HomeMy WebLinkAboutDevelopment Agmt - 1212 S. Rangeline - 9-10-09DEVELOPMENT AGREEMENT
This Development Agreement (the "Agreement ") is executed this 10'" day of
September, 2009, by and between The City of Carmel Redevelopment Commission ( "CRC ") and
R (the "Zahner Entity ").
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1. Defined Terms.
Acquisition Date shall mean September 10, 2009.
Acquisition Price shall mean the amount of winning bid made by Zahner Entity for the acquisition of the
Real Estate at the Sheriff's Sale.
CB shall mean Community Bank.
CB Loan shall mean a loan from CB to Zahner Entity in a principal amount not to exceed $3,000,000.00,
the proceeds of which are to be used for the acquisition of the Real Estate.
CB Loan Documents shall mean the documents evidencing the CB Loan.
City shall mean the City of Carmel, Indiana.
CRC Acquisition Payment shall mean a payment by CRC, the amount of which shall be the positive
difference between: (a) the Acquisition Price; minus (b)the $3,000,000.00 available in the form of the CB
Loan; and minus (c) the amount of any additional funds available to Zahner Entity for acquisition of the
Real Estate; provided that, notwithstanding the result of the foregoing calculation, in no event shall the
CRC Acquisition Payment exceed $1,000,000.00.
CRC TIC Interest shall mean an undivided tenant -in- common interest in the Real Estate, the percentage
of which shall be determined by multiplying 100 by a fraction: (a) the numerator of which is the amount
of the CRC Acquisition Payment; and (b) the denominator of which is an amount equal to: (i) the
Acquisition Price; minus (11) the Personal Property Allocation. The. CRC TIC Interest shall: (a) apply with
respect to the buildings and improvements located on the Real Estate; but (b) exclude arty interest in the
personal property associated with the Real Estate.
Extended TIC Option Exercise Period shall mean the period (a) commencing on Marchl0, 2012 (the day
immediately following the last day of the Initial TIC Option Exercise Period); and (b) ending on the Maturity
Date.
Initial TIC Option Exercise Period shall mean the period: (a) commencing on September 10, 2011 (the
day immediately following the last day of the 2 -Year Period); and (b) ending on March 9, 2012.
Law shall mean any applicable federal, state, or local law, statute, ordinance, rule, or regulation, or any order
of decree of any: (a) governmental agency, board, commission, or department; or (b) other judicial,
administrative, or regulatory body.
Maturity Date shall mean the maturity date of the CB Loan.
1 -Year Period shall mean the period: (a) beginning on the Acquisition Date; and (b) ending on
September 9, 2010.
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Owner's Policy shall mean an owner's policy of title Insurance, insuring marketable, fee simple title to the
Real Estate in the name of CRC, as a tenant -in- common with Zahner Entity, for the amount of the CRC
Acquisition Payment.
Percentage Interest shall mean the same percentage as the percentage of the undivided
tenant -in- common interest in the Real Estate that comprises the CRC TIC Interest.
Personal Property Allocation shall mean $1,000,000.00, representing an agreed upon allocation of the
Acquisition Price to personal property, as opposed to real property, which personal property shall:
(a) remain the property of Zahner Entity; and (b) not be conveyed to CRC if: (i) CRC exercises the Real
Estate Purchase Option or the Zahner TIC Purchase Option; or (ii) Zahner Entity exercises the Zahner
TIC Sale Right.
Project Agreement shall mean a project agreement under which a qualified developer that is approved
by CRC is obligated to complete a redevelopment project on the Real Estate that is approved by CRC,
which project agreement shall include the standards normally included in agreements for redevelopment
projects in that portion of the City commonly known as the Carmel City Center (including, without
limitation, standards with respect to architecture, design, density, massing, height, and parking).
Real Estate shall mean that certain real estate more particularly described and/or depicted on Exhibit A_
Real Estate Option Exercise Period shall mean the period: (a) commencing on September 10, 2011 (the
day immediately following the last day of the 2 -Year Period); and (b) ending on March 9, 2012.
