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073-20 - Kitsap County - ContractContract No. 073-20 PURCHASE AND SALE AGREEMENT SELLER: Kitsap County, a Political Subdivision of the State of Washington (under the jurisdiction of the Roads Division) PURCHASER: City of Port Orchard, a Washington Municipal Corporation ABBREVIATED Portions of the SE1/4 of Section 35, Township 24 North, Range 1 LEGAL: East and NE1/4 of Section 2 and SW1/4 of Section 1, both in Township 23 North, Range 1 East and W.M., Kitsap County, Washington PARCEL NOS: 022301-1-014-2008; 022301-1-059-2004; 012301-3-035-2000; 4625-000-003-0103; 4625-000-004-0003; and 022301-1-006-2008 This Purchase and Sale Agreement, dated for reference purposes as Cd-JgeeD Le , 2020 ("Agreement"), is entered into by and between Kitsap County, a Political Subdivision of the State of Washington ("Seller") and the City of Port Orchard, a Washington Municipal Corporation ("Purchaser"). Seller and Purchaser may be referred to herein individually as a "Party" or collectively as the "Parties". The effective date of this Agreement shall be the date upon which the last of Seller and Purchaser have both signed this Agreement ("Effective Date"). RECITALS A. Seller owns certain real properties located in the City of Port Orchard, Kitsap County, Washington, more particularly described in Exhibit A, attached hereto and incorporated herein by this reference (collectively, "Properties"); provided, the Parties authorize Escrow Agent to substitute a corrected legal description in Exhibit A, which substitution shall not affect the Effective Date. B. The Properties are located within the municipal boundaries of the City of Port Orchard along Bethel Road SE, Port Orchard WA 98366 and include unimproved parcels of real property, subject to Permitted Exceptions (as defined below). C. The Properties includes all improvements, buildings, and fixtures situated thereon of the Seller, easements, licenses, minerals, oil, gas, permits, utilities, rights of ingress and egress, development rights, water and water rights and other rights, privileges, and appurtenances pertaining to the real properties to the extent that Seller has any interest therein. The Properties do not include personal property, if any, affixed and used in the operation of the land, which shall be removed by Seller. Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 1 of 12 D. Purchaser desires to purchase from Seller, and Seller hereby desires to sell to Purchaser, the Properties on the terms and conditions set forth in this Agreement. AGREEMENT NOW THEREFORE, incorporating the foregoing, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: Section 1. Purchase and Sale. Upon the terms and subject to the conditions set forth in this Agreement, Purchaser agrees to buy the Properties and Seller agrees to sell the Properties to Purchaser for a purchase price of One Million Four Hundred Fifteen Thousand Dollars and No/100 ($1,415,000.00) in cash at Closing. Section 2. Earnest Money Deposit. The Parties agree to waive the deposit of earnest money. Section 3. Closing, Escrow Agent. Closing shall occur on or before November 30, 2020 ("Closinq Date"). Closing means the date on which all documents required to convey marketable title to the Properties and to consummate the transactions contemplated herein have been executed and delivered to Escrow Agent, a Statutory Warranty Deed subject only to Permitted Exceptions to convey the Properties to Purchaser has been recorded in the real property records of Kitsap County, and the sale proceeds are available for disbursal to Seller ("Closing"). Within fifteen (15) business days of the Effective Date of this Agreement, Seller shall open escrow by depositing a fully executed copy of the Agreement with Escrow Agent. The Escrow Agent and title company for Closing shall be Pacific Northwest Title Company ("Escrow Agent"), located at 2021 NW Myhre Road, Suite 300, Silverdale WA 98383. In the event that Closing does not occur on or before the Closing Date, this Agreement shall terminate and Seller and Purchaser shall thereafter have no further obligation to the other hereunder. The Parties agree to execute and deliver all customary escrow documentation typically required by escrow agents, including this Agreement, with Escrow Agent at Closing. Purchaser shall pay all escrow fees, title fees, and recording fees. The Escrow Agent shall ensure the following: 3.1 That all utilities such as electricity, water, sewer, gas, oil, and real property taxes shall be prorated to the date of Closing. 3.2 That any special assessments, L.I.D. assessments and R.I.D. assessments which are levied against the Properties at the time of Closing shall be prorated to the date of Closing and transferred into the name of the Purchaser upon Closing. Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 2 of 12 Section 4. Time for Acceptance. Purchaser has until September 25, 2020 to accept this Agreement. Purchaser must sign where indicated before a notary public and return the signed Agreement to Seller by 4:30 p.m. on September 25, 2020. Section 5. Title/Title Insurance. 5.1 Title Report. Within five (5) business days after the Effective Date, the Parties shall cause Escrow Agent to deliver to Purchaser a preliminary title report regarding the Properties, including legible copies of all instruments described in the report ("Title Report"). Purchaser shall review the Title Report and notify Seller within thirty (30) days after receipt of the Title Report ("Title Review Period") which title matters are approved by Purchaser. Only non - delinquent general taxes, non -delinquent general assessments and those title matters that Purchaser expressly approves in writing shall be permitted exceptions ("Permitted Exceptions"). In no event shall any monetary encumbrance or lien be a Permitted Exception; Seller must remove all of the same by Closing. Any exception in the Title Report not expressly approved by Purchaser in writing during the Title Review Period shall be deemed disapproved. Seller shall have 10 days after receiving Purchaser's title disapproval notice or deemed disapproval to notify Purchaser if Seller will cure or remove any matters disapproved or deemed disapproved by Purchaser. Failure of Seller to timely respond shall be deemed an election not to cure. If Seller elects or is deemed to have elected not to cure any objection of Purchaser, Purchaser may elect to terminate this Agreement any time prior to Closing, in which case Seller shall pay all cancellation fees due to Escrow Agent, if any, and the Parties shall have no further rights or obligations under this Agreement. Seller shall not allow any encumbrance or exception on the Properties after Purchaser's delivery of its title notice, without Purchaser's express written consent. 5.2 Title Insurance. At Closing, Seller shall cause Escrow Agent to issue a standard owner's coverage ALTA Title Insurance Policy on the Properties ("Title Policy") which shall: (i) be in the amount of the Purchase Price; (ii) insure fee simple, good and indefeasible title to such Properties and right of access thereto in Purchaser; (iii) include coverage against unrecorded liens; (iv) contain no exceptions other than the Permitted Exceptions; and (v) include any reasonable title endorsements requested by Purchaser. Purchaser shall pay for all costs of the standard coverage Title Policy and Seller shall provide any surveys of the Properties in its possession to Purchaser. Purchaser shall pay any additional costs associated with obtaining extended coverage, including the costs of an ALTA survey, and any endorsements that may be requested by Purchaser. Seller shall provide the Escrow Agent with a customary indemnity or owner's affidavit required by the Escrow Agent to remove from the Title Policy the standard general exceptions for mechanic's liens and parties in possession, Seller shall have no obligation to indemnify Escrow Agent against any matters created by, through or under Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 3 of 12 Purchaser. Section 6. Inspection and Evaluation of the Properties. Purchaser acknowledges and accepts the Properties "As -Is" and "With All Faults" and releases the Seller of any future claims regarding the Properties at Closing, except as otherwise expressly provided for herein. Within 20 days of the Effective Date, Seller shall provide or make available to Purchaser for inspection and copying to the extent available or within Seller's possession or control, copies of all contracts, appraisals, environmental surveys or audits of the Properties or the improvements, tenant leases, certificates of occupancy, soils reports, real property records, including copies of property tax assessments, LID proposals, agreements, leasing proposals and any other documents and information in the possession or control of Seller and pertaining to the Properties and all other items which Purchaser deems reasonably necessary to conduct its review of the Properties. Notwithstanding the foregoing, Seller shall have no obligation to make available any correspondence protected by attorney -client privilege. Purchaser waives receipt of a seller disclosure statement pursuant to RCW 64.06.010(7), except with respect to any positive answers to the Environmental section. 6.1 Purchaser shall have until the expiration of this Agreement in which to conduct its review of the Properties, and Purchaser's obligation to consummate the transactions contemplated herein shall be expressly conditioned upon Purchaser satisfaction, in its sole discretion, with such review. Said review shall include periodic physical and engineering inspections of the Properties. If requested, Seller agrees to cooperate with and assist Purchaser in the physical inspections of the Properties and such documents, books, records and information, provided that such inspection shall be conducted during normal business hours or at such other time as is reasonable and necessary to conduct the inspection. Purchaser shall repair any damage to the Properties caused by Purchaser, its employees and/or assigns during such inspections. 6.2 Seller agrees to allow the Purchaser and/or assigns to enter upon the Properties for the purpose of conducting due diligence investigations, including taking soil and water samples, installing monitoring wells, borings, geotechnical examinations, environmental examinations, and all other actions necessary or appropriate to complete its due diligence review. 6.3 Upon Closing, Purchaser specifically acknowledges and agrees that (1) Seller does not make any representations or warranties of any kind whatsoever, ether express or implied, with respect to the Properties except as specifically state herein and (2) the Properties is conveyed to Purchaser in an "As -Is" and "With All Faults" condition as of the date of Closing, except as specifically stated herein, including, without limitations, the condition or stability of the soils or ground waters, the presence or absence of hazardous materials on or under the Properties, suitability for any construction or development, zoning and similar matters. Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 4 of 12 Section 7. Closing Costs. Purchaser shall pay the following costs and expenses in connection with this transaction: a. Purchaser's attorney fees; b. Title insurance premium or abstract fee and sales tax thereon, if any; c. All Escrow fees with the exception of prorated real property taxes; Kitsap County is real estate tax exempt per WAC 458-61A-205(2); and d. Fees for recording the Statutory Warranty Deed. Section 8. Commissions. Purchaser and Seller are not represented by a broker in this transaction. Section 9. Possession. Purchaser shall be entitled to possession of the Properties upon the date of Closing, subject to such matters approved in writing by the Purchaser. The Seller will remove private improvements, if any, from the Properties and disconnect utilities no later than December 31, 2020. Section 10. Governing Law: Venue. This Agreement and the rights of the Parties hereto shall be governed by and construed in accordance with the laws of the State of Washington and the Parties agree that in any such action venue shall lie exclusively in Kitsap County, Washington. Section 11. Time is of the Essence. Time is of the essence in the performance of any obligation pursuant to this Agreement. Failure of either Party to insist upon the strict performance of the other Party's obligation hereunder shall not constitute a waiver of strict performance thereafter of the other Party's entire obligation hereunder. Section 12. Amend ment/Waiver. No modification, termination or amendment of this Agreement may be made except by written agreement or as otherwise may be provided in this Agreement. No failure by Seller to insist upon the strict performance of the Purchaser's obligations hereunder shall constitute a waiver of strict performance thereafter of all of the Purchaser's obligations hereunder. All the terms, provisions, and conditions of this Agreement shall inure to the benefit of and be enforceable by Seller and Purchaser and their respective legal heirs, legal representatives, successors and assigns. Section 13. Notices. Any notices required or permitted to be given shall be in writing and delivered either in person or by certified mail, return receipt requested, postage prepaid, addressed as follows or to such other address as may be designated by either party: SELLER: Kitsap County Public Works Attn: Molly Foster 614 Division Street, MS-26 Port orchard WA 98366-4699 Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 5 of 12 PURCHASER: City of Port Orchard Attn: Robert Putaansuu 216 Prospect Street Port Orchard WA 98366 Any notice given pursuant to this Agreement shall be deemed effective the day it is emailed or personally delivered or five (5) business days after the date it is deposited in the United States mails. Section 14. Entire Agreement. All understandings and agreements previously existing between Parties, if any, are merged into this Agreement, which alone fully and completely expresses their agreement, and the