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HomeMy WebLinkAbout6C 26 c (2) • vlln be Community & Economic Development" ' 1200 County -City Building, 227 West Jefferson, South Bend, Indiana 46601 -1830 Phone 574/235 -9371 Fax 574/235 -9021 To: Redevelopment Commission From: David Relos, Economic Development Plannerot- Subject: Hotel La Salle — Commercial Purchase Agreement Date: June 14, 2011 Staff has over the years worked with many interested parties, from various parts of the country, for the rehabilitation of the Hotel La Salle (Hotel). The Hotel has sat empty for approximately 10 years, and has been maintained by the Commission in the hopes that one day the right group would step forward, that has both the ability and capacity to return the Hotel to a productive use and asset to the downtown. Today I would like to tell you that we feel that group has emerged. Mavcon Properties, of Kalamazoo, Michigan, would like to enter into a purchase agreement with the Commission to acquire the Hotel. Mavcon has experience in redeveloping urban properties, with their latest project being the Metropolitan Center in downtown Kalamazoo, an $11.3 million historic rehab of four connected commercial buildings that were constructed in the late 1800's. Prior to closing this transaction, much due diligence must be completed. Mavcon, at its own expense, will hire architectural, engineering, and environmental consultants to study and plan for the eventual rehabilitation of the Hotel into 45 — 65 market rate apartments, with commercial space likely on the 1St and 2nd floors. In addition, and again at their own expense, they will put together a funding package that will include both Historic and New Market Tax Credits. Highlights of the purchase agreement include: • $5,000 purchase price, to be paid at closing • $2,000 deposit within 3 days of the acceptance of this agreement • 180 day inspection period • 180 day inspection period extension, with an additional $2,000 deposit • Closing within 90 days after the inspection period or the extension thereof • 90 day closing extension, with additional $2,000 deposit. Because of the complicated nature of putting together the Historic and New Market Tax Credit package, and the extensive architectural, engineering, and environmental studies that need to be completed, staff feels the above schedule is acceptable and necessary. What We Do Today Makes A Difference! Attached to this memo are a few press releases about Mavcon, and biographies on its three principals. Mavcon representatives will attend the meeting to give a brief history about their company, and answer questions you may have. Staff requests your approval of this Commercial Purchase Agreement, to allow Mavcon to move forward with their plans for the redevelopment of this key downtown landmark. What We Do Today Makes A Difference! at a glance: oak James Dally, president " M PVC O N Founded: 1997 Current leadership since 1997 Primary business: general contractor Sites in Michigan: l • Sites elsewhere:1 Fulkime equivalent employees: 20 in 2007.27 expected in 2008 www.mayconusa.com Macon Inc. Specializing in design -build construction, Nl.tn'con has nearh donhled its revenue fmm 2005 to 2007 and is expanding its markets front both an itulustn and geographic perspective. Nlaycon takes pride in providing an accurate budget and guaranteeing a masinwnt cost that it will not exceed. "Phis initially was financially painful, but it drove its to he more contpreliensiye to control risk, as it was our nickel and not someone else's," saysianles Dally. president. In its I0 -year history. Macon has had zero change orders requested by clients due• to onlissions and no late rcnnpleticfns, which has helped it win a loyal Ibllowing of clients. In 2006 Nlaycon implemented a Web -based management portal the first constructioll firm in wt-stern Michigan to do so, says Dally. The system has revolutionized Alayc•on's businesses by allowing stakeholders including clients and trade contractors, to access important inlinrtnation when they need it. 1,br ex:unpk . all correspondence, blueprints and documents associated with a project c•an bc• found with it Icw mouse clicks. Nlayc•on also sets iuelf apart with its revitalization pr(jects. ( )ne ecampir, the company purchased nine acres in Oshtemo I"Em nship that was it lk•partncnt of Environmental Quality .) -dund site• and has cleared and prepped the area line new ccanntc•rcial clevulopntent. Print Article: Ground broken for downtown Kalamazoo redevelopment Page 1 of 1 X Logo I Ground broken for downtown Kalamazoo redevelopment 2010 -12 -14 17:29:20 KALAMAZOO, Mich. (NEWSCHANNEL 3) — Downtown Kalamazoo is about to get a facelift. On Tuesday developers broke ground on what's called the Metropolitan Center Redevelopment Project. Downtown Kalamazoo has a section that looks out of place, being in much worse shape than the rest of the street. That's the metropolitan center group of buildings and it is getting some attention. With the breaking of a brick, crews are starting to turn back the clock on a piece of real estate in the core of downtown Kalamazoo. The city hopes to move forward by restoring four buildings in the 100 block of West Michigan to the way the looked in the 1800s. "Structures that had been empty for a number of years, in bad condition, now have this grand opportunity that will bring new life to the structures and downtown," said Kalamazoo Mayor Bobby Hopewell. For more than ten years the buildings have been largely unoccupied and untouched, an eyesore in the middle of a redeveloping downtown. "It's at one of our 100 percent corners," said Ken Nacci, Downtown Kalamazoo Inc. "We have three out of four developed, this one was sitting there waiting for something to happen." At a cost of more than $11 million, the buildings will be transformed into business space and 28 apartments. To make the project happen took federal tax breaks, state funding and developer MAVCON doing the work. "We basically developed the area around this," said James Dally, MAVCON, "now we're coming back for what was the original downtown." Downtown advocates say they hope the redevelopment is just another step toward a new downtown Kalamazoo. The project is expected to take 15 months to finish, along with the cosmetic improvements, the buildings will be going green with grass growing on the roof and less energy use overall. © Copyright 2011 Freedom Communications. All Rights Reserved. Privacy Policy I User Agreement I Site Mao http: / /www.wwmt.com/ common /printer /view.php ?db= wwmt &id= 1384949 6/7/2011 Complicated Deal for Rehab of Downtown Buildings - AM 590 - FM 96.5 1 WKZO Pagel of 3 (http : /I.w w. w k zo. c o m) W'K Z O Home (1) Weather ( /weather /) News (/news /) Blogs ( /blogs /) Media ( #) Movies (/movies /) Events ( #) On -Air (http:l lone. wkzo. com /sharedfairstaf /airstaf220.asp) Contact Us (http: / /www.wkzo.com /contact -us /) ( /news(gM1) Search News Complicated Deal for Rehab of Downtown Buildings n kALAMA20 Wednesday, December 15, 2010 7:19 a.m. EST G O S P E i MISS101 Caption: The Kalamazoo Skyline from atop Skydeck in Downtown Kalamazoo. 448 North Burdick! Kalamazoo KALAMAZOO (WKZO) -- It's the latest effort to try and salvage four largely vacant, historic buildings in the heart of downtown Kalamazoo. They will not only restore the facades to the way they looked over 120 years ago, but upgrade the interiors to thoroughly modern standards for commercial and residential use. MAVCON's Joe Augustinelli said stimulus grants, funding for depressed areas, tax increment financing, historic building grants and others have been patched together to restore the 100 - block of East Michigan Avenue. "It has a total of 14 layers of financing. It's one of -'If not the most - financially complicated deals occurring in the state right now," Augustinelli said. Jim Dailey said they will have businesses on the ground floor and moderately priced apartments in the upper stories. "These are going to range from studios to two- bedroom units there is a huge demand for these units," Dailey said. "We have probably seven or eight of them already spoken for." A brick breaking was held Tuesday. The $11 million project, called the "Metropolitan Center," should be completed by the spring of 2012. Share (http: /Iwww.facebook.com /sharer.php ?u= http %3A%2F %2Fwww.wkzo.com%2Fnews% 2F arti c les %2F2010 %2Fdec %2F 15 %2F complicated -deal• rehab - downtown - buildings %2F &src =sp ) 0 (http: //www.addth is. com /bookmark.ph p?v= 250 &winname =ad dth is& pu b =xa- 4a3a7bf17b384e 16& source =tbx -250& Inge n- us &s =g ooglebuu &u rl =http %3A %2F %2Fwkzo.com % 2Fnews %2Farticles %2F2010 %2Fdec %2FI5 %2Fcomplicated -deal- rehab - downtown - buildings % 2F &title= Complicated% 2ODeal% 20for% 2ORehab %20of'k2ODowntown %2OBuildings %20•%20AM 20590 %20.%20F M %2096.5 %20 %7C %20 W KZO& ate= AT -xa-4a 3a7bf 17b384e 16/ -/- / 4df113761faeO51c /l &uid=4dfll3762b3e44a5 &pre= http %3A%2F %2Fwww.google.com %2Fud %3Fsa % 3Dt% 26source% 3Dweb% 26cd% 3DI% 26sgi %3D2 %26ved %3DOCBYOFjAA %26un %3Dhttp %253A %252F% 252Fwkzo .com %252Fnews %252Farticles% 252F2010% 252Fdec %252F15 %252Fcompiicated•desl -rehab- downtown- buildings %252F %26rct %3Dj %26q% 3Dhttp %253A %252F %252Fwkzo.com %252Fnews % 252Farticles %252F2010% 252Fdec %252F15 %252Fcomplicated - deal - rehab %26e1 % 3DaBPxTYTGAc W ugONpayxBA %26usg %3DAFO &tt =0) (http: / /www.addthis. com /bookma rk.ph p?v= 250 &winname =ad dthis &pu b=xa- 4a3a7bf17b384el6 &source= tbx- 250&ing= en- us&s =digg &url= http %3A %2F %2Fwkzo.com %2Fnews % 2F artic les %2F2010 %2Fdec %2F I5 %2Fcom p i i Gated- deal -re hab- downtown - buildings% 2F&title= Complicated% 2ODeal% 20for% 2ORehab %20of° /.2ODowntown %2OBuildings %20 -%2OAM 20590 %20 - %20F M %2096.5 %20 %7C %20 W KZO& ate= AT -xa-4a 3a7bf 17b384e 161-/ - /4dfl 13761 faeO51 c /2 &uid=4df l l376da5b8aO7 &pre= http %3A %2F %2Fwww.goog le.com %2F url %3Fsa% 3Dt %26source %3Dweb% 26cd %3D1 % 26sgi %3D2 %26ved %3DOCBYOFjAA %26url % 3Dhttp %253A %252F % 252Fwkzo.com %252F news %252Farticles %252F 2010 %252Fdec %252F 15 %252Fcom p l i Gated- deal -reh a b- kzoogospel.or (MW&,cVw*natch.com/mwc/adclick/FCID=139/sheer *natch. coml mwc /adclick/FCID= 139 /sheer kzo /area= Tigers Winning Streak Comes to an End in 7- 3 Loss (Inews/ articles /2011/jun/09ttigers- winning- streak - comes -to-an- end4n- 7- 34oss /) Severe Thunderstorm Watch Issued for Kalamazoo, ... ( /newslarticles/2011qun/08 /severe- thu nderstorm- watch - issued- for- kelamazoo- calhoun -a Ilegan- until -3aml Governor Snyder Orders Flags to Fly at Half Staf... (/ newsl articles2011 /jun/08/governor- snyder -orde rs- flags-to-fly- at -hatf- staff -fol lowing- death -of- pfc- thomas- allers/) Petition Language Filed to Recall Michigan Senat... ( Inews /articles2011 /jun /O8 /pethion- lang uage- filed- to-recall- michigan- senate- leader- ric hardvil le- state- senator- schukmaker4 News Sections Local State ( /news /sections /locall) ( /news /sections /states National World (Mews/sections /national/) (Inews /sections/worldl) Local Sports National Sports (Inews /sections/localsport V4ews /sections /sports/) Politics Business (Inews /sections /politicst) (Inews /sections/businessl) Health Science (Mews/sectionslhealth/) (/news /sections /sclenceo Technology Entertainment (/ news/ sectionsltechnologif))ewslsections/emertainmentfI (http:/ /crtl.aimatch.com /mwc /adclick/FCID =709 /siter kzo /area= http: / /wkzo.com/ news /articles/ 2010 /dec /15 /complicated -deal- rehab - downtown - buildings/ 6/9/2011 James DallyThe MBA Group I The MBA Group James Dally President Page l of 1 Mr. Dally has over 23 years of diversified construction and development experience on projects across the United States and Canada. His experience ranges from state of the art bioscience campuses to heavy industrial plants as well as Federal Government projects. Mr. Dally brings unparalleled knowledge of incentive application through many successful self funded developments, most recently a $10.7 million mixed use historic urban redevelopment slated for double platinum LEED certification. Mr. Dally owns several other businesses, including Mavcon, a commercial construction company; TerraRoof, a green roof manufacturing company; and Bidderev, an online auction company. Mr. Dally is on constant demand for speaking engagements with topics ranging from motivation to successfully assembling sophisticated developments. James is a graduate of the Construction management program at Ferris State University. He lives in Kalamazoo County with his wife and four young children. © 2011 MBA Group http: / /thembaconsultants.com /our - team /fames -dally 4/11/2011 Joe AgostinelliThe MBA Group I The MBA Group Joe Agostinelli Vice President, Governmental Affairs & Economic Development Page 1 of 1 Mr. Agostinelli brings unique background of public sector service to the private sector. He has a comprehensive understanding of local, state and federal economic and community development incentive programs. Joe understands the legislative intent of state economic development programs, the policy behind their implementation at the state level and the real world application in the private sector. Mr. Agostinelli was previously employed by the Michigan Economic Development Corporation (MEDC) and worked on dozens of multi - million dollar deals involving a multitude of incentive programs. Prior to his time at the MEDC, Joe was the Legislative Director for the Chair of the Michigan Senate Commerce & Tourism Committee — which oversees many of the state's economic development programs. He assisted in drafting the new Michigan Film incentives, and updates to the Brownfield, MEGA job creation, State Historic, and numerous Tax Increment Financing and tax abatement programs, among many others. Joe is a graduate of the University of Michigan where he was also a Varsity Letterman on the Men's Cross Country Team. He resides in Kalamazoo with his wife and son. © 2011 MBA Group http: / /thembaconsultants.com /our- team /joe- agostinelli 4/11/2011 Steve SielatyckiThe MBA Group I The MBA Group Steve Sielatycki General Counsel Page 1 of 1 Mr. Sielatycki specializes in commercial real estate transactions and commercial litigation. As a real estate practitioner, Mr. Sielatycki assists his clients in property acquisition, financial structuring (including, but not limited to, TIF financing, New Market Tax Credits, MBT Tax Credits, Historical Tax Credits, Grants, and Municipal Loan Programs), leasing, condominium projects, and property sales. As a commercial litigator, Mr. Sielatycki is able to advocate on his clients' behalf in both state and federal court. Mr. Sielatycki is a proud alumnus of the University of Michigan Business School and Law School, and lives in Kalamazoo with his wife. © 2011 MBA Group httD: / /thembaconsultants.com /our - team /steve - sielatvcki 4/11/2011 COMMERCIAL PURCHASE AGREEMENT The Purchaser, MAVCON PROPERTIES, LLC, a Michigan limited liability company ( "Purchaser "), hereby offers and agrees to purchase, and the Seller, and the SOUTH BEND REDEVELOPMENT COMMISSION, the governing body of the Department of Redevelopment of the City of South Bend, Indiana, existing and operating under the provisions of Indiana Code § 36 -7 -14, as amended, ( "Seller "), hereby agrees to sell, land situated in the City of South Bend, St. Joseph County, Indiana, upon the following terms and conditions set forth in this Commercial Purchase Agreement ( "Agreement "): PROPERTY DESCRIPTION. The LaSalle Hotel property in downtown South Bend, together with any and all buildings, structures, rights, easements, attached surface parking lot, and appurtenances pertaining thereto and any and all improvements, trees, bushes, landscaping and foliage thereon, as legally described on the attached Exhibit A (the "Property "). 2. PURCHASE PRICE. PURCHASER shall pay therefore the sum of five thousand dollars ($5,000.00) (the "Purchase Price "). 3. DEPOSIT. Purchaser shall deposit with Seller, within three (3) days after the Effective Date, (as defined below) an initial deposit of $2,000.00, which deposit shall be applied against the Purchase Price at the time of closing. Notwithstanding anything contained in this Agreement to the contrary, in the event that the Purchaser gives written notice to Seller on or before expiration of the Inspection Period, as set forth in Paragraph 9 below, expressing intent not to close, Purchaser shall be entitled to a refund of any sums deposited, and this Agreement shall be deemed null and void and of no further force and effect. In the event that Purchaser fails to give written notice to Seller on or before expiration of the Inspection Period, and the Purchaser fails to close within the time period provided, including any extensions, except to the extent that failure to close is due to fault of the Seller, (which fault shall include, but shall not be limited to, defects in the condition of title, Seller's failure to timely perform pursuant to the terms of this Agreement, or Seller's breach of a representation, warranty or covenant, or any other default of Seller) any deposited sums paid by Purchaser shall be retained by Seller as Seller's sole remedy against the Purchaser and is in lieu of the exercise by Seller of any other legal or equitable rights or remedies all of which Seller hereby waives and relinquishes, and this Agreement shall be deemed cancelled, null and void and of no further force or effect. 4. METHOD OF CLOSING. The sale shall be consummated by the delivery of a Warranty Deed conveying fee simple marketable title with the balance of the purchase price to be paid in cash or by certified check at the time of closing. 