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1 Ogden Redevelopment Agency Meeting: September 12, 2017 TRANSFER OF REAL ESTATE PURCHASE CONTRACT FROM REDEVELOPMENT AGENCY TO OGDEN CITY – Courtyard Inn Motel - 445 25th Street - Tax ID #01-015-0023 (0.22 Acres) Action: Approve or Not Approve Resolution Executive Summary The Board will consider a Resolution authorizing the Executive Director to execute documents transfering the Real Estate Purchase Contract and Promissory Note for the Courtyard Inn Motel located at 445 25th Street from the Redevelopment Agency to Ogden City. Background July 11, 2017 The Board Office received an Administrative Transmittal requesting approval of the purchase of the Courtyard Inn Motel located at 445 25th Street. August 22, 2017 The Board adopted Resolution 2017-7 authorizing the Executive Director to execute a Real Estate Purchase Contract and Promissory Note (REPC) for purchase of property at 445 25th Street located on the southwest corner of 25th and Ogden Avenue. A summary of the REPC follows: Sellers: Jayhoun S. Saissan and Jalal A. Afnane Description: Tax ID # 01-015-0023 (0.22 acres) Purchase Price: $970,000 Terms: $50,000 Earnest Money (applicable to Purchase Price), Due July 11, 2017 Cash Due at Closing $200,000 Promissory Note for $720,000 to be paid within one year of Closing Closing Costs: Fees shall be split equally, Seller pays commissions. Closing Date: Not later than October 2, 2017 ---PAGE BREAK--- 2 Ogden Redevelopment Agency Meeting: September 12, 2017 September 7, 2017 The Council Office received an Administrative Transmittal requesting that the REPC for purchase of 445 25th Street be assigned to Ogden City prior to completion of the purchase transaction. Board Staff requested that a similar Transmittal and Resolution be submitted for action by the Board to authorize the Agency’s transaction. September 11, 2017 The Board Office received an Administrative Transmittal requesting that the REPC for purchase of 445 25th Street be assigned to Ogden City prior to completion of the purchase transaction. Proposal The Administration is requesting that the Board authorize the Executive Director to execute a First Amendment to the Real Estate Purchase Contract and Novation Agreement (Amendment). Under the terms of the Amendment, the REPC and Promissory Note would be transferred from the Redevelopment Agency to Ogden City and the City would be treated as the original party to the Contract. Funding for the initial $250,000 down payment was funded in the FY18 Capital Improvement Fund. Staff Note: It was previously represented that funding for the down payment was in the FY18 RDA Budget. Attachments Plat Map – 660 W. 24th Street Google Street View – 445 25th Street Questions 1. Please review the terms of the REPC, First Amendment, and Promissory Note. 2. Please explain why the purchase is best completed by Ogden City and not the Redevelopment Agency. Council Staff Contact: Janene Eller-Smith, (801)629-8165 ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- OGDEN CITY REDEVELOPMENT AGENCY TRANSMITTAL Date Received by Admin: Mark Johnson, CAO Date Sent to Council: DATE: September 11, 2017 TO: Ogden City Redevelopment Agency Board FROM: Tom Christopulos, CED Director TC SUBJECT: Cancellation of Real Estate Purchase Contract between Ogden City Redevelopment Agency and Jayhoun S. Saissan and Jalal A. Afnane for the purchase of .22 acres located at 445 25th Street and substitution of Ogden City as the buyer (Courtyard Inn Motel) STAFF CONTACT: Brandon Cooper, CED Deputy Director BC LEGAL CONTACT: Melven Smith, Assistant City Attorney MS REQUESTED TIMELINE: As soon as convenient RECOMMENDATION: Administration recommends approval of the terms and conditions of the First Amendment to the Real Estate Purchase Contract DOCUMENTS: REPC; Resolution; First Amendment to the Real Estate Purchase Contract and Novation Agreement Background City staff was successful in negotiating a real estate purchase contract for approximately .22 acres located at 445 25th Street – commonly known as the Courtyard Inn Motel. The original parties to the real estate purchase contract (“REPC”) are Jayhoun S. Saissan and Jalal A. Afnane, as the Sellers, and the Agency, as the Buyer. Due to Seller tax considerations and the fact the money to purchase the Property will come from Ogden City (“City”) funds, and for other reasons set forth below, the Ogden City Administration believes it is in the best interest of the City, the Agency and the Sellers that the City, and not the Agency, purchase the Property on the terms contained in the REPC. The proposed transaction provides an opportunity for the City to bring about development that will have a significant impact to the Downtown and adjacent neighborhoods. A summary of the terms of the Real Estate Purchase Contract (“REPC”) is as follows: Seller – Jayhoun S. Saissan and Jalal A. Afnane ---PAGE BREAK--- Substituted Buyer – Ogden City Property – 01-015-0023 Size – .22 acres Purchase Price – $970,000 Earnest Money – $50,000 (applicable to Purchase Price) Cash at Closing - $200,000 Promissory Note - $720,000 to be paid within 1-year of Closing Effective Date – July 3, 2017 Seller’s Disclosure Deadline – July 13, 2017 Due Diligence Deadline – August 22, 2017 Closing Date – October 2, 2017 or sooner if possible Occupancy – 1-year from Closing pursuant to Post-Closing Lease Recommendation During the implementation of internal contract and routing procedures, the REPC and associated transmittal and resolution were inadvertently transmitted as Ogden City Redevelopment Agency documents. As a result, the REPC was approved by the Agency Board on August 22, 2017. However, the funds appropriated for the acquisition were included in the Ogden City FY18 Annual Budget and the eventual demolition and construction of a new plaza in the place of the motel is intended to be an Ogden City project. For these reasons, it is recommended that the Agency Board approve the First Amendment to the Real Estate Purchase Contract and Novation Agreement, thereby authorizing the Executive Director to sign the First Amendment, thereby allowing the Agency to be released from the REPC and allowing the City to complete the purchase of the Property according to the terms of the REPC. For further information, please contact Brandon Cooper at (801) 629-8947. ---PAGE BREAK--- RESOLUTION NO. A RESOLUTION OF THE OGDEN CITY REDEVELOPMENT AGENCY APPROVING THE TERMS OF THE FIRST AMENDMENT TO REAL ESTATE PURCHASE CONTRACT AND NOVATION AGREEMENT (“FIRST AMENDMENT”) AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE FIRST AMENDMENT THEREBY CONSENTING TO A RELEASE OF THE AGENCY’S RIGHT AND OBLIGATION TO PURCHASE THE REAL PROPERTY LOCATED AT 445 25TH STREET, OGDEN, UTAH AND AGREEING TO ALLOW OGDEN CITY TO BE SUBSTITUTED THEREIN AS THE BUYER. WHEREAS, the Ogden City Redevelopment Agency (“Agency”) is a separate body corporate and politic, duly and regularly created, established, organized and existing under and by virtue of the Constitution and laws of the State of Utah; and WHEREAS, the Agency operates and is authorized to transact business and exercise its powers under and pursuant to Limited Purpose Local Government Entities – Community Reinvestment Agency Act, Title 17C, Utah Code Annotated 1953, as amended (the “Act”); and WHEREAS, the Act provides that an Agency may exercise its powers for the purpose of developing and implementing a community reinvestment plan as such term is defined in the Act; and WHEREAS, the Agency sought to purchase certain real property located at 445 25th Street, Ogden, Utah (the “Property”) from Jayhouin S. Saissan and Jalal A. Afnane (“Sellers”) in order to accommodate and facilitate future reinvestment and development activities in accordance with the Agency’s purposes and objectives; and WHEREAS, pursuant to Resolution No. 2017-7, the Agency did authorize the Executive Director to execute and deliver that certain Real Estate Purchase Contract, which is attached to and made part of Resolution No. 2017-7 as Attachment A – Real Estate Purchase Contract (the “REPC”); and WHEREAS, pursuant to Resolution No. 2017-7, the Executive Director did execute the REPC, binding the Agency to purchase the Property according to the terms of the REPC; and WHEREAS, due to important tax considerations of the Sellers and the fact that the money to purchase the Property will come from Ogden City (“City”) funds, it is now in the best interest of the City, the Agency and the Sellers that the City, and not the Agency, purchase the Property. NOW, THEREFORE, the board of the Ogden City Redevelopment Agency hereby resolves: 2017-9 ---PAGE BREAK--- 1. That the terms of the First Amendment to Real Estate Purchase Contract and Novation Agreement (“First Amendment”), attached hereto as Attachment A, are hereby approved; and 2. The Executive Director is hereby authorized to execute and deliver the First Amendment, attached hereto as Attachment A – First Amendment to the Real Estate Purchase Contract and Novation Agreement, thereby consenting to a release of the Agency’s right and obligation to purchase the Property and agreeing to allow the City to be substituted therein as the buyer. APPROVED AND ADOPTED this day of 2017. CHAIR ATTEST: CITY RECORDER APPROVED AS TO FORM: MES 9/11/17 LEGAL DATE ---PAGE BREAK--- Attachment A ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK---