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02-15-2000 - Sales Agreement with Virgil ButlerCity of West Covina Memorandum TO: City Manager and City Council FROM: Jeffrey W. Collier, Director Public Services Department SUBJECT: SALES AGREEMENT WITH VIRGIL BUTLER AGENDA ITEM. NO. C - 1 DATE FebruM 15, 2000 SUMMARY: The City Council authorized staff to prepare a Sales Agreement to purchase from Virgil Butler a 1.4 acre vacant lot adjacent to the Maverick ball field. That Sales Agreement is now ready for City Council approval. BACKGROUND: The City Council authorized staff to negotiate a Sales Agreement with Virgil Butler for his vacant lot. that is northerly of and adjacent to the Maverick ball field. That Sales Agreement is in accordance with the terms previously presented to the City Council which includes a lump sum payment of $208,000 and a sharing of the closing costs. This lot will be combined with the adjacent 10 acres owned by Valencia Heights Water Company, which will then be subdivided resulting in Valencia Heights Water Company having two lots (0.33 acre and 1.67 acres) totaling 2 acres with access and water line easements to them and the City having one lot with approximately 9.4 acres as indicated on the attached sketch. The City lot will include the existing equestrian and baseball facilities. DISCUSSION: The acquisition of the 1.4-acre lot owned by Mr. Butler makes it possible for the City to provide Valencia Heights Water Company with 2 acres of land while retaining sufficient remaining land to continue the equestrian and baseball uses. As agreed with Mr. Butler, the City will pay him $208,000 for a financially unencumbered ownership of his 1.4-acre parcel. In addition, the City will pay for the title and environmental research since they are also necessary for the City's Parcel Map to combine and resubdivide the Butler and Valencia parcels. The City will also pay for its legal co ' sts-i pursuing this sale. The remainder of the closing costs will be shared by Mr. Butler and the City. The City's Parcel Map relative to these parcels is being prepared and will be submitted to the City Planning Commission on February 8, 2000 for conditional approval. The final Parcel Map will then be processed with City Council approval anticipated during or before May 2000. Staff will attempt to expedite this process although it is primarily controlled by the County Engineer. In any eventuality the map will not be finalized before the expiration on March 30.- 2000 of the current lease extension. A final extension of the lease will be before the City Council on March 21, 2000 when a more accurate finalization date will be known. OPTIONS: If the City desires to retain the Maverick Field and Ridgeriders improvements, there is no option to the purchase of the Butler property. FISCAL IMPACT: There is no identified restrictive source available to ftind this purchase. Due to the long-term nature of this acquisition, the,use of General Fund Reserves (Account No. 110-300) is proposed. The. purchase price plus the other associated costs are not expected to exceed a total of $220,000. WUPITEMBLDE'S FILMAGENDA - 2000\Sales Agreement with Virgil But.lendoc2000-106ct 0 I-] Ll City Manager and City Council Page 2 - February 15, 2000 RECOMNMNDATION: It is recommended that the City Council take the following actions: 1. Approve the purchase of 1.4 acres from Virgil Butler for $208,000. 2. Authorize the Mayor and City Clerk to execute the Sales Agreement with Virgil Butler. 3. Appropriate $220,000 from General Fund Reserves (Account No. 110-300) to Account No. 110-320-3029-7700. Prepared by: Thomas M. Mayer City Engineer Reviewed and approved by: W. Collier Services Director Reviewed by: Margie TuckerO Finance Director Attachments: Sketch Sales Agreement AJUPITERMDE'S FILMAGENDA - 2000\Sales Agreement with Virgil Butler-doc: 2000-106ct i;000.o .100' ? t its Feb-11-00 10:38am, From-RUTAN & TUCKER LLP, T-205 P-02/14 F-060 AGREEMENT FOR ACQUISITION OF REAL PROPERTY AND ESCROW INSTRUCTIONS THIS AG REEMENT FOR ACQUISITION OF REAL PROPERTY AND ESCROW INSTRUCTIONS, (this "Agreement") is dated 2000, for reference purposes only and is entered into by and between VIRGIL J. BUTLER and ROSEMARY 1. BUTLER, husband an * d wife (together ."Seller"), and the CITY OF WEST COVINA, a municipal corporation ("Buyer"). BE C IT A L S: A. . Seller is the owner of that certain real property consisting of approximately 1.44 acres located in the City of West Covina, County of Los Angeles, State of California, more particularly