the receipt and sufficiency of which is hereby
acknowledged, City and Company agree as follows:
1. The following terms as used in this Agreement shall have the following meaning
unless the context clearly indicates otherwise:
"Effective Date"means the date of approval of this Agreement by City Council of City.
"Employment Commitment Date" means January 1,2020.
"Facility" means the distribution center and business administration offices located at the
Pueblo Memorial Airport Industrial Park, having a street address of 1 McDonnell Douglas St.,
Pueblo, Colorado,81001.
"Full-Time Employee"means a person who actually performs work at the Facility for not
less than thirty-five (35) hours per week whether employed by Company or by an outside entity
acting as an agency to provide Full-Time Employees for Company.
"Quarter"means three consecutive calendar months commencing January 1,April 1, July
1 and October 1 of each calendar year.
"Quarterly Employees" means the sum of the aggregate number of Full-Time Employees
on each business day of a Quarter, divided by the sum of the business days in such Quarter.
"Salary" means direct compensation payable to an employee including vacation pay,
bonuses, overtime compensation and the amount of any pretax benefits paid by the employee
under flexible spending or other qualified plans. The term does not include employer paid
payroll taxes nor benefits such as employer paid health insurance.
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2. If Company is not in default under this Agreement,City will advance to or for the
benefit of Company funds in the amount of Seven Million Dollars ($7,000,000.00) (the "City
Funds"), subject to and contingent upon the following conditions and covenants which Company
agrees to perform and comply with:
• Pay to the Company's affiliate, Big R Properties, LLC, a Colorado limited
liability company ("Properties"), the sum of Three Million Dollars
($3,000,000) for the purchase of the distribution center and business
administration offices located at the Pueblo Memorial Airport Industrial
Park, having a street address of 350 Keeler Parkway, Pueblo, CO 81001
("Keeler Property");
Disburse to PDF, for the benefit of Company, funds in an amount not to
exceed Four Million Dollars ($4,000,000) for the actual costs and
expenses of remodeling and renovating the Facility, including the costs of
design,engineering and construction services.
The disbursement for the purchase of the Keeler Property and remodeling and renovation of the
Facility are hereinafter referred to as the "City Funds." City, PDF and the Company agree to
perform and comply with the following conditions:
(a)(i) Purchase of the Keeler Property. The City agrees to disburse the above
funds after submission of the Company's written request for payment, if such request is
accompanied by any supporting documentation as required herein. The purchase of the Keeler
Property shall be governed by the Contract to Buy and Sell Real Estate, pertaining to the Keeler
Property, of even date herewith.The"closing"of the sale of the Keeler Property by Properties to
the City shall take place within thirty(30) days of the issuance of a Certificate of Occupancy for
the Facility following the remodeling and renovation of the Facility as set forth herein and the
seller's obligation to close on such sale is conditioned upon the mutual closing of the transaction
referenced in the following paragraph.
(ii) Sale of the Facility.City agrees to sell the Facility to Properties in
accordance with the terms and conditions of the Contract to Buy and Sell Real Estate pertaining
to the Facility of even date herewith.Properties will lease the Facility to the Company for use by
the Company as the Company's business administration offices and distribution center. The
"closing"of the sale of the Facility by City to Properties shall take place within thirty(30)days
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of the issuance of a Certificate of Occupancy for the Facility following the remodeling and
renovation of the Facility as set forth herein and simultaneously with the closing of the
transaction referenced in the preceding paragraph.
(iii) Properties Promissory Note. At the closing of real estate transactions
referenced in clauses(ii)and (iii)above, Properties shall deliver to City a promissory note in the
principal amount of Six Million Eight Hundred Fifty Six Thousand Dollars($6,856,000.00)with
an adjustable interest rate thereon computed at the"prime rate"of Wells Fargo Bank,N.A.plus
one(1)percent.The promissory note shall obligate Properties to make monthly"interest only"
payments for its ten year term.At the conclusion of the ten year term,the entire principal balance
shall be due and payable by Properties to the City. The interest rate shall be adjusted annually to
reflect changes in the"prime rate"of Wells Fargo Bank,N.A.commencing on the first annual
anniversary date of the promissory note.The promissory note shall be secured by a first-priority
Deed of Trust to the Facility from Properties.
(b) Plans and Bidding..
(i) The Company and Properties, in consultation with PDF shall
determine their needs for remodeling and renovation of the Property, and PDF (in consultation
with Company and/or Properties) shall cause plans and specifications to be prepared for the
work. The plans and specifications shall be filed with the City, but work shall not be performed
until and unless the same are approved by City, which approval shall not be unreasonably
withheld, conditioned or delayed. Additionally, PDF shall obtain the written approval of the
Company prior to any presentation of the plans and specifications to the City for the City's
approval. The remodeling and renovation of the Property in accordance with the approved plans
and specifications is hereafter referred to as the"Project".
(ii) All construction contracts for the work contemplated by the
approved plans and specifications ("Construction Contracts") shall be awarded by competitive
bidding. PDF shall invite general contractors holding Building Contractors-A (General
Unlimited) licenses having their principal place of business in the City or County of Pueblo who
are qualified and experienced to perform construction work for the Project("Local Contractors")
to submit bids. PDF may invite other qualified general contractors with their principal place of
business outside of Pueblo County, Colorado to submit bids. PDF shall assure that the same
scope of work to be bid is timely furnished to each general contractor invited to bid. For"design-
build" or other contractual arrangements, this requirement may be accomplished by a pre-bid
conference or other acceptable competitive bidding procedure which allows Local Contractors a
reasonable opportunity to participate in the competitive bidding procedures. All bids will be
received and opened publicly. PDF will use its best efforts in good faith to award the
construction contract to the lowest qualified bidder. A similar provision with respect to local
subcontractors and suppliers shall be included as part of the construction contract with the
general contractor who shall use its best efforts in good faith to engage local subcontractors and
suppliers for such construction. If the Company, its employees or agents had negotiated with a
general contractor, subcontractor or supplier with respect to the Project prior to competitive
bidding, neither the Company nor PDF shall not enter into any Construction Contract with such
general contractor, subcontractor or supplier for the Project. "Negotiate" means to discuss,
confer upon, or arrange the terms and conditions of a Construction Contract including, without
limitation, obtaining estimates of construction costs. After award, PDF shall enter into one or
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more Construction Contracts for the work and cause the remodeling and renovation to be
expeditiously completed, and PDF shall timely pay all contractors for work upon the Facility.
