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HomeMy WebLinkAbout6C(1) C C1/ r44° Department of "'(79'$ Community Investment �nct dP Memorandum Monday,April 21, 2014 TO: Redevelopment Commission FROM: Brock Zeeb, Director of Economic Resources SUBJECT: Renaissance District Update &Action Items For the past several months, Staff has been working with the Union Station Technology Center (USTC) team to move forward plans for the redevelopment of the Renaissance District (District). The items listed below represent clarification of each party's responsibilities for infrastructure improvements and environmental remediation. The items are: 1) 2nd Amendment to the Environmental Indemnity Agreement (EIA). This amendment outlines City plans to remediate the Ivy Tower site, adds clarity on USTC's requirements as Bona Fide Purchaser, and adds Building 84 as the purchaser and owner of the site. 2) Consent to Collaterally Assign EIA. Per the EIA, USTC must seek our approval to assign it to another party. USTC needs to assign the EIA to its lender. This does not change the EIA, but provides USTC's protection to its lender. 3) USTC's Business Plan has been attached for the Redevelopment Commissions review, it conforms with the Development Agreements in place. 4) Budget increase for MOU 1. This MOU covered electrical and connectivity infrastructure improvements for the District. These improvements were expanded to include Ignition Park, which caused an additional $221,674.35 in costs. The Board of Public Works has approved these cost and engineering has review and agreed with the change orders, pending Commission approval. It should note the additional funding will close out all obligations under MOU 1. Staff requests approval of the 2nd Amendment to the EIA, Consent to Collaterally Assign EIA, a $221,674.35 budget increase for MOU 1, and review of USTC's Business Plan for the District. 227 W.JEFFERSON BLVD. SOUTH BEND, IN 46601 I P: 574-235-9371 I FAX: 574-235-9021 I SOUTHBENDIN.GOV SECOND AMENDMENT TO ENVIRONMENTAL AGREEMENT REGARDING IVY TOWER THIS SECOND AMENDMENT TO ENVIRONMENTAL AGREEMENT REGARDING IVY TOWER ("Second Amendment") is entered into effective as of the 15`h day of April, 2014, ("Effective Date") by and between the City of South Bend, Indiana Board of Public Works and the South Bend Redevelopment Commission (collectively, the "Board"), Union Station Properties, LP, with an address at 506 West South Street, South Bend, Indiana 46601 ("USP") and Studebaker Building 84, LLC, with an address of 6561 Lonewolf Dr., South Bend, Indiana 46601 ("SB 84") and collectively with the Board and USP, the "Parties") with reference to the following facts. WITNESSETH: WHEREAS, SB 84 is the owner of certain real estate and improvements located at 600 United Drive and 635 South Lafayette Boulevard, in South Bend, Indiana, consisting of three (3) land parcels, two (2) of which parcels have been developed with larger industrial facilities located thereon, and the third parcel encompassing a thin tract of land located between the existing buildings and the adjacent Penn Central Railroad property (the "Property"). WHEREAS, in connection with the acquisition and redevelopment of the Property, USP and the Board entered into a certain Environmental Agreement Regarding Ivy Tower Building dated October 22, 2012, which was subsequently amended by the First Amendment to Environmental Agreement Regarding Ivy Tower Building between USP and the Board dated April 30, 2013 (as amended, the "Environmental Agreement"); and WHEREAS, subsequent to the execution of the Environmental Agreement, SB 84 purchased the Property on or about May 7, 2013 ("Closing Date"); and WHEREAS, IJSP now desires to add SB 84 as a party to the Environmental Agreement for all purposes, in order to facilitate the reuse and further development of the Property and the Board, in order to encourage such reuse and further development of the Property agrees to add SB 84 as a party to the Environmental Agreement; and WHEREAS, the Parties further desire to amend the Environmental Agreement to further clarify and define the rights and obligations of the of the Parties under the Environmental Agreement; and WHEREAS, the Parties wish to amend the Environmental Agreement pursuant to the terms and conditions set forth in this Second Amendment; NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained,the parties hereto enter into the following Second Amendment: Section I. Effect of this Second Amendment. This Second Amendment shall not change, modify, amend or revise the terms, conditions and provisions of the Environmental Agreement, the terms, conditions and provisions of which are hereby incorporated herein by reference, except as expressly provided herein and agreed upon by the parties hereto. The Parties each hereby confirm and ratify, except as modified by this Second Amendment, all of the terms, conditions and provisions of the Environmental Agreement. Section 2. Definitions. Defined terms which are used in this Second-Amendment shall have the meaning as set forth in the Environmental Agreement, unless otherwise expressly specified herein or the context expressly provides otherwise. Section 3. Addition of SB 84 as a Party. The Parties hereby agree that Studebaker Building 84, LLC, is added as a Party to the Environmental Agreement upon the Effective Date. The Parties agree that for purposes of the Environmental Agreement, SB 84 shall be (i)jointly and severally liable for all obligations of USP and(ii) shall be jointly and severally entitled to all the rights and interests of USP, as those obligations, rights and interests are set forth in the Environmental Agreement. For all purposes all references to "Union Station" in the Environmental Agreement shall, upon the Effective Date, mean USP and SB 84, whether such obligations, rights or interests arose prior to, or arise subsequent to,the Effective Date. Section 4. Amendment to Environmental Agreement. (a) Deletion of Recital: The fourth (4111) recital in the Environmental Agreement dated October 22, 2012, is hereby deleted in its entirety. (b) Paragraph 7. Remediation. is hereby amended to read in its entirety as follows: "7. Remediation. (a) Subject to the terms of this Agreement, the Board agrees to promptly perform the environmental investigations and corrective actions necessary to remediate the Hazardous Materials at the Property preexisting the date of Closing as defined in the Purchase Agreement (including, but not limited to, the Existing Environmental Conditions) to the extent required by the IDEM and any other governmental authorities with jurisdiction over the Hazardous Materials and contamination at the Property to commercial/industrial standards (the "Remediation"). The Parties agree that the Board will undertake a study to ascertain whether it is reasonably feasible to remediate to residential standards. The Board shall have sufficient time, but no more than eighteen (18) months from the Closing Date, unless otherwise agreed in writing between Union Station and the Board,in which to determine whether remediating to residential standards will result in an incremental cost of more than $250,000 over the cost to remediate to commercial/industrial standards under Indiana law. The Board agrees that it shall have an obligation to remediate to residential standards if such incremental cost over and above the cost to remediate to commercial/industrial standards is $250,000 or less, but shall have no obligation to remediate 2 to residential standards if such incremental cost is more than $250,000. As used herein, "Remediation" means (i) performing environmental property assessment activities (which may include taking soil borings and the installation, sampling and maintaining of groundwater monitoring wells and/or other monitoring points and related activities) on the Property to complete an assessment of the Property as required by IDEM or other governmental authorities; (ii) performing corrective action to diligently remediate such Hazardous Materials consistent with the rules, regulations and requirements of IDEM or other governmental authorities. If such remediation requires the installation, maintenance and operation of any remediation structures that will materially interfere with the interior operations of buildings on the Property, the size and location of such structures shall be approved by Union Station prior to any installation, provided that such approval shall not be unreasonably withheld and shall not prevent compliance with any requirements imposed by IDEM or other governmental authorities. (b) Subject to the obligations of the Board and Union Station set forth in Paragraph 7 (a), Union Station and the Board agree to cooperate with each other, by and through their respective agents, attorneys and consultants, to achieve the most cost-effective and efficient means of obtaining from IDEM or other governmental authority the issuance of a letter or similar document stating that no further Remediation of the Property is required (a "NFA Letter"). Such NFA Letter shall contain the usual terms and conditions and be subject to the provisions of Paragraph 8. Consistent with this Paragraph 7 (b), Union Station and the Board agree that provided the provisions of Paragraph 8 of this Agreement are met, Union Station agrees that it will accept the most cost-effective and timely form of NFA Letter, including without limitation, a Comfort Letter, Site Status Letter or No Further Action letter issued by the Indiana Finance Authority's Brownfields Program, a No Further Action Letter issued by the IDEM State Cleanup Program, or a Covenant Not to Sue issued pursuant to the IDEM Voluntary Remediation Program, or similar programs offering similar benefits and protection. Upon receipt of the appropriate NFA Letter, the Board's obligation to perform additional Remediation, unless otherwise required under the NFA Letter shall terminate. Union Station shall be responsible for complying with any continuing obligations imposed in such NFA Letter for such period of time as is consistent with such NFA Letter, including exposure controls, if any as required by Paragraph 8. Upon termination of the Remediation, the Board shall decommission any remaining monitoring points and other corrective action equipment and restore the surface of the Property affected by the decommissioning to substantially the same condition which existed prior to such decommissioning in accordance with the rules and regulations of IDEM or other applicable government authority. (c) Notwithstanding anything to the contrary herein, if the Property is not remediated to residential standards as provided for elsewhere herein, nothing herein shall prevent Union Station from agreeing with IDEM to having IDEM impose additional restrictions on the Property or requiring further remediation efforts at the Property, at Union Station's sole expense, to permit the use of residential uses, and the Board hereby agrees to 3 reasonably cooperate with Union Station; at no cost to the Board, as requested by Union Station in its efforts to seek residential uses. (d) During any Remediation, the Parties shall work together and take reasonable steps not to disrupt the businesses of the existing tenants in the Ivy Tower Building." (c) Paragraph 13. Board Responsibility for Additional Costs of Obtaining Comfort Letter. is hereby deleted in its entirety. Section 5. Miscellaneous, (a) This Second Amendment has been executed and delivered and is intended to be performed in the State of Indiana and shall be governed, construed and enforced in all respects in accordance with the substantive laws of the State of Indiana, without regard to its conflict of law provisions. (b) The Environmental Agreement and this Second Amendment may be amended, modified, renewed or extended only by written instrument duly executed by all of the parties hereto. (c) The Environmental Agreement and this Second Amendment contain the entire agreement of the parties hereto with regard to this subject matter and no representations, inducements or agreements, oral or otherwise, between the parties not contained or embodied in the Environmental Agreement or this Second Amendment shall be of any force or effect. (d) This Second Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, representatives, successors, and assigns. (e) In case any one or more of the provisions (or any portion thereof) contained herein shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Second Amendment, but this Second Amendment shall be construed as if such invalid, illegal, or unenforceable provision or provisions(or portion thereof) had never been contained herein. (f) The recitals and headings contained in this Second Amendment have been inserted and used solely for ease of reference and shall not be considered in the interpretation or construction of this Second Amendment. (g) Time is of the essence in the performance of all conditions hereunder of which time is a factor. (h) This Second Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which counterparts collectively shall constitute one and the same instrument representing this Second Amendment between the parties. 4 IN WITNESS WHEREOF, the Parties have caused this Second Amendment to be effective upon the Effective Date as set forth above. Board: City of South Bend, Indiana Board of Public South Bend Redevelopment Commission Works Gary A. Gilot, President Marcia I. Jones, President ATTEST: David P. Relos, Member Donald Alford, Sr., Secretary Kathryn E. Roos, Member Patrick Henthorn, Member Brian Pawlowski, Member Linda M. Martin, Clerk USP Union Station Properties, LP Kevin Michael Smith Its: Partner SB 84 Studebaker Building 84, LLC By: �?�=;yam //` Kevin Michael Siifith Its: Member KD_1M-6195162 3.doc 5