HomeMy WebLinkAboutUse, Maintenance, & Facade Agreement - Michigan Street Shops LLC - Responsibilities Post Closing after the sale of Leighton Street Garage Retail Space1316 COUNTY -CITY Buiu)ING
227 W. JEFFERSON BOULEVARD
SOUTfi BEND. INDIANA 46601-1830
CITY OF SOUTH —BEND PETE BurriGIEG, MAYOR
BD OF PUBLIC )bW
June 12, 2018
Edward Bradley
Michigan Street Shops 1,LC
4100 Edison Lakes Parkway, Suite 350
Mishawaka, IN 46545
RE: Use, Maintenance, and Fagade Agreement
Dear Mr. Bradley:
PHONE 574/235-9251
FAX 574/ 235-9171
The Board of Public Works, at its meeting held on June 12, 2018, approved the above
referenced agreement to determine responsibilities post -closing after the sale of Leighton
Street Garage retail space.
Enclosed please find a copy of the agreement for your records.
If you have any further questions regarding this matter, please call this office at (574) 235-
9251.
Sincerely,
Linda M. Mai -tin, Clerk
Enclosure
c: Dave Relos, Community Investment
Wizy A. Git,o'r S(JZANNA M. FRITZBERG EuZABEm A. MARMAK JAMEs A. MUDIER THEU'SE J. DOI�AU
LEIGHTON GARAGE
USE MAINTENANCE AND FACADE AGREEMENT
This Leighton Garage Use, Maintenance, And Fagade Agreement (this "Agreement") is
made on 2018 (the "Effective Date"), by and between the City of South
Bend, acting by and through its Board of Public Works (the "City"), and Michigan Street Shops
LLC, an Indiana limited liability company with its principal place of business at 4100 Edison
Lakes Parkway, Suite 350, Mishawaka, Indiana 46545 (the "Company") (each a "Party" and
together the "Parties").
RECITALS
A. On 2018, the City (through the South Bend Redevelopment
Commission) conveyed certain storefront parcels to the Company which are legally described in
Exhibit A (the "Shops").
B. The Shops are within that certain parking garage owned by the City and legally
described in Exhibit B (the "Parking Garage").
C. The Shops and the Parking Garage are depicted in the subdivision plat, as clarified
by that certain the Affidavit of Title, attached as Exhibit C (the "Subdivision Plat').
D. As a condition precedent to the City conveying the Shops to the Company and the
Company accepting such conveyance from the City, the Parties have agreed upon terms to govern
the Company's uses of the Shops, maintenance of the Shops' fagade, maintenance of the Parking
Garage, and other matters of mutual interest, as set forth in this Agreement.
AGREEMENT
THEREFORE, in consideration of the mutual covenants and promises h1 this Agreement
and other good and valuable consideration, the receipt of which is hereby acknowledged, the
Company and the City agree as follows:
1) Ownership, Platted Rights and Easements. The Parties mutually acknowledge that
the Company is the owner in fee simple absolute of the Shops, subject to easements and restrictions
of record, including but not limited to those easements and restrictions identified in the Subdivision
Plat and deed. The Parties also mutually acknowledge that the City is the owner in fee simple
absolute of the Parking Garage, subject to easements and restrictions of record, including but not
limited to those easements and restrictions identified in the Subdivision Plat. Furthermore, in the
event of any conflict between the terms of this Agreement and the Subdivision Plat, the Parties
agree to negotiate in good faith to amend this Agreement in accordance with Section 16 below to
resolve such conflict and to record such amendment in the Office of the Recorder of St. Joseph
County, Indiana. The Company grants an easement to the City for the installation and maintenance,
including repair and replacement, of existing and future utility lines and structures, including but
not limited to sanitary sewer, water, electric, gas, phone, and cable, and allowing such utility lines
and structures to run in and through the area within the Shops for the use of the Shops and the
Parking Garage, provided, however, that the kind and location of said utility lines and structures
will be subject at all times to the review and prior approval of the City of South Bend Engineering
Department in its sole and absolute discretion. Further, the City and its successors and assigns,
shall be allowed in the area within the Shops, upon prior notice and at all reasonable times, to
repair, maintain, add to, or replace any and all elements of the Parking Garage. Similarly, the City
grants an easement to the Company for the installation and maintenance, including repair and
replacement, of existing and future utility lines and structures, including but not limited to sanitary
sewer, water, electric, gas, phone, and cable, and allowing such utility lines and structures to run
in and through the area above and below the Shops for the use of the Shops and the Parking Garage,
provided, however, that the kind and location of said utility lines and structures will be subject at
all times to the review and prior approval of the City of South Bend Engineering Department in its
sole and absolute discretion. Further, the Company, and its successors and assigns, shall be allowed
in the area above and below the Shops, upon prior notice and at all reasonable tinges, to repair,
maintain, add to, or replace any and all structural elements of the Shops.
2) Use. The Company hereby agrees to abide by applicable zoning restrictions of the
Shops in such a manner as to ensure that the public is actively engaged. The Parties acknowledge
that the intent of the provisions of this Section 2 is to preserve and enhance the active, pedestrian -
friendly use of the Shops in perpetuity, and such covenants will be deemed to run with the land.
3) Facade Maintenance. On the east and south faces of the Shops (the "Shops
Facade") and Parking Garage (the "Parking Garage Facade") exist exterior walls, elevations, roof
lines, colors, building materials, fenestration, windows, and doors. The Company will, at all times,
maintain in good order and repair all elements of the Shops Facade, up to and including the
elevations as defined in the Subdivision Plat, and the City will, at all times, maintain in good order
and repair all elements of the Parking Garage Facade, above the Shops' top elevation. The
Company will maintain the west and north walls of the Shops in substantially the same condition
in which they exist as of the Effective Date, The Parties' maintenance obligations will require
replacement, repair, reconstruction, and any other activities by the Parties whenever necessary to
preserve their respective fagades in the same structural and aesthetic condition existing upon the
Effective Date of this Agreement. The Parties will coordinate in good faith to ensure that the
elements of the Shops Facade and the Parking Garage Facade remain consistent in appearance,
quality, and structural integrity.
4) Windows; Doors; Awnings; Signage; Fixtures. The Parties mutually agree to the
provisions set forth in this Section 4 concerning certain elements of the Shops Facade and Parking
Garage Fagadc.
(a) The Company will, at all times, maintain transparent windows across the entirety of
the ground floor of the east and south Shops Facade facing Michigan and Jefferson Streets as are
in existence on the Effective Date of this Agreement and will maintain pedestrian -access doors
across the entirety of the ground floor of the cast Shops Facade facing Michigan Sheet (as the
same may be modified in accordance with the Company's demising of the interior space of the
Shops), and such windows and doors will be of consistent and uniform color, materials, size, shape,
and installation. All additions to and alterations of the windows and doors existing on the Shops
on the Effective Date will comply with applicable laws, ordinances, and regulations.
2
(b) Any and all awnings existing on the Shops on the Effective Date or thereafter proposed
to be altered or added to the Shops will be of consistent and uniform color, materials, size, shape,
and installation and comply with applicable laws, ordinances, and regulations.
(c) Any and all signage existing on the Shops on the Effective Date or thereafter proposed
to be altered or added to the Shops will comply with applicable laws, ordinances, and regulations.
(d) Any and all exterior fixtures, including without limitation lighting, speakers, and
telecommunications equipment, existing on the Shops on the Effective Date or thereafter proposed
to be altered or added to the Shops will comply with applicable laws, ordinances, and regulations.
(c) For those windows, doors, awnings, signage, and exterior fixtures referenced in
Sections 4(a)—(d), existing on the Effective Date or thereafter proposed to be maintained, altered
or added, the City hereby irrevocably grants, conveys, and transfers to the Company, and the
Company's successors and assigns, a perpetual, exclusive easement on and over the Parking
Garage Fagade.
(f) In addition to its maintenance obligations under Section 3, the Company, at its sole
cost, will maintain in good order and repair all permitted windows, doors, signage, awnings, and
other fixtures attached to or made a part of the Shops Fagade.
5) Structural Integrity. The Parties acknowledge that there exist certain elements,
including but not limited to support columns, walls, and ramps, located within and around the
Shops that are required for the structural integrity of the Parking Garage ("Support Elements").
The Company shall not make any alterations for any purpose with regard to such Support Elements
without the prior review and approval of the City of South Bend Engineering Department, which
approval may be granted or denied in its sole and absolute discretion.
6) Garage Maintenance, Access. The Parties mutually acknowledge and agree that
general maintenance of the Parking Garage will be the City's sole responsibility, and the City will,
at all times, maintain in good order and repair all elements of the Parking Garage. The City's
maintenance obligations include replacement, repair, reconstruction, and any other activities that
are necessary to preserve and maintain the Parking Garage in substantially the same structural
condition existing upon the Effective Date of this Agreement, with reasonable wear and tear (as
maybe expected with public outdoor structures) excepted. The Company will permit the City and
its agents and contractors to enter the Shops to the extent necessary to maintain the Parking Garage
as required by this Section 6, provided that the City (a) uses reasonable care to not interfere
materially with the Company's use and enjoyment of the Shops and (b) provides the Company
with reasonable notice before entering the Shops, unless an emergency requires immediate action
without such notice. In the event that the Parking Garage becomes damaged and such damage
interferes with Company's or Company's tenants' use and enjoyment of the Shops, Company shall
provide written notice of such interference and the City shall have 30 days to repair such damage.
If the City fails to repair such damage, Company may cause repairs to be performed at its expense,
and the City shall fully reimburse Company for all costs and expenses, including any sufficiently
documented lost rental income.
7) Indemnification. The Company agrees to defend, indemnify, and hold harmless the
City and its officials, employees, contractors, and agents from and against any and all claims,
liabilities, costs, fees, or expenses of any nature arising from (a) the Company's breach of its
obligations under this Agreement or (b) the Company's use, possession, maintenance, and
operation of the Shops, except in such matters arising solely from the gross negligence of the City.
The City agrees to defend, indemnify, and hold harmless the Company and its owners, officers,
employees, contractors and agents from and against any and all clainrns, liabilities, costs, fees, or
expenses of any nature arising from (a) the City's breach of its obligations under this Agreement
or (b) the City's use, possession, maintenance, and operation of the Parking Garage, except in such
matters arising solely from the gross negligence of the Company and subject to the Indiana Tort
Claims Act (I.C. 34-13-3, as may be amended from time to time) and other similar immunity laws,
if applicable to the claim. Notwithstanding anything in this Agreement to the contrary, the City
does not waive any defense, including governmental immunity, or any liability limitation available
to it under applicable laws.
8) Insurance.
(a) The Company, at its sole cost, will at all times keep the Shops and all improvements
therein insured at its full replacement cost value (as adjusted on at least an annual basis) and will
name the City as a loss payee under such policy to the extent the City has any obligation to repair
or rebuild any part of the Shops under this Agreement. The City, at its sole cost, will at all times
Deep the Parking Garage and all improvements therein insured at its full replacement cost value
(as adjusted on at least an annual basis).
(b) The Company, at its sole cost, will at all times maintain commercial general liability
insurance covering the Company with respect to the Shops in an amount not less than Five Million
Dollars ($5,000,000.00) per occurrence (inclusive of the limit of any umbrella or excess liability
policy).
(c) Any such liability policy of insurance held by the Company in accordance with this
Section 8 will name the City as an additional insured, and the Company agrees to produce to the
City a certificate of insurance and copies of said policies (and any related endorsements)
evidencing the same.
(d) Each party waives any right it may have to recover damages from the other or any
of the other's employees, partners, directors, officers, or agents to the extent the darnages are (or
but for the party's breach of this Agreement, would be) covered by property insurance required
under this Agreement. Deductibles and self -insured retentions are deemed "covered by insurance"
for purposes of applying this paragraph. This paragraph is intended to prevent a party's insurance
carrier from subrogating against the other party. Therefore, each party must take all commercially
reasonable steps to effect this intent, including (without limitation) ordering and maintaining
appropriate endorsements on its property insurance policy.
(e) Subject to the insurance proceeds requirements of any recorded mortgage
encumbering the Shops, in the event of any loss of or physical damage to the Shops, the Company
agrees to apply all available insurance proceeds to the repair and reconstruction of the Shops.
rd
9) Taxes, The Company, and its successors and assigns, will be liable for any and all
real property taxes assessed and levied against the Shops. The City will have no liability for any
real property taxes associated with the Shops, and nothing in this Agreement will be construed to
require the proration or other apportionment of real property taxes resulting in City's liability
therefor,
10) Demolition; Right to Purchase. At the end of the useful life of the Parking Garage
(including the Support Elements), as determined 1) by written agreement of the Parties or 2) in the
City's reasonable discretion and with twenty-four (24) months' written notice, the City may
determine to demolish, reconstruct, or otherwise dispose of the Parking Garage and Shops. At
such time, the City will have an irrevocable, exclusive right to purchase the Shops from the
Company at a purchase price to be determined by the average of the appraisals of an appraiser
selected by the City and an appraiser selected by Company. Each appraiser shall be licensed by
the State of Indiana and an MAI designated member of the Appraisal Institute. Each appraisal
shall be performed as if the Shops are 100% occupied at market rents, provided that the condition
of the Shops at the time of the appraisal would allow for 100% occupancy at market rent without
any extraordinary assumptions on the part of the appraiser, and notwithstanding the impending
demolition of the Shops. The City agrees to defend, indemnify, and hold harmless the Company
and its owners, officers, employees, contractors and agents from and against any and all claims,
liabilities, costs, fees, or expenses of any nature arising from the Company's breach of its
obligations under its leases with its tenants at the Shops to the extent that the Company does not
have a force majeure or similar provision set forth in the Leases assigned to it by the City. Upon
the City's exercise of its right to purchase the Shops, the Parties will negotiate in good faith a
written agreement for the Company's conveyance of the Property to the City free of all leases,
mortgages, and encumbrances arising on or after the Effective Date of this Agreement.
11) Termination. This Agreement may be terminated (a) by mutual agreement of the
City and the Company (or their respective successors or assigns) as set forth in a written instrument
executed by the Parties' authorized representatives, (b) by the City, without the requirement of
obtaining the consent of any other party, if the Company discriminates against any person on the
basis of race, creed, color, sex, age or national origin in the sale, lease, rental, use, or occupancy
of any portion of the Shops, or (c) by the non -defaulting Party in accordance with Section 14
below.
12) Dispute Resolution. 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. Both Parties hereby waive any right to trial by jury with respect to any action
or proceeding relating to this Agreement.
13) Notices. All notices required or allowed by this Agreement will be delivered in
person or by certified mail, return receipt requested, postage prepaid, addressed to the Parties'
representatives as set forth below. Either Party may, by written notice, modify its address or
representative for future notices.
City: Executive Director
Department of Community Investment
City of South Bend
1400 S. County -City Building
227 W. Jefferson Blvd.
South Bend, Indiana 46601
With a copy to: Corporation Counsel
South Bend Legal Department
1200 S. County -City Building
227 W. Jefferson Blvd,
South Bend, IN 46601
Company: Edward Bradley, Senior VP and Principal
Michigan Street Shops LLC
4100 Edison Lakes Parkway, Suite 350
Mishawaka, Indiana 46545
14) Remedies; Waiver. 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 diligently 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, and the non -defaulting Party will have the right to recover its
costs and expenses incurred in enforcing the terms of this Agreement, including, without
limitation, court costs and reasonable attorneys' fees. All the Parties' respective rights and
remedies concerning this Agreement are cumulative. The exercise of any right or remedy
hereunder will not have the effect of waiving or limiting any other right or remedy, and the failure
to exercise any right or remedy will not have the effect of waiting or limiting the use of any other
right or remedy or the use of such right or remedy at any other time.
15) Interpretation; Severability; Applicable Law. Both Parties having participated fully
and equally in the negotiation and preparation of this Agreement, Otis Agreement will not be more
strictly construed, nor will any ambiguities in this Agreement be presumptively resolved, against
either Party. If any provision, covenant, agreement, or portion of this Agreement or its application
to any person, entity, or property, is held invalid, such invalidity will not affect the application or
validity of any other provision, covenant, agreement, or portion of this Agreement. This
Agreement will be interpreted and enforced according to the laws of the State of Indiana.
16) Entire Agreement; Amendment. This Agreement embodies the entire agreement
between the City and the Company and supersedes all prior discussions, understandings, or
agreements, whether written or oral, between the City and the Company concerning the transaction
contemplated in this Agreement except as expressly stated herein. This Agreement may be
modified only by a written instrument signed by authorized representatives of the Parties
17) Assi Went. Neither this Agreement nor any of the Company's rights or
obligations hereunder may be assigned or delegated by the Company, in whole or in part, without
notice to and the prior written consent of the City, provided, however, that the City's consent will
not be required in the event the Company wishes to assign this Agreement to an entity that (a) was
created by the Company for the purpose of owning and managing the Shops and (b) is controlled
by the Company or by the natural persons who own the Company. In the event the Company
wishes to obtain the City's consent regarding a proposed assignment of this Agreement, the
Company will provide any and all information reasonably demanded by the City in connection
with the proposed assignment and the proposed assignee,
1 S) Binding Effect; Counterparts; SigEiatures; Recordation. All the terms and
conditions of this Agreement will be effective and binding upon the Parties and their respective
successors and assigns at the time the Agreement is fully signed and delivered by the Company
and the City. This Agreement may be separately executed in counterparts by the Company and
the City, and the same, when taken together, will be regarded as one original agreement.
Electronically transmitted signatures will be regarded as original signatures. The Parties agree to
record this Agreement in the Office of the Recorder of St. Joseph County, Indiana.
19) Covenant Running with the Land. It is intended that each of the easements,
covenants, rights, and obligations set forth herein shall run with the land and create equitable
servitudes in favor of the real property benefited thereby, shall bind every person having any fee,
leasehold, or other interest therein and shall inure to the benefit of the respective Parties and their
successors, assigns, heirs and personal representatives.
20) Authority. The undersigned persons executing and delivering this Agreement on
behalf of the respective Parties represent and certify that they are the duly authorized
representatives of each and have been fully empowered to execute and deliver this Agreement and
that all necessary corporate action has been taken and done. Further, the undersigned
representative of the Company represents and warrants that the Company is duly organized, validly
existing, and in good standing under the laws of the State of Indiana.
21) Further Assurances. The Parties agree that they will undertake in good faith, as
permitted by law, any action and execute and deliver any document reasonably required to can•y
out the intents and purposes of this Agreement.
[Signature and notary pages follow.]
IN WITNESS WHEREOF, the Parties hereby execute this Leighton Garage Use,
Maintenance, And Facade Agreement to be effective as of the Effective Date stated above.
CITY:
City of South Bend
Board of Publics Woorkk&
Gary Gilot, President
y
Therese Dorau, Winber
Suza�zn Fritzberg, Member
Eli.zabeth Maradik, Member
James Mueller, Member
ATTEST:
i da Martin, ler
COMPANY:
Michigan Street Shops LLC,
an Indiana limited liability company
.
Edward Bradley, Member
Dated: 6 (? , tV
N.
STATE OF INDIANA }
) SS:
ST. JOSEPH COUNTY }
Before me, the undersigned, a Notary Public, in and for said County and State, personally
appeared
known to me to be the President and Members, respectively, of the City of South Bend Board of
Public Works and acknowledged the execution of the foregoing Leighton Garage Use,
Maintenance, And Fagade Agreement.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed illy official
seal on the day of T , 2018.
My Commission Expires:
Notary Public
Residing in St. Joseph County, Indiana
) SS:
ST. JOSEPH COUNTY )
Before me, the undersigned, a Notary Public, in and for said County and State, personally
appeared Edward Bradley, known to me to be a Member of Michigan Street Shops LLC, an Indiana
limited liability company, and acknowledged the execution of the foregoing Leighton Garage Use,
Maintenance, And Fagade Agreement.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official
seal on the day of , 2018.
My Commission Expires:
Notary Public
Residing in St. Joseph County, Indiana
r affirm, under the penalties for perjury, that 1 have taken reasonable care to redact each Social Security number in this document, unless required
by law. Sandra L. Kennedy.
This instrument was prepared by Sandra L. Kennedy, Assistant City Attorney, 1200 S. County -City Building, 227 W. Jefferson Blvd,, South
EXHIBIT A
Description of Shops
Lots 2 through 9 as shown on the recorded plat of Leighton Plaza First Minor Subdivision recorded
on February 23, 2017, as Document No. 1704410 in the Office of the Recorder of St. Joseph
County, Indiana. [Parcel Key Nos, 018-3006-019002, 018-3006-019003, 018-3006-019004, 018-
3006-019005, 018-3006-019006, 018-3006-019007, 018-3006-019008, 018-3006-019009]
10
EXHIBIT B
Description of Parking Garage
Lot 1 as shown on the recorded plat of Leighton Plaza First Minor Subdivision recorded on
February 23, 2017, as Docunient No. 1704410 in the Office of the Recorder of St. Joseph County,
Indiana. [Parcel Key No. 018-3006-0190]
11
EXHIBIT C
Leighton Plaza First Minor Subdivision recorded on February 23, 2017, as Document No.
1704410 in the Office of the Recorder of St. Joseph County, Indiana, as clarified by the
Affidavit in Aid of Title recorded on May 9, 2018, as Document No. 1810984 in the Office of
the Recorder of St. Joseph County, Indiana.
See two images, attached,
12
Date
Name
BOARD OF PUBI,IC WORKS
AGENDA ITEM REVIEW REQUEST FORM
June 5, 2018
David Relos
Department DCl
BPW Date June 12, 2018 Phone Extension 5836
. . . . ........ . ....... . ...... . . .... ..
Required Prior to Submittal to Board
Legal Attorney Name Sandra Kennedy
Controller El Controller review is required for all Contracts $5,000.00 or more and
greater than one year in length per the City Purchasing Policy
Purchasing El
Check the Appropriate Item Type — Required forAll Submissions
M Agreement F-1 Contract [:1 Proposal El Addendum
F-1 Professional Services F] Resolution
F-1 Bid Opening F1 Bid Award r_1 Req. to Advertise ❑ Title Sheet
E] Quote Opening F-1 Quote Award
F-1 Change Order No. [:] C/O & PCA No. ❑ P CA
R Ease/Encroach. F-1 Traffic Control
F-1 Other:
Company or Vendor Name Michigan Street Shops 1,LC
New Vendor
MBEANBE Contractor
Project Name
Project Number
Funding Source
Account No.
Amount
Terms of Contract
Purpose/Description
J Yes HNo H If Yes, Approved by Purchasing
I'MBE F1 WBE
Leighton Garage Use, Maintenance, and Fagade Agreement
R
To determine maintenance' use, and fagade responsibilities post closing
after the sale of the Michigan Street Shops to Cressy.
F-1 Required Contractor's Certification Form Attached (Non -
Collusion, Non -Discrimination, Non -Debarment, E-Verify, Iran, etc.)
Required For Change Orders Only
Amount of F] increase $
El Decrease $
Previous Amount $
Current Percent of Change: %
New Amount $
Total Percent of Change: %
Dispersal After Approval
Copy Original
F-1 David Relos
❑ R Sandra Kennedy
El El