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CF-Park Land-CS 871023 ,-- - .)f \ oe.. cl ~v- G~~eu-e~o~'V -(." Ie. ~ H\-t t,\W't J MEMORANDUM FROM GARDERE & WYNNE ATTORNEYS AND COUNSELORS 1500 Diamond Shamrock Tower Dallas, Texas 75201 (214) 979-4500 TO: Mayor, City Council, Frank Trando, and Larry Jackson FROM: Dean Wilkerson DATE: January 23,1987 RE: l Park Contract with u0est Attached to this Memo is an Amendment to Contract of Sale, which amends the original contract under which the City purchased the park land from Univest. The purpose of this Amendment, as you all know, is to obtain the removal of the deed restrictions on our park land so that we can receive the state grant money, but it also includes many of the items from Univest's "laundry list" of requirements in order to remove the deed restrictions. We have managed to eliminate or soften some of the items from their list. Some positive things we have negotiated are not reflected in this draft because their attorney did not have time to revise it again since yesterday. Most of these i terns I have di scussed wi th you previous ly in executive session, but there are some new items included for their side and for our side. :le are on a relatively tight time schedule with regard to this Amendment if we are to submit our application for reimbursement of the land acquisition costs of Phase III to the Texas Parks & Wildlife Department by the end of this month (i.e., next Friday). Tim Hogsett told Frank Trando and me in a telephone conversation that they will consider our Phase III application, including the land acquisition portion, if our application is submi tted by January 31 and the problems wi th our previous grants have been addressed -- namely, Obtaining the appraisal on Phase II and getting the deed restrictions removed. I earnestly Sunday evening 979-4711 with concerning this request that each of yOU try to call me either at home (393-1682) or early Monday morning an serious roblems or uestions ou have Amendment. If there appears to be a material . ..- - problem in this Amendment, we will attempt to negotiate further with Mike Allen and have necessary changes made by his attorney on Monday and Tuesday in time to have the revised copy of the Amendment available at the Council meeting Tuesday night for our approval. We have now been involved in numerous negotiating sessions with Mike Allen, some of which included John Kidd and their attorney, and some of which meetings included Dale Ware and/or Frank Trando and/or Larry Jackson. All of the items included in this Amendment have been discussed throroughly at one point or another. I am not happy with all of the provisions of this Amendment, but you rarely get everything you want in a contract, especially if you are in the weaker bargaining position. The unfortunate bottom line is that Univest is not legally required to help us in removing the deed restrictions; it is strictly an accommodation to us to receive the grant money. Rather than explain every provision in the Amendment, I want to tell you what I see as the four biggest risks to the City, although there are others Larry Jackson or I can explain if you don't see them already. 1. Money Damages. If we breach this Amendment (which incorporates all of the terms and provisions of the original contract unless amended), and we do not cure the breach after notice, as provided in Paragraph 3 of the Amendment, Coppell will be liable for a very substantial sum of money. The catastrophic remedy they had before was that they could simply repurchase our park land at the price for which we purchased it. Under this Amendment, Univest would receive a sum of money equal to the enhanced appraised value of the property, subject to the ceiling which is equal to 125% of the amount the land was appraised at in 1985. Under the old contract, there was not a provision whereby they had to give us wri tten notice nor did we have a per iod in which to cure. Under the Amendment, we essenti ally have 180 days to cure any legitimate default of which they have given us notice. 