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HomeMy WebLinkAbout6.C.(1) Environmental Testing Agreement (700 S. Lafayette) ~ ~ ~ SOU7A ~" ~~ r °I Community & Economic Development ~ `.~^~-a2 1200 County-City Building, 227 West Jefferson, South Bend, Indiana 46601-1830 • Phone 574/235-9371 • Fax 574/235-9021 To: Redevelopment Com~mis~sion From: Ann Kolata~~~ ~~-~'"/~ Subject: Agreements Related to 700 S. Lafayette Date: March 17, 2009 There are two items on the Redevelopment Commission agenda related to the property at 700 S. Lafayette. This was the site of the former Transwestern Building that the Commission bought and demolished in the early 1990s. The Commission sold the property in 1995 to Design Packaging Inc. The business was sold several years later to Tecumseh Corrugated Cardboard Company although the real estate stayed under Design Packaging ownership. In ?005 Tecumseh was interested in purchasing the real estate and had a Phase II environmental site assessment conducted using an Indiana Site Assessment Grant to the City of South Bend. That site assessment reported that there were several areas where the fill dirt that was brought in for the building demolition had levels of metals that exceeded Indiana Department of Environmental Management (IDEM) standards. Apparently there were no regulations in the early 1990s to test fill dirt at the time of the building demolition. Tecumseh intended to purchase the real estate but never went through with the transaction. They eventually moved out of the building and the building has been vacant for the last couple of years. Late last year 3 G Properties entered into a purchase agreement with the building owner to buy the property and use it for River Bend Hose. This purchase agreement is contingent on the Commission agreeing to test soils at the property and remove soil that exceeds IDEM limits. We believe that there are two areas to test and remediate. This work is covered by the Environmental Testing and Removal Agreement with 3 G Properties. The purchase agreement is also contingent on the Commission approving an Environmental Indemnit~greement ~~~ith 3 G Properties. Our original transaction with Design Packaging included an Environmental Indemnity Agreement that lasted for ten years. This was amended to add Tecumseh Con•ugated Cardboard Company and extended for an additional five years. The Environmental Indemnity Agreement with 3 G Properties is a new document but provides essentially the same indemnity that was originally provided to Design Packaging. The tens of the agreement is ten years. Approval of these documents is necessary for the transaction to take place. Once the property has been purchased by 3 G Properties, the building will be expanded by approximately 9,000 square feet and River Bend Hose will be able to expand its business and consolidate some of its operations into the building. They will also continue to operate out of their main location at 1 1 11 S. Main Street. ENVIRONMENTAL INDEMNITY AGREEMENT THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this "Agreement') is made this day of March, 2009, by and among the City of South Bend (the "City"). acting by and through the City of South Bend, Indiana, Redevelopment Commission ("South Bend Redevelopment ~) (referred to herein as "h~demnitor"') and 3G Properties (referred to herein as "Indemnitee"'). WHEREAS, the the City and/or South Bend Redevelopment are the former owners of certain real property, the legal description of which is more fully described in Exhibit A hereto (the ``Site"'); WHEREAS, the Site contains historical contamination; WHEREAS, Indemnitee desires to buy from the current owner only upon the terms and conditions hereinafter set forth; WHEREAS, in order to induce Indemnitee to purchase the Site, the Indemnitor has agreed to conduct certain environmental testing of the soil at the Site and to remove and dispose of same if such soil is in excess of agreed upon environmental criteria pursuant to that certain Environmental Testing and Removal Agreement entered into by and among the Indemnitor and the Indemnitee dated even date hereof and to enter into this Agreement to provide that the Indemnitor will indemnify Indemnitee from existing contamination, if any, existing at the Site; NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Indemnitor and Indemnitee agree as follows: 1. Definitions (a.) "Disposal"' shall mean the discharge, deposit, injection, dumping, spilling or placing of Hazardous Substances (hereinafter defined) into or on the Site so that such Hazardous Substances may enter into the soil or I,noundwater on or beneath the Site. (b.) "Environmental Law" means and includes, without limitation, any federal, state, or local law, statute, code, rule, regulation or ordinance and any order, judgment or decree of any court, commission, connnittee, panel, tribunal, department or administrative body (including, without