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CONTRACT FOR SALE OF LAND AND BUILDING FOR PRIVATE DEVELOPMENT
BY AND BETWEEN
SALEM REDEVELOPMENT AUTHORITY
AND
HABITAT FOR HUMANITY - NORTH SHORE
FOR THE PROPERTY AT
18 CROMBIE STREET, SALEM, MA
APRIL_�_, 2004
< < , �-f Sh(�' RECEIVED
c, 41 n« OCT 2 6 2004
DEPT.OFK MNM&
COMMUNNDEVELOPMENT
r
INDEX
ARTICLE TITLE
1. DEFINITIONS
Defined Terms
II. TRANSFER OF THE PROPERTY AND PAYMENT THEREOF
Authority of Seller
Covenant of Sale
Condition of Property to be Conveyed
Purchase Price/Non-Refundable Deposit
Terms and Conditions
Time of Sale and Conveyance/Closing
Title and Instrument of Conveyance
Closing Costs
Adjustments
Default by Seller re: Conveyance
Default by Buyer prior to Delivery of Deed
III. RESTRICTIONS AND CONTROL UPON DEVELOPMENT
Restrictions on Use and Design
Improvements and Submission of Plans
Time for Commencement and Completion of Improvements
When Improvements Completed
IV. PROVISIONS RELATING TO OPERATION AND MAINTENANCE
Maintenance and Operation
Fagade Easement
V. INDEMNIFICATION
Reimbursement of Seller in Respect of Certain Litigation
VI. INSURANCE
Insurance Coverage
Non-Cancellation Clause
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VII. RIGHTS, REMEDIES AND PROCEDURES IN THE EVENT OF
A BREACH BY BUYER
Default by Buyer
VIII. CONDITIONS OF CONVEYANCE
Conditions Subsequent to Conveyance
IX. ANTI-DISCRIMINATION; HIRING
Anti-Discrimination; Hiring
X. MISCELLANEOUS PROVISIONS
Obligations and Rights and Remedies Cumulative and Separable
Amendment
How Agreement Affected by Provisions Being Held Invalid
Time of Essence; Covenants to be Enforceable
Seller's Staff and Officers Barred From Interest.
Approvals and Notices
Matters to be Disregarded
Excusable Delays
Agreement Binding on Successors and Assigns
Waivers
Applicable Law
Exhibits and Attachments
CONTRACT FOR SALE OF LAND AND BUILDING FOR PRIVATE DEVELOPMENT
This Agreement is made and entered as of this day of April,2004,by and between
the SALEM REDEVELOPMENT AUTHORITY, having an office at 120 Washington Street,
Salem,MA 01970 (hereinafter referred to as the "Seller") and HABITAT FOR HUMANITY-
NORTH SHORE, with a principal office at 215 Maple Street, Lynn, MA 01904 (hereinafter
referred to as the 'Buyer").
WHEREAS the Seller desires to convey to Buyer the property at 18 Crombie Street,
Salem, and that such property be developed for purposes in accordance with the Proposal to
Purchase submitted to the Salem Redevelopment Authority on January 8, 2004 (hereinafter
"Proposal"). See attached Exhibit A.
WHEREAS Seller and Buyer wish to agree as to the terms and conditions of such
conveyance and development.
WHEREAS Seller believes that the redevelopment of the Property pursuant to this
Agreement,and the fulfillment generally thereof,are in the vital best interests of the City and the
health, safety, morals, and welfare of its residents, and in accord with the public purposes and
provisions of the applicable Federal, State and local laws and requirements under which the
project has been undertaken-and is being assisted:
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NOW, THEREFORE,in consideration of One Dollar ($1.00)and compliance with the
terms and conditions of this Contract for Sale of Land and Building for Private Development,the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Defined Terms
For the purpose of this Agreement, the following terms shall have the meaning:
a. "Agreement" shall mean this Contract for Sale of Land and Building for Private
Development.
b. "Buyer" shall mean HABITAT FOR HUMANITY - NORTH SHORE, and its
successors and assigns in legal of beneficial interest to the Property.
c. "Certificate of Completion"shall mean the instrument or certification required of the
Seller under Article III.
d. "Closing Date" shall mean the date of recording of the Deed.
e. "Deed" shall mean the instrument(s), to be recorded in the Essex County Registry of
Deeds in Salem, Massachusetts, whereby the Property is conveyed to the Buyer in
accordance with this Agreement
f. "Design Documentation" shall mean all plans, specifications,certifications and other
documents and instruments submitted by the Buyer to and approved by the Salem
Redevelopment Authority,its Design Review Board,Building Department,Board of
Health and all other regulatory boards and agencies of the City of Salem having
Jurisdiction over the Property and/or the Improvements.
g. "Improvements" shall mean all structures and amenities to be made or created by the
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Buyer on or to the Property Y p rry pursuant to thea roved Design Documentation,PP g mentation, m
accordance with the Agreement, Request for Proposals, and Proposal and Proposed
Plan.
h. "Proposal" shall mean the document dated January 8, 2004 titled "Proposal to
Purchase" by Habitat for Humanity — North Shore, which is on file in the Salem
Redevelopment Authority office, and incorporated herein by reference. See attached
Exhibit A.
i. "Property" shall mean the land and all improvements presently thereon situated at 18
Crombie Street in Salem,Massachusetts,located on City of Salem Assessor's Map 26,
Lot 0452 and as described in a deed recorded at the Essex South District Registry of
Deeds in Book 22087, Page 444.
j. "Provisional Designation" shall mean SRA's selection of a proposer to develop
property in accordance with certain terms and conditions as set forth in its Notice of
Provisional Designation (made by the January 14,2004 vote of the Board of Directors
of the SRA) and hereunder. To the extent that said conditions are inconsistent, the
terms hereunder shall control.
k. "Seller" shall mean the Salem Redevelopment Authority ("SRA").