2. Repurchase of Phase III. They still have the right to repurchase Phase III if we breach, until such time as the state approves us for some type of grant. They would not agree to remove the deed restrictions on all three phases because it is not necessary at this time. We have not purchased Phase III and therefore have no deed with restrictions on it for that piece of property. At such time as we acquire the property and are approved for a grant, then they will execute a release of the restriction. -2- /' - - 3. Release. This Amendment contains a broad release of Univest from any claims by the City now or in the future with respect to the park land and our Town Hall site. They will not do the deal without this release. By granting this release, we virtually eliminate any defense or offsetting claim against them we might raise in a lawsuit concerning any breach we might commit in the future. We could still bring claims or actions against them for things they do in Coppell that are not related to the park or our Town Hall site. But once this Amendment is signed, we have no further recourse against them for any excavat ion, drainage, landscaping 0 r other things they might have done on our property. I am opposed to granting a release, but the only alternative is to kiss the park money goodbye. As some minor comfort to us, I have negotiated a waiver of any defaults the City might have committed up to this point under the contract. According to Univest, we have already committed numerous defaults, especially with regard to changing ordinances and making them applicable to Univest when they were allowed to be governed by the old ordinances. 4. Open Drainage. The final item I see as having a significant impact on Coppell is our approval of the concept of the linear open drainage system they propose. In executive session, we a 11 agreed that it did not look too bad on its face. If done in a quality manner, it could be an enhancement to the Ci ty. I have asked Wayne Ginn' s office to review it carefully, especially concerning the water quality standards. They are reviewing the information from Univest and talking with them concerning this proposal. In Paragraph 2, they have asked us to pay the ad valorem taxes on Phase III beginning January 1, 1986. We are not legally Obligated to do this since Univest granted us an extension of our option from December 31, 1985 to December 31, 1987. There was no reference to ad valorem taxes or anything else in the extension of the option. However, they did extend the option at our request and for our convenience, and they also lost a significant tax benefit by not having the property sold by the end o~ 1986. We indicated we would purchase Phase III by the end of":1986 until we learned we had a shot at our Phase III grant. The reference in Paragraph 14C to the reimbursement in connect ion with damage caused by GTE has been or wi 1 1 be pa id by GTE, according to Jim Cowman. Jim has assured me he wi 11 get to the bottom of this so that it does not fall on the City. There are a few other points we' re sti 11 working on wi th Univest that may find their way into the revised version of this Amendment that you will have on Tuesday night for your -3- . - - / cons ideration. I wi 11 make sure any changes from th is dr a ft are marked and explained to you. I urge you to call me with your questions or comments, and to discuss this Amendment among yourselves over the weekend. Many items we consider ln our deliberations are important to Coppell, but this Amendment lS doubly important because there is significant money avai lable to us once we have signed it, but there are also significant consequences associated wi th signing thi s Amendment. Therefore, it deserves our careful consideration. ..10.1 -4- l . ~/. ~;" ..... - (' _0. - I 0 "" f"Yb.nf; V '4'./eO {; Ie 5.Q This Amendment to Contract of Sale ("Amendment") is made / and entered into as of the day of ~anuar:y-,- 1987, by and V between the Parks of Coppe~oint Vent-ure Ie ("Owner"), a Texas joint venture, and the City of Coppell ("City"), a municipal corporation and political subdivision of the State of Texas. WIT N E ~ ~ E T tl WHEREAS, heretofore on December 30, 1982, Owner and City entered into a Contract of Sale (the "Agreement"), pursuant to which Owner agreed to sell to City, and City agreed to purchase from Owner, a Municipal Center Site (herein so called) and Phase I of the Park Site (herein so called); and WHEREAS, in connection with the Agreement, Owner granted City options to purchase Phase I! of the Park Site (herein so called) and Phase III of the Park Site (herein so called); and WHEREAS, the Municipal Center Site, Phase I of the Park Site, Phase II of the Park Site and Phase III of the Park Site are described by metes and bounds in Exhibits A, B, C and 0, respectively, attached hereto; and WHEREAS, pursuant to the Agreement and the option covering Phase I! of the Park Site, the City acquired: (i) the Municipal Center Site on December 30, 1982, for a total purchase price of $361,292.00; (ii) Phase I of the Park Site on December 30, 1982, for a total purchase price of $233,750.00; and (iii) '"'hase II of the Park Site on March 14, 1986, for a total purchase price of $388,800.00; and WHEREAS, certain appraisals prepared by Bill Dotson & Associates indicate that the appraised fair market value of: (i) the Municipal Center Site as of August 5, 1983, was $960,000.00; (ii) Phase I of the Park Site as of December 1, 1982, was $743,000.00; and (iii) Phase II of the Park Site as of May 31, 1985, was $2,035,000.00; and WHEREAS, Owner sold the Municipal Center Site, Phase I of the Park Site and Phase II of the Park Site to City at a price substantially less than such properties' true fair market value as indicated by the aforesaid appraisals; and WHEREAS, the sales price for Phase II! of the Park Site also is substantially less than the true fair market value of such property; and WHEREAS, the sale of the Municipal Center Site, Phase I of the Park Site and Phase I! of the Park Site by Owner to City for a price SUbstantially less than such properties' true fair market value and Owner's agreement to sell Phase III of the Park Site to City for a price substantially less than such property's true fair market value was in part in consideration of and reliance upon the agreements of City contained in the Agreement and the options covering Phase I! of the Park Site and Phase III of the Park Site; and WHEREAS, initially City agreed to purchase the Municipal j Center Site, Phase I of the Park Site, Phase II of the Park Site and Phase III of the Park Site as undeveloped land; and \ :f \.. .1 1.1" i..' ;,. ~>:,~, "" II , " i J: ~~ ~-. F'nwJct F;k. ~ ,\ -J ()\ __ 'l., \." B. City Hall Construction - Concurrently with the execution of this Amendment, City agrees to pay Owner the sum of $1, 18.L.46 in reimbursement of costs incurred by Owner in connection with damage caused in the construction of the Coppell city hall. I \~ :- c. Telephone Network Construction - City agrees to pay Owner the sum of $7,721.94 on the earlier of that date which is sixty (60) days after the date of this Amendment or ten (10) days after the date that City collects monies from GTE, in reimbursement of costs incurred by Owner in connection with damage caused in the construction of underground telephone network improvements in Parkway Boulevard by GTE. \ 15. Parkway Boulevard Pavers. City acknowledges and agrees that Owner has no further responsibi li ty in connect ion with the pavers existing at the entrance to the Coppell city hall, and City accepts all responsibility for any removal, relocation or additional work in connection with such pavers. 16. Open Drainaqe Channels. Without in any way affecting Owner's rights to utilize open drainage channels as set forth in subsection (h) of Section 2 of the Agreement, City hereby: (i) approves the conceptual design plans for the Linear Lake system submitted by Owner and agrees to mark City's approval on one set of such conceptual design plans and deliver the same to Owner concurrently with City's execution of this Amendment; and (ii) agrees that the standards set forth on attached Exhibit H are acceptable to City for maintenance of water quality in ponds, lakes, channels or other waterways within the Property. 17. Parkway Boulevard. lane of Parkway Boulevard before July 1, 1988. City ag rees to comp lete the no r t h adjacent to the Park Site on or 18. MacArthur Road Extension. City hereby agrees that Owner will not be responsible for any costs in connection with the construction of bridges relating to the extension of MacArthur Road northward from its intersection with Deforest Road. City further agrees that City will not levy any assessments against any portion of the Property or other property owned by Owner to recover any of such costs. 19. City's Obliqation to Improve Park Site. City agrees to continue to use City's good faith efforts to make improvements to the Park Site according to City's current plan therefor, a copy of which is attached hereto as Exhibit I; provided that City shall have the right to modify such plan from time to time. City agrees to apply all funds received from governmental grants for the Park Site (whether received for land acquisition costs or for park improvements) toward improving the Park Site. City hereby reaffirms City's agreement to use all of the park fees collected in connection with development within the Property ("Property Park Fees") toward improving the Park Site; provided, however, City shall have the right to reimburse City's park fund from future Property Park Fees to the extent that park fees collected in connection with developments outside the boundaries of the Property have previously been used for improvements to the Park Site. 20. Drainaqe Improvements Approval. City hereby approves the plans submitted by Owner for drainage improvements at five (5) locations along Denton and Cottonwood creeks east of Denton Tap Road, specifically being those plans prepared by Threadgill-Dowdy & Associates, Consulting Engineers, Parks of Coppell, plates 1-4, last revised September 3, 1986, and approved by the City of Coppell Public Works Department. Owner ~'\... 7 - I, II