limitation, any Consent Decree and any Environmental Permits) now or thereafter enacted, regulating promulgated or issued or relating to any Hazardous Substance or pertaining to the health, industrial hygiene or the environmental or ecological conditions on, under or about the Site, including without limitation each of the following: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), as amended, 42 U.S.C., ~ 9601 et seq; the Resource Conservation and Recovery Act of 1976, as amended ("RCRA"), 42 U.S.C. ~ 6901 et seq.; the Toxic Substance Control Act, as amended, 15 U.S.C. ~ 2601 et seq.; the Clean Air Act, as amended, 42 U.S.C. ~ 7401 seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. ~ 1251 et seq.; the Occupational Safety and Health Act, as amended, 42 U:S.C. ~ 651 et seq.; the Federal Hazardous Materials Transportation Act, as amended, 49 U.S.C. ti 1801 et seq.; the National Environmental Policy Act of 1975, as amended, 42 U.S.C. ~ 4321 et al.; and the laws, rules, regulations and ordinances of the U.S. Environmental Protection Agency, the Indiana Department of Environmental Management and the County of St. Joseph and of all other entities, agencies, boards, commissions and other governmental offices, bodies and political subdivisions thereof having jurisdiction over the Site or the use or operation thereof. (c.) '`Enviromnental Lien" shall mean any lien, encumbrance or preferential an•angement of any kind in favor of any Person for any Claims arising under or by reason of a breach of any Environmental Law, or arising from or in response to threatened Release of a Hazardous Substance. (d.) "Environmental Permit'" shall mean any permit, approval, authorization, license variance, or permission required from a Governmental Authority under any applicable Environmental Law. (e.) "Enviromnental Reports•• shall mean the phase I Environmehtal Site Assessment Former Transwestern Building Site, South Bend, Indiana, prepared by EIS Environmental Engineers, Inc. ("EIS''), dated May 30, 1995 (including all attachments thereto); the analytical "results for monitoring wells east of Transwesterr- Site," prepared by EIS, dated May 15, 1995; the Phase II Assessment Former Transwestern Building Site, prepared by EIS, dated August 7, 1995; and the Brownfield Site Assessment Report, prepared by Keramida Environmental, Inc., dated May 26, ?005. (£) "Governmental Authority' shall mean any nation or government, any federal, state, county, local or other political subdivision thereof, any court, commissionl committee, panel, tribunal or administrative body and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. (g.) "Hazardous Substances" means and includes, without limitation: (i) Those substances included within the definitions of "hazardous substance," "hazardous waste,~~ "toxic substance," "solid waste," "pollutant' or ``contaminant' in any Environmental Law; and (ii) Any material, waste or substance which is any of the following: (A) asbestos or any material composed of or containing asbestos; (B) radioactive; (C) highly flannnable or explosive; (D) polychlorinated byphenols ("PCBs'') or (E) petroleum or any petroleum based substance or waste or any constituent of any such substance or waste or product; and (iii) those other substances, materials and wastes which are regulated under any Environmental Law or which are classified as hazardous or toxic by any Environmental Law. (h.) "Claim'" shall mean any claim or order or demand, charge, liability, obligation, action, suit, damage, judgment, loss, fine, penalty, cost or expense, brought by, or incui7•ed as a result of action by a Governmental Authority, including, without limitation, attorney, expert witness and consulting fees, and costs of investigation, clean up and feasibility studies, and consequential damages, including damages for inten-uption of business, loss of business and loss of business production. (i.) "Person'" shall mean any person, group of persons or employee, individual, corporation, partnershipr entity, organization, trust, or any Governmental Authority. (j.) "Release'' shall mean release, spill, emission, leaking, pumping, escaper injection, deposit, disposal, discharge, dispersal, leaking or migration into the indoor or outdoor environment or into or out of any property, including the movement of Hazardous Substances through or in the air, soil, surface water, groundwater, or the Site. (k.) `'Remedial Action'- shall mean actions required by any Governmental Authority under any Environmental Law (i) to investigate, contain, clean-up, remove, treat or in any other way address Hazardous Substances in, at or under (including in the groundwater) or upon the Site; or (ii) address the Release or any threatened Release of Hazardous Substances that have migrated or are migrating or that are threatening to migrate from the Site. 2. Indemnitor"s Representations and Wan-anties. Indemnitor represents and warrants