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HomeMy WebLinkAbout5A5 Real Estate Purchase Agreement Bare Hands BreweryREAL ESTATE PURCHASE AGREEMENT This Real Estate Purchase Agreement (this "Agreement ") is made on August 25, 2016 (the "Contract Date "), by and between the City of South Bend, Indiana, Department of Redevelopment, acting by and through its governing body, the South Bend Redevelopment Commission ( "Seller ") and Chris Gerard, doing business as Bare Hands Brewery, a sole proprietorship with its principal place of business at 12804 Sandy Ct., Granger, Indiana 46530 ( "Buyer ") (each a "Party" and together the "Parties "). RECITALS A. Seller exists and operates pursuant to the Redevelopment of Cities and Towns Act of 1953, as amended, being Ind. Code 36 -7 -14 (the "Act "). B. In furtherance of its purposes under the Act, Seller owns certain real property located in South Bend, Indiana (the "City "), and more particularly described in attached Exhibit A (the "Property"). C. Pursuant to the Act, Seller adopted its Resolution No. 3151 on August 15, 2013, whereby Seller established an offering price of Two Hundred Twenty -Seven Thousand Five Hundred Dollars ($227,500.00) for the Property. D. Pursuant to the Act, on August 15, 20,13, Seller authorized the publication, on August 23, 2013, and August 30, 2013, respectively, of a notice of its intent to sell the Property and its desire to receive bids for said Property on or before September 12, 2013. E. As of September 12, 2013, Seller received no bids for the Property, and, therefore, having satisfied the conditions stated in Section 22 of the Act, Seller now desires to sell the Property to Buyer on the terms stated in this Agreement. THEREFORE, in consideration of the mutual covenants and promises in this Agreement and other good and valuable consideration, the receipt of which is hereby acknowledged, Buyer and Seller agree as follows: 1. OFFER AND ACCEPTANCE A copy of this Agreement, signed by Buyer, constitutes Buyer's offer to purchase the Property on the terms stated in this Agreement and shall be delivered to Seller, in care of the following representative ( "Seller's Representative "): Brian Pawlowski, Acting Executive Director Department of Community Investment City of South Bend 1400 S. County -City Building 227 W. Jefferson Blvd. South Bend, Indiana 46601 1 This offer shall expire thirty (30) days after delivery unless accepted by Seller. To accept Buyer's offer, Seller shall return a copy of this Agreement, counter - signed by Seller in accordance with applicable laws, to the following ( "Buyer's Representative "): Chris Gerard 12804 Sandy Ct. Granger, Indiana 46530 2. PURCHASE PRICE The purchase price for the Property shall be One Dollar ($1.00) (the "Purchase Price "), payable by Buyer to Seller in cash at the closing described in Section 10 below (the "Closing," the date of which is the " CIosing Date "). 3. BUYER'S DUE DILIGENCE A. Investigation. Seller acknowledges that Buyer's purchase of the Property requires investigation into various matters (Buyer's "Due Diligence "). Therefore, Buyer's obligation to complete the purchase of the Property is conditioned upon the satisfactory completion, in Buyer's discretion, of Buyer's Due Diligence, including, without limitation, Buyer's examination, at Buyer's sole expense, of zoning and land use matters, environmental matters, real property title matters, and the like, as applicable. B. Due Diligence Period. Buyer shall have a period of sixty (60) days following the Contract Date to complete its examination of the Property in accordance with this Section 3 (the "Due Diligence Period "). C. Authorizations During Due Diligence Period. During the Due Diligence Period, Seller authorizes Buyer, upon Buyer providing Seller with evidence that Buyer has general liability insurance reasonably acceptable to Seller, in the amount of at least One Million Dollars ($1,000,000), naming Seller as an additional insured and covering the activities, acts, and omissions of Buyer and its representatives at the Property, to (i) enter upon the Property or to cause agents to enter upon the Property for purposes of examination; provided, that Buyer may not take any action upon the Property which reduces the value thereof and Buyer may not conduct any invasive testing at the Property without Seller's express prior written consent; further provided, that if the transaction contemplated herein is not consummated, Buyer shall promptly restore the Property to its condition prior to entry, and agrees to defend, indemnify and hold Seller harmless, before and after the Closing Date whether or not a closing occurs and regardless of any cancellations or termination of this Agreement, from any liability to any third party, loss or expense incurred by Seller, including without limitation, reasonable attorney fees and costs arising fiom acts or omissions of Buyer or Buyer's agents or representatives; and (ii) file any application