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HomeMy WebLinkAboutPROSPECT AND COLLEGE HOTEL - PDP190014 - SUBMITTAL DOCUMENTS - ROUND 2 - SUPPLEMENTAL INFORMATIONMEMORANDUM OF UNDERSTANDING THIS MEMORANDUM OF UNDERSTANDING ("MOU") is made this day of , 2020, by and between SAUNDERS COMMERCIAL DEVELOPMENT COMPANY LLC, a Colorado limited liability company ("Saunders"), for itself and on behalf of its assignee as contemplated under Section 14 below, and 1611 COLLEGE, LLC, a Colorado limited liability company (" 1611 ") for itself and on behalf of its assignee as contemplated under Section 14 below. Saunders and 1611 .may hereinafter sometimes be referred to individually as a "Party" and jointly as "Parties." RECITALS A. Saunders entered into a contract to purchase from Imago Enterprises, Inc., a Colorado corporation, the following described real property (the "Hotel Parcel"): Lot 2, Fox Shopping Center Subdivision according to Plat recorded July 22, 1969 in Book 1413 at Page 863, except those parcels of land as conveyed to the City of Fort Collins, a Municipal Corporation, in Deed recorded June 17, 1986 at Reception ,No. 86031803 and in Deed recorded February 8, 1996 at Reception No. 96009629 and in Deed recorded December 12, 2016 at Reception No. 20160085902, County of Larimer, State of Colorado. TOGETHER WITH all easements appurtenant thereto. B. 1611 is the owner of the following described real property, lying adjacent to the Hotel Parcel (the "Office/Restaurant Parcel", and together with the Hotel Parcel, the "Parcels"): A portion of Lot 3, Fox Shopping Center Subdivision, according to the Plat recorded July 22, 1969 in Book 1413 at Page 863, City of Fort Collins, County of Larimer, State of Colorado, which begins at the Northeast corner of said Lot 3 and runs thence S 01'03' W, 495.00 feet; thence N 82°16'45" W, 104.06 feet; thence N 45°38' W, 68.00 feet; thence S 89°22' W, 54.00 feet to a point on the West line of said Lot 3; thence N 0098' W, 244.00 feet; thence East 116.99 feet; thence N 190.00 feet; thence East 100.50 feet to the Point of Beginning. Except that portion conveyed in Deed recorded January 12, 2017, at Reception No. 20170002292. TOGETHER WITH all easements appurtenant thereto. C. Until January 1, 2020, the Parcels were subject to certain mutual parking and access rights as set forth in a Grant of Easements with Covenants and Restrictions 20265749 IN WITNESS WHEREOF, the Parties have entered into the Memorandum of Understanding SAUNDERS COMMERCIAL DEVELOPMENT COMPANY LLC, a Colorado limited liability company LM Gregory A. Schmidt, Manager "Saunders" 1611 COLLEGE, LLC, a Colorado limited liability company By: Neighborhood Equities, LLC, a Colorado limited liability company, Manager By Jeffrey D. Roemer, Manager "1611" 20265749 Affecting Land dated August 16, 1968 and recorded August 20, 1981 in Book 2129 at Page 836 under Reception No. 424820 of the Larimer County, Colorado records, which rights expired on January 1, 2020 (the "Prior Easements"). D. The Parties acknowledge the expiration of the Prior Easements, and believe that each of them, and the business and operations to be conducted upon their respective Parcels, will benefit from the continuation of reciprocal access and parking easements with respect to the Parcels. Accordingly, the Parties believe it in their mutual best interests to enter into an easement agreement providing for certain reciprocal access and parking rights with respect to the Parcels, and certain other matters, all as more fully set forth below. NOW, THEREFORE, Saunders and 1611 enter into this MOU upon the following terms and conditions: 1. Background. The Parties anticipate that parking demand for the business to be conducted on the Hotel Parcel will increase during nighttime hours and parking demand for the business to be conducted on the Office/Restaurant Parcel will increase during daytime hours. Therefore, the Parties believe that by establishing reciprocal access and parking easements over the Parcels, the parking available for the business operations on each of the Parcels can be maximized. In addition, because the Parties anticipate that additional customer traffic on either Parcel can benefit business operations on the other Parcel, 1611 desires to grant to Saunders an irrevocable license for the installation of signage for the business to be conducted on the Hotel Parcel, on the existing monument sign located on the northerly boundary of the Office/Restaurant Parcel along Prospect Road ("Monument Sign"). 2. Reciprocal Access and Parking Easements. (a) Easements. The Parties desire to enter into an easement agreement (the "Easement Agreement") pursuant to which each Party (in such capacity, the "Grantor") grants to the other (in such capacity, the "Grantee") non-exclusive, perpetual and reciprocal easements in, on and over the Grantor's Parcel for (i) pedestrian, bicycle and vehicular ingress and egress in, over, across and upon all driveways and/or walkways then existing or thereafter constructed upon the Grantor's Parcel and (ii) parking in, over, across and upon all designated parking areas then existing or thereafter constructed upon the Grantor's Parcel. The Easement Agreement will provide that such reciprocal access and parking easements: (x) shall burden and run with the Grantor's Parcel, (y) shall benefit and run with the Grantee's Parcel, and (z) are for use by the Grantee, its successors -in -title, and the respective employees, tenants, licensees, invitees and guests of any of them (collectively, "Guests"). The Parties, for themselves and their successors - in -title, acknowledge that each of them shall be both a Grantor (as to its own Parcel) and a Grantee (as to the other Parcel). 2 20265749 (b) Easement Areas. The Easement Agreement will provide that the areas of each Parcel that are subject to the reciprocal parking and access easements described in subsection (a) above (as to each Parcel, the `Basement Areas") shall be limited to those areas of such Parcel that are from time to time improved and designated for use as driveways, walkways or parking areas (as such areas may be reduced, expanded, altered or relocated by the performance of Alteration Work (defined below) as contemplated under Section 3 below). (c) No Use of Easements for Construction. The Easement Agreement will provide that, notwithstanding any provision to the contrary herein or therein, the access and parking easements described herein are not intended for use, and shall not be available, in connection with the demolition or construction of improvements or the conduct of maintenance or repairs of any improvements, whether being performed by the Grantee itself, or its employees, agents or contractors (collectively, "Construction Work"). Accordingly, the Easement Agreement will provide that if Construction Work is or will be occurring on the Grantee's Parcel, the Grantee shall ensure that only its own Parcel, and not the other Parcel, is used in connection with such Construction Work, including but not limited to the performance of work and/or the movement, delivery or storage of construction vehicles, materials, equipment and/or supplies by any person. (d) Minimum Parking. Notwithstanding any contrary provision in this MOU, the reciprocal parking easements described herein shall be subject to automatic termination as provided under the minimum parking requirements set forth in Section 4 below. 3. Additions and Modifications. The Easement Agreement will provide that, notwithstanding any provisions to the contrary therein, and without any restriction or limitation by virtue of the rights or interests granted to the other Party thereunder, each Party, as Grantor, has the right from time to time to develop and/or redevelop its Parcel by the performance of Construction Work, to the extent and in the manner determined by such Grantor, in its sole discretion. Such development or redevelopment by a Grantor (hereinafter referred to as "Alteration Work") may involve, without limitation, the demolition or modification of driveways, walkways, parking facilities or other improvements existing on its Parcel, and/or the construction of additional improvements, including additional building square footage, on its Parcel; and except as provided in Section 4 hereof, the Grantee shall have no right, by virtue of this MOU or the Easement Agreement, to limit, prevent or enjoin any such Alteration Work. Upon the performance of any Alteration Work with respect to a Parcel, the easements and other rights in such Parcel, as described in this MOU and/or provided for in the Easement Agreement, will immediately and automatically be modified, without the need for any action by either 3 20265749 Party, to reflect any expansion, reduction, elimination or modification of the Easement Areas of such Parcel that result from such Alteration Work. 4. Minimum Parking. The Easement Agreement will provide as follows, notwithstanding the provisions of Section 3 hereof, or the corresponding provisions of the Easement Agreement: (a) Requirement. The number of lawful parking spaces located on the Hotel Parcel and available for general use by Guests of either Party, on a 7-day/24-hour basis, shall not be less than eighty (80) for a Substantial Period (as defined below); and (ii) the number of lawful parking spaces located on the Office/Restaurant Parcel and available for general use by Guests of either Party, on a 7-day/24-hour basis, shall not be less than ninety-one (91) for a Substantial Period. Failure of a Parcel to satisfy the minimum parking requirement applicable to it under the preceding sentence is sometimes referred to herein as "Insufficient Parking", and a Parcel having Insufficient Parking shall be referred to as a "Non -Compliant Parcel". (b) Non -Compliance. If either Parcel becomes a Non -Compliant Parcel, then: (i) the reciprocal parking easement described in Section 2(a)(ii) above will no longer benefit the Non -Compliant Parcel, or burden the other Parcel; and (ii) the Party that owns the Non -Compliant Parcel shall no longer have an easement, for itself or its Guests, for parking on the other Parcel. Notwithstanding the provisions of preceding sentence or the corresponding provisions of the Easement Agreement, in such event: (x) the Non -Compliant Parcel shall continue to be burdened by the parking easement described in Section 2(a)(ii) above, for the benefit of the other Parcel; (y) the Party that owns such other Parcel shall continue to have an easement, for itself and its Guests, for parking in the remaining parking areas of the Non -Compliant Parcel; and (z) the reciprocal access easement described in Section 2(a)(i) above, and any other grant of rights pursuant to this MOU or the corresponding provisions of the Easement Agreement, shall nevertheless continue in full force and effect as provided herein. (c) Definitions; Determination. For purposes of determining whether a Parcel has Insufficient Parking, the term "Substantial Period" means a period of thirty (30) consecutive days. For purposes of the preceding sentence, a "day" is the 24-hour period running from midnight to midnight; and failure of a Parcel to satisfy the minimum parking requirement applicable to it under subsection (a) hereof for any part of a day shall constitute a failure for the entire day. 5. Termination of Loading Easement. The Parties acknowledge that the Office/Restaurant Parcel is subject to an easement benefitting the Hotel Parcel by providing for truck and other vehicular ingress and egress for loading purposes, as rd 20265749 described in that certain Deed dated September 26, 1968, and recorded September 30, 1968, in Book 1394 at Page 754 of the Larimer County, Colorado records (the "Loading Easement"). The Easement Agreement will provide that, at such time as the Hotel Parcel has been redeveloped and a certificate of occupancy has been issued for the redeveloped Hotel Parcel, the owner of the Hotel Parcel will execute, acknowledge and deliver to 1611 a document in recordable form, terminating the Loading Easement. 6. License for Signage. The Easement Agreement will include the grant by 1611 to the owner of the Hotel Parcel, for the benefit of the Hotel Parcel, of a permanent, irrevocable license to install in and operate as part of the Monument Sign a sign identifying the hotel to be located on the Hotel Parcel. In recognition of the fact that the Office/Restaurant Parcel will benefit from increased customer traffic due to the operation of a hotel on the Hotel Parcel, the Parties understand and intend that such license to be granted will provide the owner of the Hotel Parcel with a reasonable allocation of size and location on the Monument Sign as mutually agreed upon by the Parties. The owner of the Hotel Parcel will be solely responsible for all costs of installation and maintenance of such signage, including the face plate and badges. 7. Construction and Maintenance of Easement Improvements. (a) Owners' Obligations. The Easement Agreement will provide that the owner of each Parcel will be responsible for construction, installation and operation of any improvements for parking areas, driveways, walkways, landscaping or other improvements contemplated thereunder, at any time located in, under, over, across and upon the Easement Areas of such owner's Parcel (collectively, "Easement Improvements"); and all costs thereof will be the sole cost of the owner of such Parcel. The Easement Agreement will further provide that the owner of each Parcel will be responsible to perform or arrange for the reasonable maintenance, repair and replacement of the Easement Improvements on its Parcel, and for all costs thereof. Such maintenance and repair of the Easement Improvements on each Parcel will include, but not be limited to, cleaning, sweeping, snow removal, pothole repair, resurfacing and restriping. (b) Rights Upon Failure. The Easement Agreement will further provide that, in the event the owner of either Parcel (the "Maintaining Owner") determines that the other owner has not properly or sufficiently maintained the Easement Improvements on its Parcel, the Maintaining Owner will have the right, but not the obligation, to enter upon the other Parcel to perform, at the Maintaining Owner's sole cost and expense, such maintenance or repair of the Easement Improvements on such other Parcel as the Maintaining Owner deems necessary, including, but not limited to, repair of potholes, resurfacing, restriping, cleaning, sweeping and snow removal services; and neither the provisions of Section 2(c) or the corresponding provisions of the Easement Agreement 5 20265749 shall apply to such entry or the performance of such maintenance and/or repair work by the Maintaining Owner. 8. Insurance. The Easement Agreement will provide that the owner of each Parcel will, at its own cost and expense, secure, maintain and provide evidence of policies of insurance of the types required thereunder, and satisfying such other.insurance requirements as may be set forth in the Easement Agreement or otherwise from time to time agreed by the Parties. 9. No Sharing of Maintenance and Repair Costs Absent Written Agreement. Except as provided in Section 11 below, the Easement Agreement will provide that neither Party will be required to share in the cost of any expenses with the other Party for maintenance and repair of the Easement Improvements on the other Party's Parcel unless the Parties enter into a separate written agreement outlining the rights, duties and obligations of the owners of the Parcels with respect to the sharing of such costs. 10. Other Agreements. (a) Cooperation re: Utility Easements. The Parties agree to proceed cooperatively and in good faith, working with each other and with the City of Fort Collins, Colorado (the "City"), to develop mutually acceptable plans for easements for utility service lines running to and across the southern portions of the respective Parcels (whether to provide service to either or both of the Parcels, or to other properties). (b) Coordination re: Landscape Design. The Parties agree to coordinate the landscape designs to be prepared for their respective Parcels, with the intent of achieving a more unified appearance that will encourage their respective Guests to use the Easement Improvements located on both Parcels. (c) Tree Removals. The Parties acknowledge that each Party's redevelopment of its Parcel will require the removal of certain trees now existing on the Parcels. The Parties agree that either Party may remove any tree located on its own Parcel, if such removal has received the approval of the City. 11. Indemnity Agreements. The Easement Agreement will provide for the indemnity agreements set forth in this Section 11. (a) Utilities. If either Parcel is burdened by any easement(s) for utility line(s) that serve only the other Parcel (whether then existing or thereafter granted), the owner of the Parcel benefited by such utility easement(s) (i.e., the Parcel served by such utility line(s)) will indemnify and hold harmless the owner of the Parcel burdened by no 20265749 such utility easement(s) (i.e., the Parcel on, over, across, through or under which such utility line(s) are placed) (the "Utility Indemnitee") from and against any and all costs, loss, damage, claim or expense for damage to or destruction of any Easement Improvements on the Parcel owned by the Utility Indemnitee, caused by or arising out of the installation of any such utility service lines and other utility improvements on, over, across, through or under the Parcel owned by the Utility Indemnitee, but serving only the other owner's Parcel. (b) Extraordinag Use. If a Grantee or its employees, contractors or agents make(s) use of the Grantor's Parcel in a manner contrary to the provisions of the Easement Agreement, including, without limitation, use of the reciprocal access and parking easements for ingress, egress or parking of any construction equipment, or as otherwise prohibited under the provisions of Section 2(c) hereof or the corresponding provisions of the Easement Agreement, then the Grantee by or for whom in such unpermitted use of the Grantor's Parcel was made will indemnify and hold harmless the Grantor from and against any and all costs, loss, damage, claim or expense for damage to or destruction of any Easement Improvements on the Grantor's Parcel, caused by or arising out of such unpermitted use by the Grantee or its employees, contractors or agents. 