1 5. TRANSACTION STRUCTURE. Purchaser and Seller agree to cooperate in good faith in establishing a transaction structure suitable to facilitate a New Market Tax Credits transaction, and /or any other financial or tax incentive structures that may be required to capture the necessary financial and tax incentives for the anticipated redevelopment of the Property. 6. LOCAL INCENTIVES. Seller agrees to assist Purchaser in applying for all available financial and /or tax incentives necessary to fill the financial gap in the proposed redevelopment. 7. PRORATIONS AT CLOSING. All taxes and assessments, including but not limited to any and all special assessments, even if payable in installments after closing, which have become a lien upon the land, whether recorded or unrecorded, at the date of this agreement shall be paid by the Seller. Current taxes, if any, shall be prorated and adjusted upon information obtained from the Tax Assessor or Tax Collector's office. 8. RISK OF LOSS. If the property is destroyed or materially damaged between the date hereof and the closing, and Seller is unable or unwilling to restore it to its previous condition prior to closing, Purchaser will have the option of canceling this Agreement and receive back the earnest money, or accepting the property in its then condition. If Purchaser elects to accept the property in its damaged condition, such acceptance shall be "AS IS" and Seller shall have no further responsibility with respect to the condition of the property. 9. CLOSING FEES. Any closing fees charged for services rendered by a bank or escrow company shall be paid by the Seller except where the payment of same shall be prohibited by law, in which case, such fee shall be paid by the Purchaser. Seller's attorney fees, all conveyance taxes and /or transfer taxes, if any, imposed by the County of St. Joseph, State of Indiana, or any other governmental authority, in respect to the sale or transfer of the Property to Purchaser shall be paid by Seller not later than closing. 10. CONDITIONS PRECEDENT. Purchaser's obligations under this Agreement are conditioned upon the satisfaction of each of the following conditions: (i) Purchaser's satisfaction as to the condition of the Property after inspection during the Inspection Period, including, but not limited to, the availability of storm, sewer, and all public utilities. (ii) Purchaser's satisfaction with zoning restrictions. (iii) Purchaser's receipt of site development plan approval. (iv) Purchaser's satisfaction as to the condition of title to the Property. 2 (v) Purchaser's satisfaction with the packaging of financial and tax incentives for the proposed redevelopment. 11. INSPECTION PERIOD. Purchaser, its agents, employees, consultants and contractors shall have the privilege, opportunity, and right to enter upon the Property to inspect, examine, and perform surveys, soil tests, borings, structural analysis and tests, and any other tests needed to determine structural surface, subsurface, and topographic conditions of the Property, or for any other reasons deemed necessary by Purchaser. Purchaser shall be under no obligation to purchase the Property or otherwise perform under this Agreement unless Purchaser determines the Property to be, in all respects, suitable for its intended purposes. The decision as to whether the Property is suitable for its intended purposes shall be the sole decision of Purchaser, determined in the absolute discretion of Purchaser, with Purchaser's decision being final and binding upon both parties. Likewise, Purchaser shall be under no obligation to purchase the Property or otherwise perform under this Agreement unless Purchaser determines the Financial and Tax Incentives to be, in all respects, sufficient for the proposed redevelopment. The decision as to whether the Financial and Tax Incentives are sufficient for the proposed redevelopment shall be the sole decision of Purchaser, determined in the absolute discretion of Purchaser, with Purchaser's decision being final and binding upon both parties. Purchaser shall have one hundred and eighty (180) days from the Effective Date to notify Seller of its termination of this Agreement due to Purchaser's determination that the Property is unsuitable or unacceptable or that the Financial and Tax Incentives are insufficient or unacceptable (the "Inspection Period "). Purchaser may also extend the Inspection Period by another one hundred and eighty (180) days (the "Extension ") by providing written notice to Seller, prior to the expiration of the Inspection Period, of Purchaser's intention to extend the Inspection Period, and by Purchaser concurrently providing Seller with an additional earnest money deposit of $2,000.00 (the "Extension Deposit "). In the event Purchaser elects to terminate this Agreement, Purchaser shall provide written notice of termination to Seller prior to the expiration of the Inspection Period and /or Extension. In the event Purchaser provides said notice of termination prior to the request for any Extension, the Seller shall be obligated to return the Deposit to Purchaser as provided in Paragraph 3 hereof. In the event that Purchaser provides notice of termination after requesting an Extension, then Seller shall retain the Deposit and the Extension Deposit at which point neither party shall have any further rights or obligations under this Agreement. Moreover, Seller shall promptly provide any releases requested by the Purchaser to affect the return of the Deposit to Purchaser. In the event Purchaser does not submit written notice of termination prior to the expiration of the Inspection Period, or Extension if the Extension has been requested by Purchaser, Purchaser shall be deemed to be satisfied with its inspections of the Property and all contingencies shall therefore be deemed to be fulfilled or waived. Seller shall fully cooperate with Purchaser in the obtaining of all governmental approvals necessary for Purchaser to satisfy itself during 3 the Inspection Period of the suitability of the Property. If closing occurs, then the Deposit and any Extension Deposit shall be credited toward the Purchase Price. 