described on Exhibit "A" attached hereto and incorporated herein by reference (the "Land"). B. , Seller wishes To sell and Buyer wishes to purchase the Land, together with (i) all improvements now or hereafter constructed thereon; (ii) all rights, privileges, easements, licenses and interests appurtenant Ehereto, including, without limitation, all mineral, oil, gas, water and water rights; and (iii) all intangible property owned or held by Seller in connection with the Land, including, without limitation, any development rights, govenumental approvals and land entitlements. The Land and all of the foregoing (i) through (iii) are collectively referred to herein as the "Property". NOW, THEREFORE, incorporating the foregoing recitals and in consideration thereof, in consideration of the mutual covenants and conditions contained herein and for other good and valuable considerationj the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: TERMS AND CONDITIONS . 1". AGREEMENT TO -SIELL AND PURCHASE. Seller agrees to sell the Property to Buyer, and Buyer agrees to purchase the Property from Seller, upon the terms and for the consideration set forth in this Agreement. 2. PURCHASE PRICE. The total purchase price for the Property shall be the sum of TWO HUNDRED EIGHT THOUSAND DOLLARS ($208,000.00)("Purchase Price"). On or before L00 p.m. on the business day preceding the Closing Date, Buyer will deposit The Purchase Price with Escrow Holder in "good fhads. " "Good funds" shall mean a wire transfer of funds, cashier's or certified check drawn on or issued by the offices of a financial institution located in the State of California, or cash. Buyer and Seller each agree to execute and deliver to Escrow Holder such documents as required by Escrow Holder for the reporting of interest credited to each party. 3. OPENING Of QSCROW. Within three (3) business days after Buyer and Seller have executed this Agreement, Buyer and Seller agree to open an escrow ("Escrow") with First o14414t25-0003j32944W.4 AZ11/00 0 Feb-11-00 10:39am From-RUTAN & TUCKER LLP, T-205 P-03/14 F-060 American Title Insurance Company, 520 N. Central Avenue, Glendale, California, 91203, (818) 242-5800, Attention: ("Escrow Holder"). Escrow shall be deemed opened upon execution by both parties of this Agreement and delivery of same to Escrow Holder (" Opening of Escrow ."). Within ten G 0) days � following the Opening of Escrow, Escrow Holder shall sign and deliver EO Buyer and Seller the acceptance of The Agreement and the Escrow set forth below and shall deliver to each of Buyer and Seller written co firmation of e� e of a di, dat Opening of Escrow, the date for Buyer's initial review of title under ParagoRh 7, the Due Diligence Date under ParagMh 8(d) and the Closing Date under Par4gMh 4. This Agreement, i together with such standard provisions as may be required by Escrow, constitutes the joint Escrow Instructions of Buyer and Seller, and1scrow Holder is hereby empowered to act under I this Agreement. In the event of any conflict � between the terms of this Agreement and Escrow Holder's general conditions or other instructions, the provisions of this Agreement shall prevail. The parties hereto agree to do all acts reasonably. necessary to close'the Escrow. 4. CJOSING DATE. The term 1"Close of Escrow" shall mean the date the Grant Deed (defined below) is recorded in the Official Records of Los Angeles County, California. Close of Escrow shall occur on or before the Closing Date. The term "Closing Date" shall mean the date which is sixty (60) days after Opening of Escrow, or such other date as may be agreed upon in writing by the parties hereto. I If the Closing Date shall fall on a Monday or fall on a weekend or holiday, the Closing Date shall be the next business day. 5. CONVEYANCE OF TITLE. Seller agrees to convey to Buyer at Close of Escrow by grant deed in form acceptable to Buyer �"Grant Deed") marketable fee simple title to the Property free and clear of all recorded and unrecorded liens, encumbrances, assessments, easements, leases, and taxes, subject only to the Permitted Exceptions (hereinafter defined) 6. TITLE INSUPANCE POLICY ' Escrow, Holder shall, concurrently with the recording of The Grant Deed to Buyer, provide Buyer with a CLTA Standard Coverage Policy of Title Insurance in the amount of the Purchase Price issued by First Aiiierican Title Insurance Company ("Title Company"), showing the fide to the Property vested in Buyer, subject only to the Permitted Exceptions ("Title Policy"). Buyer may elect to obtain ALTA coverage at Buyer's additional cost and expense. 7. COMMITM T-FOR TITLE I INSURANCE. (a) Buyer shall have the right to obtain, at Buyer's expense, a Commitment for Title Insurance issued by Title Company. � together with copies of all documents referred W therein (collectively, the "Commitment") and a map prepared by Title Company plotting all easements shown therein. Buyer shall have thirty (30) calendar days following the luer of (i) the date of Opening of Escrow; or (ii) the date that Buyer has received the Commitmem from Title Company to accept any or all items ("Pirmirted ExceprionSh) or reject any item or items disclosed by the Commitment ('Disapprovedl Exceptions"). If Buyer fails to notify Seller in writing of any Disapproved Exceptions within said thirty (30) calendar day period, Buyer shall be deemed to have approved and accepted the Comm . tment. If Buyer shall disapprove of any item in the Commitment, Seller shall, within five (5) days following receipt of such disapproval, advise Buyer in wnEing, whether or not Seller shall cause to be eliminated any such Disapproved Exceptions. SeHer's failure to send such nonce shall be deemed to constitute Seller's election not to eliminate such Disapproved Exceptions'as of the end of such five (5) day period. If Seller elects to eliminate such Disapproved Exceptions, the Escrow shall remain open and Seller shall 614/01412S-M/32944M.4 202/11/00 0 0 Feb-11-00 10:39am From-RUTAN & TUCKER LLP, T-205 P-04/14 F-060 be obligated to convey the Property to Buyer subject only to the Permitted Exceptions. if Seller elects, or is deemed to have elected, not to eliminate any Disapproved Exceptions, Buyer shall have Elie right, within five (5) days following such election or deemed election, to either agree in writing to accept The Property subject to the Disapproved Exceptions which Seller has elected not to eliminate (in which event such Disapproved Exceptions shall be deemed Permitted Exceptions), or to terminate this Agreement and the Escrow. Buyer's failure to send such notice shall be -deemed Buyer's election to terminate this Agreement and the Escrow. Upon such termination, neither Buyer nor Seller shall have any ftirther liability hereunder, except that Buyer shall be entitled to the prompt return of any finids deposited by Buyer with Escrow Holder less Buyer's share of Escrow costs to date of cancellation. (b) Upon the issuance of anY* amendment or supplement to the Commitment which adds additional exceptions the foregoing right t of review and approval shall also apply to said amendment or supplement. (c) Notwithstanding anything to the contrary herein, Buyer shall be deemed to have automatically objected to all deeds of Trust, mortgages, judgment liens, mechanics' liens, federal and state income tax liens, delinquent general and special real property Taxes and assessments and similar monetary encumbrances affecting the Property, and Seller sh4-1 discharge any such non -permitted title matter of record prior to or concurrently with the Close of Escrow. 8. DUE DILIGENCE REVIEW. (a) Within ten (10) days following the Opening of Escrow, Seller shall deliver to Buyer all Due Diligence Items for Buyer's review. The term "Due Diligence Items" shall collectively refer to all documents relating to the Property which Seller has in its possession or control (or has reasonable access thereto and knowledge thereof), including without li i 'on (and to the extent such items exist), copies of the by-laws and articles of -incorporation for any owner's association affecting the Property; all leases, contracts and agreements and all amendments and modifications To any such leases, contracts and agreements; surveys (including any ALTA surveys); insurance claims reports and copies of insurance policies; engineering reports, soils studies, soils compaction reports; and environmental aud ' its and reports, environmental remediation plans (an4 all correspondence and documents related thereto) , copies of all building and operational permits, plans and specifications, inspection reports and other items relating to the construction of improvements and governmental approvals thereof. (b) The foregoing recitation of documents shall not be construed to imply that Seller has in its possession any such documents. Seller shall not be required to obtain documents which are not presently in The possession of Seller, including without limitation, any documents on file with any governmental agencyaad Buyer shall be responsible for obrai i g any such documents, provided that Seller will.cooperate with Buyer's efforts in regard thereto. (c) Buyer or Buyer's representatives may enter on the Property to malce such tests, surveys or other studies of the Property so long as Buyer pays for all such tests and studies and keeps Elie Property free and clear of any liens, repairs or damage to the Property. (d) The term "Due Diligence Date" shall mean the date which,is forty-five (45) days after The later of (i) the date of Opening of Escrow, or (ii) The date that Buyer has 6141014125-M528+4W.4 AM11100 -3- Feb-11-00 10:39am . From-RUTAN & TUCKER LLP. + T-205 P-05/14 F-060 received all Due D iligence Items from Seller. Buyer shall deliver written notice to Seller on or before the Due Diligence Date as to Buyer's approval or disapproval of the Due Diligence liems and of Buyer's inspection, of the Property. In the event. Buyer fails to deliver -such notice, Buyer shall be deemed to have disapproved the Due Diligence Items. 9. CONDITIONS PRECEDENT TO BUYER'S OBLTGATION TO CLOSE ESCROW. Buyer's obligation to acquire The Property is subject to ale satisfaction -of the following conditions which are for Buyer's benefit only: (a) Buyer has approved title To the Property as Provided in ParaUaRh 7. (b) Oa or before the Due Diligence Date, Buyer has received and approved (to the extent Buyer elects to do so): (i) the physical condition of the Property; I (ii) a Phase I environmental report; (iii) an A.L.T.A. survey of The Property prepared by a licensed . surveyor; and (iv) all other Due Diligence Items delivered by Seller to Buyer or otherwise obtained by Buyer. Escrow. c - ) Title Company commits to issue the Title Policy dated as of the Close of (d) All representations and warranties of Seller specified in Paragraph 12(a or otherwise in this Agreement are true and correct as of Close of Escrow. (e) Escrow Holder holds and will deliver to Buyer as of Close of Escrow the instruments accruing to Buyer pursuant to this Agreement. If Buyer has not delivered written notice of approval of the above conditions to Seller by the times provided, or if no time is provided, on or before the Close of Escrow, each such condition shall automatically and conclusively be deemed to have been disapproved by Buyer, and Buyer shall have the right to terminate this Agreement and the Escrow. Upon such termination, thereafter neither Buyer nor Seller shall have any further liability hereunder, except that Buyer shall be entitled to the prompt return of any funds deposited by Buyer with Escrow Holder less Buyer's share of Escrow costs to date of cancellation. 1 10. CONDITIONS PRECEDENT TO SELLF-R-S OBLIGATION TO CLOSE ESCROW. Seller's obligation to perform this Agreement is subject to the satisfaction of the following conditions which are for Seller's benefit only - (a) Escrow Holder holds and will deliver to Seller as of Close of Escrow the Purchase Price and instruments accruing to Seller Pursuant to this Agreement. 11., CLOSING DOCUMENTS. t14/01025-OW3/329"W.4 A21111W -4- Feb-11-00 10:40am From-RUTAN & TUCKER LLP, T-205 P-06/14 F-060 (a) On or before 1:00 p.m. on Elie business day preceding the Closing Date, Seller will execute, acknowledge, if appropriate, and deposit with Escrow Holder (i) the Grant Deed; (ii) an original Non -Foreign Affidavit on Escrow Holder's form; - (iii) an original California Form 590-RE Real Estate Withholding Exemption Certificate; and (iv) if requested by Buyer, a Closing Certification as defined in ParagIga 12(c). � M On or before 1:00 p.m. on the business day preceding the Closing Date, Buyer will execute, acknowledge, if appropriate, and deposit with Escrow Holder (i) the Purchase Price; and (ii) if elected by Buyer, a preliminary change of ownership statement. M Both parties shall execute and deliver Through Escrow any other documents or instruments which are reasonable necessary in order to consummate The purchase and sale of the property. (d) Escrow Holder shall confirm that any documents signed in counterpart are The matching documents and shall combine the signature Pages thereof so as to create fully executed documents. Escrow Holder will cause the Grant Deed to be recorded when it can issue the Title Policy in the form described in Paragranh 6, and holds for the account of Buyer and Seller, respectively, the funds and items described above to be delivered To Buyer and Seller, respectively. Through Escrow, less costs, expenses and disbursements chargeable to Seller pursuant to the terms hereof. Promptly following Close of Escrow, Escrow Holder shall date all undated documents as of Close of Escrow and shall distribute to each of Buyer and Seller Escrow Holder's closing statement andan original of each closing document deposited by the other party in Escrow and copies (conformed if recorded) of any other documents deposited in Escrow. 