12. Use of Easements. The Easement Agreement will provide that the owner of each Parcel (a) will not unreasonably interfere with the use by the other owner or the other owner's Guests of the access easements or parking easements contemplated hereunder, and (b) will not install or permit the installation of any permanent obstructions within the Easement Areas designated on its Parcel as a driveway or parking area. 13. Lienholder Subordination. The understandings in this MOU are conditioned upon, and execution and delivery of the Easement Agreement will require, the execution of a consent and subordination by any lienholder having a mortgage, deed of trust or other monetary lien encumbering either of the Parcels at the time of the execution and recordation of the Easement Agreement, so that the easements to be granted pursuant thereto will not be affected by any subsequent foreclosure of such mortgage, deed of trust or other lien. 14. Assignment of Contract. The Parties acknowledge that Saunders intends to assign to an affiliated entity its contract to purchase the Hotel Parcel and such assignee will thereafter enter into the Easement Agreement with 1611, as described herein. Alternatively, if Saunders determines that the Easement Agreement should be entered into prior to the acquisition of title the Hotel Parcel by Saunders or its affiliate, Saunders may designate the current owner of the Hotel Parcel to enter into the Easement Agreement with 1611. 1611 agrees to enter into the Easement Agreement with Saunders 7 20265749 or its affiliate or designee, as aforesaid. Saunders will have the right, without consent of 1611, to assign all of its right, title and interest in its purchase contract for the Hotel Parcel to such an affiliate, and 1611 agrees to enter into the Easement Agreement with such affiliate upon its acquisition of title to the Hotel Parcel. 1611 Agrees further that if Saunders, in its sole judgment, deems it preferable to have the current owner of the Hotel Parcel enter into the Easement Agreement with 1611 before Saunders or such affiliate has acquired title to the Hotel Parcel, 1611 shall enter into the Easement Agreement with such current owner. 1611 will have the right, without consent of Saunders, to assign all of its right, title and interest in the real property described herein as the Office/Restaurant Parcel to an affiliate of 1611. The Parties acknowledge that, upon the complete execution, delivery and recording in the Larimer County, Colorado records of the Easement Agreement, each of the Parcels will be subject to the provisions thereof, regardless of any subsequent transfer or conveyance thereof. 15. Contingency. 1611 and Saunders acknowledge that this MOU shall terminate, and neither Party will have any obligation to negotiate in good faith to enter into the Easement Agreement described herein in the event that, prior to the execution of the Easement Agreement, Saunders determines, in its sole judgment, that neither Saunders nor an assignee of Saunders will acquire title to the Hotel Parcel. 16. Notices. Any notice or other communication given by either of the Parties hereto to the other relating to this MOU must be in writing and will be deemed to have been delivered upon receipt by the receiving Party, which will occur: (i) upon receipt, when delivered personally; (ii) upon acknowledgment of receipt, when sent by electronic mail; (iii) three (3) business days after being sent by U.S. first-class mail; and (iv) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive such notice or other communication as set forth below: If to Saunders, to: Saunders Commercial Development Company LLC Attn: Brett Parmelee, Development Manager 1660 17`h Street, Suite LL Denver, CO 80202 Telephone: (303) 386-9310 E-mail: b.parmelee@saundersinc.com 20265749 If to 1611, to: 1611 College, LLC Attn: Jeffrey D. Roemer 5455 S. Niagara Court Greenwood Village, CO 80111 Telephone: (303) 523-1828 E-mail: jeff.roemer@cushwake.com 17. Non -Binding. The purpose of this MOU is to indicate an intent and desire on the part of both Parties to enter into an Easement Agreement which accomplishes the foregoing goals and objectives. The Parties recognize that there are various legal and/or business issues which must be considered and agreed to by each of them in implementing the above goals and objectives. Therefore, notwithstanding any provision herein to the contrary, this MOU does not constitute a legally binding instrument and does not give either Party any rights to enforce its provisions. However, this MOU represents an intent by both Parties to negotiate in good faith to enter into an Easement Agreement containing the foregoing terms. No legal liability will arise with respect to the subject matter hereof, on the part of either Party, unless and until a binding Easement Agreement is subsequently negotiated, approved, executed and delivered by each of the Parties or their respective successors or assigns on or before March 31, 2020. [Signatures on Following Page] OJ 20265749