Real Estate Option Purchase Price shall mean an amount equal to: (a) the Acquisition Price; minus
(b) the Personal Property Allocation; and plus (c) the amount of the debt service that is paid by Zahner
Entity pursuant to the GB Loan Documents at the regular (non - default) rate of interest thereunder.
Real Estate Purchase Option shall mean the option of CRC to purchase the Real Estate from Zahner
Entity for the Real Estate Option Purchase Price.
Sheriff's Sale shall mean a sheriffs sale to be conducted in the City of Noblesville, County of Hamilton,
and State of Indiana on the Acquisition Date.
TIC Interests shall mean the CRC TIC Interest and/or the Zahner TIC Interest, as applicable.
TIC Interest Purchase Price shall mean an amountequai for (a) the Acquisition Price; minus (b) the Personal
Property Allocation; minus (c) the CRC Acquisition Payment; and plus (d) the amount of the debt service that
is (i) interest paid by Zahner Entity pursuant to the CB Loan Documents at the regular (non- default) rate of
interest thereunder; and (11) not reimbursed by CRC.
TIC Memorandum shall mean a recordable memorandum of this Agreement that: (a) specifies that the
parties hold title to the Real Estate as tenants -in- common; (b) states that there are purchase and sale options
existing with respect to the Real Estate and the TIC Interests; and (c) states that there are consent
requirements with respect to the sale of the TIC Interests and the Real Estate.
Tri -Party Agreement shall mean a Tri -Party Agreement substantially in the form attached hereto as
Exhibit B.
2 -Year Period shall mean the period: (a) beginning on the Acquisition Date; and (b) ending on
September 9, 2011.
Updated Phase 1 means the Phase 1 Environmental Assessment Update — Party Time, dated
July 27, 2005, and prepared by August Mack Environmental
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Zahner shall mean Paul Zahner, individually.
Zahner TIC Interest shall mean the undivided tenant -In- common interest in the Real Estate that remains
after subtraction of the CRC TIC Interest. The Zahner TIC Interest shall Include a 100% interest in the
personal property associated with the Real Estate.
Zahner TIC Purchase Option shall mean the option of CRC to purchase the Zahner TIC Interestfrom Zahner
Entity for the TIC Interest Purchase Price.
Zahner TIC Sale Right shall mean the right of Zahner Entity to require CRC to purchase the Zahner TIC
Interest from Zahner Entity for the TIC Interest Purchase Price.
2. General. The Real Estate is scheduled for Sheriffs Sale on the Acquisition Date. Zahner Entity
intends to bid for the purchase of the Real Estate at the Sheriff's Sale, and has secured a commitment
from CB for the CB Loan. CB has required, as a condition of providing the CB Loan, that CRC, Zahner
Entity, and CB enter into the Trl -Party Agreement. Subjectto compliance by Zahner Entity with the terms
and conditions of this Agreement, all of which shall apply if Zahner Entity is the successful bidder at the
Sheriff's Sale, CRC has agreed to execute the Tri -Party Agreement if Zahner Entity in connection with
Zahner Entity's acquisition of the Real Estate.
3. Redevelopment.
(a) Project Agreement. It is Zahner Entity's intent that, prior to the expiration of the
2 -Year Period: (i) Zahner Entity shall have identified a qualified developer to which it will
sell the Real Estate for redevelopment purposes; and (ii) such qualified developer and
CRC shall have entered into a Project Agreement. During the 2 -Year Period, Zahner
Entity shall not perform, or permit the performance of, any: (1) redevelopment of the Real
Estate; (ii) remodeling or substantial alteration of the improvements located on the Real
Estate; or (iii) construction of additional improvements on the Real Estate; except
pursuant to a Project Agreement.
(b) No Project Agreement. Zahner Entity grants the Real Estate Purchase Option to
CRC, subject to the terms and conditions of this Agreement. If, at the end of the 2 -Year
Period, a Project Agreement has not been executed, then, during the Real Estate Option
Exercise Period, CRC shall have the right to exercise the Real Estate Purchase Option.