PDF shall not allow nor suffer any mechanics liens to be filed upon the Facility and in the event
any such liens are filed, shall cause same to be promptly removed.
(iii) City Funds will be disbursed by City to PDF solely for the costs of
design, renovation and remodeling of the Property in accordance with the plans and
specifications approved by City. In the event the cost of the design, remodeling and renovation
exceeds $4,000,000 of available City Funds, such costs shall be promptly paid by Company or
Properties and not by City.
(c) Company shall file in the office of the City Clerk copies of the following:
(i)a certificate or other evidence of authority to transact business in the State of Colorado issued
by the Colorado Secretary of State for each of the Company and Properties, together with
certificates of good standing issued by the governmental jurisdiction of each of Company's and
Properties' formation, (ii)certified copies of the resolutions of the governing board of Company
(or managers, as it relates to Properties) approving (A)this Agreement; (B) the Contract to Buy
and Sell Real Estate for the Facility; and (C) the Contract to Buy and Sell Real Estate for the
Keeler Property, and authorizing its officers or manager to execute and deliver said documents in
the name of Company or Properties,as applicable,and (iii) (A)this Agreement; (B)the Contract
to Buy and Sell Real Estate for the Facility; and(C)the Contract to Buy and Sell Real Estate for
the Keeler Property executed by authorized officers of Company (or the manager of Properties).
The date of the last to occur of the filings required under (i), (ii) and (iii) of this Section 2(c)
[ shall be referred to herein as "Closing". If the Closing does not occur on or before March 1,
2017, or such later date as Company and City shall mutually agree, the Company and the City,
each, at its sole option, may terminate this Agreement and the Contracts to Buy and Sell Real
Estate referenced in clauses (B) and (C) above, and City and Company shall thereafter be
released and discharged from all obligations hereunder.
(d) As conditions precedent to the disbursement of City Funds for the
renovation and remodeling of the Facility (i)Company and PDF shall have obtained City's
written approval of the plans and specifications for the renovation and remodeling of the Facility,
which shall not be unreasonably withheld, conditioned or delayed; (ii)Company shall file with
the City Clerk the documents described in subsection(c) above; and (iii)PDF shall file with the
City's Director of Finance periodic written requests for payment, certified to be true and correct
by an officer of Company or PDF, representing that the amounts included in the request for
payment have not been included in any prior request for payment and are for the actual cost of
remodeling the Facility, identifying the specific work for which payment is sought, including
paid invoices therefor and certificates of delivery and installation in the Facility. PDF shall not
submit requests for payment which exceed in the aggregate$4,000,000.
3. Company acknowledges and agrees that the primary purpose of City in entering into this
Agreement and the sole benefit to the City for making City Funds available hereunder is the
creation of jobs. Therefore, Company represents, covenants, and agrees that Company will on
and after the Employment Commitment Date continuously conduct its business operations at the
Facility and employ not less than thirty-three (33) new Full-Time Employees at the Facility
whose annual compensation shall average at least $51,452 in Salary and at least $64,315
including benefits. Company will use good faith efforts in accordance with its sound business
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practices to employ residents of the City of Pueblo as Full-Time Employees including, without
limitation, engaging in reasonable programs and posting of employment openings in the City of
Pueblo (collectively the "Employment Commitment"). The thirty-three (33) Full-Time
Employees must be new employees employed at the Facility, i.e. in addition to the number of
Full Time Employees employed by the Company as of the date of this Agreement.
4. Notwithstanding anything contained in this Agreement to the contrary, if Company shall
for any reason default in its Employment Commitment set forth in Paragraph 3, Company shall
repay to City a pro-rata share of the City Funds advanced by City under paragraph 2 hereof
based upon the number of Full-Time Employees employed by Company at the Facility (the
"Repayment Obligation"),as follows:
(a) During the seven(7)year period starting on the Employment Commitment
Date and ending eighty-four (84) months thereafter (the "Repayment Period") Company shall
pay to City an amount each Quarter equal to the new Quarterly Employees less than thirty-three
(33) Full-Time Employees employed at the Facility by Company multiplied by $1,616.88 (the
"Company's Quarterly Payments"). For example, if for the second Quarter of the third year after
the Employment Commitment Date such new Quarterly Employees is 30,the amount payable by
Company to City on or before the fifteenth (15th)day of the next calendar month would be(33 -
30)x$1,616.88=$4,850.64.
(b) Company's Quarterly Payments, if any, shall be paid to the City without
notice, demand, deduction or setoff on or before the fifteenth (15th) day of the month after the
end of each Quarter during the Repayment Period and for one month thereafter at the office of
the Director of Finance of City, 1 City Hall Place, Pueblo,Colorado, 81003,or such other person
or location as the City may designate. All past due Company's Quarterly Payments shall bear
interest at the rate of eight percent(8%)per annum ("Default Interest")until paid.
(c) Within fifteen (15) days after the end of each Quarter after the
Employment Commitment Date and for one calendar month after the Repayment Period,
Company will submit to City's Director of Finance Company's statements showing the Quarterly
Employees for the preceding Quarter and their annual Salary,together with the basis upon which
Quarterly Employees and Company's Quarterly Payment, if any, were computed certified by an
officer of the Company to be true and correct. For purposes of verifying Company's
employment and salaries, City shall have access to Company's records relating to Company's
employees employed at the Facility.
(d) Notwithstanding anything contained in this Paragraph 4 to the contrary, if
Company defaults in its Employment Commitment and Company's Repayment Obligation, and
such default is not cured within sixty(60) days after written notice specifying the default is given
by City to Company,then in such event, the entire balance of Company's Repayment Obligation
shall become due and payable, without notice, notice being hereby expressly waived, together
with Default Interest from the date of default, and for such purpose, the entire balance of
Company's Repayment Obligation shall be an amount equal to 33 times $1,616.88 multiplied by
the remaining Quarters of the Repayment Period from and after the default date plus the amount
of Company's unpaid Quarterly Payments, if any, but in no event more than $1,494,000 plus
Default Interest as herein provided Except as may be agreed by the City Council in its/their sole
5
discretion (as contemplated under paragraph 6(b) hereof), Company's Repayment Obligation is
absolute and unconditional and shall not be abated, reduced, diminished, modified, withheld or
otherwise offset for any cause or reason whatsoever.
5. Company's Repayment Obligation under this Agreement, if any is owed, shall be
deemed to be a debt of Company payable to City until Company performs and discharges its
obligations hereunder including its Employment Commitment contained in Paragraph 3 and its
Repayment Obligation contained in Paragraph 4. Company's obligations under this Agreement,
including its Employment Commitment and Repayment Obligation, shall be secured by a first-
in-priority Deed of Trust to the Facility.
6. (a) Prior to instituting any proceeding to enforce Company's Repayment
Obligation under Paragraph 4, City shall notify Company in writing of its intention to institute
such proceedings. Company may request relief from its Repayment Obligation by delivering to
City within twenty (20) days after date of City's notice, Company's written request for relief
specifying the grounds upon which such relief is sought together with documents supporting said
grounds. Within ninety (90) days after receipt of Company's request, City will schedule a
meeting with the City Council at which Company may appear. City will notify Company of the
time and place of the meeting. Failure of Company to timely deliver its complete written request
for relief or to appear at the scheduled meeting with the City Council shall entitle City to
immediately institute proceedings to enforce Company's Repayment Obligation.
(b) City Council may or may not, in its sole and absolute discretion, relieve
Company, in whole or in part, from Company's Repayment Obligation. Any action taken by the
City Council relating to a request for relief shall be final and binding on Company, and not
subject to judicial review. Any such action by City Council is, and shall constitute, a legislative
measure. Nothing contained in this paragraph 6 shall grant or be construed to grant to Company
any right or claim to relief from its Repayment Obligation or a hearing with respect thereto.
(c) No delay by the City in scheduling a meeting, or failure by City to
exercise its right to enforce this Agreement,including Company's Repayment Obligation,and no
partial or single exercise of that right, shall constitute a waiver of that right.
7. In the event of any litigation arising under this Agreement, the court shall award
to the prevailing party its costs and reasonable attorney fees. Exclusive venue for any such
litigation shall be Pueblo County, Colorado. All such litigation shall be filed in the District
Court, County of Pueblo, State of Colorado and each party submits to the jurisdiction of such
District Court. To the extent allowed by law, each party hereby waives its right to a jury trial.
8. This Agreement expresses the entire understanding of the parties and supersedes
and abrogates any and all prior dealings and commitments, whether oral or written, with respect
to the subject matter of this Agreement and may not be amended or modified except in writing
signed by City and Company and PDF. Any waiver of any provision of this Agreement must be
in writing and signed by the party whose rights are being waived. No waiver of any breach of
any provision hereof shall be or be deemed to be a waiver of any preceding or subsequent breach
[ of the same or any other provision of this Agreement. The failure of either party to enforce or
seek enforcement of the terms of this Agreement following any breach shall not be construed as
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a waiver of such breach.
9. This Agreement shall be construed in accordance with and be governed by the
laws of the State of Colorado without regard to conflict of law principles.
10. Any notices hereunder shall be sufficiently given if given in writing personally or
mailed by first class,registered, or certified mail, postage prepaid, addressed:
(a) if to City, City Manager, City of Pueblo, l City Hall Place, 2"d Floor,.
Pueblo, CO 81003 with a copy to`City Attorney, 1 City Hall Place, 3`d Floor, Pueblo, Colorado
81003,or
(b) if to the Company, 350 Keeler Parkway, Pueblo, Colorado, 81001,
attention Adam Carroll, with a copy to Maynes, Bradford, Shipps & Sheftel, LLP, Attn: Sherri
Way, 1331 Seventeenth Street, Suite 410,Denver,Colorado,80202,or
(c) if to the PDF,301 N.Main Street, Suite 210,Pueblo,Colorado 81003,
or to such other person or address as either party shall specify in written notice given to the other
party pursuant to the provisions of this Paragraph 10.
11. Time is of the essence hereof. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. Company may not assign
this Agreement or any interest herein (except for assignments to entities controlling, controlled
by or under common control of the Company, which the Company can do solely upon providing
written notice to the City)without the express written consent of the City, which consent may be
arbitrarily withheld,conditioned or delayed. PDF may not assign this Agreement or any interest
herein without the express written consent of the City, which consent may be arbitrarily
withheld, conditioned or delayed. Any assignment or attempted assignment of this Agreement
by Company or PDF without such consent shall be null and void. However, if Company
proposed to assign this Agreement to a purchaser of its business, the transaction is an arms-
length transaction, the purchaser assumes and agrees to perform Company's obligations under
this Agreement, then in such events,the assignment may be made with the express consent of the
City, which consent may not be unreasonably withheld. The City shall have the right to
determine that said proposed purchaser is creditworthy, has sufficient business experience in the
retail sector,and is capable of performing Company's obligations under this Agreement.
12. The persons signing this Agreement in the name of and on behalf of Company
and PDF represent and warrant that they and Company and PDF have the requisite power and
authority to enter into, execute, and deliver this Agreement, and that this Agreement is a valid
legally binding obligation of Company and PDF enforceable in accordance with its terms.
13. Company represents and warrants that no person, entity, or organization has been
employed or retained or will receive or be paid, directly or indirectly, any commission,
percentage, contingent fee or any other remuneration, payment or receipt of which is contingent
upon approval of this Agreement or City's advancement of City Funds hereunder. For breach or
violation of this warranty, City shall have the right to terminate this Agreement, or recover the
7
full amount of such commission, percentage,contingent fee or other remuneration,and/or to seek
such other remedies legally available to City,which remedies shall be cumulative.
14. In no event shall any Party, its officers, agents or employees (collectively, the
"First Party") be liable to any other Party for damages, including without limitation,
compensatory, punitive, indirect, special or consequential damages, resulting from or arising out
of or related to this Agreement or the performance or breach thereof by the First Party or the
failure or delay of any Party other than the First Party in the performance of any covenant or
provision under this Agreement on its part to be performed. In consideration of each Party
entering into this Agreement,the other Parties hereby waive and discharge one another, and each
of their officers, agents and employees, from all claims for any and all such damages. No
breach, default, delay or failure of City under this Agreement shall be or be construed to be a
waiver, discharge or release of Company's Repayment Obligation under Paragraph 4 hereof with
respect to the amount of City Funds actually advanced or paid by City to or for the benefit of
Company pursuant to Paragraph 2 hereof.
15. 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.
16. Neither party shall be, or hold itself out as, agent of the other or as joint venturers
or partners under this Agreement.
17. Each party acknowledges that this Agreement was fully negotiated by the parties
and, therefore, no provision of this Agreement shall be interpreted against any party because
such party or its legal representative drafted such provision.