1. "Construction Commencement Date" shall be defined as the date upon which
construction commences.
in. "Construction Completion Date" shall be defined as the date upon which the Salem
building inspector issues a Certificate of Occupancy.
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ARTICLE II
TRANSFER OF THE PROPERTY AND PAYMENT THEREOF
Authority of Seller
Seller warrants and represents that it has the power and authority to execute and deliver
this Agreement and to perform the obligations of Seller hereunder in accordance with the terms
and conditions of this Agreement, and that this Agreement is the legal and binding obligation of
the Seller,enforceable in accordance with its terms. See attached Exhibit B (Deed from Holyoke
Square, Inc. to the SRA; Vote of the Board of Directors of Holyoke Square, Inc; Tripartite
Agreement; Vote of the SRA and Tripartite Agreement; and the SRA vote to provisionally
designate HABITAT FOR HUMANITY—NORTH SHORE, as the developer for 18 Crombie
Street).
The Seller has not received written notice of any pending condemnation, expropriation,
eminent domain or similar proceeding affecting all or any portion of the property and has no
knowledge that any such proceeding is contemplated.
The Seller has not received written notice from the holder of any mortgage on the
property, any insurance company that has issued a policy with respect to the property, or any
board of fire underwriters (or other body exercising similar functions)claiming any outstanding
defect or deficiency in,or requesting the performance of any repairs,alterations or other work to,
the property not completed as of the date hereof.
There are no management, service, equipment, supply, labor, maintenance or similar
agreements with respect to or affecting all or any portion of the property which shall be binding
upon the Buyer subsequent to the delivery of the deed.
The Seller has paid or will pay in full prior to delivery of the deed all outstanding bills and
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invoices for utility charges, labor, goods, materials, and services of any kind relating to the
property except to the extent that such payment is the responsibility of tenants.
There is no action,suit,proceeding or investigation pending against the Seller with respect
to this agreement,the transactions contemplated hereby,all or any portion of the property or the
ownership thereof, in any court or before or by any federal, state, county or municipal
department, commission, board, bureau, or agency or other governmental instrumentality.
The Seller has not received written notice of any outstanding violation of any federal,
state, county or municipal laws, ordinances, orders, codes, rules regulations or requirements
affecting all or any portion of the property, or of the presence or suspected presence in or under
the property of any materials which might be classified as hazardous or toxic pursuant to
applicable law.
The Seller has not received written notice of any proposed governmental assessment for
public improvements to or for the benefit of the property.
The Sellers warrant to the best of their knowledge that no urea formaldehyde foam
insulation (uffi) is present on the property.
The Sellers warrant to the best of their knowledge that there are no underground fuel
storage tanks on the property.
The Seller agrees to sign and deliver, at the time of performance, such affidavits,
documents and certificates as may be required by any lending institution which may provide the
purchase money mortgage funds to the Buyer for this transaction, provided the same are
reasonably requested by such lending institution.
Covenant of Sale
Subject to all of the terms, covenants and conditions of this Agreement,the Seller agrees to
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sell and convey and the Buyer covenants and agrees to purchase the Property.
Condition of Property to be Convey
The Seller and Buyer agree that the Property shall be conveyed "as is," that is, in the
condition in which it exists at the time of the execution of this Agreement.
Purchase Price/Non-Refundable Deposit
The purchase price for the Property shall be One Dollar($1.00). Upon execution of this
Agreement, the Buyer shall deposit Five Thousand Dollars ($5,000.00) in an escrow account
established and held by the SRA. The deposit shall be refunded upon completion of the project.
Completion is defined as receipt of the final certificate of occupancy for an income eligible family.
Other consideration shall consist of compliance by Buyer with the terms and conditions of this
Agreement. Notwithstanding the foregoing, the deposit shall be refunded if the property is not
conveyed due to the Seller's breach of the terms of this Agreement, or if Seller fails to convey the
property and the Buyer has performed its obligations hereunder.
Terms and Conditions
a. The home shall be redeveloped into a single-family affordable home, consistent with the
Proposal dated January 8,2004 but more thoroughly specified within a redevelopment plan to
be submitted.
b. The Buyer shall furnish satisfactory evidence that the Buyer has the financial resources needed
to complete the project at the time of property closing not later than July 30, 2004. Seller is
unable to enter into land disposition agreement until Buyer has furnished this evidence. See
760 CMR 12.05 (3). Exhibit C
c. All permitting and regulatory approvals must be completed by July 30,2004. If all approvals
are not completed by July 30, 2004,Seller will agree to reasonable extension to all for Board(s)
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to complete the same.
d. Preservation of the main structure shall occur. One of the non-original "wings" can be
demolished in accordance with the Proposal.
e. Landscaping shall be designed to enhance the property.
f. All local, State and Federal regulations regarding any hazardous materials shall be followed.
g. The Buyer shall comply with M.G.L. c.7.ss40J, which requires a disclosure of beneficial
interests to be filed with the Department of Capital Asset Management.
h. Construction shall be completed by July 30, 2005, unless extended by mutual agreement of
the parties.
Time of Sale and Conveyance/Closine
If the Buyer and Seller shall then have satisfied the conditions precedent to delivery of the
Deed, the sale and conveyance and delivery of possession of the Property by the Seller and the
purchase of the same by the Buyer shall take place on the Closing Date at the office of the Salem
Redevelopment Authority, 120 Washington Street, Salem, MA 01970, or at such other place as
the Seller may designate. The Closing Date shall be no later than July 30,2004,unless extended
by mutual agreement of the parties. In addition, the Seller and the Buyer may, by mutual
agreement, accelerate the Closing Date.
