AGENDA
JOINT MEETING: GLENDALE CITY COUNCIL AND GLENDALE HOUSING AUTHORITY
COUNCIL CHAMBERS
613 E. Broadway, 2nd Floor
Glendale, CA 91206
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AUGUST 9, 2022
ROLL CALL
- 2:00 PM
- Report of the City Clerk of the City Council and Housing Authority, re: Posting of Agenda.
The Agenda for the Tuesday, August 9, 2022 joint public meeting of the City Council and Housing Authority was posted on August 3, 2022 on the Bulletin Board outside City Hall. 1 TYPED 8/4/2022 1:51:07 PM
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CC HA
A JOINT PUBLIC MEETING of the City Council and Housing Authority is hereby called to meet at 2:00 PM on Tuesday, August 9, 2022 , in the Council Chamber, 613 E.
Broadway, 2nd Floor, Glendale, CA 91206 to Consider the Following Item(s) of Business, to wit;
1. Community Development, re: Acquisition of 426 Piedmont Avenue and 507 Naranja Drive for the Purpose of Developing Affordable Housing
a. Resolution of Appropriation in the amount of $12M
b. Housing Authority Resolution to Authorize the Executive Director to Execute a Purchase and Sale Agreement with Berg Senior Services, LLC
c. Housing Authority Motion Authorizing a Streamlined RFQ Process for Developer Selection
ADJOURNMENT
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1 CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY OF GLENDALE AND GLENDALE HOUSING
AUTHORITY
AGENDA ITEM
Report: Acquisition of 426 Piedmont Avenue and 507 Naranja Drive for the Purpose of Developing Affordable Housing
1. Resolution of Appropriation in the amount of $12M;
2. Housing Authority Resolution to Authorize the Executive Director to Execute a Purchase and Sale Agreement with Berg Senior Services, LLC
3. Housing Authority Motion Authorizing a Streamlined RFQ Process for Developer Selection
COUNCIL ACTION
Item Type: Action Item
Approved for August 9, 2022 calendar
EXECUTIVE SUMMARY
In March, 2022, the Housing Authority commenced negotiations with the owner of 426 Piedmont Avenue and 507 Naranja Drive for the purpose of developing affordable housing. The site is developed as a 112-bed Senior Assisted Living Facility and staff believes it can be converted to a rental apartment community for lower income seniors, with approximately 58 units.
Since then, staff has completed its due diligence and has negotiated an acquisition price of $11.9M.
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COUNCIL PRIORITIES
Housing - By acquiring 426 Piedmont Avenue and 507 Naranja Drive, the Housing Authority will be positioned to develop approximately 58 – 67 additional units of affordable rental housing for lower income seniors.
RECOMMENDATION
Approve a Resolution of Appropriation in the amount of $12M and authorize the Executive Director to execute a Purchase and Sale Agreement with Berg Senior Services, LLC. The purchase price is $11.9M. The additional $100k will be used for escrow fees and other closing costs, as well as management of the property.
BACKGROUND
The subject property is developed with a 112-bed senior assisted living facility known as Parkview of Glendale. It was built by the Berg family in 1973 with a smaller, second building, referred to as the Annex, added in 1975. The property operated as a senior assisted living facility for decades, up until approximately 18 months ago. It has since been vacant. A major rehabilitation of the property was undertaken beginning in early 2019. The rehabilitation work stopped with approximately 90% of the exterior work done, including a new stucco façade, roof, windows, decorative details and hardscape.
The interior remodel was also stopped, with the 21 units within the Annex approximately 95% complete and little interior work done to the larger building. All necessary structural improvements have been made.
Staff had been approached by the owner of the building who is interested in selling to the City / Housing Authority. Housing staff believes the building can be adaptively re- used as a permanent, 100% affordable rental housing project for seniors. The owner did list the property for-sale to other senior assisted living facility operators without success.
The owner explained that these operators are looking for locations with high foot and vehicular traffic and visibility. The property is located along the tree-lined Piedmont Avenue near the end of a cul-de-sac. Across Piedmont and directly in front of the property sits the Piedmont mini-park. It is an idealistic location for a senior apartment community with several other multi-family buildings lining Piedmont within the larger residential neighborhood. GTV6 produced a 4-minute video of the property which can be viewed here: https://myglendale.sharefile.com/d-
scb53711bcc534bb5bd2a911e6fbf4817
Staff conducted its due diligence including a preliminary title report, Phase I Environmental Site Assessment, and an appraisal. The title report indicated a minimal amount of property taxes owed, which the seller will be required to pay before close of escrow. The Phase I did not recommend additional environmental testing.
ANALYSIS
Staff believes the buildings can be converted to approximately 58 - 67 apartment units.
The 21 units in the Annex building range in size from approximately 280 sq. ft. to 340 sq. ft. with an average square footage of approximately 296. These micro-units could remain substantially as-is with a kitchenette installed. Alternatively, the 21 units (7 units 4 of 38
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per floor) could possibly be combined to create 12 (4 units per floor) larger units averaging approximately 518 sq. ft. The main building, consisting of 91 beds, are much smaller, shared units. Each unit is approximately 160 sq. ft. in size and share a small bathroom of approximately 80 sq. ft. with an adjoining unit. Combining these two small units into one, the units could be converted to apartments ranging in size from 411 sq. ft. to 450 sq. ft. for an average square footage of approximately 425.
This site provides an opportunity to develop affordable senior housing in an accelerated timeframe. Glendale’s affordable housing projects typically take approximately four to five years from time of acquisition to a fully leased project, about half the time many market rate apartment projects are developed. With the subterranean parking and building already built, construction to adaptively re-use the structure would be approximately 9 months to one year less than a ground-up, new construction project.
Staff commissioned an appraisal for the property. An early value of $12.7M was lowered to $11.9M due to rising costs of construction. The valuation of the property is based largely on the value of the property once converted to a senior rental apartment community, minus the cost of conversion.
If the Housing Authority chooses to acquire the site, staff recommends a streamlined RFQ process in order to expedite the development. Harrower Village, now in construction at 920 E. Broadway, is an adaptive re-use project that was subject to an RFQ in 2020. The top four respondents to the 920 E. Broadway RFQ could be invited to respond to an RFQ for the subject site. The four developers who provided the highest quality response to the 920 E. Broadway RFQ were Abode Communities, Linc Housing / National CORE, Michaels and McCormack, Baron, Salazar. This streamlining of the RFQ could save 2-3 months.
STAKEHOLDERS/OUTREACH
No outreach has been conducted to date.
FISCAL IMPACT
The acquisition will cost $12M, of which $5.78M was not included in the FY 2022-23 budget and $6.22M was approved as a part of the Measure S Affordable Housing Land Acquisition budget. Therefore, staff is requesting for an appropriation of $12M, of which $5.78M will come from the Low & Mod Fund (Fund 2130) fund balance, and $6.22M will shift from the Measure S Affordable Housing Land Acquisition balance project to the newly established 426 Piedmont Land Acquisition project. The funding request is outlined below:
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Requesting Appropriation
Amount From (Account
String)
To (Account String) Funding Source
$5,780,000 GL: 24214-2130-
CDD-0020-P0000
GL: 51100-2130-
CDD-0020-P0000
PL: CDD00914AN
Low & Mod Fund
$6,220,000 GL: 51100-4011-
CDD-0020-P0000
PL: CDD00487AN
GL: 51100-4011-
CDD-0020-P0000
PL: CDD00914BN
Measure S CIP
ENVIRONMENTAL REVIEW (CEQA/NEPA)
The proposed acquisition of the existing residential buildings is categorically exempt from the California Environmental Quality Act under CEQA Guidelines section 15301 (Existing Facilities). This exemption applies to projects involving the operation, repair, maintenance, permitting, leasing, licensing or minor alteration of existing structures, facilities, mechanical equipment or topographical features, involving negligible nor no expansion of the existing or former use. This acquisition would result in an adaptive reuse of the existing buildings involving the interior modifications to configure units by moving partitions, plumbing and electrical conveyances, and performing any required interior restoration to meet current public health and safety standards. Here, exterior upgrades to the buildings were already completed and the anticipated interior work as described, would involve converting the 112-bed facility into a 100% affordable senior housing project with approximately 58-67 apartment units, which is not expansion of the former use.