18. The provisions of this Agreement are for the exclusive benefit of the parties
hereto and their successors and permitted assigns, and no third party shall be a beneficiary, or
have any rights by virtue of this Agreement.
19. This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed for all purposes to be an original, and all such counterparts shall
together constitute but one and the same original.
20. Notwithstanding this 2016 Agreement, the terms and conditions of the 2013
Agreement between the City and the Company shall remain in full force and effect in accordance
with its terms.
REST OF THIS PAGE LEFT INTENTIONALLY BLANK
SIGNATURE PAGE TO FOLLOW
8
Executed at Pueblo, Colorado,the day and year first above written.
[ SEAL]
Pueblo . ' w •: '�s�'•
Attest: By �`Z
City rk President of the City Council
[ SEAL] BIG R e DINGS, INC.,
a Color.,•o corporation
A �Gq_ K�y�u•c__ By
Name: Karla B in Name: Bryce David Blain, Jr.
Title: Secretary Title: President
PUEBLO DEVELOPMENT FOUNDATION
A Colorado Non-profit Corporation
By:
Robert L. Root, President
Attest:
Secretary
9
Executed at Pueblo, Colorado, the day and year first above written.
[ SEAL ] Pueblo, a Municipal Corporation
Attest: By
City Clerk President of the City Council
[ SEAL ] BIG R HOLDINGS, INC.,
a Colorado corporation
Attest: By
Name: Karla Blain Name: Bryce David Blain, Jr.
Title: Secretary Title: President
PUEBLO DEVELOPMENT FOUNDATION
A Colorado Non-profit Corporation
By: 7//t
Robert L. Root, President
Attest:
ecretary
9
I
CONSTRUCTION MANAGEMENT AGREEMENT
THIS AGREEMENT entered into as of November 28, 2016, between the City of Pueblo,
a municipal corporation ("City") and Pueblo Development Foundation, a Colorado nonprofit
corporation ("PDF"), WITNESSETH:
WHEREAS, City is the owner of Lots 46 and 47, Pueblo Memorial Airport Industrial
Park Subdivision, Pueblo County, Colorado, consisting of approximately 11.20 acres (the
"Property"); and
WHEREAS, City desires to convey the Property to Big R Properties, LLC. a Colorado
limited liability company ("Properties"), which shall lease the Property to its affiliate, Big R
Holdings, Inc., a Colorado corporation (the "Company"), as a part of a new job creating capital
improvement project whereby Company commits it will employ a minimum of thirty-three (33)
new full-time employees at the Property and Company and City have entered into a separate
Agreement concerning such commitment of even date herewith (the "Employment Agreement");
and
WHEREAS, City desires to engage PDF to provide construction management services
with respect to such Property, including developing plans and specifications for the renovation of
the Property and constructing the renovation of the Property;
WHEREAS, City will advance to PDF funds for the renovation of the Property and PDF
is willing to oversee and manage such construction.
NOW THEREFORE, in consideration of the foregoing and mutual covenants contained
herein, City and PDF agree as follows:
Section 1. Renovation: PDF will oversee and manage the renovation of the Property
in accordance with the prepared plans and specifications, approved in advance by the City and by
Properties and the Company in accordance with the terms of the Employment Agreement. City
will advance to PDF for the benefit of Properties and the Company funds in an amount not to
exceed Four Million Dollars ($4,000,000) (the "City Funds") for such purposes, subject to and
contingent upon the following conditions and covenants:
(a) Company executing the Employment Agreement with City approved by
City Council by Resolution.
(b) All contracts for remodeling and renovating the Property being awarded
after competitive bidding which allows qualified local contractors to participate in the
competitive bidding procedures.
(c) All City Funds shall be spent solely on the renovation of the Property.
(d) PDF shall file with City's Director of Finance written requests for
payment certified to be true and correct by an officer of PDF or its representative that the
amounts included in each request for payment have not been included in any prior request for
payment and are for the actual cost of renovating the Property, identifying the construction work
for which payment is sought has been completed. All City Funds disbursed directly to PDF shall
be held in trust by PDF for the sole and only purpose of paying for renovation of the Property.
Section 2. Construction Management Fee. All renovation construction funds
received by PDF under this Agreement shall be held in trust by PDF for the benefit of City and
Company and immediately after receipt thereof by PDF, PDF shall deliver and pay the
renovation contractors, less one percent (1%) thereof to be retained by PDF as reimbursement to
PDF for its expenses incurred in participating in this transaction and as construction manager
under this Agreement.
Section 3. Delays. Any delays in or failure of performance by any Party of its
obligations under this Agreement shall be excused if such delays or failure are a result of acts of
God, fires, floods, strikes, labor disputes, accidents, regulations or order of civil or military
authorities, shortages of labor or materials, or other causes, similar or dissimilar, which are
beyond the control of such Party.
Section 4. Default. Time is of the essence, subject to Section 3 above, if any
payment or any other material condition, obligation, or duty is not timely made, tendered, or
performed by either Party, then either Party niay exercise any and all rights available at law or in
equity, including damages, but such damages shall be limited to the actual amount that such
Party is entitled to receive or retain under this Agreement. No special or punitive damages shall
be payable hereunder.
Section 5. Article X Section 20/TABOR. The parties understand and acknowledge that
City is subject to Article X, § 20 of the Colorado Constitution ("TABOR"). The parties do not
intend to violate the terms and requirements of TABOR by the execution of this Agreement. It is
understood and agreed that this Agreement does not create a multi-fiscal year direct or indirect
debt or obligation within the meaning of TABOR and, therefore, notwithstanding anything in
this Agreement to the contrary, all payment obligations of City are expressly dependent and
conditioned upon the continuing availability of funds beyond the term of City's current fiscal
period ending upon the next succeeding December 31. Financial obligations of City payable
after the current fiscal year are contingent upon funds for that purpose being appropriated,
budgeted, and otherwise made available in accordance with the rules, regulations, and
resolutions of City, and other applicable law. Upon the failure to appropriate such funds, this
Agreement shall be terminated.
Section 6. Captions. The captions of the Sections are set forth only for the
convenience and reference of the Parties and are not intended in any way to define, limit, or
describe the scope or intent of this Agreement.
Section 7. Additional Documents or Action. The Parties agree to execute any
additional documents or take any additional action that is necessary to carry out this Agreement.
Section 8. Waiver of Breach. A waiver by any Party to this Agreement of the breach
of any term or provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either Party.
Section 9. Governing Law. This Agreement shall be governed by the laws of the
State of Colorado.
Section 10. Execution in Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall constitute but one
and the same instrument.
Section 11. Third-party Beneficiaries. This Agreement is intended to describe the
rights and responsibilities only as to the Parties hereto. This Agreement is not intended and shall
not he deemed to confer any rights on any person or entity not named as a Party hereto.
Accordingly, no third party shall have any right or remedy hereunder or the right to enforce any
provision of this Agreement.
Section 12. Good Faith of Parties. In the performance of this Agreement or in
considering any requested approval, acceptance, or extension of time, the Parties agree that each
will act in good faith and will not act unreasonably, arbitrarily, capriciously, or unreasonably
withhold, condition, or delay any approval, acceptance, or extension of time required or
requested pursuant to this Agreement.
Section 13. Venue. In the event of any litigation arising under this Agreement,
exclusive venue for any such litigation shall be Pueblo County, Colorado. All such litigation
shall be filed in the District Court, County of Pueblo, State of Colorado and each party submits
to the jurisdiction of such District Court. To the extent allowed by law, each party waives its
right to a jury trial.
Section 14. Notices. Any notices hereunder shall be sufficiently given if given in writing
personally or mailed by first class, registered, or certified mail, postage prepaid, addressed:
(a) if to City, City Manager, City of Pueblo, 1 City Hall Place, Second Floor,
Pueblo, CO 81003 with a copy to City Attorney, 1 City Hall Place, Third Floor, Pueblo,
Colorado 81003, or
(b) if to the PDF, 301 N. Main Street, Suite 210, Pueblo, Colorado 81003.
(c) and with a courtesy copy to the Company at 350 Keeler Parkway, Pueblo,
Colorado, 81001, attention Adam Carroll, with an additional copy to Maynes, Bradford, Shipps
& Sheftel, LLP, Attn: Sherri Way, 1331 Seventeenth Street, Suite 410, Denver, Colorado, 80202
or to such other person or address as either party shall specify in written notice given to the other
party pursuant to the provisions of this Section 14.
Section 15. Authority to Sign. The persons signing this Agreement in the name of
and on behalf of PDF represent and warrant that they and PDF have the requisite power and
Authority to enter into, execute, and deliver this Agreement, and that this Agreement is a valid
legally binding obligation of PDF enforceable against PDF in accordance with its terms. When
executed by the City and PDF, this Agreement shall constitute a binding Agreement and shall be
binding upon and inure to the benefit of the parties and their respective successors and permitted
assigns.
Section 16. Severability. 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.
Section 17. Drafters. Each party acknowledges that this Agreement was fully
negotiated by the parties and, therefore, no provision of this Agreement shall be interpreted
against any party because such party or its legal representative drafted such provision.
Section 18. Assignment. This Agreement shall be binding upon and inure to the
benefit of City and PDF and their respective successors and assigns, provided PDF may not
assign this Agreement or any of its rights hereunder without the prior written consent of City.
EXECUTED at Pueblo, Colorado as of the day and year first above written.
PUEBLO, A -'• _ -•RPORATION
By: ♦
WIIIWIIIIPPr
Pre IC ent of the City Council
Attest: 41116. � •
City %,erk
Approved as to form:
City Attorney
PUEBLO DEVELOPMENT FOUNDATION
A Colorado Non-profit Corporation
By:
Robert L. Root, President
�.r
Attest:
ecretary
CONTRACT TO BUY AND SELL REAL ESTATE
THIS CONTRACT TO BUY AND SELL REAL ESTATE("Contract")is made and entered
into as of November 28, 2016 (the "Effective Date") by and between Pueblo, a Municipal
Corporation (the"Seller")and Big R Properties, LLC, a Colorado limited liability company(the
"Buyer"). Buyer and Seller are sometimes referred to herein as a"Party"and, collectively,as the
"Parties"
Recitals
A. Seller is the owner of certain real property located within Pueblo County,Colorado,
and more particularly described as:
Lots 46 and 47, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County,
Colorado,more commonly known as 1 McDonnell Douglas Street,Pueblo,CO 81001
(the"Property").,_
B. Buyer is desirous of purchasing the Property from Seller upon the terms set forth
hereinafter.
C. Seller is willing to sell the Property 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 and other good and valuable consideration,the receipt and sufficiency of which is
hereby acknowledged, Seller and Buyer agree as follows:
1. Sale and Purchase: Seller agrees to sell and Buyer agrees to purchase the Property,
together with all tenements,hereditaments,appurtenances,interests,rights,benefits,easements and
improvements thereunto belong or appertaining, all of which are and shall constitute part of the
Property as defined herein,on the terms and conditions set forth in this Contract.
2. Purchase Price and Terms. The Purchase Price for the Property shall be Four Million
Eight Hundred Thousand Dollars($4,800,000.00)payable as follows:
(a) $450,000.00 payable on Closing Date(as defined in Paragraph 5 below);
(b) Delivery by Buyer to Seller of(i)the promissory note to be signed by Buyer
and(ii)a first-priority Deed of Trust,each as required by Section 2(a)(ii)of the Agreement of even
date herewith signed by Seller,Buyer and the Pueblo Development Foundation(the"Agreement").
3. Evidence of Title.
St
lit
(a) Title Commitment Policy. Prior to the Closing Date(as defined in Paragraph 5
below) Buyer shall order and obtain, at Seller's expense, a current commitment for extended
coverage title insurance in the amount of Six Million Eight Hundred Fifty Six Thousand Dollars
($6,856,000.00),together with legible copies of all documents listed as exceptions therein, and a
current certificate of taxes due with respect to the Property,from a title company selected by Buyer
authorized to issue title insurance in the state of Colorado (the "Title Company"), on the current
standard form of extended ALTA Lenders Policy(collectively,the"Title Commitment"). The Title
Company shall promptly provide copies of any amendments or modifications of the Title
Commitment to Seller. At Closing or as soon as reasonably practicable after Closing, the Title
Company shall issue and deliver to Seller the lender's title insurance policy referred to above(the
"Title Policy"),issued by the Title Company insuring Buyer's title to the Property and Seller's first-
priority encumbrance on the Property, consistent with the Title Commitment, providing "gap"
coverage,deleting the standard exceptions,endorsing over arbitration exceptions(to the extent the
Title Company will so agree),if necessary,and subject only to taxes and assessments for the year of
Closing and subsequent years, and the other matters approved by Buyer in accordance with
subparagraph(c)below and any encumbrances upon the Property caused by Buyer(the"Permitted
Exceptions"). At Closing,Seller shall pay the premium for the Title Policy. Buyer may obtain such
other endorsements to the Title Policy as Buyer desires, at the expense of Buyer, except for
endorsements obtained at Seller's cost,as provided in subparagraph(c)below. Seller shall provide
such affidavits or certificates as may be required by the Title Company to remove all liens,
including,without limitation,mechanics'or materialmen's liens,as exceptions to the Title Policy.
(b) Survey. Seller shall order an update to Seller's existing survey from its
existing surveyor(or,if such surveyor is not available,then from another surveyor selected by Seller
and reasonably acceptable to Buyer)(the"Survey"). At Seller's sole cost and expense,Seller shall
cause a copy ofthe Survey to be delivered to Buyer promptly following Seller's receipt of same.The
Survey shall show all improvements and shall plot all exceptions shown on the applicable Title
Commitment(to the extent plottable),certified in favor of Seller,Buyer,any requested affiliates of
Seller and Buyer,and the Title Company in a manner reasonably acceptable to Seller and Buyer,and
prepared in accordance with the appropriate"ALTA/ACSM"minimum standards.
(c) role Defects and Objections. Buyer will have twenty(20)days from the date
of receipt of the Title Commitment and Survey,whichever shall last occur,to notify Seller in writing
of any objections to any items identified in the Title Commitment,or of any other objections as to
title matters. Seller will have until fifteen (15) days after receipt of Buyer's written objections
("Seller's Cure Period")to elect, at its reasonable discretion,to cure all items to which Buyer has
objected,cause such items to be modified in a manner which is reasonably satisfactory to Buyer or
to advise Buyer that Seller does not intend to cure such items.Alternatively,within the Seller's Cure
Period, Seller at Seller's cost may elect to obtain one or more endorsements to the Title
Commitment,in a form reasonably acceptable to Buyer, providing title insurance protection with
regard to any objections raised by Buyer. If Seller fails to cure to the reasonable satisfaction of
Buyer any written objection by Buyer of which Seller has been given notice in accordance with this
subparagraph(c),or elects not to cure,then Buyer may elect, as its sole remedy to either(i)waive
2
1
}
the objection by written notice to Seller within ten(10)days after expiration of Seller's Cure Period
and proceed to Closing as herein provided,or(ii)terminate this Contract by written notice to Seller,
in which case the Parties will be released from all obligations hereunder,except for any obligations
that expressly survive the termination of this Contract. Buyer will have ten(10)business days after
receipt of any amendment or update to the Title Commitment or Survey to object to any changes in
the same fashion as objections to the initial Title Commitment or Survey under this subparagraph
(c). Anything above to the contrary notwithstanding,Seller shall be obligated to,and shall cause all
financing, mortgage, judgment and tax liens to be removed as title exceptions prior to or
concurrently with Closing.
4. inspection. Commencing on the Effective Date and continuing during the term ofthis
Contract until the first to occur of the Closing Date or termination of this Contract,Buyer,its agents,
consultants and employees,shall have the right to enter and access the Property at reasonable times
and upon reasonable advance notice for the purpose of making such inspections,studies,tests and
investigations ("Testing") as Buyer may elect and which it deems necessary to determine the
suitability of the Property for Buyer's intended use. All such Testing shall be performed by Buyer or
its agents or employees at Buyer's sole cost and expense. Buyer shall indemnify,defend and hold
Seller and the Property harmless from and against any and all direct costs, liabilities, claims,
demands,actions and expenses arising from or in connection with such Testing and, in the event
Buyer does not close on the purchase of the Property,Buyer shall repair any damage to the Property
or improvements thereon caused by such Testing. This indemnification shall not be deemed to apply
to costs, liabilities, claims, demands, actions or expenses arising from Seller's negligent acts or
omissions or any pre-existing condition(including,without limitation,environmental conditions)
within the Property. If Buyer is not satisfied with the physical condition of the Property,Buyer may
terminate this Contract by written notice given to Seller at least fifteen(15)days prior to Closing
Date.
5. Pate&Closing. The closing of Buyer's purchase of the Property("Closing")shall
take place within thirty(30)days after the issuance of a Certificate of Occupancy for the Property
following the remodeling and renovation of the Property and simultaneously with the closing of
Seller's purchase from Buyer ofthe real property and improvements owned by Buyer located at 350
Keeler Parkway in Pueblo, Colorado (the "Keeler Parkway Property"). The date of Closing
("Closing Date")and the hour and place of Closing shall be mutually agreed upon by the Parties.
6. Transfer.antic. Subject to payment of the Purchase Price,compliance by Buyer
with the other terms and provisions hereof,and the occurrence or waiver by Buyer of the Conditions
Precedent to Closing defined and described in Paragraph 7,Seller shall execute and deliver to Buyer
at Closing a Special Warranty Deed conveying marketable fee simple title to the Property to Buyer
free of financing,mortgage,judgment and tax liens,subject only to the Permitted Exceptions which
shall include all matters shown on the Title Commitment accepted by Buyer.
7. Additional.Conditions Precedent to Closing. The sale and purchase contemplated by
this Contract is contingent upon occurrence of all of the following prior to Closing Date
(collectively,the"Conditions Precedent to Closing"):
3
1
(a) City Council of Seller,as its governing body, approving this Contract on or
before Closing.
(b) The results of inspection and testing do not indicate any conditions which
are deemed unacceptable to Buyer, in Buyer's sole and absolute discretion.
In addition, Buyer's obligation to close on the sale of the Property hereunder shall be
conditioned upon the simultaneous closing of the purchase and sale of real property pursuant to
that certain Contract to Buy and Sell Real Estate for the Keeler Parkway Property,dated of even
date herewith.
In the event any of the Conditions Precedent to Closing are not satisfied on or before five(5)
days before the Closing Date,Buyer may by notice given to Seller not less than least five(5)days
prior to Closing Date(i)waive any or all of the above conditions in writing delivered to Seller and
close the sale and purchase of the Property,or(ii)elect to terminate this Contract, in which event
each party will be released from all obligations under this Contract.
8. Closing 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,one-half by Buyer and one-half by Seller.
9. Prorations. General taxes and assessments for the year of Closing,if any(which shall
be based on the taxes for the calendar year immediately preceding Closing),water,sewer,utility
charges and other usual and customary items shall be prorated between Seller and Buyer as of the
Closing Date.