12. CLOSING. The consummation of the purchase and sale of the Property pursuant to this Agreement (the "Closing ") shall be held within ninety (90) days after expiration of the Inspection Period or any Extension thereof. Purchaser may extend the Closing deadline by another ninety (90) days (the "Closing Extension ") by providing written notice to Seller, prior to the expiration of the original Closing deadline, of Purchaser's intention to extend the Closing Deadline, and by Purchaser concurrently providing Seller with an additional non - refundable earnest money deposit of $2,000.00 (the "Closing Extension Deposit "). Closing shall take place at the Seller's office, or such other location as the Seller and Purchaser may mutually agree in writing. 13. TITLE INSURANCE. As evidence of title, Seller shall obtain, at Seller's sole cost and expense, a commitment for Title Insurance issued by the Title Company for a policy of title insurance from an underwriter acceptable to Purchaser, insuring title subject only to those easements, conditions, reservations, leases, licenses, access agreements and restrictions as may appear of record, be apparent by an inspection of the Property, or of which the Purchaser has actual or constructive knowledge. The commitment shall be for an amount not less than the purchase price and shall bear a date later than the Effective Date. The commitment for title insurance shall be updated immediately prior to closing and shall show no exceptions, objectionable matters or defects, other than those permitted herein. All costs associated with the title policy in the form required shall be the sole responsibility of the Seller. 14. OBJECTIONS TO CONDITION OF TITLE. If objection to the title is made by the Purchaser, then Seller shall have 30 days after it is notified in writing of the particular defects claimed to employ its good faith efforts to procure a cure for the defects. In the event the Seller is unable through the exercise of its good faith efforts to procure a cure for the claimed defects to the Purchaser's satisfaction within 30 days after notice is given to Seller, then, at Purchaser's sole option, Purchaser may (i) take title to the Property despite the existence of objectionable matters, or (ii) terminate the Agreement, in which case, notwithstanding anything herein to the contrary, all sums deposited by Purchaser shall be immediately refunded to Purchaser and this Agreement shall be deemed null and void and of no further force and effect. 15. SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Seller represents, warrants and covenants to Purchaser that: (a) Seller (i) has complete and full authority to execute this Agreement and will have at Closing, complete and full authority to convey to Purchaser Good and Marketable Fee Simple Title to the Property that is free and clear of all liens, encumbrances or other exceptions to title other than those exceptions permitted herein, (ii) will execute and deliver any documents, instruments, and agreements including, but not limited to, 0 affidavits and certificates necessary to consummate the transaction contemplated herein, and (iii) will take all additional action that is reasonably necessary or appropriate to effect and facilitate the consummation of the sale and purchase transaction contemplated herein, as may be required by the Title Company. (b) Seller has not been notified of and has no knowledge pertaining to any possible existing or future improvements that might create an assessment against any part of the Property. (c) Seller has received no notice and has no knowledge of any pending, or threatened taking or condemnation of the Property or any portion thereof. (d) Seller will not further sell, encumber, convey, or assign, or contract to sell, encumber, convey, assign, pledge, or lease all or any part of the Property or restrict the use of all or any part of the Property or take or cause to be taken any action in conflict with this Agreement at any time between the Seller's acceptance hereof and (i) Closing or (ii) the earlier termination of this Agreement pursuant to its terms. Seller additionally hereby represents and warrants that no rights -of -first refusal or similar agreements exist in connection with the Property which would in any way interfere with Purchaser's ability to purchase the Property as provided herein or which are in any way in contravention of the spirit and intent of this Agreement. Notwithstanding the foregoing, nothing in this Agreement shall prohibit the Seller from apprising third parties of the status of the Property. (e) Neither the entering into of this Agreement nor the consummation of the transaction contemplated hereby will constitute or result in a violation or breach by Seller of any judgment, order, writ, injunction, or decree issued against or imposed upon it or contract to which it is a party or will result in a violation by Seller of any applicable law, order, rule, or regulation of any governmental authority. There is no action, suit, proceeding or investigation pending which would become a cloud on the title to the Property or any portion thereof or which questions the validity or enforceability of the transaction contemplated by this Agreement or any action taken pursuant hereto in any court or before or by any federal, district, county, or municipal department, commission, board, bureau, agency or other governmental instrumentality, nor does Seller have any knowledge that any such action, suit, proceeding or investigation is threatened. (f) Seller has no knowledge of, nor has Seller received any notice of, any actual or threatened action, litigation, or proceeding by any organization, person, individual or governmental agency (including governmental actions under condemnation authority or