HomeMy WebLinkAbout2014-24 Approving an Amended Ground Lease and Deed Restriction for Timeber Ridge Property RESOLUTION NO. 24
SERIES OF 2014
A RESOLUTION APPROVING A GROUND LEASE AND DEED
RESTRICTION FOR THE TIMBER RIDGE PROPERTY
WHEREAS, the Town of Vail is planning a redevelopment project for the Timber
Ridge property;
WHEREAS, the purpose of the redevelopment project is to provide employee
housing;
WHEREAS, to accommodate the redevelopment project, the Town wishes to
enter into a long-term Ground Lease with the developer of the property, Lion's Ridge
Apartment Homes, LLC;
WHEREAS, the Ground Lease will be subject to a Deed Restriction governing
the use of the property;
WHEREAS, on February 18, 2014 and August 19, 2014, the Town Council
approved prior versions of the Ground Lease and Deed Restriction, but those versions
were never executed, and since that time certain provisions of both documents have
changed; and
WHEREAS, the Town Council wishes to approve the Ground Lease and Deed
Restriction in substantially the form attached hereto, and to authorize the Town
Manager to execute the Ground Lease and Deed Restriction at closing.
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE
TOWN OF VAIL, COLORADO, THAT:
Section 1. The Town hereby approves the Ground Lease for the Timber Ridge
property in substantially the form attached hereto, subject to final approval by the Town
Attorney.
Section 2. The Town hereby approves the Deed Restriction for Lion's Ridge
Apartment Homes on the Timber Ridge property in substantially the form attached
hereto, subject to final approval by the Town Attorney.
Section 3. After execution of the Development Agreement for the Timber
Ridge property by all parties to the Development Agreement, and approval by the Town
Attorney of any other documents required by the developer's lender, the Town Council
authorizes the Town Manager to execute the Ground Lease and Deed Restriction in the
final form approved by the Town Attorney.
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GROUND LEASE
This GROUND LEASE (the "Lease") is entered into as of August , 2014 (the
Effective Date") by and between the Vail Local Housing Authority, a Colorado statutory housing
authority (the "VLHA"), and Lion's Ridge Apartment Homes, LLC, a Colorado limited liability
company ("Tenant") (each individually a "Party" and collectively the "Parties").
WHEREAS, the VLHA is the owner of certain real property more particularly described
in Exhibit A attached hereto and incorporated herein by this reference(the "Property");
WHEREAS, the Parties desire to allow for the redevelopment of the Property for
employee housing;
WHEREAS, to accomplish the redevelopment of the Property for employee housing, the
VLHA will retain fee ownership of the Property, but the VLHA will provide Tenant with a long-
term ground lease of the Property; and
WHEREAS,the Parties wish to establish terms of the long-term ground lease.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
contained herein, the sufficiency of which is mutually acknowledged, the Parties agree as
follows:
1. Lease. The VLHA, in consideration of the rents, covenants, agreements, and conditions
herein set forth which Tenant hereby agrees shall be paid, kept, and performed, does hereby lease
unto Tenant, and Tenant does hereby lease from the VLHA, the Property together with all of the
VLHA's rights, interests, estates, and appurtenances thereto.
2. Term. This Lease shall commence on the Effective Date and unless earlier terminated as
provided herein, shall terminate on August 31, 2064.
3. Rent and Security Deposit. The total rent for the period from the Effective Date through
December 31, 2024 is the sum of $10. Tenant has paid such sum to the VLHA on the date
hereof, the receipt of which is hereby acknowledged. Commencing on January 1, 2025 and each
year thereafter during the term of this Lease, Tenant shall pay to the VLHA annual rent in the
amounts set forth below.
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Period Annual Rent
January 1, 2025 through December 31, 2029 $125,000
January 1, 2030 through December 31, 2034 $140,625
January 1, 2035 through December 31, 2039 $158,200
January 1, 2040 through December 31, 2044 $177,975
January 1, 2045 through December 31, 2049 $200,220
January 1, 2050 through December 31, 2054 $225, 250
January 1, 2055 through December 31, 2059 $253,400
January 1, 2060 through August 31, 2064 $285,075
The annual rent shall be paid in twelve equal monthly installments on the first day of each
month. There shall be no security deposit.
4. Permitted Uses. Subject to the terms and provisions hereof, Tenant shall use and enjoy
the Property to construct and operate 112 dwelling units (the "Improvements"), at least 70% of
which shall be employee housing units in full compliance with the deed restriction attached
hereto as Exhibit B and incorporated herein (the "Deed Restriction"), the Development
Agreement between the VLHA, the Town of Vail and Tenant dated August , 2014 and
applicable law, including without limitation the Vail Town Code, as amended. Tenant will not
do, or permit to be done, anything on the Property which is contrary to any legal or insurable
requirement or which constitutes a nuisance.
5. Taxation.
a. The Parties acknowledge their intent that the Property is to be exempt from ad
valorem property taxes pursuant to C.R.S. § 29-4-227, by virtue of a 0.01%ownership interest in
Tenant held by the VLHA.
b. Tenant may, at its sole cost and expense, contest the validity or amount of any
taxes imposed against the Property.
6. Utilities. Tenant shall pay all charges for gas, electricity, telephone and other
communication services, and all other utilities and similar services rendered or supplied to the T"
Property, and all water, sewer and other similar charges levied or charged against, or in
connection with,the Property.
7. Net Lease. This Lease shall be a net lease, and throughout the Term, all payments and
other obligations or liabilities of any kind regarding the Property shall be solely the responsibility
of Tenant, and not the responsibility of the VLHA.
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8. Existing Conditions. As of the Effective Date, Tenant has inspected the physical
condition of the Property and receives the Property in "as is" condition, with all faults. The
VLHA makes no representations or warranties with respect to the condition of the Property or its
fitness or availability for any particular use, and the VLHA shall not be liable to Tenant for any
latent or patent defect on the Property. The VLHA owns all the improvements existing on the
Property as of the date of the Lease, which existing improvements may be removed by Tenant
prior to the construction of the Improvements.
9. Hazardous Materials.
a. Though the VLHA has no actual knowledge of the presence of any hazardous
materials or other adverse environmental conditions on the Property, the VLHA makes no
warranty regarding such materials or conditions.
b. Tenant shall keep and maintain the Property in compliance with, and shall not
cause or permit the Property to be in violation of, any federal, state, or local laws, ordinances or
regulations relating to industrial hygiene or to the environmental conditions ("Hazardous
Materials Laws") on, under, about, or affecting the Property. Tenant shall not use, generate,
manufacture, store, or dispose of on, under or about the Property or transport to or from the
Property any flammable explosives, radioactive materials, hazardous wastes, asbestos, lead-
based paints, toxic substances, or related materials, including without limitation any substances
defined as or included in the definition of hazardous substances, hazardous wastes, hazardous
materials, or toxic substances under any applicable federal or state laws or regulations
(collectively referred to hereinafter as "Hazardous Materials").
c. Notwithstanding the above, the Parties understand and agree that Tenant, in the
course of construction of the Improvements, may generate biohazardous waste materials due to
procedures performed within the primary structure. Tenant shall be solely responsible for the
proper storage and removal of these biohazardous waste materials from the property. Tenant
shall be solely responsible for, and shall indemnify and hold harmless the VLHA, its directors,
officers, employees, agents, successors, and assigns from and against, any loss, damage, cost,
expense, or liability directly or indirectly arising out of or attributable to Tenant's use,
generation, storage, release, threatened release, discharge, disposal, or presence of biohazardous
Materials on, under or about the Property.
10. Construction of Improvements. The Improvements shall be constructed in accordance
with the Development Agreement.
11. Ownership of Improvements.
a. During the Term, all Improvements shall be solely the property of Tenant, and
Tenant shall be entitled to take tax depreciation thereon,to the extent permitted by law.
b. Upon termination of this Lease, except as otherwise provided in Section 27,
Tenant shall surrender to the VLHA, 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. During the Term, the VLHA shall have a right to inspect the Property on
an annual basis to review the condition of the improvements.
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12. Maintenance and Repairs.
a. Tenant agrees to maintain the Property throughout the Term of this Lease, at
Tenant's own expense, in good working order, in a clean and safe manner. Such maintenance
shall include all work necessary to maintain the Property in a first-class condition consistent with
similar projects in the Town, including both interior and exterior repairs.
b. Throughout the Term of this Lease, Tenant shall, at its own expense, provide all
janitorial, landscaping, trash removal, snow removal and other services required for the proper
maintenance of the Property.
c. Should Tenant fail to perform the required maintenance or repairs after 30 days
written notice from the VLHA, the VLHA may, but has no obligation to, perform such
maintenance or repairs and invoice Tenant for the costs of such maintenance, plus 8% interest.
Tenant shall pay such invoice within 30 days of receipt thereof, and Tenant's failure to do so
shall constitute a Tenant Default.
13. Property Management. Throughout the Term of this Lease, Tenant shall provide for
professional management of the ongoing use and operation of the Property (either through an
independent third party or an affiliate or agent of Tenant).
14. Insurance. Tenant shall maintain the following insurance, and certificates of such
insurance shall be furnished to the VLHA prior to the commencement of this Lease and at each
subsequent policy renewal date:
a. Commercial general liability insurance, including contractual liability, with limits
of not less than $2,000,000 per occurrence for bodily injury, personal injury and property
damage, naming the VLHA as an additional insured.
b. Fire and extended coverage insurance covering the Property for injury or damage
by the elements, or through any other cause, in an amount not less than the full actual
replacement cost of the Property, common areas, and appurtenances, and sufficient to prevent the
VLHA or Tenant from becoming a co-insurer of any partial loss.
c. During the course of any construction or repair of Improvements, Builders' Risk
Insurance.
15. Indemnification. Tenant agrees to indemnify, defend, and hold the VLHA and its
officers, insurers, volunteers, representative, agents, employees, heirs and assigns harmless from
and against any and all claims, liability, damages, losses, expenses and demands, including
reasonable attorney fees, on account of injury, loss, or damage, including without limitation
claims arising from bodily injury, personal injury, sickness, disease, death, property loss or
damage, or any other loss of any kind whatsoever, which arise out of or are in any manner
connected with this Lease or Tenant's use of the Property; provided however, that Tenant shall
not indemnify, defend or hold the VLHA harmless for the VLHA's own negligence or willful
acts or omissions.
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16. Restoration. Should any Improvements be wholly or partially destroyed or damaged by
fire or other casualty, Tenant shall promptly repair, replace, restore, and reconstruct the same, all
in compliance with the provisions of this Lease.
17. Condemnation.
a. Full taking. Should the entire Property be taken by eminent domain,
condemnation or similar proceedings or conveyed in avoidance or settlement of eminent domain,
condemnation, or other similar proceedings, then Tenant's right of possession under this Lease
shall terminate as of the date of taking possession by the condemnor, and the award therefor will
be distributed as follows: first, to the payment of all reasonable fees and expenses incurred in
collecting the award; and next, the balance of the award shall be equitably apportioned between
the VLHA and Tenant based on the then respective fair market values of the VLHA's interest in
the Property and Tenant's interest in the Property. All rent shall be prorated through the date of
termination.
b. Partial Taking. Should a portion of the Property be taken by eminent domain,
condemnation or similar proceedings, this Lease shall continue in effect as to the remainder of
the Property unless, in Tenant's reasonable judgment, the taking makes it economically unsound
to use the remainder, whereupon this Lease shall terminate as of the date of taking of possession
by the condemnor in the same manner as if the whole of the Property had been taken, and the
award therefor shall be distributed as provided in subsection (a) hereof. If this Lease is not
terminated, all rent shall be equitably adjusted based on the portion of the Property taken. If this
Lease is terminated, all rent shall be prorated through the date of termination.
c. Temporary Taking. If any portion of the Property is taken for temporary use or
occupancy, the Term shall not be reduced or affected. Except to the extent Tenant is prevented
from so doing pursuant to the terms of the order of the condemning authority, Tenant shall
continue to perform and observe all of the other covenants, agreements, terms, and provisions of
this Lease. If Tenant continues to perform its obligations under this Lease throughout the term of
the temporary taking, Tenant shall be entitled to the full award for a temporary taking.
18. Assignment. Tenant may assign its rights under this Lease if the new tenant assumes in
writing all covenants and obligations of Tenant under this Lease, including without limitation all
obligations of Tenant under the Deed Restriction. Tenant shall thereupon be released and
discharged from all obligations under this Lease, but such obligations shall be binding upon the
new tenant. Notwithstanding the foregoing, Tenant may not assign its rights hereunder prior to
the issuance of final certificates of occupancy for all units in the Improvements, and Tenant may
not assign its rights hereunder if Tenant is in default of this Lease.
19. Subleasing.
a. Tenant may freely execute subleases in compliance with this Lease, the Deed
Restriction and applicable law, provided that the term of each such sublease (including all
renewal and extension rights) shall not extend past the expiration date of the Term.
b. Each sublease shall specifically provide that the sublessee's rights are subject to
the VLHA's rights under this Lease and the Deed Restriction, and shall provide that upon a
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termination of this Lease or of Tenant's right to possession of the Property such sublease, at the
VLHA's option, shall continue in effect as a lease directly between the VLHA and the sublessee
thereunder, provided that the sublessee attorns to the VLHA, the VLHA shall not be responsible
for the return or repayment of any security or other deposits made by such sublessee with Tenant
unless Tenant has turned the same over to the VLHA, and the VLHA shall not be liable or
responsible for the cure or remedy of any breach, violation, or default on the part of Tenant under
subleases occurring prior to termination of this Lease or of Tenant's right to possession of the
Property. Tenant shall give a copy of each sublease to the VLHA upon request.
20. Tenant's Right to Encumber.
a. Leasehold. Tenant may, at any time, without the VLHA's consent or joinder,
encumber its interest in this Lease and the leasehold estate hereby created with one or more
deeds of trust, mortgages, or other lien instruments to secure any borrowings or obligations of
Tenant. No lien of Tenant upon its interest in this Lease and the leasehold estate hereby created
shall encumber or affect in any way the interest of the VLHA in the Property.
b. Fee Simple. If any of Tenant's lenders requires the VLHA to subordinate its fee
interest in the Property to the lender's mortgage, the VLHA shall approve such encumbrance
provided that: at all times the Deed Restriction is first and prior to the mortgage; and the VLHA
has a first and prior right to cure any deficiency to protect its fee interest in the Property. The
VLHA shall have the right to review and approve all documents associated with such
encumbrance prior to execution by Tenant, and any encumbrance made without the VLHA's
prior review and approval shall be void.
c. No Merger. In no event shall the leasehold interest, estate, or rights of Tenant
hereunder, or of the holder of any mortgage upon the Lease, merge with any interest, estate, or
rights of the VLHA in or to the Property, it being understood that such leasehold interest, estate,
and rights of Tenant hereunder, and of the holder of any mortgage upon this Lease, shall be
deemed to be separate and distinct from the VLHA's interest, estate, and rights in or to the
Property, notwithstanding that any such interests, estates, or rights shall at any time or times be
held by or vested in the same person, corporation, or other entity.
21. Quiet Enjoyment. The VLHA covenants that Tenant, on paying the Rent and performing
and observing the obligations of this Lease, shall peaceably and quietly have, hold, occupy, use,
and enjoy the Property during the Term, and may exercise all of its rights hereunder, subject only
to the provisions of this Lease,the Deed Restriction and applicable law.
22. Access.
a. The VLHA shall have access to the Property at all times following reasonable
prior notice to Tenant to inspect the Property, provided that the VLHA shall use reasonable
efforts not to disturb Tenant's use of the Property or the occupants of the Improvements.
b. At no time shall Tenant 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
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by this reference (the "Adjacent Property"). The VLHA shall have unrestricted access to the
Adjacent Property at all times.
23. Tenant Default and Remedies.
a. Each of the following is a Tenant default of this Lease:
i. If Tenant fails to perform any of its obligations under this Lease or the
Deed Restriction and Tenant fails to commence and take such steps as are necessary to
remedy the same within 30 days after Tenant is given a written notice specifying the
same; provided, however, that if the violation is a violation of this Lease and not a
violation of the Deed Restriction, and the nature of the violation is such that it cannot
reasonably be remedied within 30 days, and Tenant provides evidence to the VLHA that
the violation cannot reasonably be remedied within 30 days, then the violation shall be
remedied as soon as reasonably practicable, but in any case, within 180 days of the
original notice of violation.
ii. If an involuntary petition is filed against Tenant under a bankruptcy or
insolvency law or under the reorganization provisions of any law, or when a receiver of
Tenant, or of all or substantially all of the property of Tenant, is appointed without
acquiescence, and such petition or appointment is not discharged or stayed within 120
days after the happening of such event.
iii. If Tenant makes an assignment of its property for the benefit of creditors
or files a voluntary petition under a bankruptcy or insolvency law, or seeks relief under
any other law for the benefit of debtors.
b. If a Tenant default occurs, the VLHA may, without waiving any other rights
hereunder or available to the VLHA at law or in equity (the VLHA's rights being cumulative),
terminate this Lease, in which event this Lease and the leasehold estate hereby created and all
interest of Tenant and all parties claiming by, through, or under Tenant shall automatically
terminate upon the effective date of such notice; and the VLHA, its agents or representatives,
may, without further demand or notice, reenter and take possession of the Property and remove
all persons and property from the Property with or without process of law, without being deemed
guilty of any manner of trespass and without prejudice to any remedies for existing breaches
hereof
c. In addition to the specific remedies set forth herein,the VLHA shall have all other
remedies available at law or equity, and the exercise of one remedy shall not preclude the
exercise of any other remedy.
24. VLHA Default and Remedies.
a. The following is a VLHA default of this Lease: if the VLHA fails perform any of
its covenants or obligations under this Lease and fails to commence and take such steps as are
necessary to remedy the same within 30 days after written notice is given specifying the same;
provided, however, that if the nature of the violation is such that it cannot reasonably be
remedied within 30 days, and the VLHA provides evidence to Tenant that the violation cannot
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reasonably be remedied within 30 days, then the violation shall be remedied as soon as
reasonably practicable, but in any case, within 180 days of the original notice of violation.
b. If a VLHA default occurs, Tenant may terminate this Lease.
c. In addition to the specific remedy set forth herein, Tenant shall have all other
remedies available at law or equity, and the exercise of one remedy shall not preclude the
exercise of any other remedy, provided that the remedy of specific performance shall not be
available against the VLHA.
25. Notices. Any notice under this Lease shall be in writing and may be given by United
States Mail, postage prepaid, addressed as set forth herein; or hand-delivery. Notice shall be
effective three days after mailing or immediately upon hand-delivery. The addresses of the
Parties shall, unless changed in writing, be as follows:
The VLHA: Town Manager
Town of Vail
75 South Frontage Road
Vail, CO 81657
Tenant: Lion's Ridge Apartment Homes, LLC
200 North Main Street
Oregon, WI 53575
Attn: Gary J. Gorman
With a copy to: Jen Wright
Wright and Company, Inc.
P.O. Box 7270
Avon, CO 81620
26. Surrender. On the last day of the term of this Lease or upon any termination of this
Lease, except as otherwise provided for in Section 27, Tenant shall surrender the Property, with
the Improvements then located thereon, into the possession and use of the VLHA, without fraud
or delay and in good order, condition, and repair, free and clear of all occupancies, liens and
encumbrances, without any payment or allowance whatever by the VLHA for any buildings or
improvements erected or maintained on the Property at the time of the surrender, or for the
contents thereof or appurtenances thereto.
27. Option to Purchase.
a. The VLHA hereby grants to Tenant an option to purchase the Property in
accordance with the terms set forth below (the "Option"). Tenant may exercise this option by
providing written notice thereof to the VLHA at any time following the Town of Vail's issuance
of final Certificates of Occupancy for all units in the Improvements, and prior to December 31,
2024, as long as Tenant is not in default of this Lease.
b. If Tenant exercises the Option, the closing of such purchase shall occur on a date
selected by Tenant not more than 90 days after Tenant has delivered the written notice exercising
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the Option. If Tenant has not delivered to the VLHA written notice of it exercise of the option
by December 31, 2024,the Option shall terminate and be of no further force or effect.
c. The purchase price to be paid by Tenant for the Property shall be the sum of
$5 million. The VLHA shall, at closing, upon payment of the purchase price, convey the
Property "as is" to Tenant by special warranty deed, subject to the Deed Restriction and any
subleases executed by Tenant pursuant to Section 19, but free and clear of all other liens,
mortgages or encumbrance of any kind and nature other than recorded easements, matters arising
by or as a result of the action of Tenant during the term of the Lease and matters to which Tenant
has consented in writing during the term of the Lease. Notwithstanding the foregoing, if Tenant
has subordinated the VLHA's fee simple interest in the Property pursuant to Section 20(b), it
shall be Tenant's sole responsibility to remove such encumbrance prior to closing of Tenant's
purchase of the Property.
c. The VLHA shall provide to Tenant, at least 30 days prior to the date of closing, a
commitment for an owner's title insurance policy, in the amount of purchase price, from Chicago
Title Insurance Company (or another title insurance company reasonably acceptable to Tenant),
naming Tenant as the insured. The VLHA shall, at its expense, cause the title insurance
company to issue the title insurance policy at closing.
d. In the event Tenant exercises the Option, the Lease shall terminate at the closing
of Tenant's purchase of the Property and all rent shall be prorated through such date, provided
that the indemnification provisions of Section 15 shall survive termination of the Lease.
28. Miscellaneous.
a. Modification. This Lease may only be modified by subsequent written agreement
of the Parties.
b. Integration. This Lease and any attached exhibits constitute the entire agreement
between Tenant and the VLHA, superseding all prior oral or written communications.
c. Binding Effect. This Lease shall be binding upon and inure to the benefit of the
Parties and their respective heirs, successors and assigns.
d. Severability. If any provision of this Lease is determined to be void by a court of
competent jurisdiction, such determination shall not affect any other provision hereof, and all of
the other provisions shall remain in full force and effect.
e. Governing Law and Venue. This Lease shall be governed by the laws of the State
of Colorado, and any legal action concerning the provisions hereof shall be brought in Eagle
County, Colorado.
f. Third Parties. There are no intended third-party beneficiaries to this Lease.
g. No Joint Venture. Notwithstanding any provision hereof, the VLHA shall never
be a joint venture in any private entity or activity which participates in this Lease, and the VLHA
shall never be liable or responsible for any debt or obligation of any participant in this Lease.
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h. Governmental Immunity. The VLHA and its officers, attorneys and employees,
are relying on, and do not waive or intend to waive by any provision of this Lease, the monetary
limitations or any other rights, immunities, and protections provided by the Colorado
Governmental Immunity Act, C.R.S. § 24-10-101, et seq., as amended, or otherwise available to
the VLHA or its officers, attorneys or employees.
Time of the Essence. Time is of the essence for all provisions of this Lease.
WHEREFORE,the Parties have executed this Lease on the Effective Date.
VAIL LOCAL HOUSING AUTHORITY
ATTEST:
TENANT
LION'S RIDGE APARTMENT HOMES, LLC
BY GORMAN EMPLOYEE GROUP LION'S
RIDGE, LLC, Manager
BY GORMAN &COMPANY, INC.,
Manager
BY
Gary J. Gorman, President
STATE OF )
) ss.
COUNTY OF )
The foregoing instrument was subscribed, sworn to, and acknowledged before me
this day of August_, 2014, by Gary J. Gorman, the President of Gorman& Company,
Inc., the Manager of Gorman Employee Group Lion's Ridge, LLC, the Manager of Lion's Ridge
Apartment Homes, LLC.
My commission expires:
(SEAL)
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION
Lot 2, Timber Ridge Subdivision, A Resubdivision of Lion's Ridge Subdivision, Block C, A
Resubdivision of Lots 1, 2, 3, 4 & 5, Town of Vail, County of Eagle, State of Colorado ,
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EXHIBIT B
DEED RESTRICTION
FOR THE OCCUPANCY OF RESTRICTED UNITS
AT LION'S RIDGE APARTMENT HOMES
THIS DEED RESTRICTION FOR THE OCCUPANCY OF RESTRICTED UNITS AT
LION'S RIDGE APARTMENT HOMES (the "Deed Restriction") is made and entered into this
day of August, 2014 (the "Effective Date"), by and between the Town of Vail, a Colorado
home rule municipality (the "Town"), the Vail Local Housing Authority (the "VLHA"), a
Colorado statutory housing authority, and Lion's Ridge Apartment Homes, LLC, a Colorado
limited liability company ("Master Lessee") (individually a "Party" and collectively the
"Parties").
WHEREAS, the VLHA is the owner of certain real property generally described as the
eastern half of the Timber Ridge property and more particularly described in Exhibit 1 attached
hereto and incorporated herein by this reference (the "Property");
WHEREAS, the Parties desire to allow for the redevelopment of the Property for
employee housing; and
WHEREAS, the VLHA, as landlord, and Master Lessee as tenant, have entered into a
Ground Lease for the Property dated August , 2014 (the "Ground Lease").
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
1. Defined Terms. For purposes of this Deed Restriction, the following terms shall
have the following meanings:
"Principal place of residence" means the dwelling in which one's habitation is
fixed and to which a person, whenever he or she is absent, has a present intention of
returning after an absence therefrom. In determining what is a principal place of
residence, the Town and Master Lessee may consider, without limitation: location of
business pursuits; employment and income sources; residence for tax purposes; residence
of parents, spouse and children, if any; location of personal property; motor vehicle
registration; and voter registration.
"Qualified Household" means one Qualified Resident or a group of persons that
contains at least one Qualified Resident (who must sign the Unit lease as a tenant). A
Qualified Household may have occupants that are not Qualified Residents (and who may
also sign the Unit lease as tenants) as long as at least one occupant who has signed the
lease is a Qualified Resident.
"Qualified Resident" means a natural person who works an average of 30 hours or
more per week at a business in Eagle County, Colorado that holds a valid and current
business license, or pays sales taxes, or is otherwise generally recognized as a legitimate
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business. For example, if a person worked 60 hours per week for one half of the year at
such a business in Eagle County, Colorado, and worked elsewhere for the other half of
the year, such person would constitute a Qualified Resident.
"Rental Guidelines" means the guidelines attached as Exhibit 2 hereto and
incorporated herein by this reference.
"Restricted Unit" means a Unit that is rented to a Qualified Household pursuant to
the terms of this Deed Restriction.
"Unit" means each of the residential dwelling units constructed on the Property.
2. Binding Effect. This Deed Restriction shall constitute a covenant running with
the Property as a burden thereon, for the benefit of, and enforceable by the Town, the VLHA and
the Master Lessee. This Deed Restriction shall bind the Master Lessee and all occupants of the
Restricted Units. Each and every occupant of a Restricted Unit shall be personally obligated
hereunder for the full and complete performance and observance of all covenants, conditions and
restrictions contained herein that are applicable to such occupant during such occupant's
respective period of occupancy of a Restricted Unit. Each and every conveyance of the Property
or a portion thereof, or interest therein, for all purposes, shall be deemed to include and
incorporate by this reference, the covenants contained in this Deed Restriction, even without
reference to this Deed Restriction in any document of conveyance.
3. Occupancy.
a. The Master Lessee covenants that at least 70% of the total Units in the
Property shall be Restricted Units. The Parties acknowledge that the Restricted Units are
not fixed and may float so long as at least 70% of the total Units are Restricted Units.
For example, assume that the Property contains 100 Units. If 75 of the Units are rented
to Qualified Households, and one of such Units becomes vacant, such Unit may
thereafter be rented to occupants who are not a Qualified Household, because at least 70
of the Units remain occupied by Qualified Households.
b. The Property may contain two additional common areas that shall not
qualify as Units, one area to be used by property management personnel, maintenance
personnel or security personnel, and one area to be used as a leasing or marketing office.
Because such common areas are not considered Units under this Deed Restriction, they
shall not be included in the calculation of Restricted Units; provided however, that if such
common areas are ever converted into Units, they shall be included in the calculation of
Restricted Units.
c. A Qualified Resident must occupy the Restricted Unit as his or her
principal place of residence. If other occupants of the Restricted Unit are not Qualified
Residents,the Restricted Unit need not be their principal place of residence.
d. At any time that the number of Restricted Units falls below 70% of the
total Units, Master Lessee shall promptly take commercially reasonable efforts in
accordance with applicable law and the Rental Guidelines to lease the next Units coming
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available for rent to Qualified Households in accordance with this Deed Restriction and
the Rental Guidelines, until at least 70%of the total Units are Restricted Units.
4. Unit Lease. No Unit shall be leased or occupied without a Unit lease. Each Unit
shall have only one Unit lease at any one time Each Restricted Unit lease shall include a clear
reference to this Deed Restriction and a brief summary of this Deed Restriction, including the
remedies upon a violation or breach of the terms of this Deed Restriction, and shall incorporate
the terms and conditions of this Deed Restriction.
5. Right To Terminate Lease. Nothing herein shall prevent the Master Lessee from
terminating the lease of a Qualified Household, or taking any other legal action against the
Qualified Household based upon any tenant's breach of the terms of the lease; provided that if a
tenant misrepresents his or her status as a Qualified Resident, Master Lessee shall terminate the
Unit lease in addition to any other available remedies.
6. Inspection. In a non-emergency situation, if the Town or Master Lessee has
reasonable cause to believe that an occupant of a Restricted Unit is violating any provision of
this Deed Restriction, the Town or Master Lessee may inspect the Restricted Unit between the
hours of 8:00 am and 5:00 pm, Monday through Friday, after providing the occupant with no less
than 24 hours written notice, which notice to tenant may be given by posting on the front door of
the applicable Restricted Unit. Nothing herein shall preclude the Town or Master Lessee from
accessing a Restricted Unit in an emergency situation where there is an imminent threat to
person(s) or property.
7. Annual Verification. No later than February 1st of each year, beginning in the
year following the first year of occupancy of the Property, Master Lessee shall submit a written
statement to the Town including the following information and stating that such information is
true and correct to the best of Master Lessee's knowledge and belief:
a. Evidence to establish that 70% of the Units were Restricted Units (i.e.,
occupied by Qualified Households) during the prior calendar year;
b. A list of tenants who occupied the Restricted Units in the prior calendar
year and the evidence submitted by such tenants to establish that they were Qualified
Residents and/or Qualified Households;
c. A copy of the lease form currently used for the Restricted Units;and
d. Copies (which may be electronic) of all application information submitted
by Qualified Residents actually occupying Restricted Units; provided that such copies
will only be provided for one Qualified Resident per Restricted Unit, even if more than
one Qualified Resident occupies such Restricted Unit.
8. Violations.
a. If Master Lessee discovers a violation of this Deed Restriction by an
occupant, or if the Town notifies Master Lessee in writing that there is a violation of this
Deed Restriction by an occupant, Master Lessee shall send a notice of violation to the
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occupant detailing the nature of the violation and allowing the occupant 10 days from the
date of the notice to cure said violation to the reasonable satisfaction of Master Lessee
and the Town. Notice may be given by posting on the front door of the applicable Unit
or by other lawful means. If the violation is not cured within such time, the violation
shall be considered a violation of this Deed Restriction by the Unit occupant.
b. If the Town discovers a violation of this Deed Restriction by Master
Lessee, the Town shall send a notice of the violation to Master Lessee, detailing the
nature of the violation and allowing Master Lessee 30 days from the date the notice is
given to cure said violation to the reasonable satisfaction of the Town. If a forcible entry
and detainer is necessary to resolve the violation, the forcible entry and detainer shall be
commenced within such 30-day period and diligently prosecuted to completion. If the
violation if not cured within such time, the violation shall be considered a violation of
this Deed Restriction by Master Lessee.
9. Remedies.
a. The Town and Master Lessee shall have any and all remedies provided by
law and in equity for a violation of this Deed Restriction, including without limitation:
(i) damages, including but not limited to damages resulting from the leasing of a
Restricted Unit in violation of this Deed Restriction; (ii) specific performance; and (iii)
injunction, including without limitation an injunction requiring eviction of the
occupant(s) and an injunction to prohibit the occupancy of a Restricted Unit in violation
of this Deed Restriction. All remedies shall be cumulative.
b. In addition to any other available remedies, if Master Lessee is found to be
in violation this Deed Restriction (after expiration of any cure period), Master Lessee
shall be subject to a penalty of$100 per violation as determined by the Town in each
instance. Each occurrence is hereby deemed to be a separate violation of this Deed
Restriction, and the penalty may be imposed for each and every day during any portion of
which a violation is found to have been committed, continued or permitted by Master
Lessee. This penalty shall not apply if it is discovered that an occupant provided false
information to Master Lessee, Master Lessee reasonably relied on such false information,
and the false information caused the violation.
c. If addition to any other available remedies, if an occupant of a Restricted
Unit is found to be in violation of this Deed Restriction (after expiration of any cure
period), the occupant shall be subject to a penalty of$100 per violation as determined by
the Town in each instance. Each occurrence is hereby deemed to be a separate violation
of this Deed Restriction, and the penalty may be imposed for each and every day during
any portion of which a violation is found to have been committed or continued by an
occupant.
d. The cost to the Town or the VLHA of any activity taken in response to
any violation of this Deed Restriction by the Master Lessee, including reasonable
attorney fees, shall be paid promptly by Master Lessee; provided that, if the Town, the
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VLHA or a court of competent jurisdiction finds that Master Lessee was not in violation
of this Deed Restriction, Master Lessee shall not be liable for such payment.
10. Term. This Deed Restriction shall commence on the Effective Date and shall
terminate on August 31, 2064.
11. Modification. This Deed Restriction may only be modified by subsequent written
agreement of the Parties.
12. Assignment. Neither this Deed Restriction nor any of the rights or obligations of
the Parties hereto shall be assigned by either Party without the written consent of the other.
13. Severability. If any provision of this Deed Restriction is determined to be void by
a court of competent jurisdiction, such determination shall not affect any other provision hereof,
and all of the other provisions shall remain in full force and effect.
14. Governing Law and Venue. This Deed Restriction shall be governed by the laws
of the State of Colorado, and any legal action concerning the provisions hereof shall be brought
in Eagle County, Colorado.
15. Third Parties. There are no intended third-party beneficiaries to this Deed
Restriction.
16. No Joint Venture. Notwithstanding any provision hereof, neither the Town or the
VLHA shall ever be in a joint venture with the Master Lessee, and neither the Town or the
VLHA shall ever be liable or responsible for any debt or obligation of the Master Lessee.
17. No Indemnity. Nothing herein shall be construed to require the Town or the
VLHA to protect or indemnify Master Lessee against any losses attributable to the rental of a
Restricted Unit, nor to require the Town or the VLHA to locate a Qualified Resident for any
Restricted Unit.
18. Governmental Immunity. The Town, the VLHA and its officers, attorneys and
employees, are relying on, and do not waive or intend to waive by any provision of this Deed
Restriction, the monetary limitations or any other rights, immunities, and protections provided by
the Colorado Governmental Immunity Act, C.R.S. § 24-10-101, et seq., as amended, or
otherwise available to the Town,the VLHA or its officers, attorneys or employees.
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IN WITNESS WHEREOF, the Parties have executed this Deed Restriction on the
Effective Date.
TOWN OF VAIL, COLORADO
Stan Zemler, Town Manager
ATTEST:
Patty McKenney, Town Clerk
VAIL LOCAL HOUSING AUTHORITY
ATTEST:
MASTER LESSEE
LION'S RIDGE APARTMENT HOMES, LLC
BY GORMAN EMPLOYEE GROUP LION'S
RIDGE, LLC, Manager
BY GORMAN &COMPANY, INC.,
Manager
BY
Gary J. Gorman, President
STATE OF )
ss.
COUNTY OF )
The foregoing instrument was subscribed, sworn to, and acknowledged before me
this day of August, 2014, by Gary J. Gorman, the President of Gorman & Company,
Inc., the Manager of Gorman Employee Group Lion's Ridge, LLC, the Manager of Lion's Ridge
Apartment Homes, LLC.
My commission expires:
(SEAL)
Notary Public
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EXHIBIT 1
LEGAL DESCRIPTION
Lot 2, Timber Ridge Subdivision, A Resubdivision of Lion's Ridge Subdivision, Block C, A
Resubdivision of Lots 1, 2, 3, 4 & 5, Town of Vail, County of Eagle, State of Colorado
x;.
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EXHIBIT 2
RENTAL GUIDELINES
1. Purpose. The purpose of these Rental Guidelines is to set forth the occupancy
eligibility requirements for the employee housing rental units (the "Restricted Units") located in
Lion's Ridge Apartment Homes, pursuant to the Deed Restriction dated August , 2014.
2. Definitions. All capitalized terms herein shall have the meanings set forth in the
Deed Restriction.
3. Administration. In accordance with the Deed Restriction, Master Lessee shall
administer these Rental Guidelines, including but not limited to, making determinations
regarding the eligibility of applicants to rent and occupy a Restricted Unit as a Qualified
Resident as set forth herein. Prior to leasing or renewing a lease for a Restricted Unit, the
occupant must sign an individual acknowledgement of acceptance of the terms of these Rental
Guidelines and the Deed Restriction.
4. Qualified Households and Residents. Except as otherwise provided herein or in
the Deed Restriction, to be eligible for consideration to rent a Restricted Unit, the occupants
must first be certified as a Qualified Household. Notwithstanding anything herein to the
contrary, Master Lessee shall not be obligated to rent any Unit to a tenant that does not meet
Master Lessee's rental guidelines, which rental guidelines shall be subject to review and approval
by the Town, in its reasonable discretion.
5. Application. To become a Qualified Resident, a person must first provide the
following information on an application to be provided by Master Lessee, and applications and
all accompanying documentation shall become the property of the Master Lessee and will not be
returned to the applicant:
a. Verification (e.g., wage stubs, employer name, address, telephone number
and other appropriate documentation as requested by Master Lessee) of applicant's
current employment with a business in Eagle County that holds a valid and current
business license, or pays sales taxes, or is otherwise generally recognized as a legitimate
business;
b. Evidence that the applicant has worked, or will work, an average of 30
hours per week or more per year for one or more of such businesses and that such level
of employment is expected to be maintained for as long as the applicant lives in the
Restricted Unit;
c. A valid form of identification, such as a driver's license, state-issued
identification, passport or military identification.
d. Any other documentation which the Master Lessee deems necessary to
make a determination of eligibility; and
e. A signed statement certifying and acknowledging: that all information
submitted in such application is true to applicant's best knowledge; that the applicant
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understands that he/she may not sublet the Restricted Unit; that the applicant authorizes
Master Lessee to verify any and all past or present employment and residency
information and all other information submitted by an applicant; and that applicant
understands that, as set forth in the Deed Restriction, the Master Lessee reserves the right
to review any applications and take any appropriate action regarding such application.
6. Lease Term. The Restricted Units shall be leased to Qualified Households, and
may be renewed to Qualified Households, on a month-to-month basis or for periods no greater
than 12 months in duration.
7. Interpretation. In evaluating a potential application to lease a Restricted Unit, the
Master Lessee shall be guided by the following:
a. An applicant's physical place of employment is controlling, not the
mailing address of such place.
b. Claims of employment by an applicant that are unable to be verified by
Master Lessee will not be utilized in determining an applicant's eligibility.
c. Seasonal work and part time work alone may not be adequate to meet the
minimum 30 hours per week average annual requirement, but may augment other
employment to meet the minimum eligibility requirements.
8. Leasing of Units to Non-Qualified Households.
a. If at least 70% of the Units in the Property are Restricted Units, other
Units may be freely leased by Master Lessee to occupants who are not Qualified
Residents or Qualified Households.
b. If there are no eligible Qualified Households available to rent a particular
Unit, Master Lessee may rent such Unit to occupants other than a Qualified Household.
However, at any time that the number of Restricted Units falls below 70% of the total
Units, Master Lessee shall thereafter use commercially reasonable efforts to lease the
next available Unit(s)to Qualified Households until the 70%threshold is again met.
c. In no event may Master Lessee lease a Restricted Unit to a Qualified
Resident who will not occupy the Restricted Unit as his or her principal place of
residence, unless first expressly approved in writing by the Town after making findings
that extraordinary circumstances and hardship exist to justify such arrangement. Such
tenancy shall be on a month-to-month basis only.
9. Misrepresentation. Any misrepresentation by an applicant in any submittal shall
disqualify such applicant from being eligible to lease a Restricted Unit, and shall be grounds for
eviction if such misrepresentation is revealed after such applicant's occupancy.
10. Inspection of Documents. The Town may inspect any documents submitted with
any application for Qualified Resident status pursuant to Section 5 hereof, at any time during
normal business hours, upon reasonable notice. In addition, upon inspection, if the Town
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reasonably determines that additional documents are necessary to verify Qualified Resident or
Qualified Household status, the Town may request additional documents. Notwithstanding the
foregoing, Master Lessee shall not be required to retain any documents submitted by applicants
who do not sign leases with Master Lessee; provided, however, that if the number of Restricted
Units falls below 70% of the total Units, then Master Lessee shall retain documents submitted by
applicants to verify its commercially reasonable efforts to lease the next Unit becoming available
for rent to a Qualified Household in accordance with the requirements of the Deed Restriction
and the Rental Guidelines, until at least 70%of the total Units are once again Restricted Units.
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EXHIBIT C
LEGAL DESCRIPTION OF ADJACENT PROPERTY
Lot 1, Timber Ridge Subdivision, A Resubdivision of Lion's Ridge Subdivision, Block C, A
Resubdivision of Lots 1, 2, 3, 4 & 5, Town of Vail, County of Eagle, State of Colorado
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3