ALTERNATIVES
Alternative 1: Approve the Resolution of Appropriation for $12M and authorize the Executive Director to Execute the Purchase and Sale Agreement with Berg Senior Services, LLC and authorize staff to conduct a streamlined RFQ process.
Alternative 2: Approve the Resolution of Appropriation for $12M and authorize the Executive Director to Execute the Purchase and Sale Agreement with Berg Senior Services, LLC and direct staff to conduct a comprehensive RFQ process.
Alternative 3: Not approve the Resolution of Appropriation for $12M or authorize the Executive Director to Execute the Purchase and Sale Agreement with Berg Senior Services, LLC.
Alternative 4: Consider any other alternatives not considered by staff. Staff would analyze the Housing Authority’s direction and provide an appropriate response. 6 of 38
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ADMINISTRATIVE ACTION
Prepared by:
Michael Fortney, Principal Housing Project Manager
Peter Zovak, Assistant Director of Community Development Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
1. Site map and aerial
2. Draft Purchase and Sale Agreement
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RESOLUTION NO. ___________
RESOLUTION OF THE COUNCIL OF THE CITY OF GLENDALE
MAKING AN APPROPRIATION
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF GLENDALE:
SECTION 1: That the sum of $12,000,000 is hereby appropriated and/or transferred from the following accounts to the following accounts:
ACCOUNTS DESCRIPTION FROM TO
51100-4011-CDD-0020-P0000-
T0000-F0000-0000-0000-
CDD00487AN
51100-4011-CDD-0020-P0000-
T0000-F0000-0000-0000-
CDD00914BN
24214-2130-CDD-0020-P0000-
T0000-F0000-0000-0000-
51100-2130-CDD-0020-P0000-
T0000-F0000-0000-0000-
CDD00914AN
Land & Land Rights, Capital Improvement
Fund (Measure S), Community
Development, Project,
Measure S Balance Project
Land & Land Rights, Capital Improvement
Fund (Measure S), Community
Development, Project, 426 Piedmont Land
Acquisition (Measure S CIP)
Undesignated Fund Balance, Low & Mod
Income Housing Asset Fund, Community
Development, Project,
Land & Land Rights, Low & Mod Income
Housing Asset Fund, Community
Development, Project, 426 Piedmont Land
Acquisition (Low&Mod)
$6,220,000
$5,780,000
$6,220,000
$5,780,000
To appropriate funding for Piedmont Affordable Housing Land Acquisition project.
SECTION 2: The Director of Finance / Information Technology is authorized to make such other revisions, individual appropriation line-items, changes in summaries, fund totals, grand totals, and other portions of the budget document as necessary to reflect and implement the changes specified in this resolution.
SECTION 3: The City Clerk shall certify to the adoption of this Resolution.
Adopted this________day of _______________, 2022.
_______________________________
Mayor
ATTEST:
___________________________________
City Clerk 08/01/2022
12,000,000
Director of Finance / Information Technology
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STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS
CITY OF GLENDALE )
I, Suzie Abajian, City Clerk of the City of Glendale, do hereby certify that the foregoing Resolution No._________was adopted by the Council of the City of Glendale, California, at a regular meeting held on the__________ day of _______________, 2022, and that the same was adopted by the following vote:
Ayes:
Noes:
Absent:
Abstain:
________________________________
City Clerk
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RESOLUTION NO. ________
A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF GLENDALE
APPROVING A PURCHASE AND SALE AGREEMENT BETWEEN THE HOUSING
AUTHORITY AND BERG SENIOR SERVICES, LLC FOR THE ACQUISITION OF PROPERTY LOCATED AT 426 PIEDMONT AVENUE AND 507 NARANJA DRIVE
WHEREAS, the Housing Authority of the City of Glendale (“Authority”) is committed to providing decent, safe and affordable housing; and
WHEREAS, the City of Glendale and the Authority have adopted the promotion of neighborhood revitalization and affordable housing development as one of their priority goals; and
WHEREAS, the Authority has negotiated a Purchase and Sale Agreement (“Agreement”) with Berg Senior Services for the acquisition of real property at 426 Piedmont Avenue and 507 Naranja Avenue (“Property”), for a purchase price of $11,900,000; and WHEREAS, the Authority finds that the purchase price of $11,900,000 for the Property represents the Authority’s acquisition costs (at fair market value).
NOW THEREFORE BE IT RESOLVED BY THE HOUSING AUTHORITY OF THE CITY OF GLENDALE THAT:
SECTION 1.The Authority hereby authorizes the purchase of the Property for the purchase price of $11,900,000, as set forth in the Agreement; and SECTION 2. The Authority hereby authorizes the Executive Director, or his designee, to approve and execute the Agreement in substantially the form set forth as Exhibit 2 to the Joint Report to the Housing Authority and the City Council dated August 9, 2022, any and all documents necessary to fulfill the acquisition described above, and any other documents necessary to implement this resolution herein; and
SECTION 3. The Authority hereby authorizes the Executive Director, or his designee, to incur all necessary costs to consummate the transaction set forth in the Agreement, including any necessary escrow and title costs reasonably necessary to close the acquisition of the Property; and
SECTION 4. The Agreement shall be in a form approved by and acceptable to the City Attorney or his designee.
Adopted this day of______________________, 2022. ___________________________
Chair of the Housing Authority
Attest:
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____________________________________________
Clerk of the Housing Authority of the City of Glendale
STATE OF CALIFORNIA )
) SS
COUNTY OF LOS ANGELES )
I, Dr. Suzie Abajian, Clerk of the Housing Authority of the City of Glendale, do hereby certify that the foregoing Resolution No.____________ was duly adopted by the Housing Authority of the City of Glendale, at a joint meeting of the Housing Authority and the Council of the City of Glendale held on the _______ day of ________________________, 2022, and that the same was adopted by the following vote:
Ayes:
Noes:
Absent:
Abstain:
_________________________________________
Clerk of the Housing Authority
of the City of Glendale
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C:\inetpub\wwwroot\Glendale\temp\JointCCHA_08092022_Motion_1c.pdf MOTION
Moved by Housing Authority Member ____________________________, seconded by Housing Authority Member ___________________________, that the Housing Authority hereby authorizes a streamlined RFQ process for developer selection for a proposed affordable housing development at 426 Piedmont Avenue and 507 Naranja Drive, as outlined in the Joint Report to the Council and Housing Authority dated August 9, 2022.
Vote as follows:
Ayes:
Noes:
Absent:
Abstain:
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Exhibit 1
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#4867-6008-0428.3
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426 Piedmont PSA
08.03.22 AGREEMENT FOR PURCHASE AND SALE OF
REAL PROPERTY AND ESCROW INSTRUCTIONS
This AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS (“Agreement”) is entered into as of August ___, 2022 (“Effective Date”) by and between the HOUSING AUTHORITY OF THE CITY OF GLENDALE, a public body, corporate and politic (“Buyer”), and BERG SENIOR SERVICES, LLC, a California limited liability company (“Seller”), for acquisition by Buyer of certain real property hereinafter described.
RECITALS
A. Buyer desires to acquire all of Seller’s rights, interest, and title in and to Seller’s real property, consisting of two adjacent lots more commonly known as 426 Piedmont Avenue and 507 Naranja Drive, Glendale, California, APNs: 5645-007-021 and 5645-007-006, which is more particularly described in Exhibit “A”, and all related improvements and appurtenances, and certain related personal and intangible property (collectively, the “Property”).
B. The Property consists of two parcels of improved real property. The first parcel (APN 5645-007-021) is approximately 35,059 square feet (.8 acres) and is improved with an approximately 36,266 square foot two-story building and subterranean parking garage with approximately 46 parking spaces (collectively, “Building 1”). The second parcel (APN 5645- 007-006) is approximately 4,119 square feet (.09 acres) and is improved with an approximately 8,797 square foot three-story building called the Annex (“Building 2”), which connects to Building
1. C. Seller desires to sell to Buyer and Buyer desires to acquire from Seller the Property, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, with reference to the foregoing Recitals which are incorporated herein by this reference, and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Seller agrees to sell and Buyer agrees to purchase the Property described below under the terms and conditions of this Agreement.
1. Agreement of Sale
1.1 Description of the Property. The Property to be sold and purchased under this Agreement consists of all of the following:
1.2.1 Land. The real property described in Exhibit “A” (“Land”).
1.2.2 Appurtenances. All privileges, rights, and easements appurtenant to the Land, vested in Seller including without limitation all minerals, oil, gas, and other hydrocarbon substances on and under the Land; all development rights, air rights, water, water rights, and water stock vested in Seller and relating to the Land; all right, title and interest of Seller in and to any streets, alleys passages, water and sewer taps, sanitary or storm drain capacity or reservations and right under utility easements, and other easements and 15 of 38
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08.03.22 other rights-of-way including in, adjacent to or used in connection with the beneficial use and enjoyment of the Land (collectively, the “Appurtenances”).
1.2.3 Improvements. Building 1 and Building 2 described in Exhibit “B” and all other buildings, structures, fences, parking areas, or improvements located upon the Land or upon the improvements, including fixtures, systems, and equipment attached to the Land or improvements and used in connection with the operation or occupancy of the Land and all improvements (collectively, the “Improvements”).
2. Purchase Price
2.1 Amount. The full purchase price (“Purchase Price”) for the Property is ELEVEN MILLION NINE HUNDRED THOUSAND DOLLARS ($11,900,000) payable by Buyer through escrow (“Escrow”) to Seller. Payment to Seller will be in cash at closing. The Purchase Price includes any and all claims Seller may be entitled to including, without limitation, any relocation benefits or claims related to investigations, planning, pre-condemnation activity, or acquisition by Buyer, including, but not limited to, value of real property rights, severance damages, value of improvements pertaining to realty, if any, costs for pre-condemnation damages, interest, costs, disbursements and expenses incurred in connection with the acquisition of the Property (except for costs to be paid by Buyer pursuant to this Agreement or in connection with the preparation of this Agreement) and improvements pertaining to realty, if any, and subsequent removal of any items retained by Seller.
2.2 Timing of Payment. Buyer agrees to pay, or cause to be paid, the Purchase Price to Seller through the Escrow by depositing a cashier’s check or executing a money wire transfer payable to Commonwealth Land Title Company (“Escrow Holder”), which shall be delivered to the Escrow Holder at least one (1) business day before the Closing Date.
3. Buyer’s Contingencies
3.1 Seller’s Delivery of Documents. Buyer’s obligation to purchase the Property is expressly conditioned on Seller’s delivering to Buyer all documents listed below in this Section 3.1 (collectively “Preliminary Documents”) with the exception of the hereinafter Title Report which Buyer shall obtain.
3.1.1 Preliminary Report. Buyer will obtain a preliminary report (the “Preliminary Report”) dated no earlier than thirty (30) days before the Effective Date covering the Land and issued by Commonwealth Land Title Company (the “Title Company”), together with a legible copy of all exceptions to title shown in the Preliminary Report, including each document, map, and survey referred to in the Preliminary Report.
3.1.2 Agreements. Copies of all written easements, covenants, restrictions, 16 of 38
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08.03.22 agreements, service contracts, and other documents that affect the Property, in the Seller’s possession or reasonably obtainable by Seller, including without limitation, any agreements relating to insurance, service, operation, repair, supply, advertising, promotion, sale, leasing, or management of the Property or the use of the common facilities.
3.1.3 Leases. Copies of any licenses, leases, rights of first offer, and/or options to purchase, if any (and any modifications or amendments to them) related to the Property.
3.1.4 Materials Related to Condition of the Property. Any environmental impact reports, complaints or notices of the presence of hazardous materials on the Property, geological surveys, soil tests, engineering reports, inspection results, complaints, or notices received regarding the safety of the Property.
3.1.5 Litigation Materials. All materials related to pending or threatened litigation during the period of Seller’s ownership of the Property, involving the Property or the Seller on account of its ownership of the Property, including correspondence, complaints, court orders, settlements, and judgments.
The Preliminary Documents shall not include any books, records, documents, or information on the corporate, financial, and accounting records of the operations of Seller as an entity (as opposed to records concerning the Property).
3.2 Buyer’s Approval of Preliminary Documents. Buyer’s obligation to purchase the Property is expressly conditioned on its approval, in its sole discretion, of the matters disclosed in the Preliminary Documents. Buyer shall have the period of fifteen (15) days from the Effective Date (the “Contingency Date”) to review the Preliminary Documents to decide whether to approve the matters disclosed in the Preliminary Documents. On or before the Contingency Date, Buyer shall deliver written notice to Seller either accepting the matters disclosed in the Preliminary Documents or terminating this Agreement. If Buyer fails to give such notice on or before the Contingency Date, Buyer shall be deemed to have elected to not terminate this Agreement.
3.3 Approval of Title. Buyer’s obligation to purchase the Property is expressly conditioned on Buyer’s approval of the condition of title of the Property in accordance with the following procedure:
3.3.1 Permitted Exceptions. The following exceptions shown on the Preliminary Report (hereinafter referred to collectively as the “Permitted Exceptions”) are approved by Buyer: (a) exceptions for a lien for local real estate taxes and assessments not yet due or payable, (b) the standard preprinted exceptions and exclusions of the Title Company, and (c) any other exception on Schedule B of the Preliminary Report which Buyer does not 17 of 38
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08.03.22 object to by written notice to Seller prior to the Contingency Date (the “Buyer’s Title Notice”), or as otherwise provided in this section. On or before the Contingency Date, Buyer shall deliver Buyer’s Title Notice to Seller identifying any title exceptions in the Preliminary Report that Buyer objects to and such title exceptions shall each be a “Title Objection.” If Buyer fails to deliver Buyer’s Title Notice within the time specified in this Section, Buyer shall be deemed not to have objected to each title exception shown in the Preliminary Report that is not otherwise a Permitted Exception.
3.3.2 Title Objections. With respect to any Title Objection, Seller shall have five (5) days after delivery of Buyer’s Title Notice, to give notice to Buyer in writing (the “Seller’s Title Notice”), stating either (a) the manner in which Seller will remove or cure such Title Objection, or (b) that Seller shall not remove or cure such Title Objection. If Seller fails to deliver Seller’s title Notice within the time specified in this Section 3.3.2, Seller shall be deemed to have elected not to cure such Title Objection.
3.3.3 Seller Elects Not to Cure. If Seller elects not to cure or remove a Title Objection (or is deemed to have so elected), then Buyer shall have five (5) days after delivery of the Seller’s Title Notice to deliver a written notice to Seller (the “Buyer’s Election Notice”) of Buyer’s election either to a (a) proceed with the purchase of the Property, waive such Title Objection, and accept the exception shown in the Preliminary Report as a Permitted Exception, or (b) terminate this Agreement. If Buyer fails to deliver Buyer’s Election Notice within the time specified in this Section, Buyer shall be deemed to have elected to not terminate this Agreement.