the following to be true and accurate as of the effective date of this Agreement: (a.) Indemnitor has engaged environmental consultants to conduct environmental investigations at the Site and has provided to Indemnitee all of the reports generated by such environmental investigations or which reports constitute the Environmental Reports defined herein. Indemnitor warrants and represents that but for the information contained in the Enviromnental Reports or in the publicly accessible records of any Governmental Authority it has no knowledge of: a) any Hazardous Substance at, under (including the groundwater) or upon the Site; orb) any Hazardous Substances Released fi•om the Site onto any other property or into the waters of the State, the groundwater or any publicly or privately owned well. (b.) To the best of Indemnitor's knowledge, neither the Site nor Indemnitor, due to anv of the City's or Indemnitor's past operations on the Site, are subject to any judcial or adminitstrative proceedings or to any order from, or abn•eement with, any Governmental Authority respecting: (i) any violation or alleged violation of any Environmental Laws or (ii) any Remedial Action or (iii) any Claims arising from the Release or threatened Release of a Hazardous Substance to, at or fi•om the Site. (c.) The City or Indemnitor have not received any written or, to the best of Indemnitor's knowledge, any oral communications from any Governmental Authority informing the City or the Indemnitor of any investigation being or to be conducted by a Governmental Authority with regard to the Release or threatened Release of a Hazardous Sustance to,at or from the Site. (d.) No Environmental Lien has attached to or been asserted against all or any portion of the Site. (e.) To the best of Indemnitor"s knowledge there are no underground storage tanks on the Site. These representations and warranties shall be in effect and survive for ten (10) years after the effective date of this Agreement. 3. Indemnitee's Representations and Warranties. Indemnitee represents and warrants as follows: (a.) Indemnitee has had full access to the Site and a full opportunity to investigate the environmental conditions of the Site, including any Release of Hazardous Substances on, into or from the Site. Further Indemnitee has received from Indemnitor the Environmental Reports and has had sufficient time to review those docuiment$. (b.) Indemnitee's post-closing activities shall not involve the use, generation, processing, treatment or storage of any Hazardous Substances unless such activities are conducted in material compliance with Environmental Laws. (c.) Indemnitee's post-closing activities shall not include the Disposal of Hazardous Substances into or upon the Site. These representations and warranties shall be in effect and survive after the effective date of this Agreement and after Closing. Both parties agree, however, that the breach of the representations and warranties set forth in Section 3 (b.) and 3 (c.) by Indemnitee shall not relieve Indemnitor of their obligation to indemnify Indemnitee under the terms of this Agreement, except as it relates to such post-closing activities. 4. Indemnitor's Indemnifications. (a) The Indemnitor hereby covenants and agrees that they will indemnify, exonerate, hold harmless, and defend Indemnitee and any officer, director, shareholder, employee, attorney or agent of Indemnitee, Indemnitee"s successor and assigns, including any lender who holds indicia of ownership primarily to protect the lender"s security interest in the Site (as provided in paragraph 7) (individually the "Indemnitee"' and collectively the "Indemnitees"'), from any and all Claims, arising out of or in any way relating to any of the following: (i) Remedial Action addressing Hazardous Substances occun-ing and/or in existence prior to or at the time of Closing: over, underneath, in or upon the Site or in the groundwater, or the Release fiom the Site of any such Hazardous Substance into the ahnosphere or the waters of the State, ground water, or publicly or privately owned well, or on any other parcel of property. Such Hazardous Substances shall include, but shall not be limited to those Hazardous Substances identified in the Environmental Reports. (ii) Any violation or alleged violation of any Environmental Law, regarding, arising out of or in connection with the activities of the the City or Indemnitor at the Site. (iii) Any Release or threatened Release to, at or fiom any facility owned or operated by another person, of any Hazardous Substances generated by the the City or Indemnitor at the Site. (iv) During the above referenced ten year effective period, any misrepresentation, omission, or breach of any representation or wan•anty contained in Section 2 of this Agreement. (b) Provided, however, that in case any Indemnitee has received written notice of any Claim in respect of which Claim indemnity properly may