same is entered into after full investigation, neither Party relying upon any statement or representation made by the other not embodied herein. This Agreement may not be changed or terminated orally. Section 15. Merger of Prior Agreements. This Agreement and the exhibits hereto constitute the entire agreement between the Parties with respect to the purchase and sale of the Properties and supersedes all prior and contemporaneous agreements and understandings between the Parties hereto relating to the subject matter hereof. Section 16. Indemnity. Purchaser shall indemnify, and hold Seller harmless from and against any costs, expenses and liabilities, including without limitation reasonable attorneys' fees, which Seller may suffer or incur resulting from any action or inaction of Purchaser, its agents or employees occurring on or after Closing. Section 17. Assignment. This Agreement and all terms, provisions and covenants contained herein shall apply to, be binding upon and inure to the benefit of the Parties hereto, and their respective successors, assigns and heirs. No rights or interests under this Agreement shall be assigned without the written consent of both Parties. All terms of this Agreement shall survive after closing, and unless agreed to in this Agreement, shall not merge with the granting of the deed. Section 18. Default: Remedies: Specific Performance. In the event of material breach or default in or of this Agreement or any of the representation, warranties, terms, covenants, conditions or provisions hereof by Purchaser, Seller shall have, in addition to a claim for damages from such breach or default and without prejudices to any other right or remedy available under this Agreement or at law or in equity, the right to (a) demand and have specific performance of this Agreement; (b) demand injunctive relief to enforce any provision of this Agreement; or (c) terminate this Agreement upon written notice without any additional liability to Seller and Purchaser shall be entitled to a full refund of any payments outlined herein. In the event of a material breach or default in or of this Agreement or any representations, warranties, terms, covenants, conditions or provisions hereof by Seller, Purchaser's only remedy shall to terminate this Agreement. Section 19. Neutral Authorship. Each of the provisions of this Agreement has been reviewed and negotiated and represents the combined work products of both Parties Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 6 of 12 hereto. No presumption or other rules of construction which would interpret the provisions of this Agreement in favor of or against the Parties preparing the same shall be applicable in connection with the construction or interpretation of any of the provisions of this Agreement. Section 20. Severability. In case any one or more of the provisions contained in the Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. Section 21. Remedies Cumulative. Except as otherwise expressly provided herein, the rights and remedies given herein to Purchaser and Seller shall be deemed cumulative, and the exercise of one or more of such remedies shall not operate to bar the exercise of any other rights reserved to Purchaser or Seller under the provisions of this Agreement. Section 22. Purchaser's Title Information. Unless otherwise notified by Purchaser in writing prior to the date of closing, Seller shall convey the Properties to Purchaser as follows: City of Port Orchard, a Municipal Corporation Section 23. Representations and Warranties. Seller makes the following representations and warranties to Purchaser, which shall also be true at Closing: 23.1 Seller has full right, power, and authority to sell the Properties to Purchaser and to carry out its obligations hereunder. All required action necessary to authorize Seller to enter into this Agreement and to carry out its obligations hereunder have been or will be taken prior to Closing, and the undersigned is authorized by Seller to execute and deliver this Agreement. 23.2 The Properties are not subject to any preemptive rights, including, without limitation, options to purchase, rights of first refusal, rights of first offer, or leases, except as disclosed to Purchaser within 20 days of the Effective Date. 23.3 There are no parties in possession of any portion of the Properties, except those disclosed to Purchaser within 20 days of the Effective Date. 23.4 Seller has received no written notice from any other governmental authority regarding any violation of any statute, regulation, ordinance, administrative order or judicial order. 23.5 There are no claims, litigation, proceedings, or investigations pending related to the Properties, and no fact or condition which, given the passage of time, is Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 7 of 12 likely to result in a potential claim, dispute or litigation relating to the Properties, and upon obtaining knowledge of the institution of any claim, litigation, or proceeding relating to or involving the Properties or any portion thereof in any way, Seller will notify Purchaser of the pendency of such claim, litigation, or proceeding. 23.6 Seller has not used, generated, processed, stored, disposed of, released or discharged any Hazardous Substance on, under, or about the Properties or transported Hazardous Substances to or from the Properties, nor has any party ever alleged that any such activities have occurred; (b) there are no underground storage tanks at, on, or under the Properties and any prior underground storage tanks that previously existed at the Properties were removed in accordance with applicable laws; and (c) no use by Seller or any other person or entity has occurred which violates or has been alleged by any party to violate any applicable Environmental Law. As used herein, "Hazardous Substance" means all hazardous, dangerous or toxic substances, materials, pollutants, particles or contaminants (including asbestos, PCBs, radon and urea formaldehyde), and any similar substances that are regulated by any local, state, or federal law, rule, or regulation pertaining to environmental regulation, contamination, clean-up or disclosure or to the health and safety of persons or protection of the environment, including without limitation, the Comprehensive Environmental Response Compensation and Liability Act, the Superfund Amendments and Reauthorization Act, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, and the Washington Model Toxics Control Act, all as amended (collectively, "Environmental Laws"). 23.7 Seller's representations and warranties set forth herein are material to this Agreement and shall be true as of the Effective Date and true and deemed re -made at Closing. All of Seller's representations and warranties shall survive Closing and shall not merge into the Statutory Warranty Deed. If any of Seller's representations and warranties become untrue before Closing, Seller shall take all necessary actions to make such representations and warranties true and correct before Closing. If any Seller's representations and warranties are not corrected before the Closing Date, Purchaser shall be entitled to terminate this Agreement. Additionally, if Seller breaches any of Seller's representations or warranties, Seller shall indemnify, defend and hold Purchaser, its successors and assigns, harmless from and against all claims, costs, expenses, fines, penalties and liabilities of any kind or nature whatsoever, whether foreseeable or not, and all other damages and losses, including without limitation reasonable attorneys' fees, directly or indirectly and in whole or in part, arising out of or attributable to such breach, including clean-up, removal, monitoring, and remediation costs for breach of any Seller representation or warranty concerning environmental matters. The foregoing indemnification obligation shall survive Closing and not merge with the Statutory Warranty Deed. Section 24. Closing Conditions. Purchaser's obligation to close this transaction shall be expressly conditioned upon the following (collectively, "Closing Conditions")- (i) Seller has performed all of its obligations under this Agreement and is not in default; (ii) Escrow Agent has committed to issuing the Title Policy, subject only to the Permitted Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 8 of 12 Exceptions; (iii) no material change has occurred to the physical condition and legal status of the Properties since the Effective Date: (iv) no material change has occurred with respect to the environmental condition of the Properties or the property in the immediate vicinity of the Properties since Purchaser's inspections; (v) at Closing, there are no parties in possession of any part of the Properties, except such parties as are accepted by Purchaser; (vi) Purchaser has received the approval of the City of Port Orchard City Council to this close this Agreement; and (vii) Seller's representations and warranties are true and correct. IN WITNESS WHEREOF, the Parties hereto have hereunto subscribed their names. Kitsap County Representative Date: -Z_• City of Port Orchard Representative Title: Mayor Date: Septernberilt 2020 FORT �0���'''% \y�GORPo%igry�': SEAL ,190r o,� 0F�11111 WAS�N�NGP� Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 9 of 12 STATE OF WASHINGTON ) ) ss. COUNTY OF KITSAP COUNTY ) On this -� ,r date of nQ7tnV , 2020, before me, the undersigned, a Notary Public in and for the State of Washington, duly commissioned and sworn, personally appeared M b j �'aS-1!cR to me known to be the Real Estate Services Manager representing Kitsap County that executed the foregoing instruments, and acknowledged the said instrument to be the free and voluntary act and deed of said County, for the uses and purposes therein mentioned, and on oath, stated that she is authorized by the Board of County Commissioners to execute the said instrument. Witn'R%, R kogn d and official seal hereto affixed the day and year first above written. ����PNNA s c�Itiii SwN'r�'ii� �t / • ,,�Z2oGC . .4 A`� Name: Notary Public in and for the State of Washington /��� �a�,�,���C•1 O _- Residing at: C�� Z= My appointment expires: 4 3a Q, `WWN`�``�... STATE OF WASHINGTON ) ) ss. COUNTY OF KITSAP COUNTY ) On this ? date of �� j ; �Ij� 2020, before me, the undersigned, a Notary Public in and fo the St to of Washington, duly commissioned and sworn, personally appeared WPO A �('r 2L)f, to me known to be the 1 I, )t . representing the City of Port Orchard that executed the foregoing instruments, and acknowledged the said instrument to be the free and voluntary act and deed of said City, for the use and pur therein me coned, and on oath, stated that he/she is authorized by the L 41/ /> F 'Kr f ) jQ Wexecute the said instrument. Witness my hand and official seal hereto affixed the day and year first above written. N E Name: Norq �..In _ Notary Public in and for the State of Washington (-n aL 17 Residing at: 'YM.bet�.•GC\\�. M a ex Tres: Y ointment >` pp p O itWA Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 10 of 12 Exhibit A (Bethel Road Corridor Properties) Legal Descriptions Tax Parcel No. 022301-1-014-2008 Portion of the Northeast Quarter of the Northeast Quarter, Section 2, Township 23 North, Range 1 East, W.M., described as follows: beginning at a point on the East line of said Section 2, 1050 feet due South of the Northeast corner of said Section 2; thence South along said Section line 125 feet to an existing established fence which point is 1175 feet South of the Northeast corner of said Section 2; thence South 88°28' West along said fence 225 feet; thence North parallel with said Section line 125 feet; thence North 88028' East parallel with said existing fence line 225 feet to the point of beginning; EXCEPT portion in State Highway; Situate in the County of Kitsap, Washington. Tax Parcel No. 022301-1-059-2004 Lot B of Short Plat No. 4924, as recorded under Auditor's File No. 9001170117 being a portion of the Northeast Quarter of the Northeast Quarter of Section 2, Township 23 North, Range 1 East, W.M., Kitsap County, Washington; EXCEPT that portion conveyed for Bethel Road SE under Auditor's File No. 8903140065 and 9610280038; Situate in the County of Kitsap, Washington. Tax Parcel No. 012301-3-035-2000 Starting at a point which is South 89012' East 30 feet from the West Quarter corner of Section 1, Township 23 North, Range 1 East, W.M., Kitsap County, Washington; thence South 89°12' East 230 feet; thence South 00036' West 139.76 feet; thence North 89012' West 230 feet; thence North 00°36' East 139.76 feet to the point of beginning; less portion for SE Salmonberry Road and Bethel Road SE; Situate in the County of Kitsap, Washington. Tax Parcel Nos. 4625-000-003-0103 & 4625-000-004-0003 The South half of the South half of Lot 3 of Port Orchard Villa Tracts, as per plat recorded in Volume 4 of Plats, Page 100, records of Kitsap County Auditor; EXCEPT the East 30 feet; AND Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 11 of 12 Lot 4 of Port Orchard Villa Tracts, as per plat recorded in Volume 4 of Plats, Page 100, records of Kitsap County Auditor; EXCEPT the South 146.35 feet of the West half thereof; and EXCEPT the East 30 feet; Situate in the County of Kitsap, Washington. Tax Parcel No. 022301-1-006-2008 The East 6 acres of the following: the South half of the North half of the Southeast Quarter of the Northeast Quarter of Section 2, Township 23 North, Range 1 East, W.M., Kitsap County, Washington; EXCEPT Bethel Road SE as conveyed to the State of Washington for State Highway No. 14 by deed recorded under Auditor's File No. 144195; UKIW, The North 50 feet of the following described tract: the North 220 feet of the East 396 feet of the North half of the South half of the Southeast Quarter of the Northeast Quarter of Section 2, Township 23 North, Range 1 East, W.M., Kitsap County, Washington; EXCEPT the East 30 feet for Bethel Road SE as conveyed to the State of Washington for State Highway No. 14 by deed recorded under Auditor's File No. 144195; Situate in the County of Kitsap, Washington. Purchase & Sale Agreement Bethel Road SE Corridor Properties Page 12 of 12