HomeMy WebLinkAbout2007-2-7235204
ORDINANCE NO. 2007-2-7235
AN ORDINANCE PROVIDING AUTHORITY TO THE MAYOR TO
EXECUTE ON BEHALF OF THE CITY DOCUMENTS NECESSARY FOR ACQUISTION
OF PROPERTIES LOCATED ON HARRISON STREET AND MARTIN LUTHER KING, JR.
\ DRIVE FOR THE DEVELOPMENT OF AN ART SCHOOL
WHEREAS, the City of Paducah, Kentucky (the "City") has previously
determined that it is the public purpose of the City to foster economic development within the
downtown business and residential area of the City, all to the benefit of the citizens and residents
of the City; and
WHEREAS, the City has further determined that in order to accomplish such
public purpose that the City proceed at this time with the acquisition of the real properties of F.
Burnham Jones and wife, Cynthia B. Jones ("Jones") located at 905 Harrison Street, 931
Harrison Street, 900 Martin Luther King, Jr. Drive, 910 Martin Luther King, Jr. Drive, and 924
Martin Luther King, Jr. Drive, Paducah, McCracken County, Kentucky, (collectively, the
"Property") for the development of an art school in the downtown area of the City, in accordance
with the terms of the Option to Purchase Agreement ("Option"), which the parties desire to enter
into regarding the acquisition.
BE IT ORDAINED BY THE CITY OF PADUCAH, KENTUCKY:
SECTION 1. The City hereby approves and consents to the acquisition of the
Property from Jones and further approves and consents to the Option among City and Jones in
substantially the form attached hereto as Exhibit A and made part hereof. It is hereby found and
determined that the acquisition is public property to be used for the public purposes of the City.
It is further determined that it is necessary and desirable and in the best interests of the City to
execute the Option and the execution of the Option is hereby authorized and approved. That the
Mayor, on behalf of the City of Paducah, Kentucky, is hereby authorized to execute the Option
and any other documents necessary to accomplish the transaction contemplated by the Option
with such changes in the Option not inconsistent with this Ordinance and not substantially
adverse to the City as may be approved by the official executing the same on behalf of the City.
The approval of such changes by said official, and that such are not substantially adverse to the
City, shall be conclusively evidenced by the execution of the Option by such official.
SECTION 2. That the City of Paducah further authorizes the purchase of the
Property in Section 1 for the Purchase Price of $375,000, plus accrued interest and shall be paid
as follows:
(a) the sum of One Hundred Twenty-three Thousand Three Hundred Thirty -
Three and 33/100 Dollars ($123,333.33) in cash or cash equivalent shall
be paid to Jones at time of closing, plus a credit of $5,000.00 shall be
given towards the purchase price for the option price paid; and
(b) the sum of One Hundred Twenty -Three Thousand Three Hundred Thirty -
Three and 33/100 Dollars ($123,333.33) shall be paid to Jones on or
before the 11th day of January 2008, plus accrued interest on said amount
at the rate of New York prime as published in the Money Section of The
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Wall Street Journal as of date of closing, which rate shall be adjusted on a
monthly basis, which adjustment shall be made on the first day of each
successive month until the payment of this purchase price installment is
made; and
(c) the sum of One Hundred Twenty -Three Thousand Three Hundred Thirty -
Three and 33/100 Dollars ($123,333.33) shall be paid to Jones on or
before the 9th day of January 2009, plus accrued interest on said amount at
the rate of New York prime as published in the Money Section of The
Wall Street Journal as of date of closing, which rate shall be adjusted on a
monthly basis, which adjustment shall be made on the first day of each
successive month until the payment of this purchase price installment is
made.
SECTION 3. The Finance Director is hereby authorized to make said expenditure
approved in Section 2 from project account ED0040.
SECTION 4. Corporate Counsel is hereby authorized to conduct such due
diligence and investigation as it deems necessary and in the best interest of the City and as
contemplated by the Option. Further Corporate Counsel is authorized to prepare the general
warranty deed of conveyance contemplated by the Option.
SECTION 5. If any section, paragraph or provision of this Ordinance shall be
held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such
section, paragraph or provision shall not affect any of the remaining provisions of this
Ordinance.