Title and Instrument of the Conveyance
The sale and conveyance of the Property shall be by Quitclaim Deed conveying good
record and marketable fee simple title to the Property subject only to the terms and conditions of
this Agreement and to all liens, encumbrances, easements and restrictions existing at the date
thereof(excluding monetary liens),provided however that any liens, encumbrances, easements,
restrictions or the like hereafter arising(excluding monetary liens)shall not affect either the use or
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development of the Property or any part thereof,as contemplated hereunder, or the value of the
Property.
It is understood and agreed by the parties that the property shall not be in conformity
with the title provisions of this Agreement unless:
a. No building, structure, fence or other improvement of any kind belonging to any other
person or entity shall encroach upon or under the property.
b. All buildings,structures and improvements,including but not limited to driveways,septic
systems and all means of access to the property, shall be located completely within the
boundary lines of said property and shall not encroach upon or under the property of any
other person or entities.
c. Title to the property shall be insurable for the benefit of Buyer by a title insurance
company at normal premium rates in the American Land Title Association form currently
in use, subject only to those printed exceptions to title normally included in the "jacket"
to such form and to the exceptions set forth in Title Section of the agreement.
Closing Costs
It shall be at the Buyer's expense to pay any and all of its closing costs arising from the sale
of the subject property including but not limited to cost of recording the Deed, this Agreement,
and all other instruments and plans to be recorded together with the Deed.
Adjustments
The Seller shall pay all operating costs of the Property allocable to time periods prior to
the Closing Date. The Buyer shall pay all operating costs of the Property allocable with respect to
any period after delivery of the Deed hereunder.
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Default by Seller re: Conveyance
In the event that the Seller shall be unable to make conveyance or to deliver possession of
the Property as provided herein, the Seller shall use reasonable efforts to make conveyance or to
deliver possession as herein agreed, in which event the Seller shall give written notice thereof to
the Buyer at or before the Closing Date in question,and thereupon the time for the performance
by the Seller shall be extended for a period of sixty (60) days, or such longer period as the Seller
and the Buyer shall mutually agree. Provided further,the Buyer shall have the election, either at
the original or any extended time for performance,to accept such title and possession as the Seller
can deliver to the Property and to pay therefor the purchase price without deduction, in which
case the Seller shall go forward with the closing. In no event shall the Buyer be entitled to acquire
less than all of the Property. In the event that at the expiration of all extensions of time,the Seller
shall be unable to make conveyance or to deliver possession as herein provided, then all
obligations of the parties hereto shall cease,and this Agreement shall be void and the parties shall
have no further recourse to each other hereunder and the$5,000.00 deposit shall be refunded to
the Buyer.
Default by Buyer Prior to Delivery of Deed
In the event that prior to delivery of the Deed, the Buyer shall default in its obligations
hereunder and shall be unable to correct such default within 60 days of the Seller's receipt of
notice thereof, then the Seller may, at its election, by notice to the Buyer given on or prior to the
Closing date(as the same may be extended hereunder)terminate this Agreement and all rights of
the Buyer hereunder.
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ARTICLE III
RESTRICTIONS AND CONTROL UPON DEVELOPMENT
Restrictions on Use and Design
The Property is to be redeveloped for use as a single-family affordable home,in accordance
with the Proposal and Design Documentation to be reviewed and approved by the SRA and any
other applicable boards. The home is to be sold to a low-to moderate-income family as defined
by the US Department of Housing and Urban Development (HUD) and the deed shall be
restricted for use by a low-to moderate-income family for at least fifteen (15) years.
a. The deed shall state the conditions restricting use of the Property, and shall provide
Seller with a right of entry after notice and reasonable period for Buyer to cure in the
event that the Property ceases to be used for such purposes.
b. Improvements will be in compliance with plans acceptable to the Salem
Redevelopment Authority, the City of Salem acting through the Salem Planning
Department, and other applicable boards and review entities. In its construction of
the Improvements, the Buyer shall insure that there is no deviation from such
approved Design Documentation in connection with the appearance of the
Improvements, except and only to the extent that changes have been requested in
writing and have been approved in writing by the Seller. Approval by the Seller does
not supersede or circumvent the requirements of any local, state or federal law or
regulations. Seller hereby agrees to approve any change in Design Documentation
required by the Historic Structure Rehabilitation Standards promulgated by the US
Department of the Interior.
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c. The Buyer must sell the home at an affordable price to a first-time homebuyer
household with an income not more than or equal to 80 percent of area median
adjusted for household size as established by HUD. A first-time homebuyer is defined
by HUD as one that has not purchased a home in three years.
d. Buyer shall be solely responsible for determining the selection process for the selection
of a first-time homebuyer provided that the selection process and the qualifications of
the first-time home-buyer conform to the requirements of this LDA, the Buyer's
Proposal and the Seller's RFP.
Improvements and Submission of Plans
Buyer hereby agrees to submit to the Salem Redevelopment Authority and all other
government authorities any and all documents necessary to secure approvals, permits or other
permission to construct and expedite the Improvements;to notify the Seller of such submissions;
and to forward to the Seller copies of all approvals, permits or other permissions received from
the above entities upon receipt.
In the event the Buyer shall reasonably fail to comply with the foregoing requirements in
proceeding with construction or modification of all or any part of the Improvements,the Seller
may, within a reasonable time after discovery thereof,direct in writing that the Buyer modify or
reconstruct such portion or portions of the Improvements as deviate from the approved Design
Documentation or any change with respect thereto in order to bring them into conformance
therewith. The Buyer shall promptly comply with such a directive. In addition to any other
remedies available to it under law or under the Agreement, the Seller may enforce these
provisions by an action in a court of appropriate jurisdiction.
