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HomeMy WebLinkAbout2014-149 AMS - Main Street Partners of Chapel Hill LLC Due Diligence Authorization Agreement for Butler Property $0 ,eM,5 DUE DILIGENCE AUTHORIZATION AGREEMENT G 4M This Due Diligence Authorization Agreement (this "Agreement"), is made by and between Main Street Properties of Chapel Hill, LLC (hereinafter called "Main Street") and Orange County, North Carolina (hereinafter called "County"), for the purpose of authorizing County to commence certain due diligence on the project described below(the"Project"): WHEREAS, Main Street is the developer of a project located in central Carrboro known as "300 East Main" which is comprised of is a phased mixed-use development project offering dining, shopping, arts, a parking deck and hotel accommodations; and WHEREAS, Main Street has an option to purchase real property with an address of 120 Brewer Lane, Carrboro, North Carolina, and having Orange County PIN 9778-96-8060 (the "Property")which such option will be fully documented on or before the expiration of the Term; and WHEREAS, the Property is adjacent to 300 East Main; and WHEREAS, Main Street anticipates the Property will ultimately contain, among other improvements, a multi-story building anchored by a single or multiple users on the building's first floor located at Main Street elevation (the "First Floor") and approximately 4 floors of single family apartments located on the upper floors of the building; and WHEREAS, the County has approved a set of guiding principles and a comprehensive site selection criterion for locating the Orange County Public Library-Southern Branch (the "Southern Library"); and WHEREAS, the County has identified the Property as a potential site for the Southern Library; and WHEREAS, the County and Main Street desire to provide for a period of mutual due diligence concerning the potential location of the Southern Library on the Property. NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the parties hereto agree as follows: 1. Intent to Negotiate Definitive Contract: The County and Main Street desire to enter into contract negotiations for the potential location of the Southern Library on the Property (the "Contract"). The scope and form of the Contract by and between Main Street and the County (i.e. contract for the lease of the First Floor either with or without an option to purchase; or purchase of a condominium interest(s) in the building to be constructed by either Main Street or the County on the Property, etc.,) is subject to future negotiation and any such agreement is conditioned upon the Parties' reaching a mutual written agreement on terms. 2. Due Diligence: Main Street grants County, its employees, agents, citizen committees, and contractors a right of entry onto and into the Property and the property upon which 300 East Main is located during the Term for the purposes of conducting surveys, inspections, tests and other analysis and due diligence on the Property. County will provide reasonable notice to Main Street prior to entering the Property to conduct any onsite due diligence. County understands and agrees that land disturbing activities on the Property (including, but not limited to, soil borings, excavation, and removal)requires prior regulatory approval. Main Street and County shall work cooperatively to obtain such approval prior to the County conducting any land disturbing activities on the Property. The Parties will coordinate all entries so as to minimize any disturbance to tenants on the subject properties. During the Term, County will work diligently to determine the viability of locating the Southern Library on the Property. County will keep Main Street informed of its due diligence progress throughout the Term. It is the intent of both Parties to work toward entering into a mutually beneficial agreement for the location of the Southern Library on the Property at the end of the Term based on County's due diligence and the viability of development options available to the Parties. If the County and Main Street are unable to reach an agreement at the end of the Term, County will deliver to Main Street copies of all its due diligence studies. 3. Exclusivity: In consideration of substantial expenditure of time, effort and funds by County in connection with due diligence efforts which will be carried on in connection with the transaction contemplated hereby, Main Street agrees that during the Term, neither Main Street nor any of its members, managers, officers, directors, agents, or employees will directly or indirectly solicit, encourage, negotiate with any third party or entertain or consider any inquiry, proposal, or offer relating to the acquisition, development,joint venture or other disposition of the First Floor. It is expressly understood and agreed that this exclusivity does not pertain to negotiations with third parties related to portions of the Property other than the First Floor. Main Street will immediately cease any existing activities, discussions or negotiations with any persons or entities conducted heretofore with respect to any of the foregoing except as expressly permitted herein. Nothing contained in this Section 3 shall prevent Main Street from: (i) discussing the terms of the current option to purchase it holds on the Property with the current owner of the Property; (ii) discussing any matter related to the Property (specifically including the First Floor) with its lenders and financing partners; (iii) discussing the development or potential development of the Property with any regulatory agency or governing body with jurisdiction over the Project. If the County affirmatively decides, or otherwise reasonably forecasts that its proposed use of the Property may comprise less than 18,000 sf of the First Floor, then the County promptly shall notify Main Street of the same, and Main Street shall immediately be permitted to resume discussions with any other potential user of first floor space that the County has indicated it may not occupy in the future. 