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Home My WebLink About6A (3)�e A C 3) �U Community & Economic Development • lib 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 6it__ Subject: Hotel La Salle — Commercial Purchase Agreement Addendum Date: July 12, 2012 On June 14, 2011, the Commission approved a Commercial Purchase Agreement (Agreement) with Mavcon Properties, LLC, from Kalamazoo, Michigan. This Agreement gave Mavcon two 180 day inspection periods to determine the feasibility of rehabilitating the Hotel in to approximately 60 market rate apartments. Mavcon, at its own expense, has studied the architectural, engineering, and environmental condition of the Hotel, as well as a financing package that may include New Market and Historic Tax Credits. Mavcon has spent much time and effort to get construction estimates and pulling together a financing package. At the Commission's last meeting on June 28, an update was given that a 30 day extension was needed for Mavcon to present their findings. Attached is an Addendum to the Agreement, granting this 30 day extension to July 31, 2012. During the remainder of this month, Mavcon's findings will be analyzed, and a recommendation made. Staff requests approval of this Commercial Purchase Agreement Addendum, to allow time to study Mavcon's needs to move forward with their plans for the redevelopment of this key downtown landmark. What We Do Today Makes A Difference! ADDENDUM TO COMMERCIAL PURCHASE AGREEMENT WHEREAS, the Purchaser, MAVCON PROPERTIES, LLC, a Michigan limited liability company ( "Purchaser "), and the Seller, 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 "), having entered into a certain Commercial Purchase Agreement (the "Agreement ") for the purchase and sale of real estate situated in the City of South Bend, St. Joseph County, Indiana, commonly known as the LaSalle Hotel, pursuant to the terms and conditions set forth in the Agreement; and WHEREAS, the Parties now wish to amend the Agreement by way of this Addendum. NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, the parties make this Addendum to Commercial Purchase Agreement as follows: (1) Paragraph 11 entitled "Inspection Period" shall be and is hereby amended, revised and replaced as follows: 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 1 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 "). Purchaser may extend the Extension Period by another thirty -one (31) days to and through July 31, 2012, (the "Additional Extension ") by providing written notice to Seller, of Purchaser's intention to extend the Extension Period, however, Purchaser shall not be required to provide any additional earnest money deposit to elect the Additional Extension. 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 any 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 Additional 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 any Extension if any 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 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. (2) Each and every other provision of the Agreement is hereby ratified, approved and reaffirmed by the parties and all other matters previously agreed to and set forth in the Agreement and not affected by this Addendum shall remain in full force and effect. (3) This Addendum may be executed in multiple counterparts, each of which shall be deemed an original. (4) The undersigned person(s) executing and delivering this Addendum on behalf of a Party represent and certify that: a. He /she is a duly authorized agent, representative, member or officer of said Party and has been fully empowered to execute and deliver this Addendum and that all necessary corporate or administrative action has been taken and done; and 2 b. To the best of his /her knowledge, he /she has not, nor has any other member, employee, representative, agent of office of said Party, entered into or offered to enter into any combination, collusion or agreement to receive or pay, and that he /she has not received or paid, any sum of money or other consideration for the execution of this Addendum other than that which appears on the face hereof. IN WITNESS WHEREOF, the Parties hereto have executed this Addendum to Commercial Purchase Agreement as of the date set forth below. Dated: July , 2012 ATTEST: Printed Name and Title Dated: July , 2012. PURCHASER: MAVCON PROPERTIES, LLC By: James Dally Its: Member CITY OF SOUTH BEND, DEPARTMENT OF REDEVELOPMENT, by and through the South Bend Redevelopment Commission, its governing body Printed Name and I it le 3