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Time for Commencement and Completion of Improvements
The Buyer shall begin the construction of the Improvements, in accordance with the
approved Design Documentation and shall diligently proceed to completion of the construction
of the Improvements and shall substantially complete such construction by July 30,2005,unless
extended by the parties.
When Improvements Completed
The construction of the Improvements shall be deemed completed for the purpose of this
Agreement when a Certificate of Occupancy is issued by the Building Inspector. Promptly after
receiving notice of completion by the Buyer and after the certificate of occupancy is obtained,the
Seller shall inspect the Property to insure substantial completion of the Improvements in
accordance with the requirements of the Design Documentation,this Agreement and the Request
for Proposals;after which time the Seller will furnish the Buyer with a Certificate of Completion
so certifying. Such certification by the Seller shall be conclusive determination of satisfaction of
the agreements and covenants in this Agreement and in the relevant Deed with respect to the
obligations of the Buyer to construct such Improvements.
Buyer agrees that Seller shall be under no obligation to issue a Certificate of Completion
until such time as the Seller has had a reasonable opportunity to inspect the Improvements
constructed pursuant to the provisions of this Agreement, after written request from the Buyer
that the Seller issue a Certificate of Completion, provided further that such issuance shall not be
unreasonably withheld or delayed. The Seller shall provide a detailed list of work needing to be
completed or corrected in accordance with original or agreed upon amended plans within 30 days
after receiving the Buyers request for a Certificate of Completion, if the Seller does not provide
said Certificate.
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ARTICLE IV
PROVISIONS RELATING TO OPERATION AND MAINTENANCE
Maintenance and Operation
The Buyer shall,at all times during ownership keep the Property and all Improvements in
good and safe condition and repair, and in the occupancy, maintenance and operation of such
Improvements,the Property and the Improvements shall comply with all laws,ordinances,codes
and regulations applicable thereto.
Facade Easement
The Seller and Buyer shall enter a Fagade Easement Agreement prior to the date of closing
which shall be recorded with the Deed to the property. See attached Exhibit D.
ARTICLE V
INDEMNIFICATION
Reimbursement of Seller in Respect of Certain Litigation
Provided that Seller prevails, after exhausting all rights of appeal, the Buyer shall pay all
reasonable costs (including attorney fees),expenses,judgment,decrees or damages which may be
incurred by the Seller in any proceeding brought to enforce the obligations of the Buyer set forth
in the provisions of this Agreement. The Buyer and Seller shall indemnify and hold harmlesseach
other from any claims due to the other's breach or default hereunder arising in connection with
this Agreement.
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ARTICLE VI
INSURANCE
Insurance Coverage
The Buyer shall keep the Improvements and personalty used in connection therewith
insured by general comprehensive liability insurance and builder's risk property insurance to the
same extent and amount which is normally required by mortgagees with respect to similar
properties in the City of Salem. The Buyer shall provide evidence of insurance to the Seller. In
the event of a property insurance claim, proceeds shall be used for completion of construction.
Non-Cancellation Clause
All insurance policies shall provide that any cancellation, change or termination thereof
shall not be effective with respect to the Seller until after at least thirty (30) days prior notice has
been given to the Seller to the effect that such insurance policies are to be canceled, changed or
terminated at a particular time.
ARTICLE VII
RIGHTS,REMEDIES AND PROCEDURES IN THE EVENT OF A BREACH BY BUYER
Default by Buleer
If, at any time, after delivery of the Deed the Buyer shall fail or refuse to commence,
diligently pursue or complete construction in accordance with the terms and conditions of this
Agreement, or shall fail or cease to use the Property for purposes authorized (specifically, an
affordable single-family home), or shall otherwise violate or fail to comply with conditions set
forth in this Agreement, the Seller shall in writing notify the Buyer of such failure or violation.
The Buyer shall thereupon have sixty (60) days from the receipt by it of such written notice to
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cure such failure or violation.
a. If the Buyer does not cure such failure or violation within the 60 day period(or within
such extended period of time as may be reasonably established by the Seller acting
solely in its discretion) or where cure requires more than 60 days, if Buyer does not
promptly begin such cure and thereafter diligently prosecute the same to completion,
an event of default ("Event of Default") shall be deemed to exist.
i. If there is an Event of Default,the Seller may,at its election,terminate this
Agreement and all rights of the Buyer hereunder by written notice to
Buyer. The Seller, at its election, shall also have the right to reenter and
take possession of the Property and all Improvements thereon and to
terminate and revest in the Seller title to the fee simple estate therein. The
Deed shall reference the Seller's right of entry for condition broken in the
event of an Event of Default, and shall state that such right of entry shall
terminate upon issuance of the certificate of completion.
ii. If there is an Event of Default, the Seller hereto may in addition to or in
lieu of other remedies set forth herein or allowed by law institute such
actions and proceedings as may be appropriate, including actions and
proceedings to compel specific performance and payment of all damages,
expenses and costs.
Neither these remedies nor that class of remedies more particularly
described in this Agreement shall be exclusive unless expressly stated.
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ARTICLE VIII
CONDITIONS OF CONVEYANCE
Conditions Subsequent to Conveyance
Not less than ten (10) days prior to the construction commencement date, the Buyer shall satisfy
the following conditions:
a. The Buyer shall provide the Seller with a copy of the contract documents for
completion of the Improvements described in this Agreement.