with any federal, state, county, municipal or regional agency relating to the Property for the purpose of obtaining any approval necessary for Buyer's anticipated use of the Property. If Seller's written consent to or signature upon any such application is required by any such agency for consideration or acceptance of any such application, Buyer may request from Seller such consent or signature, which Seller shall not unreasonably withhold. Notwithstanding the foregoing, any zoning commitments or other commitments that would further restrict the future use or development of the Property, beyond the restrictions in place as a result of the current zoning of the Property, shall be subject to Seller's prior review and written approval. D. Termination of Agreement. If at any time within the Due Diligence Period Buyer determines, in its sole discretion, not to proceed with the purchase of the Property, Buyer may terminate this Agreement by written notice to SeIler's Representative. 4. SELLER'S DOCUMENTS; ENVIRONMENTAL SITE ASSESSMENT Upon Buyer's request, Seller will provide Buyer a copy of all known environmental inspection, engineering, title, and survey reports and documents in Seller's possession relating to the Property. In the event the Closing does not occur, Buyer will immediately return all such reports and documents to Seller's Representative with or without a written request by Seller. In addition to reviewing any environmental reports provided by Seller, Buyer may, at Buyer's sole expense, obtain a Phase I environmental site assessment of the Property pursuant to and limited by the authorizations stated in Section 3 above. 5. PRESERVATION OF TITLE After the Contract Date, Seller shall not take any action or allow any action to be taken by others to cause the Property to become subject to any interests, liens, restrictions, easements, covenants, reservations, or other matters affecting Seller's title (such matters are referred to as "Encumbrances "). Seller acknowledges that Buyer intends to obtain, at Buyer's sole expense, and to rely upon a commitment for title insurance on the Property (the "Title Commitment ") and a survey of the Property (the "Survey ") identifying all Encumbrances as of the Contract Date. The Property shall be conveyed to Buyer free of any Encumbrances other than Permitted Encumbrances (as defined in Section 7 below). 6. TITLE COMMITMENT AND POLICY REQUIREMENTS Buyer shall obtain the Title Commitment for an owner's policy of title insurance issued by a title company selected by Buyer and reasonably acceptable to Seller (the "Title Company ") within twenty (20) days of the Contract Date. The Title Commitment shall (i) agree to insure good, marketable, and indefeasible fee simple title to the Property (including public road access) in the name of the Buyer for the full amount of the Purchase Price upon delivery and recordation of a special warranty deed (the "Deed ") from the Seller to the Buyer, and (ii) provide for issuance of a final ALTA owner's title insurance policy, with any endorsements requested by Buyer, subject to the Permitted Encumbrances. Regardless of whether this transaction closes, Buyer shall be responsible for all of the Title Company's title search charges and all costs of the Title Commitment and owner's policy. 3 7. REVIEW OF TITLE COMMITMENT AND SURVEY Buyer shall give Seller written notice, within twenty (20) days after the Contract Date, of any objections to the Title Commitment or Survey. Any exceptions identified in the Title Commitment or Survey to which written notice of objection is not given within such period shall be a "Permitted Encumbrance." If the Seller is unable or unwilling to correct the Buyer's title and survey objections within the Due Diligence Period, Buyer may terminate this Agreement by written notice to Seller prior to expiration of the Due Diligence Period. If Buyer fails to so tenninate this Agreement, then such objections shall constitute "Permitted Encumbrances" as of the expiration of the Due Diligence Period, and Buyer shall acquire the Property without any effect being given to such title and survey objections. 8. DISPUTE RESOLUTION A. Forum. Any action to enforce the terms or conditions of this Agreement or otherwise concerning a dispute under this Agreement will be commenced in the courts of St. Joseph County, Indiana, unless the Parties mutually agree to an alternative method of dispute resolution. B. Waiver of Jury Trial,. Both Parties hereby waive any right to trial by jury with respect to any action or proceeding relating to this Agreement. 9. NOTICES All notices required or allowed by this Agreement, before or after Closing, shall be delivered in person or by certified mail, return receipt requested, postage prepaid, addressed to Seller in care of Seller's Representative (with a copy to South Bend Legal Department, 1200 S. County -City Building, 227 W. Jefferson Blvd., South Bend, IN 46601, Attn: Corporation Counsel), or to Buyer in care of Buyer's Representative at their respective addresses stated in Section 1 above. Either Party may, by written notice, modify its address or representative for future notices. 10. CLOSING A. Timing of Closing. Unless this Agreement is earlier terminated, the Closing shall be held at the office of the Title Company, and the Closing Date shall be a mutually agreeable date not later than thirty (30) days after the end of the Due Diligence Period. B. Closing Procedure. (i) At Closing, Buyer shall deliver the Purchase Price to Seller, conditioned on Seller's delivery of the Deed, in the form attached hereto as Exhibit B, conveying the Property to Buyer, free and clear of all liens, encumbrances, title defects, and exceptions other than Permitted Encumbrances, and the Title Company's delivery of the marked -up copy of the Title Commitment (or pro forma policy) to Buyer in accordance with Section 6 above. 11 (ii) Possession of the Property shall be delivered to the Buyer at Closing, in the same condition as it existed on the Contract Date, ordinary wear and tear and casualty excepted. C. RESERVED. D. Closing Costs. Buyer shall pay all of the Title Company's closing and /or document preparation fees and all recordation costs associated with the transaction contemplated in this Agreement. 11. ACCEPTANCE OF PROPERTY AS -IS• REMEDIATION WORK; APPROVALS A. "As -Is" Transaction. Buyer agrees to purchase the Property "as -is, where -is" and without any representations or warranties by Seller as to the condition of the Property or its fitness for any particular use or purpose. Seller offers no such representation or warranty as to condition or fitness, and nothing in this Agreement will be construed to constitute such a representation or warranty as to condition or fitness. B. Remediation Work. The Parties acknowledge that Seller expects to complete certain environmental remediation work on the Property before the Closing Date (the "Seller's Work "). Seller will carry out Seller's Work in Seller's sole discretion and at Seller's sole expense. By undertaking Seller's Work, Seller accepts no liability for any damages or claims arising out of the environmental or other condition of the Property, and upon taking title to the Property Buyer accepts any and all such liabilities. In the event Seller's Work will be completed after the Closing Date, Seller will notify Buyer of the same, and Buyer will permit Seller to enter upon and have access to all parts of the Property necessary to complete Seller's Work. C. Approvals for Relocation. The Parties acknowledge that Buyer intends to seek from relevant authorities all necessary approvals, including without limitation re- zoning and special use approvals, to facilitate Buyer's relocation to the Property of all of Buyer's current operations existing as of the Contract Date at its Granger, Indiana, location (Buyer's "Relocation "). In the event Buyer fails to obtain within six (6) months after the Closing Date all zoning and land use approvals necessary for Buyer's Relocation, Seller agrees to negotiate in good faith with Buyer for the re- conveyance of the Property to Seller, provided, however, Seller will not be required to bear any costs in connection with the transaction or assume any liabilities in connection with the Property. 12. BUYER'S POST - CLOSING OBLIGATIONS A. Property Improvements. Within thirty -six (36) months after the Closing Date (the "Phase 1 Deadline "), Buyer will expend at least Four Hundred Fifty -Five Thousand Eight Hundred Twenty -Eight Dollars ($455,828.00) to complete improvements to the Property, including the interior of the existing structure on the Property, to facilitate Buyer's Relocation (as defined above) (the "Phase 1 Investment "). Within sixty (60) inonths after the Closing Date (the "Phase 2 Deadline "), Buyer will expend a total sum of at least Nine Hundred Seventy -Eight Thousand Nine Hundred Eight -Seven Dollars ($978,987.00), including the Phase 1 Investment to complete further improvements to the Property, including any expansion of the existing structure 5 or the construction of one or more new structures on the Property (the "Phase 2 Investment "). All work associated with the Phase 1 Investment and the Phase 2 Investment will be carried out in compliance with all applicable laws and industry standards. B. Certificate of Completion. Promptly after Buyer completes both the Phase I Investment and the Phase 2 Investment, Buyer may request from Seller a certificate acknowledging such completion and releasing Seller's reversionary interest in the Property (the "Certificate of Completion "). The Parties agree to record the Certificate of Completion immediately upon issuance, and Buyer will pay the costs of recordation. C. Reversion upon Default. In the event Buyer fails to perform any of its obligations, or satisfactorily prove such performance, under this Section 12, then Seller shall have the right to re -enter and take possession of the Property and to terminate and revest in Seller the estate conveyed to Buyer at Closing and all of Buyer's rights and interests hi the Property without offset or compensation for the value of any investments or improvements made by Buyer after the Closing Date. The Parties agree that Seller's conveyance of the Property to Buyer at Closing will be made on the condition subsequent set forth in the foregoing sentence. 