If CRC timely exercises the Real Estate Purchase Option, then: (1) the closing with
respect to the conveyance of the Real Estate to CRC shaft occur: (A) at a place mutually
acceptable to CRC and Zahner Entity; and (B) on or before the date that is 30 days after
the date on which CRC exercises the Real Estate Purchase Option; provided that the
actual closing date shall be a date mutually acceptable to CRC and Zahner Entity; (ii) at
the closing, CRC shall pay the Real Estate Option Purchase Price to Zahner Entity in
cash or by wire transfer; (iii) at the closing, Zahner Entity shall deliver standard
commercial closing documents that reasonably are acceptable to CRC; provided that
such closing documents shall convey to CRC marketable, fee simple title to the Real
Estate, free and clearofall liens, encum brances, easements, restrictions, covenants, and
other title defects, other than the Permitted Encumbrances; and (iv) on the date of the
closing, Zahner Entity shall deliver possession of the Real Estate to CRC, free and clear
of all rights and claims of any other party to the possession, use, or occupancy of the
Real Estate.
TIC Interests.
(a) CRC TIC Interest. If, to acquire the Real Estate at the
necessary for Zahner Entity to bid an amount that exceeds: (1)
available in the form of the CB Loan; plus (ii) any additional funds
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Entity for acquisition of the Real Estate; then CRC shall pay the CRC Acquisition
Payment. Immediately following: (1) payment by CRC of the CRC Acquisition Payment;
(ii) acquisition by Zahner Entity of the of the Real Estate; and (iii) execution of the CB
Loan Documents; Zahner Entity shall convey the CRC TIC Interest to CRC pursuant to
standard commercial closing documents that reasonably are acceptable to CRC; provided
that: (I) such closing documents shell convey to CRC marketable, fee simple title to the
CRC TIC Interest, free and clear of all liens, encumbrances, easements, restrictions,
covenants, and other title defects, other than the Permitted Encumbrances, the lien of the
mortgage securing the CB Loan, and the rights and claims of Zahner Entity as the holder
of the Zahner TIC Interest; and (ii) in addition to the standard commercial closing
documents, CRC and Zahner Entity shall execute the TIC Memorandum.
(b) Title Insurance, If CRC acquires the CRC TIC Interest, then, on or before
September 25, 2009, Zahner Entity shall provide the Owner's Policy to CRC. The
exceptions to title set forth in the Owner's Policy shall include only the Permitted
Encumbrances, the lien of the mortgage securing the CB Loan, and the rights and claims
of Zahner Entity as the holder of the Zahner TIC Interest; provided that, if, in addition to
the foregoing, the exceptions to title include any liens, encumbrances, easements,
restrictions, covenants, or other title defects that would have a material and adverse
effect on the value of, and/or the redevelopment options available with respect to, the
Real Estate, then Zahner Entity immediately shall repay to CRC the full amount of the
CRC Acquisition Payment, at which time CRC shall reconvey the CRC TIC Interest to
Zahner Entity.
(b) Zahner TIC Purchase Option.
(i) Subject to the terms and conditions of this Agreement, Zahner
Entity grants the Zahner TIC Purchase Option to CRC.
(ii) If: (A) CRC acquires the CRC TIC Interest; and (B) at the end of
the 2 -Year Period, a Project Agreement has not been executed; then,
during the Initial TIC Option Exercise Period, CRC shall have the right to
exercise the ZahnerTlC Purchase Option. Zahner shall have no right to
exercise the Zahner TIC Sale Right during the Initial TIC Option Exercise
Period.
(iii) If: (A) CRC acquires the CRC TIC Interest; (B) at the end of the
2 -Year Period, a Project Agreement has not been executed; and (C) the
Initial TIC Option Exercise Period has expired without CRC having
exercised the ZahnerTlC Purchase Option; then, at any time during the
Extended TIC Option Exercise Period prior to the date on which Zahner
Entity exercises the Zahner TIC Sale Right as permitted by this Section,
CRC shall have the right to exercise the Zahner TIC Purchase Option.