10. Possession. Possession of the Property shall be delivered to Buyer by Seller on
.. . .......... ..:.
Closing Date.
1
11. Time of Essence/Default and Remedies. Time is of the essence hereof. If any
obligation required to be performed prior to closing(and including the obligation to close)is not
performed there shall be the following exclusive remedies:
(a) If Buyer is in Default: In the event Buyer defaults in the performance of its
obligations hereunder prior to Closing,Seller shall have the right to(i)terminate this Contract upon
written notice to the Buyer,or(ii)subject to Buyer's agreement,treat this Contract as being in full
force and effect and to obtain specific performance,but not any damages..
(b) If Seller is in Default: In the event Seller defaults in the performance of its
obligations hereunder, Buyer shall have the right to(i)terminate this Contract by written notice to
Seller or(ii)treat this Contract as being in full force and effect and to obtain specific performance,
but not any damages.
4
(c) Costs and Attorneys'Fees. Anything to the contrary herein notwithstanding,
in the event of any action or litigation arising out of this Contract, the court shall award to the
prevailing party all reasonable costs and expenses,including reasonable attorneys' fees. Exclusive
venue and jurisdiction for any such litigation shall be in the District Court in and for Pueblo County,
Colorado and to the maximum extent permitted by law,Buyer and Seller waive their right to a trial
by jury.The provisions of this subparagraph(c)shall survive Closing or termination of this Contract.
{
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 obligation of Seller,enforceable against Seller in accordance
with its terms.
(c) Seller is not a party to any judicial,administrative,arbitration or other similar
{ proceedings relating in any manner to the Property or to Seller's interest therein or that may
detrimentally affect Seller's ability to perform its obligations under this Contract or the ability of
persons who acquire portions of the Property to develop,own or operate the Property. Seller has not
received notice of(and to Seller's knowledge there is no basis for)any pending or threatened claims,
actions,suits or other proceedings of the nature described in the immediately preceding sentence,nor
are any such claims,actions,suits or other proceedings contemplated by Seller.
(d) To Seller's knowledge, there are no violations of laws, rules, regulations,
ordinances,codes,covenants,conditions,restrictions, instructions or agreements applicable to the
Property. Seller has not received notice from any governmental or other agency or any other person
with respect to any such violations concerning the Property.
(e) There are no contracts or other obligations outstanding for the sale,lease or
transfer of all or any part of the Property.
(f) There is no default, nor has any event occurred which, with the passage of
time, the giving of notice or both, would constitute a default under any agreement, contract,
mortgage, deed of trust or other instrument which relates Seller's interest in the Property,to the
Property itself,or which affects the Property in any manner that would have a material adverse effect
on the Buyer.
(g) Notwithstanding any other provision of this Agreement to the contrary,it is
understood and agreed that Seller is not making and has not at any time made and Seller hereby
disclaims any warranties or representations of any kind or character,express or implied with respect
5
jI
{
to: (i) the Property's compliance with all applicable state and federal environmental laws,
regulations,ordinances,rules and orders(collectively,"Environmental Laws");(ii)any pending or
threatened judicial or administrative proceedings of any kind with respect to the Property alleging
the violation or potential violation of any Environmental Law nor any pending or threatened
investigations of any matters relating to any Environmental Laws with respect to the Property;(iii)
the release or threatened release of any hazardous,toxic or otherwise regulated substance,waste,
contaminant or material (collectively "Hazardous Materials"), as such terms are defined in any
applicable Environmental Law, on, in or at the Property, or any part thereof; (iv) the use of the
Property as a dump site, a storage site for solid wastes or the location of above ground or
underground fuel or storage tanks;and(v)that Hazardous Materials are not currently present on or
have at any time been stored or used on the Property
Seller shall indemnify and hold Buyer harmless and defend Buyer from any loss,
liability or expense, including reasonable attorneys' fees, incurred by Buyer, or any claim made
against Buyer,by reason of Seller's breach of any ofthe foregoing representations or warranties.The
provisions of this Paragraph 12 shall survive closing in perpetuity,as it relates to the representations
and warranties set forth in Sections 12(a),(b),(c),(e)and(0,and for a period equal to the applicable
statute of limitations plus six(6)months,as it relates to the representations and warranties Section
12(d).
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) Subjeot to approval by Buyer's City Council,this Contract will have been
duly authorized, executed and delivered by Buyer and constitutes the legal, valid and binding
obligation of Buyer,enforceable against Buyer in accordance with its terms.
14. Seller Covenants. Commencing on the Effective Date and until the first to occur of
Closing or termination of this Contract,Seller shall not(a)lease,sell,convey or further encumber
any portion of the Property, (b) consent to any zoning or other change affecting the use of the
Property, except for those requested or approved by Buyer, or(c)cause any other changes which
affect the condition of Seller's title to the Property or would otherwise be reasonably likely to
adversely impact the condition of the Property or Buyer's intended use thereof.
15. Notices; Any notice required or permitted to be given or delivered under this
Contract shall be in writing and shall be given by personal delivery, or by the United States Postal
Service, by registered or certified mail, postage prepaid, or reputable national overnight courier
service:
(a) If to Seller,addressed to:
6
City Manager
City of Pueblo
1 City Hall Place, 2nd Floor
Pueblo,Colorado 81003
Telephone No. (719)553-2655
1 with a copy to: City Attorney
1 City Hall Place, 3rd Floor
Pueblo,Colorado 81003
Telephone No.(719) 562-3899
(b) If to Buyer,addressed to:
350 Keeler Parkway,Pueblo,Colorado,81001,attention Adam Carroll, with a copy
to Maynes,Bradford,Shipps&Sheftel,LLP,Attn:Sherri Way, 1331 Seventeenth Street,Suite 410,
Denver,Colorado, 80202
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. Any notice shall be deemed delivered on
the day on which personal delivery is effected or three(3)days after deposit in the mail in the case
} of registered or certified mail,and one(1)business day in the case of overnight courier.
16. Assignment. This Contract and the rights granted to Buyer hereunder may be
assigned by Buyer with Seller's consent,provided,such consent shall not be unreasonably withheld,
conditioned or delayed. Except as so restricted,this Contract shall inure to the benefit of and be
binding upon the Parties and their respective successors and assigns.
17. 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.
18. 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.