The Buyer shall at all times keep the Seller fully and currently advised of the status of
all aspects of the Buyer's progress in meeting the conditions of the Agreement with
respect to the Improvements, including, without limiting the generality of the
foregoing, securing of financing and arrangements for construction. All contracts
entered into by the Buyer respecting the development of the Property shall obligate
the parties thereto act in a manner consistent with the obligations of the Buyer under
this Agreement. During the implementation of any such contracts the Seller shall
have the right to review all aspects of the work performed thereunder in order to
insure that such work is being undertaken in manner consistent with the obligations
of the Buyer under this Agreement.
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ARTICLE IX
ANTI-DISCRIMINATION; HIRING
Anti-Discrimination; Hirin¢
The Buyer agrees that in the construction of the Improvements and otherwise in
the performance of this Agreement,it shall comply and shall cause all contractors to comply with
all applicable laws,ordinances,regulations and orders from time to time in effect relating to non-
discrimination, equal employment opportunity, contract compliance and affirmative action.
ARTICLE X
MISCELLANEOUS PROVISIONS
Obligations and Rights and Remedies Cumulative and Separable
The respective rights and remedies of the Seller and the Buyer provided by this Agreement
or by law shall be cumulative,and the exercise of any one or more of such rights or remedies shall
not preclude the exercise, at the same or different times of any other such rights or remedies.
Amendment
This Agreement shall constitute the entire agreement between the parties hereto;it may be
amended only by an instrument in writing signed by the Seller and the Buyer.
How Agreement Affected by Provisions Being Held Invalid
If any provisions of this Agreement are held invalid,the remainder of this Agreement shall
not be affected hereby,if such remainder would then continue to conform to the requirements of
applicable laws.
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Time of Essence; Covenants to be Enforceable
Time is of the essence in the performance of this Agreement, and the parties hereto shall
diligently,promptly and punctually perform the obligations required to be performed by each of
them and shall diligently, promptly and punctually fulfill the conditions applicable to each of
them.
Seller's Staff and Officers Barred From Interest
a. No member, official or employee of the Seller shall have any personal interest,direct
or indirect, in this Agreement or the Buyer, nor shall any such member, official or
employee participate in any decision relating to this Agreement which affects his
personal interest or the interests of any corporation, partnership, or association in
which he is,directly or indirectly,interested. No member,official or employee of the
Seller shall be personally liable to the Buyer or any successor in interest in the event of
any default or breach by the Seller or for any amount which may become due to the
Buyer or to its successor or on any obligations under the terms of this Agreement.
b. The Buyer covenants that he has not employed or retained any company or person
(other than a full-time bona fide employee working for the Buyer) to solicit or secure
this Agreement, and that he has not paid or agreed to pay any company or person
(other than such an employee) any gift,contribution,fee,commission,percentage,or
brokerage fee, contingent upon or resulting from the execution of this Agreement.
Approvals and Notices
Where the consent or approval of the Seller is required hereunder, such consent or
approval shall not be unreasonably withheld,conditioned,or delayed, but the same shall be valid
and binding only if given in writing signed by a duly authorized official,provided, however,that
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if the Buyer has requested approval from Seller such approval shall be deemed granted after a 30
day period of non-reply from the date of Buyer's request.
Notices shall be deemed given when deposited in the United States mail and sent registered
or certified mail,postage prepaid,to the principal office of the parry to whom it is directed,which
is initially as follows:
Buyer: HABITAT FOR HUMANITY - NORTH SHORE
215 Maple Street
Lynn, MA 01904
With a copy to: Warren Sawyer
The Caleb Foundation
491 Humphrey Street
Swampscott, MA 01907
Seller: Salem Redevelopment Authority
Executive Director
120 Washington Street
Salem, MA 01970
With copy to: City Solicitor
Salem City Hall
93 Washington Street
Salem, MA 01970
The parties shall promptly notify each other of any change of their respective addresses set
forth above.
Any requests for approvals made by Buyer to the Seller where such approvals shall be
deemed granted after a period of non-reply by the Seller shall, as a condition to the effectiveness
thereof, be prefaced with the following language printed in capital letters in bold face type:
"NOTICE: THIS REQUEST FOR APPROVAL REQUIRES IMMEDIATE REPLY.
FAILURE TO RESPOND WITHIN 30 DAYS SHALL RESULT IN AUTOMATIC
APPROVAL."
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Matters to be Disregarded
The index to and titles of the several articles and sections of this Agreement are inserted
for convenience of reference only and shall be disregarded in construing or interpreting any of the
provisions of this Agreement.
Excusable Delays
For the purpose of any of the provisions of this Agreement, neither the Seller nor the
Buyer, as the case may be, shall be considered in breach of or default in its obligations hereunder
in the event of unavoidable delay in the performance of such obligations due to causes beyond its
control and without its fault or negligence, including but not restricted to, acts of God, or of the
public enemy, act of the Government, act of the other party, fires, floods or other casualties,
epidemics, quarantine restrictions, labor disputes, shortages, freight embargoes, and unusually
severe weather or delays of contracts and subcontractors due to such causes; it being the purpose
and intent of this provision that in the event of the occurrence of any such excusable delay, the
time or times for performance of the obligations of such parry shall be extended for the period of
the excusable delay, provided,that the parry seeking the benefit of the provisions of this Section
shall, within thirty (30) days after the beginning of any such excusable delay, have first notified
the other party thereof in writing stating the cause or causes thereof and requested an extension
for the period of the excusable delay. In calculating the length of the delay, the Seller shall
consider not only actual work stoppages but also any consequential delays resulting from such
stoppages as well. In no event shall any financing difficulty or inability to secure a building
permit be a cause for an extension, except as provided hereunder.