SECTION 6. This City Commission hereby finds and determines that all formal
actions relative to the adoption of this Ordinance were taken in an open meeting of this City
Commission, and that all deliberations of this City Commission and of its committees, if any,
which resulted in formal action, were in meetings open to the public, in full compliance with
applicable legal requirements.
SECTION 7. All ordinances, resolutions, orders or parts thereof in conflict with
the provisions of this Ordinance are, to the extent of such conflict, hereby repealed and the
provisions of this Ordinance shall prevail and be given effect.
SECTION 8. This ordinance shall be read on two separate days and will become
effective upon summary publication pursuant to KRS Chapter 424.
ATTEST:
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Tammara S. Brock, City Clerk
Introduced by the Board of Commissioners January 23, 2007
Adopted by the Board of Commissioners February 13, 2007
Recorded by Tammara S. Brock, City Clerk, February 13, 2007
Published by The Paducah Sun, February 21, 2007
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Mayor
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EXHIBIT A
SEE ATTACHED OPTION TO PURCHASE AGREEMENT
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79846
OP'T'ION TO PURCHASE AGREEMENT
THIS AGREEMENT made and executed on this day of September,
2006, between F. BURNHAM JONES and wife. CYNTHIA B. JONES, hereinafter
collectively referred to as "Seller," and CITY OF PADUCAH, Kentucky, a Kentucky
municipality of the second class, hereinafter referred to as "Buyer."
WITNESSETH:
WHEREAS, Seller is owner of certain tracts of real property located in
Paducah, Kentucky; and
WHEREAS, Buyer is desirous of acquiring an option to purchase said tracts
of real property, and all improvements and appurtenances located thereon, and
WHEREAS, the parties do now desire to enter into an Option to Purchase
Agreement regarding Buyer's acquisition of such property from Seller.
NOW, THEREFORE, in consideration of the foregoing premises, and for
other valuable consideration, the legal adequacy and sufficiency of which is hereby
acknowledged by all parties hereto, the parties do hereby covenant and agree as follows:
I . Option to Purchase. The Seller does hereby give and grant to Buyer
an exclusive option to purchase the hereinafter described tracts of real property as a
package in their entirety, and all improvements. appurtenances, equipment, HVAC system,
casements, access rights, and other ancillary rights associated therewith, hereinafter
collectively referred to as the '`Property." The tracts of real property are generally
described as follows:
(a) The tract of real property located at 905 Harrison Street, Paducah,
Kentucky (60,000 sq. ft. structure);
(b) The tract of real property located at 931 Harrison Street, Paducah,
Kentucky (Block Building)-,
(c) The tract of real property located at 900 Martin Luther King Jr.
Drive, Paducah, Kentucky (vacant lot);
(d) The tract of property located at 910 Martin Luther King Boulevard,
Paducah, Kentucky (House and Lot); and
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(e) The tract of property located at 924 Martin Luther Kine Boulevard,
Paducah, Kentucky (Vacant Lot).
A specific description of these properties is attached hereto as Appendix "A,” and made a
part hereof. The parties agree that a memorandum of this A,reement shall be filed of
record with the McCracken County Court Clerk's Office so as to provide record notice of
this Agreement.
2. Option Term. The term of this option shall commence as of the
effective date of this Agreement and shall continue a to and including 2
P 007. 1�
which term shall expire at midnight on said date./j T,4,L)
3. Option Price. For and in consideration of the option to purchase l�
accorded by Seller to Buyer, Buyer shall pay to Seller the sum of $5,000.00, which
payment shall be paid on the effective date of this Agreement. In the event Buyer
consummates purchase of the Property, Buyer shall be entitled to a credit of this option
price against the purchase price.
4. Purchase Price. The purchase price for the Property shall be Three
Hundred Seventy -Five Thousand Dollars ($375.000.00). The purchase price shall be paid
in the manner as set forth below. An allocation of the purchase price to each of the tracts
being sold hereunder is as follows:
(a) 905 Harrison Street - $300,000.00;
(b) 931 Harrison Street - $17,500.00.
(c) 900 Martin Luther Kine Jr. Blvd — 6,000.00;
(d) 910 Martin Luther Kind_= B011lcvard - $46,000.00; and
(e) 924 Martin Luther King Boulevard - $5,500.00.
5. Exercise of Option. Buyer may exercise this option by providing to
Seller written notice of intent to purchase the Property within the option term as described
in paragraph 2 above. In the event Buyer fails to provide such written notification within
such option term, this option to purchase shall terminate, and Seller shall have the right to
retain the option price paid hereunder. In the event Buyer exercises this option, Seller shall
be obligated to sell the Property to Buyer and shall consummate the transaction at closing,
subject to the terms and conditions as herein after set forth.
6. Time of Closing_ In the event Buyer exercises the option to
purchase the Property within the option term, the closing shall take place within 30 days
following the date of Owner's receipt of the written notification of election to purchase, or
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March 1, 2007, the later date to apply, unless otherwise mutually extended. As to date of
closing, time is of the essence.
7. Manner of Payment. The purchase price to be paid by Buyer to
Seller for the purchase price of the Property shall he as follows:
(a) the sum of One Hundred T�\enty-Three Thousand Three Hundred
Thirty -Three and 331100 Dollars (S 123,333.33) in cash or cash
equivalent shall be paid to Seller at time of closing, plus a credit of
$5,000.00 shall be given towards the purchase price for the option
price paid;
(b) the sum of One Hundred Twenty -Three Thousand Three Hundred
Thirty -Three and 331100 Dollars ($123,333.33) shall be paid to
Seller on or before the 1 V' day of January 2008, plus accrued
interest on said amount at the rate of New York prime as published
in the Money Section of 77ie Wall Street Journal as of date of
closing, which rate shall be adjusted on a monthly basis, which
adjustment shall be made on the first day of each successive month
until the payment of this purchase price installment is made; and
(c) the sum of One Hundred Twenty -Three Thousand Three Hundred
Thirty -Three and 33/100 Dollars ($123,333.33) shall be paid to
Seller on or before the 9"' day of January 2009, plus accrued interest
on said amount at the rate of New York prime as published in the
Money Section of The troll Street Journal as of date of closing,
which rate shall be adjusted on a monthly basis, which adjustment
shall be made on the first day of each successive month until the
payment of this purchase price installment is made.
Interest shall accrue on these installment payments from and after date of closing. Seller
shall have the right to retain a vendor's lien in the decd of conveyance as security for the
payment of the purchase price.
8. Title Examination, Survey, and Inspection. Between the date of the
agreement and the closing date, Buyer shall have the right to obtain a title examination and
survey with regard to the Property. Buyer shall also have the right to inspect the Property
prior to and at closing to assure that Seller has complied with all of its obligations
hereunder. In the event such examination or inspection should reflect any defects or
deficiencies in title, description, or condition. Seller shall have a period of thirty (30) days
after notification in which to cure such defects or deficiencies.
9. Representations and Warranties—Disclaimer. Seller represents and
warrants to Buyer that as of date of closing: (a) Seller hits merchantable title to the
3
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Property free and clear of any liens, encumbrances and adverse interests, excepting the
tenant lease as defined under paragraph I i herein. (h) There are no other purchase
contracts, leases, options or other a<(yreements of any kind whereby any other person or -
entity has the right to use, occupy or acquire the Property or any interest therein, excepting
the tenant lease as defined under paragraph l I herein. (c) All improvements,
appurtenances, fixtures, and equipment located on the Property are in the same state of
Rood condition and repair as of the date that Buyer exercises its option; (d) to the
knowledge of the Seller, the Property is compliant with all federal, state, and local
environmental law; and (e) Seller shall have complied with and fully satisfied all of
Seller's obligation as Landlord on the tenant lease as defined under the paragraph 11
herein. These representations and warranties shall survive closing.
10. Conditions of Buyer's Obligations. The obligation of Buyer to
purchase at closing is subject to each of the following conditions:
a. Seller shall have tendered to Buyer at time of closing a duly
executed general warranty decd of conveyance conveying the
Property to Buycr;
b. Seller has full and merchantable title to the Property, and the
Property is free of any and all liens, encumbrances, and other -
adverse interests, excepting the tenant lease as defined under
paragraph l 1 herein; and
Seller shall have complied with and otherwise satisfied all of
Seller's representations and warranties made herein.
In the event of the failure of any of the conditions set forth above, Buyer
shall have the right to terminate this agreement and receive back the option price paid
hereunder, or in the alternative, shall have the right to declare Seller in default, and have all
rights and remedies as provided under paragraph 19 hereunder. �--
11. Approved Tenant Lease. The 905 Harrison Street tract is presently
subject to a ]ease with Paducah Service Company for monthly rentals in the amount of
$1,000.00, which lease is a month-to-month lease. It is agreed that following closing,
Paducah Service Company shall have the right to continue under the lease for a period of
up to six (6) months, provided that it complies with and satisfies all obligations under the
lease agreement. Seller shall assign and transfer such lease to Buyer at time of closing. In
making this assignment, Seller expressly covenants and warrants to Buyer that Seller has
fully complied with and timely satisfied all of Seller's obligations and undertakings under
such lease through the date of closing and that no event of default presently exists
thereunder. Predicated on such covenants and warranties, the Buyer shall assume and
accept the approved tenant lease following closing for a period of up to six (6) months.
Buyer shall have the right to terminate this lease following the six (6) month period,
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provided, however, that Seller shall have the right to terminate the lease at any time for
reason of any default by tenant in performing its obligations under the lease.
Seller, jointly and severally, shall defend, indemnify and hold Buyer
harmless from and against any and all claims, demands, and causes of action and from all
related damage, loss, cost, expense, obligation. claim or liability. including costs of
investigation, court costs and reasonable attorneys' fees t"llamages") suffered or incurred
by Buyer on account of or relating to (i) Seller's breach of any warranty, representation or
covenant made as this tenant lease assigned to Buyer, and (ii) Seller's acts or omissions
under the Lease while it was the Lessor. The Buyer shall promptly notify the Seller of the
existence of any claim, demand or other matter to which Seller's indemnification
obligation would apply and shall jive Seller a reasonable opportunity to defend the same at
Seller's own expense and with counsel of'Seller's own selection reasonably satisfactory to
Buyer; provided that Buyer also has the right to fully participate in the defense at its own
expense. 1f Seller, within a reasonable time after this notice, but no later than fifteen (1.5)
days, fails to defend, Buyer shall have the right, but not the obligation, to undertake the
defense thereof, and to compromise or settle (exercising reasonable business judgment) the
claim or other matter on behalf, for the account, and at the risk, of Seller.
I?. Transaction at Closing. At the closing, Seller shall deliver to Buyer
the deed of conveyance vesting in Buyer good title to the Property which Buyer is entitled
to acquire hereunder, subject only to any vendor lien retained by Seller as security for the
payment of the balance of purchase price to be paid followingclosing, and any approved
and accepted tenant lease. Seller shall also deliver to Buyer an assignment of the tenant
lease as defined under paragraph I I herein. At the closing, Buyer shall, in exchange for the
transfer of the aforesaid instruments, pay to Seller the purchase price in the manner as
described above. Time shall be deemed of the essence.
13. Taxes and Assessments. Taxes and assessments for the current year
shall be paid by prorated as of the date of closing. Seller shall pay any transfer taxes
attributable to the sale of the tracts hereunder.
14. Transfer of Title --Risk of Loss. Title and possession to the Property
sold hereunder shall pass to Buyer on the closing date on delivery to it of the proper
instruments of transfer at which time risk of loss shall pass to Buyer.
15. Brokerage Fees. If any brokerage or finder's fee claims shall be
made based on this Agreement, the defense of said claim shall be the responsibility of the
party that the claimant asserts made the commitment on which the claim is based, and
additionally, such party shall pay and satisfy such claim should the claim be deemed valid
by any court of competent jurisdiction. Additionally. such party shall indemnify the other
party from any and all costs and expenses incurred by reason of such claim, including
reasonable attorney fees.
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16. Indemnity. Seller docs herchti expressly agree and covenant to
indemnify Buyer and hold Buyer harmless from am, claim, demand. or cause of action
asserted against Buyer by reason of the failtrrC of any representation or warranty made by
Seller herein, and from any and all loss, cost, and expenses incurred by Buyer by reason of
such failure, which indemnity shall include Bmcr's reasonable attorney's fees. It is agreed
that this indemnity shall survive the closing* of this transaction.
