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HomeMy WebLinkAbout6C (1)� C (I) e 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 Planner W1r� Subject: Res. No. 2958 — Real Estate Option Agreement for 3408 Ardmore Trail Date: December 13, 2011 This is the staff report for the Real Estate Option Agreement (Option Agreement) for 3408 Ardmore Trail, the St. Vincent DePaul property at LaSalle Square. This property was added to the Airport Economic Development Area Acquisition List by Resolution No. 2875 on July 12, 2011. This particular property consists of 8 acres, with a one story 83,000 square foot retail building. If the Commission exercised its option to acquire this property, it would allow its consolidation with the abutting 8.7 acres owned by the Commission, making a larger, more marketable property for redevelopment. Resolution No. 2958 sets the acquisition value of the property at $732,500. The acquisition value is the average value as determined by two independent appraisals. Specifics of the Option Agreement are: • $180,000 initial option payment • annual option renewal dates of December 15, 2012 - 2014 • $138,125 annual option payment • exercise option in 2015 with payment of $138,125 • all option payments to be applied to the acquisition price • if right of first refusal is not exercised, past payments are refunded. Staff believes this Option Agreement will continue the forward momentum occurring in the La Salle Square area, and requests your favorable consideration of Resolution No. 2958 and the Real Estate Option Agreement, allowing the Commission flexibility to acquire this property. What We Do Today Makes A Difference! REAL ESTATE OPTION AGREEMENT This Option Agreement is made and entered into on , 2011, between the St.Vincent de Paul Society of St. Joseph County, Inc. (the "Owner ") and the Redevelopment Commission of the City of South Bend, Indiana (the "Optionee "). 1. Consideration and Grant of Option. In consideration of the payment of $ 180,000.00 (the "Option Amount ") to the Owner, the receipt and sufficiency of which is hereby acknowledged, the Owner grants to the Optionee and its heirs and assigns the sole and exclusive right and option, subject only to the Right of First Refusal, provided for herein below, to purchase the premises (the "Premises ") described in Exhibit "A ", attached to and made a part of this Agreement, together with all improvements, easements, and appurtenances for the Purchase Price and within the time specified in this Agreement. If the Option is exercised, the Option Amount shall be applied to and be considered a part of the Purchase Price. 2. Exercise of Option. This Option may be exercised by the Optionee by delivering written notice of the exercise of this Option to the Owner at the address set forth in Section 6, below, on or before 5:00 p.m. on December 15, 2012. Such notice shall result in the binding contract of purchase and sale between the parties in accordance with the terms and conditions of the Purchase Agreement (the "Contract ") attached to this Agreement as Exhibit "B ". Notwithstanding any other provision herein, the Option shall not expire unless and until the Owner shall have give notice to the Optionee of the pending expiration and providing thirty (30) days to make the required option payment and renew the Option. If the Optionee fails to exercise this Option as provided in this Section 2, then the Option shall expire and the Option Amount, along with any Renewal Option Amounts as provided in Section 7, below, shall be retained by the Owner.. 3. Purchase Price. The purchase price (the "Purchase Price ") for the Premises shall be $732,500.00, which shall be paid in accordance with the Contract. 4. Right of First Refusal. Should the Owner, at any time during the option period, receive a bonafide offer to purchase the Premises from a third party, then the Owner shall provide to the Optionee notice of such offer to purchase and grant the Optionee forty five (45) days to respond if the Optionee desires to match the offer. If Optionee agrees to match the offer, then closing will be scheduled within sixty (60) days or at a time agreed upon by both parties. If Optionee declines to match the offer, then within a period not to exceed ninety (90) days, the Owner shall return to the Optionee at closing the Option Amount together with all Renewal Option Amounts paid by the Optionee under this Option Agreement. 5. Entry for Inspection. Subject to 48 hours prior notice, the Optionee or the agent of the Optionee is authorized to enter upon the Premises and make such inspections, surveys, and soil tests -1- of the Premises as it deems appropriate. The Optionee is authorized to make such other investigations with respect to the zoning and use of the Premises as it deems appropriate. 6. Delivery of Notice. All notices provided for herein, if not delivered in person, shall be sent by United States certified mail, return receipt requested, to the Optionee at Department of Community and Economic Development, Suite 1200, County -City Building, 227 W. Jefferson Blvd., South Bend, Indiana 46601 and to City Attorney, Suite 1400, County -City Building, 227 W. Jefferson Blvd., South Bend, Indiana 46601 and to the Owner at 520 Crescent Avenue, South Bend, IN 46617. Each party may designate a new address for the receipt of notices by written notice given to the other party. 7. Renewal of Option. The Optionee may renew the terms of this Option Agreement on or prior to December 15, 2012, and each year thereafter until and including December 15, 2014. To extend the term of this Option Agreement for an additional year, the Optionee shall pay to the Owner on the date of renewal, subject to the notice requirements stated above, an additional payment of $138,125.00 (the "Renewal Option Amount ") for each one year extension of this Option Agreement. If the Option is exercised, all Renewal Option Amounts paid to the Owner shall also be applied to and be considered a part of the Purchase Price. St. Vincent de Paul Society of St. Joseph County, Inc., OWNER Redevelopment Commission of the City of South Bend, IN, OPTIONEE W: \1 B &C \LAWOFFICE \STVINCNT \Real Estate \OPTION.AGMT.11.26.1 Ldoc -2- EXHIBIT "A" TO: Real Estate Option Agreement between St. Vincent de Paul Society of St. Joseph County, Inc. as Owner, and Redevelopment Commission of the City of South Bend, IN as Optionee, dated , 2011. Legal Description