HomeMy WebLinkAboutMemorandum of Understanding with Gordon W. Heath for Commerical Investment Real Estate located on 200 and 226 East Broadway
COMMERCIALIINVESTMENT REAL EST ATE
MEMORANDUM OF UNDERSTANDING
1. PARTIES. The City of Meridian, a Municipal Corporation and/or assigns (hereinafter
called "City"), whose address is 33 East Idaho Avenue, Meridian, Idaho 83642, agrees to consider
purchasing, and Gordon W. Heath (hereinafter called "Heath"), whose address is 9700 N. Cartwright
Road, Boise, Idaho 83714-9745, agrees to consider selling the following described real estate
hereinafter referred to as "Premises" and/or "Property".
2.
PROPERTY ADDRESS AND LEGAL DESCRIPTION. The property commonly
known as 200 and 226 E. Broadway Avenue, Meridian Idaho, legally described as Lots 1,2,3,4, and
9 of Block 6 Meridian Townsite, and Lot 6, Block 2 Rowan Addition, City of Meridian Ada County
Idaho. City and Heath authorize Agent or Closing Agency to insert and/or correct, over their
signatures, the legal description of the property as provided by Heath pursuant to Paragraph 6 herein.
3.
PURCHASE PRICE. The closing of this transaction is contingent upon the parties
agreeing to a purchase price. The purchase price shall be the amount as determined pursuant to the
following process: The City and Heath must agree on a purchase price within ninety (90) days of the
date of this agreement. City shall conduct an appraisal of the Subject Property with an appraiser who
is acceptable to City and Heath and who can prepare an appraisal report within sixty (60) days. City
and Heath agree to use their respective best efforts to establish a purchase price within thirty (30)
days of the receipt of the appraisal using the following procedure. Upon completion ofthe appraisal,
City shall submit to Heath a written proposal, within ten (10) calendar days, identifying the price that
City is willing to pay for the Subject property. Heath shall respond in writing to City's proposal
within ten (10) calendar days by either accepting City's proposal, declining City's proposal or by
submitting Heath's proposal ofthe price for which Heath is willing to sell the Subject Property. In
the event Heath submits Heath's written proposal to City, City would have ten (10) calendar days to
accept orreject Heath's proposal. In the eventthat City is unwilling to accept Heath's proposal then
this Agreement would expire at the end of business on day ten (10) of City's response period. If the
parties are unable to agree upon a purchase price, this agreement shall be considered null and void
and no longer in force. If the parties agree on a purchase price, said purchase price shall be
COMMERCIAL/INVESTMENT REAL ESTATE MEMORANPUM OF UNDERSTANDING - page 1 of9
memorialized through the execution of an addendum or amendment to this agreement.
4. PURCHASE TERMS AND EARNEST MONEY. The agreed upon purchase price,
if any, shall be paid in cash on the day of closing. City agrees to cooperate in any tax deferred
exchange that Heath may elect to conduct so long as City does not realize any liability or expense for
City's cooperation with Heath in the exchange. Earnest Money consideration of the City consists of
City's agreement to pay the cost ofthe appraisal and any inspection costs such as an environmental
assessment of the Property and any other inspections the City deems necessary and prudent to
conduct. As part ofthe Earnest Money consideration, City agrees to deliver to Heath a copy of the
appraisal and reports generated from any inspections conducted on the premises.
5.
INCLUDED ITEMS. As for the land, the following shall be included: All water and
water rights (including water shares and/or certificates), all ditches and ditch rights that are
appurtenant thereto that are now on or used in connection with the premises shall be included in the
sale unless otherwise provided herein. Other items specifically included in this sale: All
improvements and any fences on the Subject Property. Items specifically excluded in this sale: All
inventory, trade fixtures, and Heath's business equipment now on or to be used on the Subject
Property prior to closing
6.
ENVIRONMENTAL ASSESSMENT.
A) The closing of this transaction is contingent upon the City's satisfaction with the
results of an environmental assessment of the Premises. The City shall have sixty
(60) days from the date ofthis agreement to conduct environmental assessments
of the Property, conduct physical inspections of the Property, and conduct any
engineering studies ofthe Property that City may deem necessary, to include but
not limited to, survey work, soils and materials testing, and structural review of
the improvements. The City and/or its agents will be allowed to enter the
Premises and have access to the Premises during the term of this agreement for
the purpose of inspecting the Premises and the taking of soil samples, as
necessary. All inspections ofthe Premises by the City shall be at the expense of
the City. The City agrees to leave the Premises in the condition in which it was
found by the City, normal wear and tear excepted. City agrees to indemnify and
COMMERCIALfINVESTMENT REAL ESTATE MEMORANDUM OF UNDERSTANDING - page 2 of9
hold Heath harmless for any acts of City and/or City's agents during said
inspections. City agrees to conduct any City inspections in a manner that will not
disturb Heath's business.
B) In the event that the environmental assessments reveal the presence of hazardous
substances (including but not limited to underground storage tanks and asbestos)
on the Premises and Heath elects not to cleanup, remove, or remediate to the
City's satisfaction, City may elect to terminate this agreement in City's sole
discretion.
