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6 <br /> RIVERFRONT PROPERTY DISPOSITION AGREEMENT <br /> EXECUTIVE SUMMARY <br /> The anticipated Riverfront Development(the "Development")will be governed, as a <br /> matter of contract,by the proposed Property Disposition Agreement("PDA"). The PDA <br /> addresses both the sale of the property owned by the City(the "City Property") and the rights and <br /> obligations of the developer, OliverMcMillan, LLC ("OM"), and the City related to the <br /> Development and surrounding infrastructure. <br /> The City Property includes the area depicted in the drawing attached to this Summary. <br /> For purposes of the PDA, the City Property is segregated into the portion generally comprising <br /> the former Simpson mill site(the "Simpson Site"), the portion generally comprising the former <br /> landfill (the "Landfill Site") and the area generally comprising the former Eclipse mill site(the <br /> "Mill Site"). <br /> Pursuant to the PDA, the City Property will be sold to OM for a cash purchase price of <br /> $8,000,000.00. At closing, the City is to receive for nominal consideration a Lease for the <br /> existing animal shelter, which Lease will expire on June 30, 2008, subject to a possible limited <br /> extension, and a Lease for the existing Public Works Yard, which will expire on September 28, <br /> 2007. In addition to the Leases, the City will be granted certain easements on the City Property <br /> allowing it to maintain various existing facilities and utilities and to preserve and provide certain <br /> required access rights. Closing is to occur no later than June 30, 2007. As conditions to Closing, <br /> OM is obligated to incur an additional $400,000 in third party development costs related to the <br /> Development, and the City will need to obtain a clarification of the FEMA Flood Insurance Rate <br /> Map and cause certain title encumbrances to be removed. The City and OM also will need to <br /> prepare an agreement addressing a variety of environmental matters (the "Environmental <br /> Indemnity and Landfill Agreement") and obtain an acceptable Prospective Purchaser Consent <br /> Decree or amendment to the existing Consent Decree from the Washington Department of <br /> Ecology. Some of the agreed upon material terms of the Environmental Indemnity and Landfill <br /> Agreement are set forth in Exhibit K to the PDA and the final Environmental Indemnity and <br /> Landfill Agreement must be substantially consistent with those terms. <br /> In addition to the sale of the City Property, the City is agreeing in the PDA, for a period <br /> of 10 years, to provide OM with a limited first right to negotiate with the City for the purchase of <br /> the adjacent so-called "Drywall Parcel," described in Exhibit C to the PDA, if the Drywall Parcel <br /> should become available for purchase from the City. If OM elects not to purchase the Drywall <br /> Parcel, the City agrees to record a limited restrictive covenant prohibiting uses that would be <br /> commercially incompatible with the Development. <br /> After closing, OM will be obligated to proceed with the filing and prosecution of various <br /> required permits and approvals, which are generally identified in Exhibit L to the PDA. If <br /> certain Key Development Permits are not obtained by OM with terms and conditions that are <br /> reasonably acceptable to OM within three years then OM is granted a limited right to rescind the <br /> purchase transaction. Upon a rescission election by OM, the City will be obligated to return the <br /> purchase proceeds and OM will be obligated to grant a release to the City and convey its third <br /> party work product(the "OM Deliverables") in exchange for an agreed upon payment of <br /> 16 <br /> 06107-0063/LEGAL12979654.I 1 <br />