Agreement Binding on Successors and Assigns
The respective provisions of this Agreement, in accordance with their terms, shall be
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binding upon, and shall inure to the benefit of the successors and assigns of the Buyer and any
public body succeeding to the interests of the Seller. It is intended and agreed that the conditions
and covenants contained in this Agreement shall be covenants running with the land which will
continue in force and effect after the delivery of the Deed.
Waivers
Any right or remedy which the Seller or the Buyer may have under this Agreement or any
of the provisions, may be waived in writing, without execution of a new or supplementary
Agreement. The Seller, in writing, may waive any provisions herein contained for its or their
benefit.
Applicable Law
This Agreement shall be construed and enforced in accordance with the laws of the
Commonwealth of Massachusetts. This Agreement is to be construed as a Massachusetts contract
and is to take effect as a sealed instrument.
Exhibits and Attachments
Any and all exhibits and attachments referenced herein or attached hereto, are duly
incorporated within this Agreement.
(space intentionally left blank)
21
IN WITNESS WHEREOF, as of this day of �, 2004, at Salem,Massachusetts,
the parties hereto have caused this Agreement to be signed, sealed and delivered by their duly
authorized officers or representatives, respectively.
SALEM REDEVELOPMENT AUTHORITY:
By: ( —Gvua.— By:
Robert Curran, repg P. Walsh,
SRA Chairman ecutive Director
HABITAT FOR HUMANITY — NORTH SHORE
By: /.P,C.i a /po&4tai
Bernice A. Pasternak
President
Approved as to form:
G�iGCc,�t ,
J' n Gilbert, City Solicitor
22
CONTRACT FOR SALE OF LAND AND BUILDING FOR PRIVATE DEVELOPMENT
BY AND BETWEEN
SALEM REDEVELOPMENT AUTHORITY
AND
HERITAGE PLAZA ENTERPRISES, LLC
FOR THE PROPERTY AT
17 CENTRAL STREET, SALEM, MA-KNOWN
AS THE OLD SALEM POLICE STATION
AUGUST 29, 2003
f
INDEX
ARTICLE TITLE
I. DEFINITIONS
Defined Terms
II. TRANSFER OF THE PROPERTY AND PAYMENT THEREOF
Authority of Seller
Covenant of Sale
Condition of Property to be Conveyed
Purchase Price/Non-Refundable Deposit
Terms and Conditions
Time of Sale and Conveyance/Closing
Title and Instrument of Conveyance
Closing Costs
Adjustments
Default by Seller re: Conveyance
Default by Buyer prior to Delivery of Deed
Performance Mortgage
III. RESTRICTIONS AND CONTROL UPON DEVELOPMENT
Restrictions on Use and Design
Improvements and Submission of Plans
Time for Commencement and Completion of Improvements
When Improvements Completed
IV. PROVISIONS RELATING TO OPERATION AND MAINTENANCE
Maintenance and Operation
Fagade Easement
V. INDEMNIFICATION
Reimbursement of Seller in Respect of Certain Litigation
VI. INSURANCE
Insurance Coverage
Non-Cancellation Clause
VII. RIGHTS, REMEDIES AND PROCEDURES IN THE EVENT OF
A BREACH BY BUYER
Default by Buyer
VIII. CONDITIONS OF CONVEYANCE
Conditions Subsequent to Conveyance
IX. ANTI-DISCRDvUNATION; HIRING
Anti-Discrimination; Hiring
X. MISCELLANEOUS PROVISIONS
Obligations and Rights and Remedies Cumulative and Separable
Amendment
How Agreement Affected by Provisions Being Held Invalid
Time of Essence; Covenants to be Enforceable
Seller's Staff and Officers Barred From Interest
Approvals and Notices
Matters to be Disregarded
Excusable Delays
Agreement Binding on Successors and Assigns
Waivers
Applicable Law
Exhibits and Attachments
CONTRACT FOR SALE OF LAND AND BUILDING FOR PRIVATE DEVELOPMENT
This Agreement is made and entered as of this 29TH day of August, 2003, by and between the
SALEM REDEVELOPMENT AUTHORITY, having an office at 120 Washington Street, Salem, MA
01970 (hereinafter referred to as the "Seller") and HERITAGE PLAZA ENTERPRISES,LLC , with a
principal office at One Newbury Street, Peabody, MA 01960 (hereinafter referred to as the 'Buyer").
WHEREAS the Seller desires to convey to Buyer the property at 17 Central Street,Salem,and that
such property be developed for purposes in accordance with the Approved Plan"Renovation of Old Salem
Police Station, Salem, MA" (Neshamkin French Architects, Inc., dated November 18, 2002)(hereinafter
"Approved Plan"). See attached Exhibit A.
WHEREAS Seller and Buyer wish to agree as to the terms and conditions of such conveyance and
development.
WHEREAS Seller believes that the redevelopment of the Property pursuant to this Agreement,and
the fulfillment generally thereof,are in the vital best interests of the City and the health, safety, morals, and
welfare of its residents, and in accord with the public purposes and provisions of the applicable Federal,
State and local laws and requirements under which the project has been undertaken and is being assisted:
NOW, THEREFORE, in consideration of One Hundred and Twenty Five Thousand Dollars
($125,000.00), ten percent of which has been paid as a nonrefundable deposit as set forth herein, and
compliance with the terms and conditions of this Contract for Sale of Land and Building for Private
Development, the parties hereto agree as follows:
1
ARTICLE I
DEFINITIONS
Defined Terms
For the purpose of this Agreement, the following terms shall have the meaning:
a. "Agreement" shall mean this Contract for Sale of Land and Building for Private
Development.
b. "Approved Plan"shall mean the final set of plans as approved by the Seller(SRA),Planning
Board, Salem Historic Commission. See attached Exhibit A.