7.
TITLE COMPANY/CLOSING AGENCY.
A) The parties agree that Pioneer Title Insurance Company of Ada County shall
provide any required title policy and preliminary report of commitment.
B) The closing agency for this transaction shall be Pioneer Title Insurance Company
of Ada County.
C) Each party agrees to pay one-half (112) ofthe closing agency's fee.
8.
TITLE INSURANCE.
A) Heath is to pay for a standard Owner's Title Policy premium in this transaction.
The policy shall name the City as the insured in the amount of the purchase price.
Any additional title premium(s) required by City shall be paid by the City.
The Title Company is to provide all parties to this Agreement with a preliminary
title report on or before 10 days after execution of this agreement by the City.
The City shall have 30 days to object in writing to the condition of the title as set
forth in the report. In the event the City makes written objection to the title,
Heath shall have a reasonable time, not to exceed 30 days, to cure any defects of
title or provide affirmative title insurance coverage, and in the event Heath cannot
cure said defects or is unwilling to cure said defects or provide affirmative title
insurance coverage, the City may elect, as its sole remedy, to either (i) terminate
this Agreement, (ii) cure the defects at the City's expense, or (iii) proceed to
closing, taking title subject to such defects. If the City does not so object, the
City shall be deemed to have accepted the condition of the title.
COMMERCIAL/INVESTMENT REAL ESTATE MEMORANDUM OF UNDERSTANDING - page 3 of9
B) The final Title Insurance policy shall be delivered to the City by the Title
Company as soon as possible after closing.
9.
PAYMENT FOR APPRAISAL. Payment for the cost of the appraisal shall be
made by City within 30 days of invoice from the appraiser. In the event that City does not purchase
the Premises, City shall be fully responsible for the cost of the appraisal. In the event that the
transaction contemplated by this agreement is completed, Heath agrees to provide a credit against the
purchase price at closing in the amount of one half of the cost of the appraisal.
10.
CLOSING DATE. On or before the closing date, the City and Heath shall deposit
with the closing agency all funds and instruments necessary to complete the sale. The closing date
shall be no later than July 14, 2006. "Closing Date" means the date on which all documents are
either recorded or accepted by an escrow/collection agency and the sale proceeds are available to
Heath.
ll. POSSESSION. City shall be entitled to possession on the day of closing, subject to
any lease back arrangements that may be negotiated between City and Heath.
12.
PRORATED ITEMS. Taxes, water assessments (if any), and utilities shall be
prorated as of the date of closing.
13. DEF AUL T. If Heath executes this Agreement, and title to said property is marketable
and insurable and all City's contingencies have been removed or waived and the City neglects or
refuses to comply with the terms or any conditions of sale by the date on which said term or
condition is to be complied with, then the Earnest Money as defined herein shall be forfeited in the
form of delivery of all appraisal and environmental reports to Heath and City's interest in the
property shall be immediately terminated as Heath's sole remedy and/or compensation for entering
into this agreement with the City. In the event Heath does not perform in accordance with the terms
and conditions of this agreement then the City shall have any recourse under the law to enforce this
contract.
14.
TRANSACTION COSTS IN EVENT OF DEF AUL T. The defaulting party shall
pay the costs oftitle insurance, escrow fees, attorney fees and any other expenses directly incurred in
connection with this transaction, with the exception of the cost of items identified herein as earnest
money consideration to be paid by City.
COMMERCIAL/INVESTMENT REAL ESTATE MEMORANDUM OF UNDERSTANDING - page 4 of9
15. ATTORNEY FEES. In the event of default by either of the parties in their
performance of the terms or conditions of this agreement, the defaulting party agrees to pay all
attorney fees and costs incurred by the non-defaulting party and in the event of suit the prevailing
party shall be entitled to its reasonable attorney fees and costs.
l6.
TITLE CONVEYANCE. Title is to be conveyed by warranty deed, and is to be
marketable and insurable except for rights reserved in federal patents, building or use restriction,
building and zoning regulations and ordinances of any governmental unit, rights of way and
easements established or of record, any other liens, encumbrances or defects approved by City.
17.
RISK OF LOSS. Until Closing, Heath shall assume all risk ofloss or damage with
respect to the Premises. In the event of any loss or damage to all or any part of the Premises, the City
shall have the right to (i) terminate this Agreement, in which event each party shall be fully released
and discharged from any further obligations under this Agreement, (ii) close the purchase of the
Premises and reduce the Purchase Price by an equitable amount equal to the loss or damage, or (iii)
close the purchase of the Premises and elect to receive all insurance proceeds paid or payable by
reason ofthe loss or damage.
18.
CONDITION OF PROPERTY AT CLOSING. Heath shall maintain the Property
until the closing in its present condition, ordinary wear and tear excepted.
19.
INSPECTION. The City hereby acknowledges further that City has not received or
relied upon any statements or representations by Heath which are not herein expressed. The City has
entered into this Agreement relying upon information and knowledge obtained from City's own
investigation or personal inspection of the premises.
COMMERCIAL/INVESTMENT REAL ESTATE MEMORANDUM OF UNDERSTANDING - page 5 of9
20.
AGENCY DISCLOSURE.
A) Check one (l) box in Section 1 below and one (1) box in Section 2 below to
confirm that in this transaction, the brokerage(s) involved had the following
relationship(s) with the CITY AND HEATH.
SECTION 1:
A. X The broker working with the CITY is acting as an AGENT for the
CITY.
C.
The broker working with the CITY is acting as a LIMITED DUAL
AGENT for the CITY.
The broker working with the CITY is acting as a NONAGENT for
B.
the CITY.
SECTION 2:
A.
The broker working with HEATH is acting as an AGENT for
HEATH.
B.
The broker working with HEATH is acting as a LIMITED DUAL
AGENT for HEATH.
C.
X
The broker working with REA TH is acting as a NONAGENT for
HEATH.
B) Each party signing this document confirms that he or she has received, read and
understood the Agency Disclosure Brochure and has elected the relationship
confirmed above. In addition, each party confirms that the Brokers agency office
policy was made available for inspection and review. Each party understands that
he or she is a "Customer" and that he or she is not represented by a Broker unless
there is a signed written agreement for agency representation.
21.
REPRESENTATION CONFIRMATION. City is represented by the Igo Company,
an Idaho Corporation By: 1. Martin Igo, Designated Corporate Broker; Telephone: 383-1133.
22. BROKER FEES. City agrees to pay any real estate commission due to The Igo
Company and Heath is not responsible to The Igo Company for any real estate commission due to
The Igo Company as a result of this transaction. However, Heath agrees to be responsible for any
COMMERCIAL/INVESTMENT REAL ESTATE MEMORANDUM OF UNDERSTANDING - page 6 of9
real estate commission Heath may otherwise be obligated to pay to another Broker and agrees to hold
City harmless from any obligation to pay a real estate commission to any other Broker.
23.
HEATH'S REPRESENTATIONS AND WARRANTIES. Heath represents and
warrants to the City that:
A) Heath has received no notice from any governmental agency that the Premises are
in violation of any statute, law, ordinance, rule, regulation, or deed restriction
affecting the Premises.
B) Heath has good, marketable title to the subject property. No other party has any
right, title, or interest in the subject property.
C) There is no pending or threatened litigation or condemnation proceedings
affecting the Premises and there are no governmental assessments or local
improvement district assessments on the Premises nor are there any agreements
to convey any portion ofthe Premises to any party other than the City.
D) Heath has disclosed to the City the presence of all known hazardous substances or
storage tanks that Heath is aware of on the Premises. "Hazardous Substances"
means any hazardous, dangerous or toxic substance (including petroleum
products) as defined under federal, state and/or local law, including all
regulations promulgated under such laws.
24.
ENTIRE AGREEMENT. This Agreement, including any addendum or exhibits,
constitutes the entire Agreement between the parties, and no warranties, including any warranty of
habitability, agreements or representations have been made or shall be binding upon either party
unless herein set forth.
25.
TIME IS OF THE ESSENCE IN THIS AGREEMENT. This is a legally binding
agreement. City and Heath each represent that they have had the opportunity to consult legal counsel
regarding the terms and conditions of this agreement and the instruments referred to herein.
26.
SURVIVAL OF TERMS. All the terms and conditions hereof and all instruments
referred to herein and contemplated hereby shall survive closing and the transfer oftitle to City and
shall remain in full force and effect in accordance with their terms.
27.
CONSTRUCTION OF TERMS. All times provided for in this Agreement or any
COMMERCIAL/INVESTMENT REAL ESTATE MEMORANDUM OF UNDERSTANDING - page 7 of9
instrument referred to herein will be strictly construed, it being agreed that time is ofthe essence of
this Agreement. Whenever the context requires, the singular includes the plural and vice versa, and
each gender includes each other gender, or the neuter, as the case may be.
28.
BINDING ON SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.
29. IDAHO LAW. This Agreement shall be construed and governed in accordance with
the laws of the State of Idaho.
30.
HEADINGS. Headings preceding the text of the several Articles and Sections hereof,
and the table of content, are solely for convenience or reference and shall not constitute a part of this
Agreement or affect its meaning, construction or effect.
31.
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.
IN WITNESS WHEREOF, the parties have executed and attested this Agreement as of this
~ day of March, 2006.
HEATH:
By/~g/ h/~
Gordon W. Heath
CITY:
MERIDIAN CITY
ATTEST
STATE OF IDAHO)
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County of Ada )
On this ~ day of Tì\(\ r r h 2006, before me, a notary public in and for
said state, personally appeared Tammy de Weerd and William G. Berg, Jr., known to me to be the
Mayor and City Clerk of Meridian City, Idaho, who executed the within instrument, and
acknowledged to me that Meridian City executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year first above written.
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County of Ada )
On this '7 ~ day of ~ ~ , 2006, before me, the undersigned, a notary public
in and for said county and state, personally appeared Gordon W. Heath, known or identified to me to
be the person who executed the instrument, and acknowledged to me that he executed the same.
STATE OF IDAHO
IN WITNES S WHEREOF, I have hereunto set my hand and affixed my official seal the day
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