proceedings similar thereto) against the Property or Seller, in Seller's capacity as the owner of the Property, nor has any such organization, person, individual or governmental agency communicated to Seller anything which Seller believes to be a threat of any such action, litigation or proceeding. (g) Seller has not received notice of any violations of law or of any municipal or county ordinances, agency rules or regulations, court orders or decrees, or other legal requirements with respect to the Property or with respect to the use of the property, occupancy or construction thereon. (h) The Purchaser agrees to purchase the Property "AS IS WHERE IS" and without any representations or warranties as to the condition of the Property by the Seller and acknowledges that the Seller, including any of its representatives, has not made any warranties or representations of any kind relating to the Property or the condition or use thereof. The Purchaser has been advised by the Seller to complete to its satisfaction, its own investigations of the Property. The Purchaser will conduct and will rely exclusively on its own inspections of the Property in proceeding with this transaction to purchase the Property. If, and only if, the Purchaser purchases the Property, then the Purchaser will assume any liability the Seller may have for the condition of the Property, environmental or otherwise, as a result of the Seller's ownership of the Property. The Purchaser agrees to defend, indemnify, and hold harmless the Seller from and against any and all damages, claims, fines or liability for injuries to (including death of) persons or damage to or loss of property, real or personal, or expense in any manner connected with the activities of the Purchaser, its agents, contractors, employees involving the Property. The Seller hereby represents that it has not taken any action that would reasonably result in a lien or encumbrance being placed against the Property. The Purchaser further acknowledges that the accuracy of the legal description contained herein is not warranted by the Seller. To the best of Seller's knowledge, during Seller's ownership of the Property and through the date of Closing (i) none of the Property has been or will be excavated or used as a landfill, (ii) no fill has been or will be deposited on or taken from the Property, (iii) no construction debris or other debris (including, without limitation, rocks, stumps, or concrete) has been or will be buried upon any of the Property, and (iv) no Hazardous Substances have been or will be generated, manufactured, refined, treated, stored, handled, disposed of, produced, processed, deposited and /or released in, on or about the Property. Seller represents and warrants that to the best of its knowledge none of the foregoing has occurred with respect to the Property prior to the time Seller became the owner of the Property. Seller represents and warrants that, as of Closing, the Property is not in a condition by virtue of the applicability of any Environmental Laws or otherwise that either restricts the use of the Property for any purpose or imposes any liability upon Purchaser. Moreover, Purchaser shall have no responsibility to Seller and Seller hereby releases Purchaser from all costs, expenses and liabilities arising in connection with environmental conditions, hazardous materials release, or underground structures or utilities that were not disclosed to Purchaser as provided in this paragraph. Notwithstanding the foregoing, nothing in this Agreement shall put an affirmative obligation on the Seller to expend financial resources to remediate any environmental conditions on the Property. 0 "Hazardous Substances" means any, hazardous or toxic substances, materials or wastes, pollutants or contaminants defined, listed or regulated by the Environmental Laws or by any other federal, state or local law, regulation or order or by common law decision, and shall include, without limitation, asbestos, polychlorinated biphenyls, radon, urea formaldehyde, petroleum (including gasoline, crude oil and natural or synthetic gas), and related substances. "Environmental Laws" means and includes any federal, state or local law, rule, ordinance, regulation or other legal requirement now or hereinafter in effect relating to land use, air, soil, surface water, groundwater (including the protection, cleanup, removal, remediation or damage thereof, human health and safety or any other environmental matter, including, without limitation, the following laws as the same may be amended from time to time: The National Resources and Environmental Protection Act; The Indiana Environmental Management Act; the rules of any of the following agencies: Indiana's Air Pollution Control Board, Indiana's Water Pollution Control Board, Indiana's Underground Storage Tank Financial Assurance Board, and Indiana's Solid Waste Management Board; Comprehensive Environmental Response. Compensation and Liability Act of 1980, 42 U.S.C. § 9602, et sec ; Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et se Q; Clean Water Act, 33 U.S.C. § 1251, et se q; Toxic Substances Control Act, 15 U. S. C. § 2601, et seq; Refuse Act, 3 3 U.S.C. § 407 and Occupational Safety and Health Act, 29 U.S.C. § 651, et seq., Clean Air Act, 42 U.S.0 § 740 1, et seq. (i) Seller is not a "foreign person" as that term is defined in the Internal Revenue Code, Section 1445(F)(3) and the sale of the Property is not subject to any withholding requirements imposed by the Internal Revenue Code, including, without limitation, Section 1445(F)(3). 