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HomeMy WebLinkAbout6C (1)� c (t) 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 Commissi n From: Ann Kolata Subject: Environmental Agreement Regarding Real Estate — Data Realty Date: September 21, 2011 The Commission previously approved a Contract for Purchase and Sale of Real Estate in Ignition Park with Data Realty Northern Indiana. Pursuant to the terms of the Contract, the Commission provided environmental information to Data Realty concerning environmental conditions on the property. After analysis of that information, Data Realty requested an Environmental Agreement with the Commission to cover the current environmental conditions and provide an environmental indemnification to Data Realty. This Agreement is a result of discussions between Data Realty and the Commission's attorneys and addressees these issues. Please contact me at 235 -9374 or akolataasouthbendin.gov if you have any questions. ENVIRONMENTAL AGREEMENT REGARDING REAL ESTATE THIS ENVIRONMENTAL AGREEMENT REGARDING REAL ESTATE (the "Agreement ") is made and entered into by and between South Bend Redevelopment Commission (the "Commission ") and DATA REALTY NORTHERN INDIANA, LLC a limited liability company existing under the laws of the State of Indiana ( "DRNI "). WHEREAS, the Commission and DRNI are parties to a certain Contract for Purchase and Sale (the "Purchase Agreement") for the sale by the Commission and purchase by DRNI of certain property located in the Ignition Park Planned Unit Development ( "IPPUD ") referenced in paragraph 1 of Purchase Agreement and described completely in Exhibit A to the Purchase Agreement, containing five (5) acres more or less (the "Property "); and WHEREAS, DRNI intends to construct a data warehousing facility (the "Facility ") on the Property; and WHEREAS, the Purchase Agreement, at paragraph 6(a), provides, among other things, that DRNI will purchase the property "AS IS WHERE IS" and without any representations or warranties as to the condition of the Property, and that neither party is indemnifying the other regarding condition of the Property, but that DRNI may, after inspection of the Property and before Closing, terminate the Purchase Agreement in its sole and subjective discretion; and WHEREAS, after the Purchase Agreement was executed, the Commission produced environmental site assessments for the Property indicating certain environmental remediation has been initiated at the Property but that contamination remains in the groundwater at and/or under the Property in certain instances in excess of the Indiana Department of Environmental Management's ( "IDEM ") industrial clean-up criteria and "vapor intrusion" screening levels; and WHEREAS, DRNI will be taking steps to qualify as a Bona Fide Prospective Purchaser (`BFPP ") under CERCLA and analogous Indiana laws and intends to apply for a "comfort letter" from the Indiana Finance Authority's Brownfields Program (the ` Brownfields Program ") that details DRNI's liability protection for pre- existing contamination at the Property and the "continuing obligations" DRNI must satisfy to maintain its BFPP liability protections under CERCLA and analogous Indiana Laws (the "Comfort Letter "); and NOW, THEREFORE, for and in good consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Existing; Environmental Conditions. DRNI acknowledges that there are certain environmental defects on, at, or under the Property, including without limitation, groundwater contamination, which is in excess of the Indiana Department of Environmental Management's ( "IDEM ") clean-up criteria or screening levels ( "Existing Environmental Conditions "), as described in the July 27, 2011 letter from Doug Stuart, Hull & Associates, to Ann Kolata, South Bend Department of Community and Economic Development, a copy of which is attached hereto, together with all attachments and enclosures referenced in that letter, copies of which have been provided to and reviewed by DRNI. 2. Environmental Indemnification . The Commission agrees to release, indemnify and hold harmless DRNI against and in respect of any and all damages, claims, losses, liabilities and expenses, including without limitation legal fees and environmental consulting or sampling fees or expenses (the "Environmental Costs ") which may be imposed upon, incurred by or asserted against DRNI pursuant to the requirements of any governmental authority, including but not limited to the IDEM and the United States Environmental Protection Agency, or any unrelated third party, arising out of, in connection with or relating to the Existing Environmental Conditions described in paragraph 1 above, or any other environmental condition, known or unknown, existing at the Property on or before the date of Closing as defined in the Purchase Agreement, including without limitation, the Environmental Costs which may be imposed upon, incurred by or asserted against DRNI in relation to the movement, excavation, handling, storage, and/or disposal of contaminated soils and/or groundwater removed from the Property or relocated on the Property as a result of the Existing Environmental Conditions. The Commission shall have the right to review and approve any and all activities or plans that may result in such Environmental Costs in order to minimize such Environmental Costs, provided that if the Commission objects to any such activities, plans or Costs, the Commission shall propose an alternative that is consistent with: a) applicable federal and Indiana laws, including without limitation, implementing regulations and guidance; and b) DRNI's redevelopment and use of the Property. The Commission's review of activities and plans that may result in Environmental Costs shall not exceed fifteen (15) business days and approval shall not be unreasonably withheld. 