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6 c (2) • vlln be 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 Plannerot- Subject: Hotel La Salle — Commercial Purchase Agreement Date: June 14, 2011 Staff has over the years worked with many interested parties, from various parts of the country, for the rehabilitation of the Hotel La Salle (Hotel). The Hotel has sat empty for approximately 10 years, and has been maintained by the Commission in the hopes that one day the right group would step forward, that has both the ability and capacity to return the Hotel to a productive use and asset to the downtown. Today I would like to tell you that we feel that group has emerged. Mavcon Properties, of Kalamazoo, Michigan, would like to enter into a purchase agreement with the Commission to acquire the Hotel. Mavcon has experience in redeveloping urban properties, with their latest project being the Metropolitan Center in downtown Kalamazoo, an $11.3 million historic rehab of four connected commercial buildings that were constructed in the late 1800's. Prior to closing this transaction, much due diligence must be completed. Mavcon, at its own expense, will hire architectural, engineering, and environmental consultants to study and plan for the eventual rehabilitation of the Hotel into 45 — 65 market rate apartments, with commercial space likely on the 1St and 2nd floors. In addition, and again at their own expense, they will put together a funding package that will include both Historic and New Market Tax Credits. Highlights of the purchase agreement include: • $5,000 purchase price, to be paid at closing • $2,000 deposit within 3 days of the acceptance of this agreement • 180 day inspection period • 180 day inspection period extension, with an additional $2,000 deposit • Closing within 90 days after the inspection period or the extension thereof • 90 day closing extension, with additional $2,000 deposit. Because of the complicated nature of putting together the Historic and New Market Tax Credit package, and the extensive architectural, engineering, and environmental studies that need to be completed, staff feels the above schedule is acceptable and necessary. What We Do Today Makes A Difference!