0) Seller is not a party to or bound by any contract or agreement of any kind or whatsoever, written or verbal, which might adversely affect the interests of the Purchaser in the Property. In addition to all other rights and remedies of Purchaser set forth herein, Seller shall defend, indemnify and hold Purchaser, its employees, officers, shareholders, members, directors, agents, contractors, assigns and successors -in- interest harmless from and against any and all claims, actions, liabilities, losses, costs, injuries, fines, damages and/or expenses (including reasonable attorneys' fees) resulting from a material breach by Seller of any of the representations, warranties and /or covenants contained in this Agreement. In the event of a breach of a representation, warranty or covenant as set forth herein, Purchaser shall promptly notify Seller of same and deliver to Seller such information as is necessary to enable Seller to defend, protect and hold Purchaser harmless from and 7 against the indemnified liability. Counsel for Seller shall be subject to the approval of Purchaser, which approval shall not be unreasonably withheld or delayed. Purchaser shall cooperate with Seller at Seller's cost in the defense of the indemnified liability. Seller shall keep Purchaser regularly advised as to the status of the defense of the indemnified liability, including, without limitation, any settlement negotiations in connection therewith. 16. CONDEMNATION. If at any time between the effective date and Closing all or any portion of the Property is condemned by any legally constituted authority for any public use or purpose or any of the improvements located on the Property are damaged or destroyed by whatever cause, then not later than 21 days after the date upon which Purchaser receives from Seller notice of the condemnation or damage or destruction, Purchaser shall give to Seller written notice that Purchaser has elected to (a) terminate this Agreement, in which event all sums held in escrow by the Seller, if any, shall be immediately refunded or returned by the Seller to Purchaser, and this Agreement shall be null and void and of no further force or effect and neither Purchaser nor Seller shall have any further liabilities, obligations, or rights with regard to this Agreement or (b) take an assignment from Seller of and collect all proceeds from any condemnation or from any insurance policies insuring the improvements located on the Property after satisfying all amounts due to Seller, and the terms of this Agreement shall remain in full force and effect and binding on the parties hereto. If Purchaser does not give this notice to Seller within the 21 day period hereinabove described, then Purchaser shall be deemed to have elected to proceed pursuant to clause (b), above. If all or any portion of the Property is condemned and if Purchaser does not elect to terminate this Agreement pursuant to the foregoing terms, "Property" shall thereafter mean the Property less and except any portion thereof taken by condemnation. 17. DEFAULT. If the purchase and sale contemplated herein is not consummated because of the inability, failure or refusal for whatever reason whatsoever, of Seller to convey the Property in accordance with the terms and conditions provided herein, or because of any other default by Seller, any and all sums deposited by Purchaser with the Seller, shall be delivered to Purchaser, without prejudice to any other legal or equitable rights or remedies of Purchaser against Seller including, but not limited to, specific performance. If the purchase and sale contemplated herein is not consummated herein because of the default of Purchaser, then the Seller shall retain any and all deposited sums paid by Purchaser as Seller's sole remedy against the Purchaser and in lieu of the exercise by Seller of any other legal or equitable rights or remedies all of which Seller hereby waives and relinquishes, and this Agreement shall be deemed cancelled, null and void and of no further force and effect. A default shall be deemed upon the occurrence of any one or more of the following events: (a) any representations or warranties set forth in this Agreement are untrue or inaccurate in any material respect, either when made or at closing, (b) failure of a party to meet, comply with or perform a material covenant, agreement or obligation within the time limits made and in the manner set forth in this Agreement. 18. MEDIATION. Any claim or controversy between Purchaser and Seller arising out of or related to the transaction contemplated in this Agreement will be subject to mandatory non - binding mediation in accordance with the following alternative dispute resolution (ADR) process. In the event of a dispute, the nondefaulting party will give written notice to the other party as soon as reasonably possible after learning of the dispute —but no later than the applicable statute of limitations. The notice will set forth in specific detail the nature and extent of the dispute and damages claimed. The notice will be sent by certified mail, return receipt requested, or served personally on the breaching party. The recipient party will acknowledge receipt of the notice and respond in writing to the claim within 21 days of receipt of the written notice. If the matter is not resolved after receipt of the response, the parties will mutually agree on a date, time, and neutral location for a face -to -face settlement meeting of the parties. Such settlement meeting will be held within 21 days after the date of the recipient party's response. The purpose of the settlement meeting will be to further define the nature and extent of the dispute and to explore options for resolution. The parties will participate in such meeting in good faith. If no resolution is achieved within 14 days of the settlement meeting, the parties will submit the matter to neutral, nonbinding confidential mediation in accordance with the Commercial Rules of the American Arbitration Association. Unless otherwise agreed, the parties to the dispute will share equally in the costs of the mediation, including forum fees, expenses, and charges of the American Arbitration Association and the mediator. The mediation will be conducted in accordance with the Commercial Rules of the American Arbitration Association and mediation will take place within sixty (60) days after submission of the dispute to the American Arbitration Association or in accordance with the mediation rules of the American Arbitration Association. All parties will attend the mediation in person unless otherwise mutually agreed, and each party will have at least one person present at mediation with full settlement authority. The parties and their counsel will participate in the mediation in good faith. If the dispute is not resolved in mediation, either party may file a complaint in a court of competent jurisdiction. 