3.3.4 Nonmonetary Cure. If Seller elects to cure or remove a Title Objection, but the method specified for removing or curing the Title Objection is other than the payment of a specified sum of money, then Buyer shall have five (5) days after delivery of the Seller’s Title Notice to deliver Buyer’s election Notice specifying whether it elects to (a) proceed with the purchase of the Property, subject to Seller’s removal of the Title Objection, or (b) terminate this Agreement. If Buyer fails to deliver Buyer’s Election Notice within the time specified in this Section 3.3.4, Buyer shall be deemed to have elected to not terminate this Agreement.
3.3.5 Additional Encumbrances. If any encumbrance or other exception to title arises or is discovered after the delivery of the Preliminary Report (an “Additional Encumbrance”), the party discovering such Additional Encumbrance shall promptly give written notice to the other. No later than five (5) days after delivery of the notice of such Additional Encumbrance, Buyer shall deliver a new Buyer’s Title Notice to Seller specifying whether the Additional Encumbrance is a Title Objection or a Permitted Exception.
If Buyer objects to the Additional Encumbrance, the parties shall proceed in the same manner as set forth above for Title Objections arising from the 18 of 38
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08.03.22 Preliminary Report. If Buyer fails to deliver Buyer’s Election Notice within the Time specified in this section, Buyer shall be deemed to have elected to not terminate this Agreement.
3.3.6 Seller’s Failure to Remove Title Objection. If Seller elects to cure or remove a Title Objection and fails to do so at least five (5) days before the Closing Date or fails to show that it will be able to do so on Closing, then Seller shall be in default under this Agreement, and Buyer shall have all its rights and remedies provided by this Agreement. Seller shall not be in default if Seller has diligently attempted to cure/remove said objection and Buyer agrees to extend the Closing by a reasonable amount of time to allow Seller to cure or remove the Objections.
3.4 Review of Preliminary Documents and Physical Condition.
3.4.1 Due Diligence. Buyer’s obligation to purchase the Property is expressly conditioned on its approval, in its sole discretion, of the condition of the Property and all other matters concerning the Property, including without limitation economic, financial, and accounting matters relating to or affecting the Property or its value, and the physical and environmental condition of the Property. Buyer shall have until the Contingency Date to conduct or complete review of the Buyer prepared Phase I Environmental Site Assessment and other such investigations as Buyer may chose (the “Due Diligence”) to determine, in its sole discretion, whether this contingency is met. On or before the Contingency Date, Buyer shall deliver written notice to Seller accepting the Property or terminating this Agreement. If Buyer fails to give such notice on or before the Contingency Date, Buyer shall be deemed to have elected to not terminate this Agreement.
3.4.2 Access to Property. As part of its Due Diligence, Buyer may investigate economic, financial, and accounting matters relating to or affecting the Property or its value, and conduct inspections, tests, and studies with respect to the physical and environmental condition of the Property. Buyer and Buyer’s consultants, agents, engineers, inspectors, contractors, and employees (hereinafter referred to collectively as “Buyer’s Representatives”) shall be given reasonable access to the Property during regular business hours for the purpose of performing such Due Diligence.
Buyer shall undertake the Due Diligence at its sole cost and expense, except as provided in herein. Buyer shall, except to the extent arising from Seller’s willful misconduct or gross negligence, indemnify, defend with counsel reasonably acceptable to Seller, and hold Seller harmless from all claims (including claims of lien for work or labor performed or materials or supplies furnished), demands, liabilities, losses, damages, costs, fees, and expenses, including Seller’s reasonable attorney fees, costs, and expenses, arising from the acts or activities of Buyer or Buyer’s Representatives in, on, or about the Property during or arising in connection with Buyer’s 19 of 38
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08.03.22 inspections of the Property.
4. Seller’s Preclosing Covenants
4.1 No Amendment or Agreements. On or after the Effective Date, Seller shall not (a) amend or waive any right under any Preliminary Document or (b) enter into any lease or other agreement of any type affecting the Property that would survive the Closing Date, without Buyer’s prior written consent in Buyer’s sole discretion.
4.2 No Marketing. Seller agrees not to market, show, or list the Property to any other prospective buyer during the term of this Agreement.
4.3 Access to Property. Buyer and Buyer’s Representatives, agents, and designees shall have the right at all reasonable times until Closing to enter the Property as provided herein.
4.4 Notification. Seller shall promptly notify Buyer of any material change in any condition with respect to the Property or of any material event or circumstance that makes any representation or warranty of Seller under this Agreement untrue or misleading.
4.5 Service Contracts. Seller covenants and agrees that before the Closing Date it shall terminate all service contracts related to the Property except any that Buyer has specifically elected to assume.
5. Representations and Warranties
5.1 Seller’s Representations and Warranties. Seller hereby represents and warrants to Buyer that each of the following is true as of the Effective Date and the Closing Date.
5.1.1 Intentionally deleted.
5.1.2 Compliance with Laws. The Property does not violate any applicable laws, ordinances, rules, regulations, judgments, order, or covenants, conditions and restrictions, whether federal, state, local, foreign or private. Buyer acknowledges that the Building has been partially renovated and construction has not been completed. See also Section 5.4 concerning the “as is” condition of the Property.
5.1.3 Documents. All Preliminary Documents delivered to Buyer under Section 3, and all other documents delivered to Buyer by or on behalf of Seller, are true, correct, and complete copies of what they purport to be. The documents delivered by Seller to Buyer are all the material documents concerning the Property in Seller’s possession or under its control. Seller makes no warranties or 20 of 38
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08.03.22 representations as to the accuracy of documents not prepared by Seller, but Seller represents that it has no actual knowledge of any inaccuracy of any of such documents. Delivery of digital or electronic versions of Preliminary Documents shall be accepted as delivery of the documents.
5.1.4 Litigation. There is no pending litigation or threatened litigation by any governmental authority or person against Seller relating to the Property that might, if it and all other pending and threatened litigation were adversely determined, result in a material adverse change in the Property or its operation or that challenges the validity of or otherwise materially adversely affects the transaction contemplated by this Agreement.
5.1.5 Other Proceedings. There are no attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization, or other proceedings pending or threatened against Seller or Seller’s interest in the Property, nor are any such proceedings contemplated by Seller.
5.1.6 Due Authorization. This Agreement and the performance of Seller’s obligations under it and all documents executed by Seller that are to be delivered to Buyer at the Closing are, or on the Closing Date shall be, duly authorized, executed, and delivered by Seller and are, or at the Closing Date shall be, binding obligations of Seller, and do not, and on the Closing Date shall not, violate any provision of any agreement or judicial order to which Seller is a party or to which Seller or the Property is subject. No additional consent of any partner, shareholder, creditor, investor, judicial or administrative body, government agency, or other party is required for Seller to enter into or to perform Seller’s obligations under this Agreement.
5.1.7 Title to the Property. Seller agrees to convey the Property to Buyer by Grant Deed. There are no unrecorded or undisclosed legal or equitable interest in the Property owned or claimed by anyone other than Seller. At the Closing, no person or entity will have any right to possession of the Property. There are no unsatisfied mechanics’ or materialmen’s lien rights on the Property. No assessment, lien, or bond encumbers the Property, and no governmental authority has undertaken an action that could give rise to an assessment lien affecting the Property.
5.1.8 Personal Property. At the Closing, no person or entity will have any right to possession of any personal property, if any, included in the Purchase Price nor knowledge of any liens or encumbrances affecting such personal property. Without limiting the generality of 21 of 38
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08.03.22 the foregoing, the chandeliers located in the 2 nd floor community room in Building 1 shall remain at Closing as personal property conveyed to Buyer. Seller shall have the right to remove the piano that is in the dining room of Building 1 prior to Closing.
5.1.9 Hazardous Materials. “Hazardous Materials” means any substance, material, or waste which is or becomes, regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a “hazardous waste,” “extremely hazardous waste,” or “restricted hazardous waste” under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a “hazardous substance” under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum and products thereof, (vi) asbestos, (vii) polychlorinated biphenyls, (viii) methyl tert butyl ether, (ix) listed or defined as “hazardous” under Article 11 of Title 22 of the California Code of Regulations, Division 4.5, (x) designated as “hazardous substances” pursuant to Section 311 of the Clean Water Act (33 U.S.C. section 1317), (xi) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. section 6901 et seq. (42 U.S.C. section 6903) or (xii) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. section 9601 et seq.
To Seller’s knowledge there are no Hazardous Materials located on, in, or under the Property; there has been no release, storage, treatment, generation, or disposal of any Hazardous Materials on, under, or from the Property; and no hazardous materials have been transported from the Property.
Notwithstanding the foregoing, Buyer acknowledges that Seller has removed asbestos-containing material from the Property. Seller represents and warrants that such removal was done in accordance with all applicable laws.
5.1.10 Foreign Person. Seller is not a foreign person and is a “United 22 of 38
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08.03.22 States Person” as such term is defined in §7701(a)(30) of the Internal Revenue Code of 1986, as amended.
5.2 Buyer’s Representations and Warranties. Buyer hereby warrants and represents that, as of the Effective Date, this Agreement and the performance of Buyer’s obligations under it and all the documents executed by Buyer that are to be delivered to Seller at the Closing are, or on the Closing Date shall be, duly authorized, executed, and delivered by Buyer and are, or at the Closing Date shall be, legal, valid, and binding obligations of buyer, and do not, and on the Closing Date shall not, violate any provisions of any agreement or judicial order to which Buyer is a party or to which Buyer or the Property is subject. No additional consent of any partner, shareholder, creditor, investor, judicial or administrative body, government agency, or other party is required for Buyer to enter into or to perform Buyer’s obligations under this Agreement. Buyer is a governmental entity, a body corporate and politic, and is qualified to do business in the State of California.
5.3 Effect of Representations and Warranties. Each representation and warranty in this Agreement (a) is material and being relied upon by the party to which the representation and warranty is made; (b) is true in all respects as of the Effective Date; (c) shall be true in all respects on the Closing Date; and (d) shall survive the Closing for a period of one (1) year following Closing Date (the “Survival Period”).
From time to time after the Effective Date through the Closing, Seller or Buyer may deliver schedules or other documents that update or otherwise modify its representations and warranties in this Agreement to reflect matters, if any, that arise after the Effective Date and, in such event, its representations and warranties will be deemed to have been remade, as of the date of such delivery, with the changes, if any, set forth in such updated schedules or other documents. Prior to the Closing, Buyer shall have five (5) days after its receipt of written notice of a change of a Seller representation and warranty from Seller within which to terminate this Agreement. If Buyer does not terminate this Agreement in said 5-day period, Buyer shall be deemed to have elected to not terminate this Agreement. If Seller’s disclosure is made within five (5) days of, or at, the Closing, then Buyer may postpone the Closing for the relevant number of days to ensure it has a full five (5) day period during which it may terminate hereunder.
5.4 “As is” Purchase. THE PARTIES HEREBY ACKNOWLEDGE AND AGREE AS FOLLOWS: (A) BUYER IS A SOPHISTICATED BUYER WHO IS FAMILIAR WITH THIS TYPE OF PROPERTY; (B) EXCEPT AS MAY BE
SPECIFICALLY SET FORTH IN THIS AGREEMENT, NEITHER SELLER
NOR ANY OF ITS AGENTS, REPRESENTATIVES, MEMBERS, OFFICERS,
OR EMPLOYEES HAS MADE OR WILL MAKE ANY REPRESENTATIONS
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08.03.22 OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY;
AND (C) THE PROPERTY IS BEING SOLD TO BUYER IN ITS PRESENT “AS IS, WHERE IS” CONDITION “WITH ALL FAULTS.”
SUBJECT TO THE TERMS HEREOF, BUYER WILL BE AFFORDED THE
OPPORTUNITY TO MAKE ANY AND ALL INSPECTIONS OF THE
PROPERTY AND SUCH RELATED MATTERS AS BUYER MAY
REASONABLY DESIRE AND, ACCORDINGLY, EXCEPT AS MAY BE
SPECIFICALLY SET FORTH IN THIS AGREEMENT, BUYER WILL RELY
SOLELY ON ITS OWN DUE DILIGENCE AND INVESTIGATIONS IN
PURCHASING THE PROPERTY.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING AND
EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH IN THIS
AGREEMENT, NEITHER SELLER, NOR ANY OF ITS AGENTS,
REPRESENTATIVES, MEMBERS, OFFICERS, OR EMPLOYEES HAS
MADE OR WILL MAKE ANY REPRESENTATIONS OR WARRANTIES,
WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, WITH RESPECT
TO THE ECONOMIC VALUE OF THE PROPERTY, ADEQUACY OF
UTILITIES SERVING THE PROPERTY, THE FITNESS OR SUITABILITY OF THE PROPERTY FOR BUYER’S INTENDED USES OR THE PRESENT USE
OF THE PROPERTY, OR THE PHYSICAL CONDITION, SIZE, SQUARE
FOOTAGE, DIMENSIONS OF THE PROPERTY OR ANY PORTION
THEREOF, ITS COMPLIANCE WITH APPLICABLE STATUTES, LAWS,
ORDINANCES, ORDERS, RULES, REGULATIONS OR REQUIREMENTS
OF ALL GOVERNMENTAL AUTHORITIES RELATING TO OCCUPANCY,
LEASING, ZONING, SUBDIVISION, STRUCTURAL MATTERS, SEISMIC
MATTERS, PLUMBING, ELECTRICAL, HVAC, REMOVAL OF
ARCHITECTURAL OR COMMUNICATIONS BARRIERS, PLANNING,
BUILDING, FIRE SAFETY, OR HEALTH OR ENVIRONMENTAL MATTERS (INCLUDING, WITHOUT LIMITATION, THE PRESENCE OR ABSENCE OF ASBESTOS OR TOXIC OR HAZARDOUS SUBSTANCES OR MATERIALS).
Buyer has initialed this Section 5.4 to further indicate its awareness and acceptance of each and every provision of this Section 5.4. The provisions of this Section 5.4 shall survive the Closing.
_____________
Buyer’s Initials
5.5 Intentionally Omitted.
5.6 Waiver of Relocation Benefits. Seller, in consideration of the performance by Buyer of its obligations hereunder and the payment to Seller of the Purchase Price and other consideration provided herein for benefit of Seller, expressly acknowledges and agrees that the Purchase Price and other consideration provided in this Agreement for the benefit of Seller represents an all-inclusive settlement with Seller and is full payment for the acquisition of all property interests involved and satisfies any and all other payments that may be required by law arising out of the acquisition, displacement, 24 of 38
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08.03.22 and relocation that is the subject matter of this Agreement or that may arise from this Agreement, and specifically includes, but is not limited to, all interests of Seller in the Property and all or any portion thereof and/or interest therein; and any and all Acquisition and Relocation Benefits as defined herein.
For purposes of this Agreement, the term “Acquisition and Relocation Benefits” shall mean: just compensation for the acquisition, taking or threatened taking of property interests in the Property (including land, building, fixtures, equipment, improvements and loss of goodwill); costs for payment of goodwill or loss of goodwill as provided under any applicable law; and any additional costs incurred to settle or pay claims of inverse condemnation, or judgments in inverse condemnation; costs for relocation assistance and benefits pursuant to all applicable state and local relocation laws, including without limitation, the California Relocation Assistance Law (Government Code §7260 et seq.) and the implementing regulations thereto and local implementing regulations thereto, and all applicable federal relocation laws, including, without limitation, the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. §4655, and 49 CFR part 24), acquisitions and eminent domain laws (Government Code §7267 et seq. and Code of Civil Procedure §1240.000 et seq.) and any other applicable federal, state or local enactment, regulation or practice providing for relocation assistance and benefits, acquisition and/or compensation for property interests (including without limitation goodwill and furnishings, fixtures and equipment, leasehold bonus value, and moving expenses); and any and all related claims.
Without limiting the foregoing, the amount of the Purchase Price and other consideration set forth in the Agreement has been determined based upon negotiations at arm’s-length and is in lieu of any and all amounts required or that may be required to be paid for Acquisition and Relocation Benefits. Seller, on behalf of itself and any employees, agents, contractors, agents, officers, and directors, hereby forever knowingly, intelligently and voluntarily waives, disclaims and releases Buyer from any claims for Acquisition and Relocation Benefits.
SELLER, ON BEHALF OF ITSELF AND ANY EMPLOYEES, AGENTS,
CONTRACTORS, AGENTS, OFFICERS, AND DIRECTORS, EXPRESSLY WAIVES IT RIGHTS GRANTED UNDER CALIFORNIA CIVIL CODE §1542 AND ANY
OTHER PROVISION OF LAW THAT PROVIDES A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS THAT A SELLER DOES NOT KNOW OR SUSPECT TO EXIST IN SELLER’S FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY IT MUST HAVE MATERIALLY AFFECTED ITS
AGREEMENT TO RELEASE BUYER.
Seller has initialed this Section 5.6 to further indicate its awareness and acceptance of each and every provision of this Section 5.6. The provisions of this Section 5.6 shall survive the Closing.
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Seller’s Initials
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08.03.22 5.7. Energy Star Report. Seller shall use good faith commercially reasonable efforts to deliver to Buyer prior to Closing all disclosures and other documentation or information for the Property required under Section 25402.10 of the California Public Resources Code and its implementing regulations. Buyer acknowledges that Seller makes no claims, representations or warranties regarding the current or future Energy Star profile of the Property or any such disclosures or other documentation or information relating thereto. Seller shall not be in default hereunder, nor shall it be a condition precedent to Buyer’s obligations to consummate the transactions contemplated under this Agreement, if Seller fails to deliver Buyer any such disclosure or other document or information contemplated under this Section prior to the Closing (and in no event shall Buyer have any right to terminate this Agreement as a result thereof).
5.8. California Disclosure Report. Seller acknowledges that California Civil Code Sections 1103 et seq., California Government Code Sections 8589.3, 8589.4 and 51183.5, California Public Resources Code Sections 2621.9, 2694 and 4136 (collectively, the Disclosure Statutes) provide that a seller of real property must make certain disclosures regarding certain natural hazards potentially affecting the real property, as more particularly provided therein. Seller shall promptly order a Natural Hazard Disclosure Report for the Property to be certified to Buyer (the Natural Hazard Report) and shall deliver the Natural Hazard Report to Buyer promptly upon Seller’s receipt thereof. Seller shall use its commercially reasonable efforts to cause the Natural Hazard Report to be delivered to Buyer. Buyer hereby agrees as follows with respect to the Disclosure Statutes and the Natural Hazard Report: (i) the delivery of the Natural Hazard Report to Buyer as provided above shall be deemed to satisfy all obligations and requirements of Seller under the Disclosure Statutes; (ii) subject to the provisions of California Civil Code Section 1103.4, Seller shall not be liable for any error or inaccuracy in, or omission from, the information in the Natural Hazard Report provided that Seller provides to Buyer the full and complete Natural Hazard Report; (iii) the Natural Hazard Report is being provided by Seller for purposes of complying with the Disclosure Statutes and shall not be deemed to constitute a representation or warranty by Seller as to the presence or absence in, at or around the Property of the conditions that are the subject of the Disclosure Statutes; and (iv) the Natural Hazard Report is for Seller and Buyer only and is not for the benefit of, or to be used for any purpose by, any other party, including, without limitation, insurance companies, lenders, or governmental agencies.
6. Closing Conditions.
6.1 Buyer’s Closing Conditions. All obligations of Buyer under this Agreement are subject to the fulfillment, before or at the Closing, of each of the following conditions (collectively, the “Buyer’s Closing Conditions”). Buyer’s Closing Conditions are solely for Buyer’s benefit and any or all of the Buyer’s Closing Conditions may be waived in writing by Buyer in whole or in part without prior notice.
6.1.1 Title. It is a Buyer’s Closing Condition that, on the Closing Date, Seller convey to Buyer fee simple title to the Land free and clear of all liens and encumbrances except the Permitted Exceptions, by execution and delivery of a grant deed (hereinafter referred to as the “Grant Deed”). Seller must deliver to the Title Company such instruments, documents, releases, and agreements and must perform such other acts as Title Company may 26 of 38
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08.03.22 reasonably require in order to issue to Buyer a C.L.T.A. Owner’s policy of title insurance, with coverage in the amount of the Purchase Price, showing fee simple title to the Land vested in Buyer, with title as set forth in this Agreement (the “Title Policy”). Seller shall pay the cost of the Buyer’s C.L.T.A. Title Policy. Buyer may elect to obtain additional endorsements or an A.L.T.A. policy at Buyer’s cost, including without limitation any survey that may be required. Indemnification of the Title Company to induce it to insure any otherwise unpermitted exception to title shall not be allowed except with Buyer’s prior written consent after full disclosure to Buyer of the nature and substance of such exception and indemnity, which consent shall not be unreasonably withheld by Buyer for exceptions not material to marketable title to the Land.
6.1.2 Liens. Buyer must have received a certified report, with copies of all documents, satisfactory to Buyer and Buyer’s counsel, from the Title Company or a reputable lien search company indicating that there are not personal property liens of record on file with the Secretary of State of California, other than those that will be discharged at the Closing, as of a date no more than five (5) business days before the Closing Date, and a confirmation dated no more than three (3) business days before the Closing Date that no further liens have been filed since the date of the certified report. Also, Buyer must have received a verified report, satisfactory to the Buyer and Buyer’s counsel, from the Title Company or a reputable lien search company, indicating that there are not federal or state tax liens of record against the Property and on file with the respective agencies as of a date no more than ten (10) business days before the Closing Date.
6.1.3. Seller’s Representations, Warranties, and Covenants. The representations and warranties of Seller in this Agreement must be true in all material respects on and as of the Closing Date with the same effect as if such representations and warranties had been made on and as of the Closing Date.
Seller must have performed and complied with all covenants, agreements, and conditions required by this Agreement to be performed or complied with by it before or on the Closing Date. Buyer must have been furnished with a certificate of Seller dated as of the Closing Date, certifying to the fulfillment of the foregoing conditions. Such certificate shall have the effect of a representation and warranty of Seller made on and as of the Closing Date.
6.1.4 Closing Documents and Funds. Seller must have delivered to Escrow the documents and funds it is required to deliver through Escrow at Closing.
6.1.5 Physical Condition. The physical condition of the Property must be substantially the same on the Closing Date as on the Effective Date, reasonable wear and tear excepted, and changes and/or damage to the Property as a result of Buyer’s activities on the Property excepted. 27 of 38
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08.03.22 6.1.6 Adverse Actions. There shall exist no other actions, suits, arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization, or other proceedings, pending or threatened, against the Seller or regarding the Property that would materially and adversely affect the Seller’s ability to perform its obligations under this Agreement or Buyer’s title to the Property and there shall exist no pending or threatened action, suit or proceeding regarding the Seller before or by any court or administrative agency that seeks to restrain or prohibit, or to obtain damages or a discovery order with respect to, this Agreement or the consummation of the transactions contemplated by this Agreement.
6.1.7 Hazardous Material. No Hazardous Materials shall have been discovered on the Property after the Contingency Date that were not previously disclosed to Buyer or discovered by Buyer before the Contingency Date.
6.1.8 No Material Changes. No event shall have occurred, nor shall any condition have arisen after the Contingency Date, that as of the Closing Date materially and adversely affect all or any part of the Property or its current or prospective operation, use, value, income, expenses, or occupancy.
6.1.9 Consents. All necessary agreements and consents of all parties to consummate the transaction contemplated by this Agreement shall have been obtained and furnished by Seller to Buyer.
6.2 Seller’s Closing Conditions. Seller’s obligation to sell the Property is expressly conditioned on the fulfillment of each condition precedent at or before the Closing (collectively, the “Seller’s Closing Conditions”). Seller’s Closing Conditions are solely for Sellers’ benefit and any of Seller’s Closing Conditions may be waived in writing by Seller in whole or in part without prior notice.
6.2.1 Approval of Contingencies. It is a Seller’s Closing Condition that Buyer must have acknowledged its approval or waiver of all contingencies as required under this Agreement.
6.2.2. Purchase Price. Buyer must have delivered the Purchase Price to Escrow.
6.2.3. Closing Documents and Funds. Buyer must have delivered to Escrow the documents and funds it is required to deliver through Escrow at Closing.
6.2.4. Buyer’s Representations, Warranties, and Covenants. The representations and warranties of Buyer in this Agreement must be true in all material respects on and as of the Closing Date with the same effect as if such representations and warranties had been made on and as of the Closing Date.
Buyer must have performed and complied with all covenants, agreements, and conditions required by this Agreement to be performed or complied with by it before or on the Closing Date. Seller must have been furnished with a certificate of Buyer dated as of the Closing Date, certifying to the 28 of 38
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08.03.22 fulfillment of the foregoing conditions such certificate shall have the effect of a representation and warranty of Buyer made on and as of the Closing Date.
6.3. Termination for Failure of a Condition. If Buyer’s Closing Conditions or Seller’s Closing Conditions, as the case may be, have not been previously approved or waived, this Agreement may be terminated by the party in whose favor the Closing Condition runs by written notice to the other. If this Agreement is so terminated, the parties shall have no further obligation or liability under this Agreement, except as provided in this Section 6.3. Any cancellation fee or other costs of the Escrow Holder and Title Company shall be borne equally by Seller and Buyer and each party shall pay its own expenses.
7. Closing
7.1 Escrow. The Escrow shall be opened with the Escrow Holder on the execution of this Agreement. Buyer and Seller shall promptly on the Escrow Holder’s request execute such additional escrow instructions as are reasonably required to consummate the transaction contemplated by this Agreement and are not inconsistent with this Agreement.
7.2. Closing Definitions.
7.2.1. Closing. The “Closing” means the exchange of money and documents as described in this Section and shall be deemed to have occurred when Seller’s Grant Deed to Buyer has been recorded, the Title Company is irrevocably and unconditionally committed to issue the Title Policy, and Buyer has delivered the Purchase Price in immediately available funds to Escrow Holder.
7.2.2. Closing Date. Seller and Buyer agree that the Closing shall occur on the “Closing Date.” The Closing Date shall be a date mutually agreeable to Buyer and Seller that is no later than thirty (30) days after the Contingency Date. The Closing shall be at the offices of Escrow Holder or such other place as the parties may agree.
7.3. Seller’s Deposit of Documents and Funds. Seller must deposit into Escrow the following documents duly executed by Seller in form and substance reasonably satisfactory to Buyer:
7.3.1. Grant Deed. Seller’s warranties, representations and covenants, in the duly executed and acknowledged Grant Deed conveying the Property to Buyer shall be subject only to the Permitted Exceptions;
7.3.2. Bill of Sale. A Bill of Sale to evidence the transfer of title to any personal property being conveyed as part of this Agreement, including the chandeliers identified in this Agreement. 29 of 38
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08.03.22 7.3.3 Non-foreign Certification. Certificates required by §1445 of the Internal Revenue Code of 1986, and the California Revenue and Taxation Code §18815, executed by Seller and in a form satisfactory to Buyer (the “Non-foreign Certification”), to relieve Buyer of any potential transferee’s withholding liability under such statutes;
7.3.4. Seller’s Proof of Power and Authority. Such proof of Seller’s authority and authorization to enter into and perform under this Agreement, and such proof of power and authority of the individuals executing or delivering any instruments, documents, or certificates on behalf of Seller to act for and bind Seller as may reasonably be required by Buyer or the Escrow Holder; and
7.3.5. Assignment and Assumption. A duly executed assignment, by which Buyer assumes Seller’s interest in (a) the Plans (if any), (b) all warranties of which Seller is the beneficiary with respect to the Improvements or personal property, to the extent assignable, (c) all intangible assets of the Property, and (d) such assumable service contracts and other assumable agreements as Buyer elects to assume (the “Assignment”). Any charge for any assignment by the assigning party shall be paid by Buyer
7.3.6 Additional Documents. Such additional documents, including written Escrow instructions consistent with this Agreement, as may be necessary or desirable to convey the Property in accordance with this Agreement.
7.4. Buyer’s Deposit of Documents. Buyer must deposit into Escrow the following documents duly executed by Buyer in form and substance reasonably satisfactory to Seller:
7.4.1. Buyer’s Proof of Power and Authority. Such proof of Buyer’s authority and authorization to enter into and perform under this Agreement, and such proof of power and authority of the individuals executing or delivering any instruments, documents, or certificates on behalf of Buyer to act for and bind Buyer as may reasonably be required by Seller and the Escrow Holder; and
7.4.2. Conveyance Documents. Such documents, including written Escrow instructions consistent with this Agreement, as may be necessary or desirable for conveyance of the Property in accordance with this Agreement.
7.4.3. Assignment. The Assignment.
7.5. Closing. When the Escrow Holder receives all documents and funds identified in Sections 7.3 and 7.4, and the Title Company is ready, willing, and able to issue the Title Policy, then, and only then, the Escrow Holder shall close Escrow by:
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08.03.22 7.5.1. Recording the Grant Deed;
7.5.2. Committing to issue the Title Policy to Buyer;
7.5.3. Delivering to Buyer the Non-foreign Certification, copies of all recorded and unrecorded documents related to the transfer or encumbering of the Property, and a copy of Seller’s and Buyer’s Escrow instructions;
7.5.4. Paying the Purchase Price through escrow, plus or minus prorations, if any; and
7.5.5. Thereafter, Escrow Holder shall deliver signed closing statements showing all receipts and disbursements to Buyer and Seller and shall file with the Internal Revenue Service (with copies to Buyer and Seller) the reporting statement required under Internal Revenue Code §6045(e).
7.6 Closing Costs.
7.6.1. Escrow costs shall be shared equally by Seller and Buyer;
7.6.2. Seller shall pay the cost of the C.L.T.A. Title Policy, and Buyer shall pay the cost of any endorsements, survey or extended coverage requested by Buyer;
7.6.3. Buyer shall pay the cost of recording the Grant Deed;
7.6.4. Buyer shall pay any sales tax;
7.6.5. Seller shall pay any documentary transfer tax; any municipal transfer tax shall be paid by the parties 50-50.
7.6.6. Property tax shall be prorated between Seller and Buyer.
8.Default.
8.01. Buyer or Seller shall be deemed to be in default under this Agreement if either such party fails, for any reason other than the other party’s default under this Agreement or the failure of a condition precedent to such party’s obligation to perform under this Agreement, to meet, comply with, or perform any covenant, agreement, or obligation required on its part within the time limits and in the manner required in this Agreement, or a material breach shall have occurred of any representation or warranty (made by such party); provided, however, that no such default shall be deemed to have occurred unless and until the other party has given the defaulting party written notice of the default, describing the nature of the default, and the defaulting party has failed to cure such default within five (5) days after the receipt of such notice (but in any event before the Closing Date, unless such default occurs after Closing).
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08.03.22 9. General.
9.1. Notices. Any notices relating to this Agreement shall be given in writing and shall be deemed sufficiently given and served for all purposes when delivered personally, be generally recognized overnight courier service, received by the other party when sent via United States mail certified or registered, return receipt requested, with postage prepaid, addressed as follows:
SELLER:
Berg Senior Services, LLC
Attn: Chris Berg
1036 Country Club Drive, Suite 110
Moraga, CA 94556
Phone: (925) 765-2994
Copy to:
Merrill J. Schwartz
Donahue Fitzgerald LLP
1999 Harrison Street, 26th floor
Oakland, CA 94612
Phone direct: (510) 419-2224
Phone switchboard: (510) 451-3300
Mobile: (510) 919-7538
Fax: (510) 451-1527
BUYER:
Glendale Housing Authority
Executive Director
141 N. Glendale, Room 202
Glendale, CA 91206-4387
Attn: Michael Fortney
Phone: (818) 548-3723
Fax: (818) 548-3724
Copy to:
Gillian van Muyden, Chief Assistant City Attorney
City Attorney’s Office
City of Glendale
613 E. Broadway, Suite 220
Glendale, CA 91040
Phone: (818) 548-2080
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08.03.22 Fax: (818) 547-3402
Escrow Holder:
Cheryl Greer
Commonwealth Land Title Company
601 S Figueroa St., Suite 4000
Los Angeles, CA 90017
Phone: (213) 330-3080
Fax: (213) 947-4403
9.2 Entire Agreement. The terms of the Agreement are intended by the parties as a final expression of their agreement with respect to such terms as are included in this Agreement and may not be contradicted by evidence of any prior or contemporaneous agreement. This Agreement specifically supersedes any prior written or oral agreements between the parties. The language in all parts of the Agreement shall be construed as a whole in accordance with its fair meaning and without regard to California Civil Code §1654 or similar statues.
9.3 Amendments and Waivers. No addition to or modification of this Agreement shall be effective unless it is made in writing and signed by the party against whom the addition or modification is sought to be enforced. The party benefitted by any condition or obligation may waive the same, but such waiver shall not be enforceable by another party unless it is made in writing and signed by the waiving party.
9.4 Invalidity of Provision. If any provision of this Agreement as applied to either party or to any circumstance is adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, this fact shall in no way affect (to the maximum extent permissible by law) any other provision of this Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of this Agreement as a whole.
9.5 No Merger. This Agreement, each provision of it, and all warranties and representations in this Agreement shall survive the Closing and shall not merge in any instrument conveying title to Buyer. All representation, warranties, agreements, and obligations of the parties shall, despite any investigation made by any party to this Agreement, survive Closing, and the same shall inure to the benefit of and be binding on the parties’ respective assessors and assigns.
9.6 References. Unless otherwise indicated, (a) all article and section references are to the articles and sections of this Agreement, and (b) except where otherwise stated, all references to days are to calendar days. Whenever under the terms of this Agreement the time for performance of a covenant or condition falls on a Saturday, Sunday, or California state holiday, such time for performance shall be extended to 33 of 38
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08.03.22 the next business day. “Business day” means a day other than Saturday, Sunday, and California state holidays. The headings used in the Agreement are provided for convenience only and this Agreement shall be interpreted without reference to any headings. The date of the Agreement is for reference purposes only and is not necessarily the date on which it was entered into.
9.7 Governing Law. This Agreement shall be governed by the laws of the State of California applicable to contracts made by residents of the State of California and to be performed in California.
9.8 Time is of the Essence. Time is of the essence in the performance of the parties’ respective obligations under this Agreement.
9.9 Attorney Fees. In the event of any action or proceeding to enforce a term or condition of this Agreement, any alleged disputes, breaches, defaults, or misrepresentations in connection with any provision of this Agreement or any action or proceeding in any way arising from this Agreement, the prevailing party in such action shall be entitled to recover its reasonable costs and expense, including without limitation reasonable attorney fees and costs of defense paid or incurred in good faith. The “prevailing party” for purposes of this Agreement, shall be deemed to be that party who obtains substantially the result sought, whether by settlement, dismissal, or judgment.
9.10. No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any person other than the parties to it and their respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any third person to any party to this Agreement or give any third person any right of subrogation or action over against any party to this Agreement.
9.11. Remedies Cumulative. The remedies set forth in this Agreement are cumulative and not exclusive to any other legal or equitable remedy available to a party, except where limited herein.
9.12. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Digital, electronic or Docusign signatures shall be deemed original signatures.
9.13. Tax-Deferred Exchange. Seller may use the proceeds from the sale of the Property to affect one or more tax deferred exchange under Internal Revenue Code §1031. Buyer agrees to accommodate Seller in effecting such tax-deferred exchange.
9.14. Confidentiality. Buyer and Seller agree to hold all communications concerning the transaction the subject of this Agreement as confidential except as required by applicable law. No documents, materials or any information concerning this transaction shall be disseminated by either party except for those persons 34 of 38
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08.03.22 specifically authorized in writing by the Buyer or Seller to do so in support of this transaction or as may be required by applicable law.
9.15 Commissions. Each party represents to the other that it has not dealt with any broker, agent, or finder for which a commission or fee is payable with respect to the Property or this Agreement, and each party shall indemnify, defend and hold harmless the other from any claims, demands, liabilities, or judgments for commissions or fees arising from such party’s breach of this Section. The foregoing indemnification, defense and hold harmless obligations of the parties shall survive Closing and any termination of this Agreement.
9.16 Condemnation/Casualty. If after the Effective Date of this Agreement and prior to the Closing all or any part of the Property is taken or threatened to be taken by eminent domain or condemnation or is destroyed by fire, earthquake or other casualty, Buyer may elect either (a) to terminate this Agreement as to the entire Property, in which event this Agreement shall be null and void and of no further force or effect, or (b) to consummate purchase of the Property as herein provided, in which event Seller shall pay or assign to Buyer all condemnation awards or payments in respect of the Property and/or all insurance proceeds paid or payable to Seller as a consequence of such casualty. If this Agreement is terminated in full pursuant to this Section 9.16, neither party shall have any further rights, duties, obligations or liabilities, at law or in equity, arising out of or relating to this Agreement except for those that specifically survive termination of this Agreement pursuant to other provisions hereof.
9.17 Executive Director Authority. The Executive Director of Buyer (“Executive Director”) or his/her/their designee shall have the authority to take all actions and execute all documents required or necessary for the Buyer to perform its obligations under this Agreement, to extend the Closing Date, and to otherwise complete the Closing and conveyance of the Property to Buyer pursuant to this Agreement. [SIGNATURES FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
Seller: Buyer:
BERG SENIOR SERVICES, LLC,
a California limited liability company
By:
Chris Berg, Authorized Member
THE HOUSING AUTHORITY OF THE
CITY OF GLENDALE
By:
Roubik R. Golanian, P.E.
Executive Director
Approved as to Form:
MICHAEL J. GARCIA, AUTHORITY
COUNSEL
By:
Gillian van Muyden
Chief Assistant City Attorney
Approved as to Form:
KANE, BALLMER & BERKMAN
Special Counsel to the Authority
By:
CONSENT OF ESCROW HOLDER
Escrow Holder accepts the foregoing Purchase and Sale Agreement and Joint Escrow Instructions as escrow instructions, agrees to act as escrow holder and agrees to be bound by their provisions applicable to it as Escrow Holder.
Date: COMMONWEALTH LAND TITLE
COMPANY
By:
Name:
Title:
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EXHIBIT “A”
LEGAL DESCRIPTION
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EXHIBIT “B”
IMPROVEMENTS
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