HomeMy WebLinkAboutTimber Ridge Gorman & Company Pre Development AgreementPRE - DEVELOPMENT AGREEMENT
THIS PRE - DEVELOPMENT AGREEMENT (the "Agreement ") is made this day of
y i y- , 2013 (the "Effective Date "), by and between the Town ofVail, Colorado, a
Colorado home rule municipality, (the "Town ") and Gorman & Company, Inc., a Wisconsin
corporation ( "Developer's, (individually a "Party" and collectively the "Parties ").
WHEREAS, the Town is the owner ofcertain real property generally described as the eastern
halfofthe Timber Ridge property and more particularly described in Exhibit A attached hereto and
incorporated herein by this reference (the 'Property ");
WHEREAS, the Parties desire to redevelop the Property consistent with the Housing zone
district;
WHEREAS, to accomplish the redevelopment ofthe Property, the Town would retain fee
ownership of the Property, but would provide Developer with a long -term ground lease of the
Property; and
WHEREAS, the Parties wish to establish terms of the development ofthe Property.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
contained herein, the sufficiency ofwhich is mutually acknowledged, the Parties agree as follows:
1. Exclusive Option. During the term ofthis Agreement and subject to all ofits terms,
Developer shall have the exclusive option to redevelop the Property for employee housing as
provided in this Agreement.
2. Parameters ofDevelopment. The redevelopment ofthe Property (the "Development')
shall be subject to the execution of a mutually acceptable development improvement agreement
DIA "). The Development shall meet the following parameters, which shall be further detailed and
refined in the DIA:
a. The Development shall at all times be subject to the Vail Town Code.
b. The Town shall provide the Developer with a long -term ground lease ofthe
Property, with a term ofthirty-five (35) years (the "Ground Lease'). The rent shall be one
dollar ($1.00) per year, and there shall be no security deposit. The form ofthe Ground Lease
must be mutually acceptable to the Town and Developer. All improvements constructed on
the Property shall be owned by Developer; provided that Developer may grant to the Town
or its housing authority an interest in Developer, which percentage interest shall be the
minimum percentage allowable under Colorado law to obtain propertytax exemption on the
Property and all improvements.
C. Upon termination of the Ground Lease, Developer shall surrender to the
Town, free and clear of all debt and other encumbrances, all improvements, inclusions,
fixtures, equipment and other appurtenances on the Property in good condition and repair.
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During the term ofthe Ground Lease, the Town shall have a right to inspect the Property on
an annual basis to review the condition ofthe improvements.
d. The Development shall include at least one hundred eight (108) dwelling
units. At least seventy percent (70 %) ofthe dwelling units in the Development shall be
employee housing units , as the term "employee" is defined in Section 12 -2 -2 of the Vail
Town Code.
e. Except as otherwise expressly provided herein, Developer shall be solely
responsible for all improvements on the property, including construction, maintenance and
repairs. Developer shall be solely responsible for all expenses of operating the Property,
including insurance and utility costs.
f. The Ground Lease shall be for the Property "as is," though the Town has no
actual knowledge ofthe presence ofanyhazardous materials or other adverse environmental
conditions on the Property.
g. Developer may convey equity interests in its limited liability company entity
without the Town's consent, provided that any assignment ofthis Agreement or anyrights or
obligations hereunder shall be subject to Section 13 hereof.
h. The Property shall be subject to a deed restriction (the "Deed Restriction ")
requiring at least seventy percent (70 %) of the dwelling units in the Development to be
employee housing units capable ofhousing employees, as the term "employee" is defined in
Section 12 -2 -2 ofthe Vail Town Code. The form of such Deed Restriction must be mutually
acceptable to the Town and Developer.
i. Developer shall be solely responsible to procure financing for the
Development. Developer may encumber its leasehold interest in the Ground Lease in
connection with the initial financing for the Development and any refinancing during the
term ofthe Ground Lease. If a lender (whether the initial lender or a lender in connection
with any refinancing) requires the Town to subordinate its fee interest in the Propertyto the
lender's mortgage, the Town will do so provided that: (a) at all times the Deed Restriction
shall be first and prior to the mortgage; and (b) the Town shall have a fast and prior right to
cure any deficiency to protect its fee interest in the Property. If Developer wishes to use
federal funds forthe Development, it shall be Developer's sole responsibility to procure such
funds.
j. Developer shall conduct at least one pre - application conference with the
Town Council prior to submitting its initial application for the Development. Such pre-
application conference is an opportunity for Developer to hear comments from the Town
Council concerning the Development, but the Town shall not be bound by any such
comments, and any reliance on such comments shall be at Developer's own risk.
k. Developer shall submit to the Town a development application for the
Development on or before November 24, 2013. The development application must be
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consented to and signed by the Town, because the Town will remain the fee owner ofthe
Property.
1. At no time shall the Development eliminate access to or the ability to safely
occupy or operate the Timber Ridge housing units currently existing on the real property
adjacent to the Property, as more particularly described on Exhibit B, attached hereto and
incorporated herein by this reference (the "Adjacent Property"), and the Ground Lease shall
provide the Town with unrestricted access to the Adjacent Property at all times.
M. Developer shall be responsible for construction of any public improvements
necessary for the Development, including streets, sidewalks and utilities.
n. Income from the Development shall be distributed in the following order of
priority:
1) To pay all Development costs and operating and maintenance
expenses, including without limitation property management fees and the
Development Fee described in Section 3 hereof.