3. Environmental Indemnification to Run with the Property in Perpetuity. The indemnification in Paragraph 2, above, shall run with the Property in perpetuity and shall inure to the benefit of DRNI and all future owners of the Property or any interest therein and their respective successors, assigns, parents, affiliates, mortgagees, or lessees ( "Indemnitees "), except to the extent that any such Indemnitee causes or contributes to any environmental condition at or from the Property or exacerbates any Existing Environmental Condition, unless exacerbation of Existing Environmental Conditions results from pre - construction or construction activities, including without limitation, activities related to the movement, excavation, handling, storage and/or disposal of contaminated soils and/or groundwater removed from the Property or relocated on the Property as a result of the Existing Environmental Conditions in which case the indemnification provided in Paragraph 2, above, continues to apply. 4. Waiver of Commission Defenses Based on Language in the Purchase AUeement. The Commission expressly waives any legal defenses, either in law or equity, based on language in paragraph 6(a) of the Purchase Agreement, including without limitation, language characterizing purchase of the Property "AS IS WHERE IS ", without any representations or warranties as to the condition of the Property or stating that neither party is indemnifying the other regarding condition of the Property. 5. Waiver of Commission Defenses Based on DRNI Knowledge of Environmental Defects at the Property. The Commission expressly waives any legal defenses, either in law or equity, based on DRNI's actual or constructive knowledge of the existence or potential existence of environmental defects on, at, or under the Property. 2 6. Commission Responsibility for the Incremental Cost of Handling Unsuitable Materials at the Property. The Commission agrees to reimburse DRNI for the reasonable costs related to the movement, excavation, handling, storage, sampling, treatment and/or disposal of Unsuitable Materials, as defined herein, removed from the Property or relocated on the Property in the course of pre - construction or construction activities of the Facility necessary to comply with applicable laws and regulations (the "Incremental Costs "), but only to the extent such Incremental Costs would not be incurred by DRNI for preconstruction or construction activities at another property which has not been used for industrial purposes or has no environmental defects. The Commission shall have the right to review and approve any and all activities or plans that may result in such Incremental Costs in order to minimize such Incremental Costs, provided that if the Commission objects to any such activities, plans or Incremental Costs, the Commission shall propose an alternative that is consistent with: a) all applicable federal and Indiana laws, including without limitation, implementing regulations and guidance; and b) DRNI's redevelopment and use of the Property. The Commission's review of activities and plans that may result in Incremental Costs shall not exceed fifteen'(15) business days and approval shall not be unreasonably withheld. "Unsuitable materials" means any materials that would not be reasonably expected to be found during an excavation for preconstruction or construction activities at a Property that has not been used for industrial purposes or has no environmental defects, including without limitation, contaminated soil or groundwater. 7. Commission Responsibility for Additional Costs of Obtaining Comfort Letter. Except for the expense of obtaining a new Phase I Environmental Site Assessment ( "Phase I ") at the Property and $1,000.00 for the expense of legal review of that Phase I, the Commission shall reimburse DRNI for any additional costs, including without limitation, environmental testing or other measures, deemed necessary by IDEM or the Indiana Finance Authority Brownfields Program, either on the Property or off -site, as a condition for granting the Comfort Letter to DRNI or as a necessary condition for DRNI to maintain liability protections provided in the Comfort Letter. 8. Multiple Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be considered an original with counterparts signed by one party when combined with counterparts signed by other parties to this Agreement constituting an original contract. 9. Paragraph Headings. This Agreement shall be construed without reference to paragraph headings which are inserted only for convenience of reference. 10. Controlling Effect of This Agreement. To the extent that any provision in this Agreement conflicts with any provision of the Purchase Agreement, this Agreement shall control. 3 IN WITNESS WHEREOF, the undersigned executed and delivered this Environmental Agreement Regarding Real Estate on the date set forth below the name of each. «DRNI" DATA RE Y NORTHERN INDIANA, LLC By: Its: Dated: /l� "COMMISSION" CITY OF SOUTH BEND, by its Redevelopment Commission By:_ Its: Dated: ATTEST: By: Its: Dated: 4