be sought against the City or Indemnitor pursuant to this Agreement, the Indemnitee must give notice in writing to the Indemnitor within thirty (30) days of receipt of said notice and the Indemnitee's failure to provide such notice will relieve the Indemnitor of the obligation to indemnify the Indemnitees of such Claim. (c) If, but only to the extent, the foregoing indemnification described above is found by a court of competent jurisdiction to be void, invalid or unenforceable as against the Indemnitor under any applicable law, then Indemnitor shall pay to the Indemnitee or Indemnitees the maximum contribution to the pa}nnent of the foregoing Claims as may be permitted under such law and under any other applicable law. 5. Indemnitees Indemnity and Covenant Not to Sue (a) Indemnitee hereby covenants and agrees that it will indemnify exonerate, hold harmless and defend Indemnitor from any and all Claims arising out of or in any way relating to the existence of Hazardous Substances on the Site first occun•ing after Closing and which existence is caused by the action or omission of Indemnitee, its officers, directors, shareholders or employees. (b) Provided, however, that in case the City or Indemnitor receives written notice of any Claim in respect of which Claim indemnity properly may. be sought against the Indemnitee pursuant to this Agreement, Indemnitor must give notice in writing to the Indemnitee within, thirty (30) days of receipt of said notice and Indemnitor's failure to provide such notice will relieve the Indemnitees of their respective obligation to iudemnify the Indemnitor of such Claim. (c) In consideration for the indemnity fi•om the Indemnitor, Indemnitee hereby covenants not to sue the Indemnitor under any common law or statutory cause of action, now existing or available in the future for any and all costs, expenses, fees, liabilities or obligations attributable to a voluntary effort by Indemnitee its officers, directors, shareholders or agents to investigate, contain, cleanup, remove, heat or in any other way address Hazardous Substances existing prior to or at the time this Agreement becomes effective and located in, at, under (including the groundwater) or upon or Released from the Site. 6. Survival of Indemnities. The obligations and agreements of and between Indemnitee and Indemnitor set forth in Sections 4 and 5 of this Agreement shall survive Closing. 7. Transfer of Indemnity. Indemnitor~s obligation to indemnify Indemnitee under this Agreement shall apply to a subsequent purchaser, including a lender who forecloses on its security interest in the Site, provided that such subsequent purchaser sets forth in writing its agreement to the terms and conditions set forth herein (including but not limited to those set forth in Sections 3 and 5 and such written notice is given to Indemnitor in accordance with Section 8 of this Agreement. Indemnitor"s obligation to indemnify a subsequent purchaser shall be effective immediately upon receipt by Indemnitor of the notice set forth herein. 8. All demands, notices and other communications given hereunder shall be in writing and given in accordance with and to the addresses set forth below. 9. This Agreement constitutes the entire A~n•eement of the parties hereto with respect to the subject matter hereof. This Agreement may not be amended, modified, revised, supplemented or restated except by a writing signed by each of the parties hereto. Any consent, waiver or suspension of any duty or responsibility of Indemnitor hereunder shall not be deemed effective unless in writing and signed by a duly authorized officer of the Indemnitee. 10. This Agreement has been made and delivered in and shall be construed according to and governed by the intei~lal laws of the State of Indiana. This Agreement shall be construed and interpreted in such a manner as to be effective, enforceable and valid under all applicable laws. If any provision hereof shall be held invalid, prohibited or unenforceable under any applicable laws of any applicable jurisdiction, such invalidity, prohibition or unenforceability shall be limited to such provision and shall not affect or invalidate the other provisions hereof or affect the validity or enforceability of such provision in any other jurisdiction, and to that extent, the provisions hereof are severable. 1 1. This Agreement shall be binding upon and enforceable against the parties and their respective successors and assigns; provided, however, that Indemnitor may not assign any of its obligations, duties or responsibilities hereunder without the prior written consent of the Indemnitee, which consent shall not be unreasonably withheld. IN WITNESS WHEREOF, the undersigned have caused their duly authorized officers to execute and deliver this Agreement as of the day and year first above written. SOUTH BEND, INDIANA REDEVELOPMENT COMMISSION By: Name: Title: 3G PROPERTIES By: Name: Title: ATTEST: