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Home My WebLink AboutMO # 1941MUNICIPAL ORDER NO. 1941 A MUNICIPAL ORDER APPROVING AND AUTHORIZING THE EXECUTION OF A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PADUCAH AND THE KENTUCKY OAKS MALL COMPANY REGARDING THE FORMER SERVICE MERCHANDISE BUILDING LOCATED AT 3410 JAMES SANDERS DRIVE BE IT ORDERED BY THE CITY OF PADUCAH, KENTUCKY: SECTION 1. Authorization. The Board of Commissioners of the City of Paducah hereby approves and the Mayor of the City of Paducah, Kentucky, is hereby authorized and directed to execute the Memorandum of Understanding with The Kentucky Oaks Mall Company regarding the former Service Merchandise building located at 3410 James Sanders Drive in substantially the form attached hereto as Exhibit A and made part hereof. SECTION 2. Effective Date. This Order shall be in full force and effect on and after the date as approved by the Board of Commissioners of the City of Paducah, Kentucky. Z1,44 A, yor ATTEST: Tammara Sanderson, City Clerk Adopted by the Board of Commissioners, November 1, 2016 Recorded by Tammara S. Sanderson, City Clerk, November 1, 2016 \mo\agree-Service Merchandise Bldg 486 Exhibit A to the Municipal Order MEMORANDUM OF UNDERSTANDING This is a Memorandum of Understanding made and entered into on this the day of , 2016, by and between CITY OF PADUCAH, KENTUCKY, P.O. Box 2267 Paducah, Kentucky 42002-2267, (the "City" or "City of Paducah"), a municipality of the second class and THE KENTUCKY OAKS MALL COMPANY, C/O CAFARO COMPANY, P.O. BOX 2266, Youngstown, OH 44504-0186, hereinafter called (the "Developer"). WITNESSETH: WHEREAS, Developer is an Ohio Limited Partnership and operates Kentucky Oaks Mall in Paducah, Kentucky and is the present owner of two parcels of real estate located at 3430 and 3330 James Sanders Drive in the City of Paducah; and WHEREAS, a parcel of real estate is located adjacent to and between the two parcels owned by Developer as set out above, designated as 3410 James Sanders Drive, within the City of Paducah. This Paducah property is owned by SM NEWCO PADUCAH, LLC, a Delaware Limited Liability Company, upon which site is a building that formerly housed a SERVICE MERCHANDISE BUSINESS, hereinafter called "Service Merchandise Building"; and WHEREAS, the City of Paducah is charged with enforcement of regulations known as the Nuisance Code Enforcement Board Ordinance which references the International Property Maintenance Code. These codes are to protect the public health, safety and welfare of all existing premises located within the City; and WHEREAS, said SERVICE MERCHANDISE BUILDING and lotwere inspected bythe City of Paducah Inspection Department and its successors code enforcement division, The Fire Prevention Division of the Paducah Fire Department, which issued a Correction Notice for many violations. Re -inspections were made which revealed the owner SM NEWCO PADUCAH, LLC, had failed to comply with the Correction Notice; and WHEREAS, an Action was filed in the McCracken Circuit Court, by Developer against SM NEWCO PADUCAH, LLC to enforce restrictive covenants placed on the Service Merchandise tract. The case is listed as Civil Action No. 13 -CI -1099. As part of the relief demanded in the lawsuit, the Developer moved for a Temporary Injunction to enjoin Defendant from demolishing the SERVICE MERCHANDISE BUILDING as directed by the City in its Corrective Notice. The Court subsequently entered the Temporary Injunction on May 14, 2014. Defendant then filed an Interlocutory Appeal with the Kentucky Court of Appeals styled SM NEWCO PADUCAH LLC vs. KENTUCKY OAKS MALL COMPANY docketed as Case No. 2014 -CA -900. Said Action is on the Court's Active Docket awaiting a decision; and WHEREAS, Developer has contacted the City regarding a possible purchase of the SERVICE MERCHANDISE BUILDING and site, from SM NEWCO PADUCAH, LLC providing a proposal to perform certain duties to resolve the violations within a timetable for the corrections to be completed; AND WHEREAS, the parties agree that the actions of Developer will have a positive impact on the community in general and the immediate area in particular, and to encourage DEVELOPER to purchase the site and improvements thereon, and perform the corrective work within the time schedule in accordance with its proposal, the City does now authorize this MEMORANDUM OF UNDERSTANDING by and between CITY and DEVELOPER. NOW, THEREFORE, in consideration of the foregoing premises and for other good consideration, the legal adequacy and sufficiency of which is hereby acknowledged by the 487 parties hereto, the parties do covenant and agree as follows: DEVELOPER AGREES TO THE FOLLOWING: 1. If the closing on the purchase of the SM Newco property occurs (presently scheduled for December 31, 2016), Developer agrees to complete, within six months subsequent to the closing date, the following work: a. Repair and/or replacement of the existing parking lot lights on the property so that same are operable in a manner consistent with the balance of the Kentucky Oaks Mall Complex. b. The complete cleanup of the debris and weeds along the front curbs of the building. c. Power washing of the sidewalk adjacent to the front of the building. d. The patching/resealing/and restriping of the entirety of the front parking lot. e. Cleaning and/or sandblasting and/or painting the front masonry exterior of the building. f. Spray painting of the underside of the front canopy. 2. Within three years after the closing date, Developer shall commence with and thereafter diligently proceed to complete one of the following alternatives: a. The complete razing of the building improvements, and installation of grass/landscaping on the existing building pad, or b. A complete refurbishment/renovation/upgrading of the existing building improvements so as to make the building fully compliant with the various Correction Notices sent to SM Newco, Paducah, LLC, by the City, to make the building tenantable going forward, or c. The partial razing of a portion of the improvements so that only the structural shell of the building will remain for future potential use (and during such time as the building shell exists, occupancy shall not be permitted within the remaining building). Subject to Developer timely meeting the above conditions, CITY AGREES TO THE FOLLOWING: 1. To waive the current unpaid $500.00 fine (and any other such unpaid fine that may have been levied) and interest thereon, and to refrain from future assessments of fines. 2. To hold in abeyance the various requirements as set forth in the prior Correction notices submitted to SM Newco, Paducah, LLC. 3. To hold in abeyance the order stating that "... it shall be unlawful to sell, transfer, mortgage, lease or otherwise dispose of the premises to another unless the receiving party acknowledges receipt of this order and gives written notice to this office of fully accepting the responsibility of this order pursuant to PM -107.5". 4. To rescind the City Notice of Condemnation and the City determination to raze the building improvements in accordance with the December 10, 2012 Correction 488 _i -- .-:,-F-f i -1 1� -I T-.-rr -r -T -:r -r:.- 7 -- -7-7- .- Notice. The parties agree that in the event the obligations of Developer are not met on a timely basis, the requirements the City set out above shall no longer be enforceable and City may commence with its Actions to pursue its Correction Notices and all other remedies at law, to include an Action seeking to lift the Temporary Injunction entered by the Court on May 14, 2014 to permit razing of the structure. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions shall apply: 1. Assignment. This Memorandum of Understanding shall be binding upon and shall inure to the benefit of the parties hereto, and their respective legal representatives, heirs, successors and permitted assigns. The Developer shall not assign its rights and obligations hereunder, in whole or in part, except to a wholly owned subsidiary, without the prior consent of the City, but in no event, shall any assignment hereunder release or relieve the Developer from any obligations of this Agreement for which the Developer shall remain fully bound to the City. 2. Merger Clause. It is agreed and understood between the parties that this Memorandum of Understanding represents the entire and exclusive agreement between the parties and that all prior representations, covenants, warranties, understandings and agreements are merged herein. This Memorandum of Understanding may only be modified in writing executed by all parties hereto. 3. Construction. This Memorandum of Understanding shall be governed and construed under the laws of the Commonwealth of Kentucky. 4. Assurances. The city and the Developer agree to execute such further documents and instruments as shall be necessary to fully carry out the terms of this Agreement. 5. Amendments. This memorandum of Understanding may not be modified or amended unless in writing signed by both parties hereto. 6. Execution and Delivery. This Memorandum of Understanding shall be of no force or effect unless and until it shall have been executed ,by both the City and the Developer and approved by the governing body of the City of Paducah. 7. Time. All times referred to herein shall be strictly construed, as all of such times shall be deemed of the essence. 489 WITNESS signatures of the parties as of the year and date first above written. CITY: CITY OF PADUCAH, KENTUCKY GAYLE KALER, MAYOR DATE: DEVELOPER: THE KENTUCKY OAKS MALL COMPANY Ll."V ANTHONY M. CAFARO, SR. SPECIAL AUTHORIZED AGENT DATE: LL!ff, 491 gg a�`��`. R.M. !t' f'=s" `y3:" itrt,3J.':• _ `<j .r`•''�.:':�':. 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