13. TAXES Buyer, and Buyer's successors and assigns, shall be liable for any and all real property taxes assessed and levied against the Property with respect to the year in which the Closing takes place and for all subsequent years. Seller shall have no liability for any real property taxes associated with the Property, and nothing in this Agreement shall be construed to require the proration or other apportionment of real property taxes resulting in Seller's liability therefor. 14. REMEDIES Upon any default in or breach of this Agreement by either Party, the defaulting Party will proceed immediately to cure or remedy such default within thirty (30) days after receipt of written notice of such default or breach from the non - defaulting Party, or, if the nature of the default or breach is such that it cannot be cured within thirty (30) days, the defaulting Party will diligent pursue and prosecute to completion an appropriate cure within a reasonable time. In the event of a default or breach that remains uncured for longer than the period stated in the foregoing sentence, the non - defaulting Party may terminate this Agreement, commence legal proceedings, including an action for specific performance, or pursue any other remedy available at law or in equity. All the Parties' respective rights and remedies concerning this Agreement and the Property are cumulative. 15. COMMISSIONS The Parties mutually acknowledge and warrant to one another that neither Buyer nor Seller is represented by any broker in connection with the transaction contemplated in this Agreement. Buyer and Seller agree to indemnify and hold harmless one another from any claim for cominissions hi connection with the transaction contemplated in this Agreement. 16. INTERPRIETATION, APPLICABLE LAW r1i Both Parties having participated fully and equally in the negotiation and preparation of this Agreement, this Agreement shall not be more strictly construed, nor shall any ambiguities in this Agreement be presumptively resolved, against either Party. This Agreement shall be interpreted and enforced according to the laws of the State of Indiana. 17. ENTIRE AGREEMENT This Agreement embodies the entire agreement between Seller and Buyer and supersedes all prior discussions, understandings, or agreements, whether written or oral, between Seller and Buyer concerning the transaction contemplated in this Agreement. 18. ASSIGNMENT Buyer and Seller agree that this Agreement or any of Buyer's rights hereunder may not be assigned by Buyer, in whole or in part, without the prior written consent of Seller. In the event Buyer wishes to obtain Seller's consent regarding a proposed assignment of this Agreement, Seller may request and Buyer shall provide any and all information reasonably demanded by Seller in connection with the proposed assignment and /or the proposed assignee. 19. BINDING EFFECT; COUNTERPARTS; SIGNATURES All the terms and conditions of this Agreement will be effective and binding upon the Parties and their successors and assigns at the time the Agreement is fully signed and delivered by Buyer and Seller. This Agreement may be separately executed in counterparts by Buyer and Seller, and the same, when taken together, will be regarded as one original Agreement. Electronically transmitted signatures will be regarded as original signatures. 20. AUTHORITY TO EXECUTE The undersigned persons executing and delivering this Agreement on behalf of Seller represent and certify that they are the duly authorized representatives of Seller and have been fully empowered to execute and deliver this Agreement and that all necessary corporate action has been taken and done. The undersigned representative of Buyer represents and warrants that Buyer is a sole proprietorship and that he is duly authorized to bind Buyer to the terms of this Agreement. [Signature page follows.] 7 IN WITNESS WHEREOF, the Parties hereby execute this Real Estate Purchase Agreement to be effective as of the Contract Date stated above. BUYER: Chris Gerard, doing business as Bare Hands Brewery, a sole proprietorship Chris Gerard Dated: �IZ -2 SELLER: City of South Bend, Department of Redevelopment, by and through its governing body, the South Bend Redevelopment Commission Marcia 1. Jones, President ATTEST: Donald E. Inks, Secretary 4000.000000142458324.003 EXHIBIT A Description of Property Real property located in the City of South Bend, County of St. Joseph, Indiana, more particularly described as follows: Lot A as shown on the plat of Vail's Subdivision (First Replat), recorded on October 4, 2013, as Document No. 1330638 in the Office of the Recorder of St. Joseph County, Indiana. Parcel Key No. 018- 3012 - 044003 Coninionly known as 331 W. Wayne St., South Bend, Indiana EXHIBIT B Form of Special Warranty Deed SPECIAL WARRANTY DEED THIS INDENTURE WITNESSETH, that the City of South Bend, Department of Redevelopment, by and through its governing body, the South Bend Redevelopment Commission, 1400 S. County -City Building, 227 W. Jefferson Boulevard, South Bend, Indiana (the "Grantor ") CONVEYS AND SPECIALLY WARRANTS to Chris Gerard, doing business as Bare Hands Brewery, a sole proprietorship with its principal place of business at 12804 Sandy Ct., Granger, Indiana 46530 (the "Grantee"), for and in consideration of One Dollar ($1.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the following real estate located in St. Joseph County, Indiana (the "Property "): Lot A as shown on the plat of Vail's Subdivision (First Replat), recorded on October 4, 2013, as Document No. 1330638 in the Office of the Recorder of St. Joseph County, Indiana. Parcel Key No. 018 -3012- 044003 Commonly known as 331 W. Wayne St., South Bend, Indiana The Grantor warrants title to the Property only insofar as it might be affected by any act of the Grantor during its ownership thereof and not otherwise. The Grantor hereby conveys the Property to the Grantee free and clear of all leases or licenses; subject to real property taxes and assessments; subject to all easements, covenants, conditions, restrictions, and other matters of record; subject to rights of way for roads and such matters as would be disclosed by an accurate survey and inspection of the Property; subject to all applicable building codes and zoning ordinances; and subject to all provisions and objectives contained in Grantor's development area plan and any design review guidelines associated therewith, as the same may be amended from time to time. The Grantor conveys the Property to the Grantee pursuant to the terms of that certain Real Estate Purchase Agreement dated August 25, 2016, by and between the Grantor and the Grantee (the "Agreement") and subject to all Permitted Encumbrances established under the Agreement. Capitalized terms not otherwise defined in this deed will have the meanings stated in the Agreement. Pursuant to Section 12 of the Agreement, the Grantor conveys the Property to the Grantee by this deed subject to a certain condition subsequent. In the event the Grantee fails to perform any of its obligations, or satisfactorily prove such performance, under Section 12 of the Agreement, then the Grantor shall have the right to re -enter and take possession of the Property and to terminate and revest in the Grantor the estate conveyed to the Grantee by this deed and all of the Grantee's rights and interests in the Property without offset or compensation for the value of any investments improvements made by the Grantee after the Page 1 of 2 delivery of this deed to the Grantee. The recordation of a Certificate of Completion in accordance with Section 12 of the Agreement will forever release and discharge the Grantor's reversionary interest stated in the foregoing sentence. The Grantor conveys the Property to the Grantee subject to the limitation that the Grantee, and its successors and assigns, shall not discriminate against any person on the basis of race, creed, color, sex, age, or national origin in the sale, lease, rental, use, occupancy, or enjoyment of the Property or any improvements constructed on the Property. Each of the undersigned persons executing this deed on behalf of the Grantor represents and certifies that s/he is a duly authorized representative of the Grantor and has been fully empowered, by proper action of the governing body of the Grantor, to execute and deliver this deed, that the Grantor has full corporate capacity to convey the real estate described herein, and that all necessary action for the making of such conveyance has been taken and done. 14"Sy 211101tii CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT Marcia I. Jones, President ATTEST: Donald E. Inks, Secretary STATE OF INDIANA ) ) SS: ST. JOSEPH COUNTY ) Before me, the undersigned, a Notary Public, in and for said County and State, personally appeared Marcia I. Jones and Donald E. Inks, known to me to be the President and Secretary, respectively, of the South Bend Redevelopment Commission and acknowledged the execution of the foregoing Special Warranty Deed. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day of , 2016. My Commission Expires: Notary Public Residing in St. Joseph County, Indiana 1 affirm, under the penalties for perjury, that 1 have taken reasonable care to redact each Social Security number in this document, unless required bylaw. Benjamin J. Dougherty. This instrument was prepared by Benjamin J. Dougherty, Assistant City Attorney, 1200 S. County -City Building, 227 W. Jefferson Blvd., South Bend, Indiana 46601. Page 2 of 2