4. Term: This Agreement shall be effective as of the Effective Date until July 1, 2014 unless earlier terminated as provided herein or upon the full execution of a Contract (the"Initial Term"). This Agreement may be renewed and otherwise extended for additional periods upon the mutual written agreement of the Parties (each a "Renewal Term"; the Initial Term and any and all Renewal Term(s) are collectively referred to herein as the"Term"). 5. Termination: This Agreement shall terminate: (i) immediately and automatically upon execution of the Contract between Main Street and County pertaining to the subject matter hereof, (ii) automatically upon the expiration of the Term; (iii) at any time, by mutual agreement of the Parties; or (iv) by Main Street, upon the material breach by County of any provision contained herein which material breach remains uncured by County after Main Street provides thirty days advance written notice of said material breach to County, and by County, upon the material breach by Main Streets of any provision contained herein which material breach remains uncured by Main Street after County provides thirty days advance written notice of said material breach to Main Street. 6. Joint Publication: Main Street and the County desire to coordinate the dissemination and delivery of press releases and other formal public disclosures regarding the Project. Therefore, no press release or other public disclosure may be made by Main Street or its members, managers, officers, directors, agents, or employees concerning the Project, the negotiations regarding the Contract, and any subsequent agreements or discussions between Main Street and the County regarding the Property without the prior written consent of County. Nothing contained in this Section 6 shall prevent Main Street from: (i) discussing the terms of the current option to purchase it holds on the Property with the current owner of the Property; (ii) discussing any matter related to the Property (specifically including the First Floor) with its lenders and financing partners; (iii) discussing the development or potential development of the Property with any regulatory agency or governing body with jurisdiction over the Project. 7. Conditions Precedent& Contingencies: The Parties understand and agree that there are a number of conditions precedent and contingencies that will impact the ability to enter into a Contract for the Project. The Parties agree to negotiate in good faith in an attempt to address such conditions precedent and contingencies during the Term. 8. Representations and Warranties of Main Street& County: The Parties understand and agree that each party will be subject to commercially reasonable representations and warranties in the Contract. The Parties agree to negotiate in good faith to address such representations and warranties during the Term. 9. Miscellaneous: A. Assignment. The rights under this Agreement may be transferred and assigned only upon the written consent of the non-assigning party. B. Fees and Expenses. Each party will be responsible for its own legal fees and other expenses incurred in connection with the performance of this Agreement. C. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina. Any dispute regarding this Agreement shall be filed in a court of competent juri sdiction located in Orange County,NC. D. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same document. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy. E. Mutual Waiver of Consequential Damages. In no event shall any parry be liable to the other for consequential, punitive or special type of damages or lost profits on account of this Agreement. This mutual waiver includes, but is not limited to, all damages incurred by the Main Street for rental expenses, for losses of use, income, profit, opportunities, revenue, funds, financing, business and reputation, for extended interest expenses, insurance premiums, supervisory costs and common area charges, for increased overhead costs, for carrying costs, maintenance costs, taxes, insurance deductibles and write- downs, and for loss of management or employee productivity or of the services of such persons. This mutual waiver is applicable, without limitation, to all consequential, incidental, indirect or special damages due to either party's termination of this letter of agreement. Further, in no event shall any party's liability to the other arising out of this Agreement exceed $50,000. F. Amendment, This Letter shall not be amended except by a written instrument executed by both County and Main Street. G. No Third Party Beneficiaries. Nothing contained in this Agreement shall be deemed to create a contractual relationship with, or a cause of action in favor of, any third party against Main Street or County. IN WITNESS WHEREOF, Main Street and County have caused this instrument to be executed under seal as of the day and year first set forth above. Main Street:: Orange County: Main Street Properties of Chapel Hill,LLC Oran nty,North Carolin By: _ (SEAL) By: Name: S j�w Gi - Name: �, '� Title: , Title: CW 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 18, 2014 Action Agenda Item No. 6-e SUBJECT: Southern Library Site Selection Due Diligence Process Update — Butler Property Due Diligence Agreement DEPARTMENT: Library, Asset Management PUBLIC HEARING: (Y/N) No Services, Planning ATTACHMENT(S): INFORMATION CONTACT: Due Diligence Authorization Agreement Lucinda Munger, (919) 245-2528 Jeff Thompson, (919) 245-2658 Michael Harvey, (919) 245-2597 PURPOSE: To: 1) Review the Due Diligence Authorization Agreement between Orange County and Main Street Properties of Chapel Hill, LLC; and 2) Authorize the Chair to execute the Agreement pending final County Attorney approval. BACKGROUND: The Board authorized staff to continue investigating the Butler Property site with regard to its adopted Southern Branch Library Site Selection Criteria and process. As part of this due diligence process, County staff has met extensively with the Butler Property developer, Main Street Properties of Chapel Hill, LLC ("Developer"), and has developed the attached Due Diligence Authorization Agreement that provides a framework for the County and the Developer to work together during this due diligence process. FINANCIAL IMPACT: This Agreement is non-binding to the County and the Developer and has no associated costs. RECOMMENDATION(S): The Manager recommends the Board: 1) Review the Due Diligence Authorization Agreement between Orange County and Main Street Properties of Chapel Hill, LLC; and 2) Authorize the Chair to execute the Agreement pending final County Attorney approval. 2 DUE DILIGENCE AUTHORIZATION AGREEMENT This Due Diligence Authorization Agreement (this "Agreement"), is made by and between Main Street Properties of Chapel Frill, LLC (hereinafter called "Main Street") and Orange County, North Carolina (hereinafter called "County"), for the purpose of authorizing County to commence certain due diligence on the project described below(the"Project"): WHEREAS, Main Street is the developer of a project located in central Carrboro known as "300 East Main" which is comprised of is a phased mixed-use development project offering dining, shopping, arts, a parking deck and hotel accommodations; and WHEREAS, Main Street has an option to purchase real property with an address of 120 Brewer Lane, Carrboro, North Carolina, and having Orange County PIN 9778-96-8060 (the "Property")which such option will be fully documented on or before the expiration of the Term; and WHEREAS, the Property is adjacent to 300 East Main, and WHEREAS, Main Street anticipates the Property will ultimately contain, among other improvements, a multi-story building anchored by a single or multiple users on the building's first floor located at Main Street elevation (the "First Floor") and approximately 4 floors of single family apartments located on the upper floors of the building; and f WHEREAS, the County has approved a set of guiding principles and a comprehensive site selection criterion for locating the Orange County Public Library-Southern Branch (the "Southern Library"); and WHEREAS, the County has identified the Property as a potential site for the Southern Library; and WHEREAS, the County and Main Street desire to provide for a period of mutual due diligence concerning the potential location of the Southern Library on the Property. NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the parties hereto agree as follows: 1. Intent to Negotiate Definitive Contract: The County and Main Street desire to enter into contract negotiations for the potential location of the Southern Library on the Property (the "Contract"). The scope and form of the Contract by and between Main Street and the County (i.e. contract for the lease of the First Floor either with or without an option to purchase; or purchase of a condominium interest(s) in the building to be constructed by either Main Street or the County on the Property, etc.,) is subject to future negotiation and any such agreement is conditioned upon the Parties' reaching a mutual written agreement on terms. 2. Due Diligence: Main Street grants County, its employees, agents, citizen committees, and contractors a right of entry onto and into the Property and the property upon which 300 East Main is located during the 3 Term for the purposes of conducting surveys, inspections, tests and other analysis and due diligence on the Property. County will provide reasonable notice to Main Street prior to entering the Property to conduct any onsite due diligence. County understands and agrees that land disturbing activities on the Property (including, but not limited to, soil borings, excavation, and removal)requires prior regulatory approval. Main Street and County shall work cooperatively to obtain such approval prior to the County conducting any land disturbing activities on the Property. The Parties will coordinate all entries so as to minimize any disturbance to tenants on the subject properties. During the Term, County will work diligently to determine the viability of locating the Southern Library on the Property. County will keep Main Street informed of its due diligence progress throughout the Term. It is the intent of both Parties to work toward entering into a mutually beneficial agreement for the location of the Southern Library on the Property at the end of the Term based on County's due diligence and the viability of development options available to the Parties. If the County and Main Street-are unable to reach an agreement at the end of the Term, County will deliver to Main Street copies of all its due diligence studies. 3. Exclusivity: In consideration of substantial expenditure of time, effort and funds by County in connection with due diligence efforts which will be carried on in connection with the transaction contemplated hereby, Main Street agrees that during the Term, neither Main Street nor any of its members, managers, officers, directors, agents, or employees will directly or indirectly solicit, encourage, negotiate with any third party or entertain or consider any inquiry, proposal, or offer relating to the acquisition, development,joint venture or other disposition of the First Floor. It is expressly understood and agreed that this exclusivity does not pertain to negotiations with third parties related to portions of the Property other than the First Floor. Main Street will immediately cease any existing activities, discussions or negotiations with any persons or entities conducted heretofore with respect to any of the foregoing except as expressly permitted herein. Nothing contained in this Section 3 shall prevent Main Street from: (i) discussing the terms of the current option to purchase it holds on the Property with the current owner of the Property; (ii) discussing any matter related to the Property (specifically including the First Floor) with its lenders and financing partners; (iii) discussing the development or potential development of the Property with any regulatory agency or governing body with jurisdiction over the Project. If the County affirmatively decides, or otherwise reasonably forecasts that its proposed use of the Property may comprise less than 18,000 sf of the First Floor, then the County promptly shall notify Main Street of the same, and Main Street shall immediately be permitted to resume discussions with any other potential user of first floor space that the County has indicated it may not occupy in the future. 4. Term: This Agreement shall be effective as of the Effective Date until July 1, 2014 unless earlier terminated as provided herein or upon the full execution of a Contract(the"Initial Term"). This Agreement may be renewed and otherwise extended for additional periods upon the mutual written agreement of the Parties (each a "Renewal Term"; the Initial Term and any and all Renewal Term(s) are collectively referred to herein as the"Term"). 5. Termination: This Agreement shall terminate: (i) immediately and automatically upon execution of the Contract between Main Street and County pertaining to the subject matter hereof, (ii) 4 automatically upon the expiration of the Term; (iii) at any time, by mutual agreement of the Parties; or (iv) by Main Street, upon the material breach by County of any provision contained herein which material breach remains uncured by County after Main Street provides thirty days advance written notice of said material breach to County, and by County, upon the material breach by Main Streets of any provision contained herein which material breach remains uncured by Main Street after County provides thirty days advance written notice of said material breach to Main Street. 6. Joint Publication: Main Street and the County desire to coordinate the dissemination and delivery of press releases and other formal public disclosures regarding the Project. Therefore, no press release or other public disclosure may be made by Main Street or its members, managers, officers, directors, agents, or employees concerning the Project, the negotiations regarding the Contract, and any subsequent agreements or discussions between Main Street and the County regarding the Property without the prior written consent of County. Nothing contained in this Section 6 shall prevent Main Street from: (i) discussing the terms of the current option to purchase it holds on the Property with the current owner of the Property; (ii) discussing any matter related to the Property (specifically including the First Floor) with its lenders and financing partners; (iii) discussing the development or potential development of the Property with any regulatory agency or governing body with jurisdiction over the Project. 7. Conditions Precedent& Contingencies: The Parties understand and agree that there are a number of conditions precedent and ( contingencies that will impact the ability to enter into a Contract for the Project. The Parties agree to negotiate in good faith in an attempt to address such conditions precedent and contingencies during the Term. S. Representations and Warranties of Main Street& County: The Parties understand and agree that each party will be subject to commercially reasonable representations and warranties in the Contract. The Parties agree to negotiate in good faith to address such representations and warranties during the Term. 9. Miscellaneous: A. Assi_ng ment. The rights under this Agreement may be transferred and assigned only upon the written consent of the non-assigning parry. B. Fees and Expenses. Each party will be responsible for its own legal fees and other expenses incurred in connection with the performance of this Agreement. C. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina. Any dispute regarding this Agreement shall be filed in a court of competent jurisdiction located in Orange County,NC. D. Counterparts. This Agreement may be executed in any number of counterparts, each of ( which shall be deemed an original, but all of which together shall be deemed to be one and the same document. A signed copy of this Agreement delivered by facsimile, e-mail i I 5 or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy. E. Mutual Waiver of Consequential Damages. In no event shall any party be liable to the other for consequential, punitive or special type of damages or lost profits on account of this Agreement. This mutual waiver includes, but is not limited to, all damages incurred by the Main Street for rental expenses, for losses of use, income, profit, opportunities, revenue, funds, financing, business and reputation, for extended interest expenses, insurance premiums, supervisory costs and common area charges, for increased overhead costs, for carrying costs, maintenance costs, taxes, insurance deductibles and write- downs, and for loss of management or employee productivity or of the services of such persons. This mutual waiver is applicable, without limitation, to all consequential, incidental, indirect or special damages due to either party's termination of this letter of agreement. Further, in no event shall any party's liability to the other arising out of this Agreement exceed $50,000. F. Amendment. This Letter shall not be amended except by a written instrument executed by both County and Main Street. G. No Third Parry Beneficiaries. Nothing contained in this Agreement shall be deemed to create a contractual relationship with, or a cause of action in favor of, any third party against Main Street or County. IN WITNESS WHEREOF, Main Street and County have caused this instrument to be executed under seal as of the day and year first set forth above. i Main Street:: Orange County: Main Street Properties of Chapel Hill,LLC Orange County,North Carolina By: - (SEAL) By: Name: S 64 ) Name: Title: All&k'_ Title: I I