(c) Zahner TIC Sale Right.
(i) Subject to the terms and conditions of this Agreement, CRC grants
the Zahner TIC Sale Right to Zahner Entity.
(ii) If: (A) CRC acquires the CRC TIC Interest; (B) at the end of the
2 -Year Period, a Project Agreement has not been executed; and (C) the
Initial TIC Option Exercise Period has expired without CRC having
exercised the Zahner TIC Purchase Option; then, at any time during the
Extended TIC Option Exercise Period prior to the date on which CRC
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exercises the Zahner TIC Purchase Option as permitted by this Section,
Zahner Entity shall have the right to exercise the ZahnerTlC Sale Right.
(d) Closing. If CRC or Zahner Entity timely exercises the Zahner TIC Purchase Option
or the Zahner TIC Sale Right, respectively, then: (1) the closing with respect to the
conveyance of the ZahnerTlC Interest to CRC shall occur: (A) at a place mutually acceptable
to CRC and Zahner Entity; and (B) on or before the date that is 30 days after the date on
which the CRC or Zahner Entity exercises the Zahner TIC Purchase Option or the Zahner
TIC Sale Right, as applicable; provided that the actual closing date shall be a date mutually
acceptable to CRC and Zahner Entity; (ii) at the closing,.CRC shall pay the TIC Interest
Purchase Price to Zahner Entity in cash or by wire transfer; (iii) at the closing, Zahner Entity
shall deliver standard commercial dosing documents that reasonably are acceptable to CRC;
provided that such closing documents shall convey to CRC marketable, fee simple title to the
Zahner TIC Interest, free and clear of all liens, encumbrances, easements, restrictions,
covenants, and other title defects, other than the Permitted Encumbrances; and (iv) on the
date of the closing, Zahner Entity shall deliver possession of the Real Estate to CRC, free
and clear of all rights and claims of any other party to the possession, use, or occupancy of
the Real Estate.
Maintenance and Expenses.
(a) General Obligations. If CRC acquires the CRC TIC Interest, then, at all times,
Zahner Entity shall: (I) maintain the Real Estate in a good, safe, clean, and sightly
condition that complies with all Laws; (11) provide all repairs necessary to maintain the
Real Estate in such condition; (iii) maintain in full force and effect a policy of liability
insurance that: (A) satisfies the coverage and other requirements set forth in Exhibit C;
and (B) names CRC as an additional insured; (iv) pay in full when due all charges for
utility services provided to the Real Estate; (v). pay in full when due all real estate taxes
and assessments that are or become a lien against the Real Estate; (vi) satisfy in full and
in a timely manner all obligations of landlord or owner under any leases dr occupancy
agreements with respect to the Real Estate; (vii) exercise commercially reasonable efforts
to enforce the full and timely performance of all obligations of tenants or occupants under
any leases or occupancy agreements with respect to the Real Estate; and (viii) satisfy in
full and in a timely manner all obligations of the borrower and /or the mortgagor under the
CB Loan Documents (including, without limitation, paying in full and in a timely manner
all payments becoming due under the CB Loan Documents).
(b) Reimbursements. If CRC acquires the CRC TIC Interest, then, from and after
the end of the 1 -Year Period, CRC shall reimburse Zahner Entity for the Percentage
Share of:
(1) the actual out -of- pocket costs and expenses reasonably incurred
by Zahner Entity to satisfy its obligations under Subsections 5(a)(i),
5(a)(ii), 5(a)(iii), 5(a)(iv), and 5(a)(v); provided that CRC shall have no
obligation to pay any costs or expenses of addressing or correcting any
violations of Laws to the extent that such violations existed before the
date hereof; and
(ii) the regular monthly debt service payments becoming due under
the CB Loan Documents.
Payments by CRC of the Percentage Share of costs, expenses, and debt service shall
be made in the usual course of CRC business after receipt of sufficient invoices and
supporting documentation; provided that, in all cases, all rental and other income from the
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Real Estate shall be applied: (I) first, to payment of regular monthly debt service
payments becoming due under the CB Loan Documents; (11) second, to payment of the
actual out -of- pocket costs and expenses reasonably incurred by Zahner Entity to satisfy
its obligations under Subsections 5(a)(1), 5(a)(ii), 5(a)(iii), 5(a)(iv), and 5(a)(v); and
(iii) third, to pay down the principal balance of the CB Loan. Payments by CRC of the
Percentage Share shall: (i) reflect; and (ii) be determined based upon the outstanding
costs, expenses, and debt service remaining after; the foregoing application of the rental
and other income from the Real Estate.
Representations. Zahner and Zahner Entity represent and warrant to CRC that:
(a) Fee simple title to the Real Estate is subject only to the Permitted Encumbrances
and, after the execution thereof, the lien of the mortgage securing the CB Loan;
(b) Neither Zahner nor Zahner Entity has received any notification from any
governmental agency, authority, or instrumentality that the Real Estate is in violation of
any Laws;
(c) to the best knowledge of Zahner and Zahner Entity, there is not now, and there
has not been, any contamination or pollution of the Real Estate, the improvements
located thereon, any part thereof, or of any groundwater thereunder, by any hazardous
waste, material, or substance in violation of any Laws, except as disclosed by the
Updated Phase 1; and
(d) to the best knowledge of Zahner and Zahner Entity, there are not now, and there
have not been, any underground storage tanks on, in, or under the Real Estate or the
improvements located thereon, except as disclosed by the Updated Phase 1.
7. Notices. All notices permitted or required to be given hereunder shall be in writing, and shall be
deemed to be delivered when: (a) delivered personally; (b) sent by facsimile, with electronic confirmation
of receipt; or (c) sent by national overnight courier; In all events to the following addresses: to CRC c/o
City of Carmel, Indiana, One Civic Square, Carmel, Indiana 46032, Facsimile: 317- 844 -3498, Attn: Les Olds,
with a copy to: Kari P. Haas, Esq., Wailack Somers & Haas, PC, One Indiana Square Suite 0,
Indianapolis, Indiana 46204, Facsimile: 317- 231 -9900; and to Zahner Entity at 97C 31 4 J
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Either party may change its address for notice by written notice delivered to the other party as provided
above.
8. Authority. Each of the undersigned persons executing this Agreement on behalf of CRC and
Zahner Entity represents and certifies that: (a) he or she is empowered and authorized by all necessary
action of CRC and Zahner Entity, respectively, to execute and deliver this Agreement; (b) he or she has
full capacity, power, and authority to enter into and carry out this Agreement; (c) the execution, delivery,
and performance of this Agreement have been authorized by CRC and Zahner Entity, respectively; and
(d) this Agreement is the legal, valid, and binding obligation of CRC and Zahner Entity, respectively.
9. Transfer Limitations. Until the Maturity Date, there shall be no: (a) sale, conveyance, transfer,
or assignment of the Real Estate, the CRC TIC Interest, or the Zahner TIC Interest; (b) grant of any
security or other interest therein, or (c) creation of any lien or encumbrance thereon; except: (a) the lien
of current real estate taxes and assessments; (b) as required by an executed Project Agreement; (c) as
provided in this Agreement in connection with the exercise of the Real Estate Purchase Option, the Zahner
TIC Purchase Option, or the Zahner TIC Sale Right; or (d) as approved by both CRC and Zahner Entity.
Notwithstanding the foregoing: (a) without the approval of CRC, Zahner Entity may lease the Real Estate
on commercially reasonable terms and conditions for a term ending on or before the end of the 1 -Year
Period; (b) without the approval of Zahner Entity, CRC may assign this Agreement to the City or any
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agency or instrumentality thereof; and (c) after a closing pursuant to the exercise of the Real Estate
Purchase Option, the Zahner TIC Purchase Option, or the Zahner TIC Sale Right, the limitations of this
Section shall have no further force or effect. There shall be no amendment, modification, extension, or
change in the terms and conditions of the CB Loan Documents or the CB Loan without the approval of
both CRC and Zahner Entity.