19. Captions. 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.
20. Validity. 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.
7
{
21. Broker. Buyer and Seller represent and wan-ant to the other that no broker or finder
has been engaged by such Party in connection with this transaction. Seller agrees to indemnify,
defend and hold Buyer harmless from and against any and all claims, loss, liability, costs and
expenses(including reasonable attorneys' fees),resulting from any claims that may be made against
Buyer by any broker or other person claiming a commission,fee or other compensation by reason of
the transaction contemplated hereby if the same shall arise by, through or on account of Seller.
Buyer agrees to indemnify,defend and hold Seller harmless from and against any and all claims,
loss, liability,costs and expenses(including reasonable attorneys' fees),resulting from any claims
that may be made against Seller by any broker (other than Broker) or other person claiming a
commission,fee or other compensation by reason of the transaction contemplated hereby if the same
shall arise by,through or on account of Buyer.
22. Applicable LW. 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).
23. Intetpretation. 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.
24. Survival ofRepresentations. Except as otherwise limited under the last paragraph of
Section 12 hereof,the representations,warranties,covenants and agreements of Buyer and Seller in
this Contract are and shall be construed to be covenants running with the Property,shall survive the
Closing of the transaction contemplated hereby and recordation of the Special Warranty Deed,may
be enforced by either Buyer or Seller after Closing Date,and shall not be merged or be deemed to be
merged into the Special Warranty Deed.
25. Third Parties. Buyer and Seller and their respective successors and permitted assigns
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.
26. Counterparts and Facsimile,Signatures'. This Contract may be executed in multiple
counterparts,which taken together shall be deemed one original.
27. Exclusivity: In consideration of the time and resources which the Buyer will devote
to the transactions contemplated herein,Seller agrees that until Closing or the earlier termination of
this Contract, Seller will not, directly or indirectly, solicit, initiate or enter into discussions or
transactions with,or encourage,or provide any information to,any individual,entity or group(other
than to Buyer and Buyer's designees) concerning any sale or lease of the Property or any similar
transaction or alternative. The provisions of this Paragraph shall not be construed to prohibit Seller
or Buyer from discussing the transaction contemplated herein with their attorneys or other
consultants.
28. Limitations on Liability. EXCLUDING LIABILITY ARISING FROM THE
8
WILLFUL OR INTENTIONAL MISCONDUCT OF A PARTY,NEITHER PARTY SHALL BE
LIABLE FOR ANY CONSEQUENTIAL,INCIDENTAL,PUNITIVE,SPECIAL,EXEMPLARY
OR INDIRECT DAMAGES (INCLUDING LOSS OF PROFITS ARISING OUT OF THIS
AGREEMENT, EVEN IF IT IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
REST OF THIS PAGE LEFT INTENTIONALLY BLANK
SIGNATURE PAGE TO FOLLOW
1
9
1 E
Executed at Pueblo, Colorado, the day and year first above written.
BUYER:
CITY OF PUEBLO, CO
AO
A MUNICIPAL CORPORATION
delli011111111.11r
iiiiiiiii"."--
By: —,,, �.
� Counci 'resident
ATTESTED BY: '\__PA,._,.-,C st1\
CITILERK
SELLER :
BIG R PROPERS, LLC
a Colorado limited l ability/company
By ./
Name: Bryce David Blain, Jr.
Title: Manager
10
Official Records of Pueblo County Clerk&Recorder 2095934
02/05/2018 02:49.07 PM Page 1 of 2
Warranty Deed R:$18.00 0:$0.00 Gilbert Ortiz
SPECIAL WARRANTY DEED
T iS DEED is dated February 1,2018,and is made between Big R Properties,LLC,Colorado a limited liability
company,the'Grantor,"and the City of Pueblo,Colorado,a Colorado municipal corporsdion,the"Grantee,"whose
legal address is 1 City Hall Place,Pueblo,Colorado 81003.
WITNESS,that the Grantor,for and in consideration of the sum of TEN DOLLARS,(810.00),the receipt and
aatlliciency of which is hereby acknowledged,hereby grants,bargains,sells,conveys and confirms unto the Grantee and
the Grantee's heirs and assigns forever,all the real property.together with any improvements thereon,located in the
County of Pueblo and State of Colorado,described as follows:
Lot 33,Pueblo Memorial Airport Industrial Park Subdivision,Pueblo County,Colorado
also known by street address as:350 Reeler Parkway,Pueblo,Colorado 81001
and assessor's schedule or petrel number: 330021003
TOGETHER with all and Angular the hereditaments and appurtenances thereunto belonging, or in anywise
appertaining,the sever lona,remainders,rents,issues and profits thereat 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 pretnises,with the
hereditaments and appurtenances.
TO HAVE AND TO HOLD the said premises above bargained and described, with the improvements,
hereditaments and appurtenances,unto the Grantee and the Grantee's heirs and assigns brewer.The Grantor,for butt'and
its successors and assigns,does covalent and agree that the Grantor shall and will WARRANT THE TITLE AND
DEFEND the above described premises,but no any a4obaing vacated street or alley,or other right-ofway that ltd)ares
the real property,if any,in the quiet and peaceable possession of the Grantcc and the heirs and assigns of the Grantee,
against all and every person or persons claiming the whole or any part thereof,by,through or under the Grantor except
and subject to: 0 none;or®the following matter,:
See Exhibit A.attached hereto
IN WITNESS WHEREON,the Grantor has caused its corporate name to be hereunto subscribed by its manager on
the date set forth above.
GRANTOR:
BIG R PROPERTIES,LLC ' limited liability
company
Ada 'Attorney-ln-Pact
for Bryce David Blain,Jr.,Manager
STATE OF COLORADO )
)ss.
County of Pueblo )
The foregoing instrument was acknowledged before me this i day of+1 1'1 r 1 'i t 4t f 2018,by Adam
Carroll,as AgenttAttwmey-In-Fac for Br} David Blain,Jr.,a Meager of Big R Properties f.L.C,a Colorado limited
liability company,on behalf of the limited liability company.
Witness my band and official seal.
My commission expires:
tcrmtsste L.aACAe4- Oil#43f .
MnrARvt•traUC
STATE nes COLORAO1
notary Public
IOEsIiWo
MY COMMISSION SPS Et501
Name and Address ofPerson Creating Newly Crearted Legal Description(138-33-1065,C.R.S.)
laid
ma".-
Ts.1ia.kir.a-t7.SPECIALWARRaScI V DINE(Frew aCarpswrtloal