19. MISCELLANEOUS. (a) Governing Law: This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Indiana and venue shall lie in St. Joseph County, Indiana. (b) Entire Agreement: This Agreement constitutes the entire, integrated agreement between the parties, and supersedes all prior written and unwritten negotiations, W agreements, proposals and understandings. This Agreement shall not be orally amended, modified, superseded, or cancelled, it being specifically understood that any of the terms, covenants, representations and conditions contained herein may be amended only by written instrument executed by all parties. (c) Binding Effect: The covenants and conditions herein shall bind and inure to the benefits of the executors, administrators, successors and assigns of the respective parties. (d) Assignment: This Agreement may be assigned by Purchaser to any entity in which James Dally has a controlling ownership interest without the consent of the Seller. Other assignments may not occur without the consent of Seller, with such consent not being unreasonably withheld. (e) Counterparts: This Agreement may be executed in counterparts each of which may be deemed an original, and all such counterparts together shall be deemed one and the same agreement. (f) Survival: All warranties, covenants and representations made herein shall survive closing. BROKERS. Neither Seller nor Purchaser has engaged a real estate broker in regards to this transaction and specifically disclaims any liability for a broker's commission. 20. CONFIDENTIALITY. The parties agree that the specific business terms of this Agreement are subject to the Indiana Open Door Law. 21. ADVICE OF COUNSEL. This Agreement has been drafted for submission to Seller and Seller's attorney. All parties involved in a real estate transaction should seek the advice of legal counsel before entering into any agreement; to determine the marketability of title; understand possible tax consequences; to ascertain that the terms of the sale are adhered to before the transaction is Closed; and to obtain advise with respect to all notices related to this Agreement. Purchaser and Seller acknowledge the importance of advice from counsel and expressly acknowledge that they have been provided full opportunity to seek the advice of counsel. Moreover, this Agreement has been the result of substantial negotiations between the Parties and they are fully aware of its contents and of its legal effect. Accordingly, this Agreement will not be construed against any party on the grounds that such party drafted this Agreement. Instead, this Agreement will be interpreted as though drafted equally by both parties. The parties enter into this Agreement freely and voluntarily and with a full understanding of its terms. 22. SECTION 1031 TAX - DEFERRED EXCHANGES. Upon either party's request, the other party shall cooperate and reasonably assist the requesting party in structuring the 10 purchase and sale contemplated by this Agreement as part of a tax deferred, like -kind exchange under Section 1031 of the Internal Revenue Code of 1986, as amended; provided, however, that in connection therewith, the non - requesting party shall not be required to: (a) incur any additional costs or expenses; (b) take legal title to additional real property (i.e., the requesting parties' "replacement property" or "relinquished property "); or (c) agree to delay the Closing. However, should both parties wish to complete a tax - deferred exchange, the parties will each incur their own additional expenses related to their exchange and shall split any common costs which will benefit both parties by such a division. 23. EFFECTIVE DATE. "Effective Date" shall mean the date upon which this Agreement is accepted by the party to whom the offer is made. Acceptance shall be deemed to have been made on the date the fully executed Agreement is received by the party first executing the Agreement. 24. NOTICES. All notices, requests, demands or other communications hereunder shall be in writing and deemed given (a) when delivered personally or (b) on the day said communication is deposited in the U.S. mail, by registered or certified mail, return receipt requested, postage prepaid, or (c) on the next business day after notice is sent by facsimile or (d) on the day said communication is deposited with a nationally recognized overnight courier service, addressed and /or sent by facsimile, as the case may be, as follows: If to Seller: Donald E. Inks, Director Department of Redevelopment City of South Bend, Indiana 1200 City- County Building 227 W. Jefferson Blvd. South Bend, Indiana 46601 With copy to: Charles Leone, Esq. City Attorney City of South Bend, Indiana 1400 City- County Building 227 W. Jefferson Blvd. South Bend, IN 46601 If to Purchaser: MAVCON PROPERTIES, LLC 9110 Portage Road Portage, MI 49002 Attn: James Dally Fax No.: 269 - 381 -4225 The parties executed this Commercial Purchase Agreement as of the date set forth below. PURCHASER: 11 Dated: June , 2011 ATTEST: Signature Printed ame and Title Dated: June , 2011. MAVCON PROPERTIES, LLC James Dally Its: Member CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT, by and through the South Bend Redevelopment Commission, its governing body Printed ame and Title 12 Exhibit A (Legal Description of the Property) 13