C. 'Buyer" shall mean HERITAGE PLAZA ENTERPRISES,LLC, and its successors and
assigns in legal of beneficial interest to the Property.
d. "Certificate of Completion" shall mean the instrument or certification required of the Seller
under Article III.
e. "Closing Date" shall mean the date of recording of the Deed.
f. "Deed" shall mean the instrument(s),to be recorded in the Essex County Registry of Deeds in
Salem, Massachusetts, whereby the Property is conveyed to the Buyer in accordance with this Agreement
g. 'Design Documentation" shall mean all plans, specifications, certifications and other
documents and instruments submitted by the Buyer to and approved by the Salem Redevelopment Authority,
its Design Review Board,the Salem Historic Commission,Planning Board,Building Department,Board of
Health and all other regulatory boards and agencies of the City of Salem having jurisdiction over the
Property and/or the Improvements. Decisions of said boards are incorporated herein by reference. See
attached Exhibit B.
h. "First Mortgagee" shall mean the lending institution providing the financing for the
construction of the project.
2
i. "Improvements" shall mean all structures and amenities to be made or created by the Buyer
on or to the Property pursuant to the approved Design Documentation, in accordance with the Agreement,
Request for Proposals, and Proposal and Approved Plan.
,i. "Proposal" shall mean the document dated September 25,2000 titled"Response to Request
for Proposal" by the Charing Cross Realty Trust, which is on file in the Salem Redevelopment Authority
office, and incorporated herein by reference. See attached Exhibit C.
k. "Property"shall mean the land and all improvements presently thereon situated at 17 Central
Street in Salem, Massachusetts, commonly known as the Old Police Station located on City of Salem
Assessor's Map 35, Lot 236 and as described in a deed recorded at the Essex South District Registry of
Deeds in Book 17801, Page 352.
1. "Provisional Designation" shall mean SRA's selection of a proposer to develop property in
accordance with certain terms and conditions as set forth in its Notice of Provisional Designation(made by
the October 10, 2001 vote of the Board of Directors of the SRA) and hereunder. To the extent that said
conditions are inconsistent, the terms hereunder shall control.
In. "Seller" shall mean the Salem Redevelopment Authority ("SRA").
n. "Construction Commencement Date" shall be defined as the date upon which construction
commences (see attached Exhibit D), but shall not include preliminary abatement work as described in
Abatement Agreement dated January 27, 2003 between SRA and Heritage Plaza, LLC and the Asbestos
Certification reports dated March 25,March 28, and March 31, 2003 (See attached Exhibit E),nor shall it
include the Subsurface Remediation as described in ISP Report (dated July 9, 2003) and contract for
removal in accordance therewith. See attached Exhibit F.
o. "Construction Completion Date" shall be defined as the date upon which the Salem building
inspector issues a Certificate of Occupancy.
3
-7
ARTICLE 11
TRANSFER OF THE PROPERTY AND PAYMENT THEREOF
Authority of Seller
Seller warrants and represents that it has the power and authority to execute and deliver this
Agreement and to perform the obligations of Seller hereunder in accordance with the terms and conditions of
this Agreement, and that this Agreement is the legal and binding obligation of the Seller, enforceable in
accordance with its terms. See attached Exhibit G (vote of Salem City Council transferring this property to
the SRA, Cooperation Agreement between the City of Salem City Council and the SRA,and the SRA vote
to provisionally designate the HERITAGE PLAZA ENTERPRISES, LLC, as the developer for the Old
Police Station site).
Covenant of Sale
Subject to all of the terms,covenants and conditions of this Agreement, the Seller agrees to sell and
convey and the Buyer covenants and agrees to purchase the Property.
Condition of Property to be Conveyed
The Seller and Buyer agree that the Property shall be conveyed "as is," that is, in the condition
in which it exists at the time of the execution of this Agreement. In consideration of the "as is,"
conveyance, Seller has provided to Buyer prior to the execution of this Agreement, full and complete
copies of all environmental reports, site assessments, or other documents or information in its possession
regarding any aboveground or underground storage tanks at the Property and the environmental
conditions of the Property. Seller is under no obligation to perform any work or preparation on said
Property for conveyance or during the course of construction or preconstruction remediation.
Purchase Price/Non-Refundable Deposit
The purchase price for the Property shall be One Hundred and Twenty Five Thousand Dollars
($125,000.00). A ten percent payment($12,500.00)has been made and shall be considered a non-refundable
4
deposit. The balance ($112,500.00) shall be paid to the Seller at the closing. Other consideration shall
consist of compliance by Buyer with the terms and conditions of this Agreement. Notwithstanding the
foregoing, the deposit shall be refunded if the property is not conveyed due to the Seller's breach of the
terms of this Agreement,or if Seller fails to convey the property and the Buyer has performed its obligations
hereunder.
Terms and Conditions
a. The development shall be converted into residential condominiums with the two first floor units on
Central Street, dedicated to artist live/work space, in accordance with the Approved Plan and as amended
through the permitting process, all conditions of which are incorporated herein. Any changes in said plans
must be approved by Seller and the pertinent boards.
b. The Buyer shall secure a firm"Commitment Letter"from the project lending institutions and provide
a commitment to close the project funding at the time of property closing not later than December 31,2003.
Seller is unable to enter into land disposition agreement until Buyer has furnished satisfactory evidence that
the Buyer has the financial resources needed to complete the Improvements. See 760 CMR 12.05 (3). See
attached Exhibit H.
C. All permitting(including final SRA site plan review)and regulatory approvals have been completed.
d. Preservation of the main structure shall occur. One of the non-original "wings" added after initial
construction of the Police Station can be demolished in accordance with the Approved Plan.
e. Landscaping shall be in accordance with the Approved Plan.
f.� All local, State and Federal regulations regarding any hazardous materials shall be followed.