12. REPRESENTATIONS OF SELLFA. (a) Seller hereby makes the following representations and warranties to Buyer, each of which is material and relied upon by Buyer in making its determination to enter into this Agreement, is true in all respects as of the date hereof and shall be true in all respects on the date of Close of Escrow on The Property, and shall survive Elie Close of Escrow of the purchase and sale of the ProperTy as well as any future Transfer of the Property to Buyer or any transferee, successor or assignee of Buyer: (i) Seller is the owner of and has fall right, power and authority to sell, convey and transfer the Property To Buyer as provided herein and to carry out Seller's obligations hereunder. Seller has obtained, or will obtain before the Close of Escrow, all required'coasents, releases and permissions in order to vest good and maricetable title in B I uyer subject to no other possessory, ownership or leasehold interests. (ii) Seller will have received no notices, orders or directives as of Close of Escrow from any applicable goverranental authority of zoning, building, environmental protection, clean air, pollution, fire or health code violations with respect to the Property. (iii) As used herein, "Hazardous Substances" means any substance, material or waste defined or designated as hazardous or toxic waste, hazardous or To= material, hazardous or toxic subsmce, or other similar term, including, without 614/0W25-=3/32S44W.4 42M/00 -5- Feb-11-00 10:40am From—RUTAN & TUCKER LLP, + T-205 P. 0 T'/1 4 F-060 limitation, Pefroleuru products or byproducts, or, asbestos comaming products, w, hich is or becomes regulated by any federal, state or local governmental authority 1',starure, regulation or ordinance, including, but not limited to, any substance defined �such or regulated by any "Superfund" or "Superlien" law, or any other federal, state or local law, statute, ordinance, code, rule, regulation, order or decree regulating, rel�ling to, or imposing liability or standards of conduct concerning Hazardous Materials and/or oil wells and/or underground storage tanks'and/or pipelines, as now, or at any tune her6after, in effect. To.the best of Seller's knowledge, G) There exist no na'z'ardous Substances, on, under or around the ProperTy, groundwater, or otherwise; (ii) S�Ner has received no written notice from any third parties, prior owners of the Properryj or any federal, state or local governmental agency, indicating that "any additional ]��ardous waste remedial or clean-up work will be required; (iii) there are not any on -site! spills, releases, discharges or disposal of Hazardous Substances which have occurred or are pre- seutly occurring on any of the Property; Ov) no * spills or disposal of Hazardous Substances' have occurred or are presently occurring off the Property as a result',of any activities on The Property; and (v) there exist no underground gasoline or other �'S�Torage T tanks on, under or about the Property. Nothing in the fore g*oing shall diminish any obligations of Seller under applicable federal. stale or local law. 1 Ov) There are no pending, or -threatened litigqtion,, allegations, lawsuits or claims. whether for personal injury, prop' 6 erty damage, landlord-tenam disputes., property taxes, contractual disputes or otherwise, which do or may affect the Ptopenv or the operation or value thereof, and There are no actions or proceedings pendin g�� �r, to the best of Seller's knowledge, Threatened against Seller before any cd'un or administrative agency in any way connected with The Property and neither The ente i LF ring into of this Agreement nor the consummation' of the tratisactions contemplated '�6reby will constitute or result in a violation or breach by Seller of any judgment, order, writ, injunction or decree issued against or imposed upon it, nor constitute or result 1,in any default or event that with The notice or lapse of time, or both, wid uld be a default, breach or violation of any lease, mortgage, deecl of Trust or other agreement, instrument or arrangement by. which Seller or the Property are bound. (v) There are no contracts, leases, claims or rights affecting The Pr operry and no contracts or agreements have been entered into by or under