2) To pay principal and interest on Development debt.
3) To fund any reserves required by any lender related to the
Development (each a "Lender Reserve ").
4) To pay the required return on investment to anyequity investors inthe
Development.
5) To fund aproject reserve (the "Project Reserve', which shall be used
for any shortfalls in subsections (1) -(4) above. Upon termination of the Ground
Lease, if any amounts remain in the Project Reserve or any Lender Reserve, such
amounts shall be remitted to the Town,
6) In the event all Lender Reserves are fully funded in the amount
required by the lender, and the amount of the Project Reserve is at least $150,000,
any amount in excess of $150,000 shall be distributed fifty percent (50 %) to the
Town and fifty percent (50 %) to the Developer.
3. Development Fee. Developer shall be entitled to a development fee (the
Development Fee ") in connection with its development of the Property. The amount of the
Development Fee shall not exceed the maximum development fee allowed by the Colorado Housing
and Finance Authority under its qualified allocation plan adopted on October 25, 2012 and approved
by the governor on January 16, 2013. The Development Fee may be paid from any Project sources
including, without limitation, -debt - proceeds; equity proceeds, and- income from the Development.
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4. Town Oblieations.
a. The Town shall be responsible for all costs associated with any necessary
rockfall mitigation.
b. The Town shall work with Developer and the Colorado Department of
Transportation ( "CDOT') to resolve roadway issues related to the Development; provided
that Developer shall be responsible forthe cost ofany additional turn lanes on the Frontage
Road necessitated by the Development.
C. The Town shall grant to Developer, for the benefit ofthe Property, easements
across the Adjacent Property that are mutually determined to be necessary for the
Development; including without limitation utility, drainage, and access easements; provided,
however, that no such easements will have a material adverse effect on the operation ofthe
Adjacent Property.
d. The Town shall cause any existing liens and encumbrances on the Property to
be released in order to facilitate Developer's financing.
e. The Town shall refund one hundred percent (100 %) ofall amounts paid bythe
Developer for the Town's construction and building materials use tax applicable to the
Property. Developer shall be responsible for all demolition and building permit fees for
permits issued by the Town in connection with the Development. In addition, the Town shall
impose typical and customary plan review fees for review of all plans for the Property, and
Developer shall be responsible for payment of such fees.
f. The Town shall use its best efforts to help Developer obtain an exemption
from property taxes for the Development from all taxing authorities. To the extent the
Property is not tax- exempt, the Town shall refund one hundred percent (1001/16) of any
property taxes, net of the Eagle County Treasurer's fee, collected by the Town on the
Property or improvements thereon.
5. Due Diligence. During the term ofthis Agreement, Developer shall conduct all due
diligence necessary to determine whether the Property is suitable for the Development, at
Developer's sole cost.
6. Term and Termination. This Agreement shall commence upon the Effective Date and
terminate on August 15, 2014 (unless such date is extended by mutual agreement of the Parties);
provided that Developer may terminate this Agreement earlier than such date upon thirty (30) days
written notice to the Town.
7. Costs. Except as otherwise set forth herein, each Party shall be responsible for its
own costs under this Agreement:
8. Modification. This Agreement may only be modified by subsequent written
agreement of the Parties.
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9. Integration. This Agreement and any attached exhibits constitute the entire agreement
between Developer and the Town, superseding all prior oral or written communications.
10. Binding. This Agreement shall bebinding upon and inure to the benefit ofthe
parties hereto and their respective heirs, successors and assigns.
11. Severability. Ifany provision ofthis Agreement is determined to be void by a court
ofcompetent jurisdiction, such determination shall not affect any other provision hereof, and all of
the other provisions shall remain in full force and effect.
12. Governing Law and Venue. This Agreement shall be governed by the laws ofthe
State of Colorado, and any legal action concerning the provisions hereofshall be brought in Eagle
County, Colorado.
13. Assignment. There shall be no transfer or assignment of any of the rights or
obligations of Developer under this Agreement without the prior written approval of the Town;
provided, however, that Developer may make a single assignment of this Agreement to a limited
liability company in which Developer is a member without such prior written approval. Developer
shall provide the Town with written notice of such assignment within thirty (30) days thereof.
14. Third Parties. There are no intended third -party beneficiaries to this Agreement.
15. Contingency: No Debt. Pursuant to Article X, § 20 oftheColorado Constitution, any
financial obligations of the Town under this Agreement are specifically contingent upon annual
appropriation offunds sufficient to perform such obligations. This Agreement shall never constitute
a debt or obligation of the Town within any statutory or constitutional provision.
16. No Joint Venture. Notwithstanding any provision hereof, the Town shall never be a
joint venture in any private entity or activity which participates in this Agreement, and the Town
shall never be liable or responsible for any debt or obligation ofany participant in this Agreement.
WHEREFORE, the parties hereto have executed this Agreement on the day and year first
above written.
A EST:
ammy N el, terim To n Cle k
APPROVED AS TO FORM:
J. Matthew Mire, Town Attorney
tOF7770
St mler, Town Manager
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By:
Name:
Its:
WkscmS r\
STATE OFC-6bORADO }
ss.
COUNTY OF )
The foregoing instrument was subscribed, sworn to, and acknowledged before me this
day of L) wambe.F , 2013, by as the
J I ce-c-I ofGorman & Company, Inc..
My commission expires:
J-3EAL) vUV
Not lie
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