17. Buyer's Default. In the event Buyer fails or- is otherwise unable to
purchase the Property for reason other than Seller's default, or a failure of one of the
conditions to Buyer's obligations as defined herein, Seller's sole and exclusive remedy
against Buyer shalt be the retention of the option price.
18. Destruction of Pro erty. In the event any residential structure or
other improvement or appurtenance located on any tract is subject to any destruction prior
to closing (affected structure), the Seller shall have the right to restore the affected structure
within a reasonable period of time, subject to any modifications which are approved by the
Buyer in Buyer's discretion, or in the alternative, shall have the right to retain the insurance
proceeds paid by reason of the destruction. In the event Seller fails to restore the affected
structure, Buyer shall have the right to (a) purchase the tract for the fair market value of the
tract in its then present condition, which value shall take in consideration the costs of
removal of debris and restoring the tract to a saleable condition; or (b) to terminate this
agreement, and receive back the option price paid.
19. Seller's Default. to the event Seller fails or is otherwise unable to
sell and deliver to Buyer the Property as herein defined, or in the event Seller fails to
satisfy Seller's representations, warranties, obligations, and duties as herein described,
Buyer may, at its option, have the right to require Seller to specifically perform Seller's
obligations hereunder, and shall have the right to Cure and remedy Seller's default and
deduct any cost or expense of cure and remedy from the purchase price; or shall have the
right to acquire and purchase any of the aforementioned tracts as determined by Buyer at
the allocated purchase price for the tract or tracts purchased, in which event the purchase
price shall be reduced by the purchase price for any tract not acquired and purchased,
which adjusted purchase price shall thereafter be paid on a pro rata basis over the time
periods as reflected in paragraph 4 above; or shall have the right to terminate this
agreement and receive back the option price paid hereunder. In addition to the foregoing,
Buyer shall have all other rights and remedies provided at law or in equity.
Notwithstanding the foregoing, Seller reserves the right to cure any deficiency at its costs
provided Seller effectuates cure in a reasonable manner and within a reasonable period of
time. In the event of Seller's default, it is agreed that Buyer shall recover from Seller any
and all of its costs and expenses resulting therefrom, including any reasonable attorney's
fees and other out-of-pocket expenses incurred by Buyer. Any sums due Buyer under this
Agreement shall accrue interest at the rate of eight percent (8(X).
6
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20. Miscellaneous PrM i<ioIIS_. I he following miscellaneous provisions
shall apply:
a. Assignment. This Agreement shall he binding upon and shall inure
to the benefit of the parties hereto. and their respective legal
representatives, heirs. Succcs�ots and permitted assigns. The Buyer
shall have the absolute riLht to assign its rights and obligations
hereunder, in whole or '111 t, without the prior consent of the
Seller, but in no event, shall any assignment hereunder release or
relieve Buyer from any obligations of this Agreement for which
Buyer shall remain fully hound to Seller-,
Merger Clause. It is agreed and understood between the parties that
this Agreement re-arding sale of assets together with the appendices
represents the entire and delusive agreement between the parties,
and that all prior representations, covenants, warranties,
undcrstandinas and agreements are merged herein. This Agreement
may only be modified in a writing executed by all parties hereto;
Construction. This Agreement shall he governed and construed
under the laws of the Commonwealth of Kentucky; and
d. Effective Date. The effective date of this Agreement shall be
WITNESS our signatures on the date first above written.
JJ ' SELLER
F. Burnham Jones
Cynthia B. Jones
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BUYER
CITY OF PADUCA [L KENTUCKY
� ,4 f
B
STATE OF KENTUCKY
COUNTY OF MCCRACKEN )
The fore-oin- instrument was acknowled-ed to before me on this
day of A7/J--&L-- .2006. by BLII-1111ZIM Jones and wife,
Jones.
My commission expires
4:
Notary Public
STATE OF KENTUCKY
COUNTY OF MCCRACKEN )
The foi.e(yom- instrument was pyknowledged to,f5oeforc me on this -0 -
da 6f,f.
2006, by
(title) of the City of Paducah, a Kentucky municipality of the second
class, on behalf of said municipality.
My commission expires
tx
Notary Public-
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