Seller, 61r�l or written, which shall survive The Close of Escrow. (vi) AN Due Diligence Items provided by Seller to Buye.. accurate and complete copies of same and, to 'the best knowledge of Selle'r, all information contained in the Due Diligence Items is true, accurate and complete (vii) Seller is not a "foreign person" within the meaning of Secui on 1445 of the Internal Revenue Code of 1986, as amended, or California Revenue and 1� Tax Code Section 1880, as amended. (b). Within five (5) days following the Opening of Escrow, Sellet' shall deliver to Buyer any and all disclosures a . s,required by applicable law -in connection wi I th the proposed, mansfer of ownership of real property. 6141014125-aMJ3284400.4 xO�JIJIOO —6— Feb-11-00 10:41am From-RUTAN & TUCKER LLP, T-205' P-08/14 F-060 (c) , If Seller becomes aware of any.act or circumstance which would change or render incorrect, in whole or 'in part, any representation or warranty made by Seller under this Agreement, whether as of the,daTe given or any time thereafter through the Closing Date and whether or not such representation or warranty was based upon Seller's knowledge and/or belief as of a certain date, Seller will give immediate written notice of such changed fact or circumst . ance to Buyer, but such notice shall not release Seller of its liabilities or obligations with respect Thereto. If requested by Buyer, Seller shall issue a certificate regarding representations and warranties in form reasonably satisfactory to Buyer and Seller. for delivery to Buyer through Escrow at the Close of Escrow ("Closing Certification"), stating that all the representations and warranties contained in Paragrgb 12(a) are True and correct as of said date, or setting I forth in detail - which- of such matters are not True and correct, 13- , IndgnMity. Seller shall indemnify Buyer agamst and hold Buyer harmless from any and all loss, damage, liability or expense, including court costs and reasonable attorneys' fees, which Buyer may reasonably incur or sustain either prior to or following the Close of Escrow by reason of or in connection with (i) any misrepresentation made by or on behalf of Seller contained in any certificate or other instrument furnished or to be furnished by Seller, or -at its request hereunder; 00 =Y breach of SeHer's represemations and/or warranties contained herein; (iii) the failure of Seller To fulfill any of its covenants or agreements under this Agreement; (iv) any and all obligations, liabilities, claims, accounts, demandsi liens or encumbrances, whether direct, contingent or consequential, and no matter how arising, in any way related to or arising from any act, conduct, omission, contract, agreement or commitment of Seller or iu any way relating to or arising from the consTruction, completion, sale, use or occupancy of the Property prior to The Close of Escrow; or (v) in any way relating To the generation, treatment, storage or disposal of Hazardous Materials or Substances prior to the Close of Escrow.. Buyer shall notify Seller within ten (10) days in the event any claim is made against it for which Seller shall have agreed to indemnify Buyer as set forth in this Agreement, and Seller shall thereupon undertake to defend and hold Buyer free and harmless Therefrom. Should Seller fail To discharge or undertake To defend against any such liability, then Buyer way settle Elie same, and Seller's liability, to Buyer shall be conclusively established by such settlement, the amount of such liability shall include both the settlement consideration and the reasonable costs, attorneys' fees and expenses, necessarily incurred by the Buyer in effecting such settlement. 14. PRORATIONS AND EXPENSES. (a) All non -delinquent general and special real property taxes and assessments shall be prorated to The Close of Escrow. Any supplemental tax bills received, after Close of Escrow shall be paid by Seller to the extent they relate to a period prior to Close of Escrow, and by Buyer to the extent they relate to a period after Close of Escrow- � (b) Buyer and Seller shall cause any and all utilities which are in the name of Seller to be transferred to the name of Buyer as -of the Close of Escrow or as soon thereafter as practicable. (c) - in the event final amounts with respect to any proTations are not available as of Close of Escrow, the proration shall be done- on an estimated basisand the parties shall prepare a final proration within sixty (60) days following Close of Escrow. Any party who is 614JO1412S-00031328440U.4 4011/00