10. Miscellaneous. The terms and conditions of thisAgreementshalI be governed by, and construed
in accordance with, the laws of the State of Indiana. The section headings shall not be considered in any
way to affect the interpretation of this Agreement. All Exhibits referenced in this Agreement are attached
hereto and incorporated herein by reference. This Agreement is the final expression of the complete and
exclusive agreement between CRC and Zahner Entity. No agreement by and between CRC and Zahner
Entity to modify or amend this Agreement shall be binding and enforceable, unless all terms and
provisions of the modification or amendment are setforth in writing and signed by CRC and Zahner Entity.
The representations, warranties, and agreements contained in this Agreement shall survive the closing,
and CRC, Zahner Entity, and Zahner(with respectonly to its representations and warranties in Section 6)
each shall indemnify and hold harmless the other from and against any and all claims, actions, liabilities,
losses, damages, injuries, costs, and expenses (including, without limitation, attorneys' fees and court
costs) incurred as a result of, or in connection with, any breach of any representation, warranty, or
agreement contained in this Agreement
IN WITNESS WHEREOF, CRC and Zahner Entity have executed this Agreement as of
the date set forth above.
THE CITY OF CARMEL
REDEVELOPMENT COMMISSION:
By:
Ronald E. Carter, President
ZAHNER ENTITY:
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Title:
EXECUTION FOR LIMITED PURPOSES
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Zahner is executing this Agreement for the purpose of: (a) making to CRC the representations and
warranties set forth in Section 6; and (b) committing to the indemnification and hold harmless obligation
of Zahner set forth in Section 10; and for no other purpose whatsoever. Except as expressly provided
in the foregoing sentence, Zahner is not a party to this Agreement.
By:
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agency or instrumentality thereof; and (c) after a closing pursuant to the exercise of the Real Estate
Purchase Option, the Zahner TIC Purchase Option, or the Zahner TIC Sale Right, the limitations of this
Section shall have no further force or effect. There shall be no amendment, modification, extension, or
change in the terms and conditions of the CB Loan Documents or the CB Loan without the approval of
both CRC and Zahner Entity.
10. Miscellaneous. The terms and conditions of this Agreement shall be governed by, and construed
in accordance with, the laws of the State of Indiana. The section headings shall not be considered in any
way to affect the interpretation of this Agreement. All Exhibits referenced in this Agreement are attached
hereto and incorporated herein by reference. This Agreement is the final expression of the complete and
exclusive agreement between CRC and Zahner Entity. No agreement by and between CRC and Zahner
Entity to modify or amend this Agreement shall be binding and enforceable, unless all terms and
provisions of the modification or amendment are set forth in writing and signed by CRC and Zahner Entity.
The representations, warranties, and agreements contained in this Agreement shall survive the closing,
and CRC, Zahner Entity, and Zahner (with respect only to its representations and warranties in Section 6)
each shall indemnify and hold harmless the other from and against any and all claims, actions, liabilities,
losses, damages, injuries, costs, and expenses (including, without limitation, attorneys' fees and court
costs) incurred as a result of, or in connection with, any breach of any representation, warranty, or
agreement contained in this Agreement
IN WITNESS WHEREOF, CRC and Zahner Entity have executed this Agreement as of
the date set forth above.
THE CITY OF CARMEL
REDEVELQPMENT COMMISSION:
77 /Y
Ronald E. Carter, President
ZAHNER ENTITY:
By:
Printed:
Title:
EXECUTION FOR LIMITED PURPOSES
Zahner is executing this Agreement for the purpose of: (a) making to CRC the representations and
warranties set forth in Section 6; and (b) committing to the indemnification and hold harmless obligation
of Zahner set forth in Section 10; and for no other purpose whatsoever. Except as expressly provided
in the foregoing sentence, Zahner is not a party to this Agreement.
By:
Paul Zahner
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