With regard to any environmental conditions on or under the Property, both prior and subsequent to
Seller's delivery of the Deed to Buyer, Seller agrees to cooperate fully with Buyer and take all actions
necessary, including granting Buyer access to the Property, to assist Buyer and its employees, agents,
5
contractors and consultants in: (a)Buyer's provision of notice to the Department of Environmental
Protection of any release of oil or hazardous materials at the Property; (b) Buyer's investigation or
assessments of the Property; (c)Buyer's undertaking of any response actions and remediation at the
Property pursuant to federal, state or local law, including but not limited to, M.G.L. c. 21E and 310
CMR 40.0000; and (d) Buyer's compliance with all local, state or federal laws or regulations. In no
event shall the Seller be obligated to contribute financially to the environmental abatement and/or
remediation of the property. Further,Buyer shall indemnify and hold harmless Seller of any claims
made against it as a result of said remediation. The Buyer agrees to complete the subsurface remediation
in accordance with the LSP report. See attached Exhibit F.
g. The parking plan shall be in accordance with the Approved Plan.
h. The Buyer shall comply with M.G.L. c.7.ss40J which requires a disclosure of beneficial interests to
be filed with the Department of Capital Asset Management ("DCAM").
i. All Improvements in accordance with the Approved Plan shall be completed by October 15,2004,
unless extended by mutual agreement of the parties. Insofar as Buyer has proceeded in good faith and made
a diligent effort to comply with said completion date, Buyer shall have the right, if it deems necessary, to
request a six month extension from Seller for completion of the project. Said extension shall not be
unreasonably withheld by Seller.
j. Buyer shall provide to Seller a performance and payment bond to assure the completion of project.
Bond shall be delivered prior to commencement of construction.
k. Buyer, as the SRA's designated developer, shall comply with Deeds of Easements
between the SRA and Barbara Lally and the SRA and Bernard's, Inc., dated December 23, 1996. See
attached Exhibit I. Buyer shall comply with Side Agreements by and between the Designated Developer
and Barbara Lally and the Designated Developer and Bernard's, Inc., dated September 10, 2003. See
attached Exhibit J.
6
1. Buyer shall comply with Agreement with Arjod,Inc.,dated August 29,2003,regarding the dumpster
servicing Red's Sandwich Shop at 15 Central Street. See attached Exhibit K.
Time of Sale and Conveyance/Closing
If the Buyer shall then have satisfied the conditions precedent to delivery of the Deed, the sale and
conveyance and delivery of possession of the Property and the purchase of the same by the Buyer shall take
place on the Closing Date at the office of the Salem Redevelopment Authority, 120 Washington Street,
Salem, MA 01970, or at such other place as the Seller may designate. The Closing Date shall be no later
than December 31,2003,unless extended by mutual agreement of the parties. In addition,the Seller and the
Buyer may,by mutual agreement,accelerate the Closing Date upon satisfaction of First Mortgagee to close
the construction financing.
Title and Instrument of the Conveyance
The sale and conveyance of the Property shall be by Quitclaim Deed conveying good record and
marketable fee simple title to the Property subject only to the terms and conditions of this Agreement and to
all liens,encumbrances,easements and restrictions existing at the date thereof(excluding monetary liens),
provided however that any liens, encumbrances, easements, restrictions or the like hereafter arising
(excluding monetary liens)shall not affect either the use or development of the Property or any part thereof,
as contemplated hereunder, or the value of the Property.
Closing Costs
It shall be at the Buyer's expense to pay any and all of its closing costs arising from the sale of the
subject property including but not limited to cost of recording the Deed, this Agreement, and all other
instruments and plans to be recorded together with the Deed.
Adiustments
The Seller shall pay all operating costs of the Property allocable to time periods prior to the Closing
Date. The Buyer shall pay all operating costs of the Property allocable with respect to any period after
7
delivery of the Deed hereunder. The Buyer shall be solely responsible for any and all abatement costs
performed prior to the closing.
Default by Seller re: Conveyance
In the event that the Seller shall be unable to make conveyance or to deliver possession of the
Property as provided herein, the Seller shall use reasonable efforts to make conveyance or to deliver
possession as herein agreed, in which event the Seller shall give written notice thereof to the Buyer at or
before the Closing Date in question, and thereupon the time for the performance by the Seller shall be
extended for a period of sixty (60) days, or such longer period as the Seller and the Buyer shall mutually
agree. Provided further, the Buyer shall have the election, either at the original or any extended time for
performance,to accept such title and possession as the Seller can deliver to the Property and to pay therefor
the purchase price without deduction,in which case the Seller shall go forward with the closing. In no event
shall the Buyer be entitled to acquire less than all of the Property. In the event that at the expiration of all
extensions of time, the Seller shall be unable to make conveyance or to deliver possession as herein
provided, then all obligations of the parties hereto shall cease, and this Agreement shall be void and the
parties shall have no further recourse to each other hereunder and the$12,500.00 deposit shall be refunded to
the Buyer.
Default by Buyer Prior to Delivery of Deed
In the event that prior to delivery of the Deed,the Buyer shall default in its obligations hereunder and
shall be unable to correct such default within 60 days of notice thereof, then the Seller may, at its election,
by notice to the Buyer given on or prior to the Closing date (as the same may be extended hereunder)
terminate this Agreement and all rights of the Buyer hereunder.
8
ARTICLE III
RESTRICTIONS AND CONTROL UPON DEVELOPMENT
Restrictions on Use and Design
The Property is to be developed for use as residential condominiums with the two first floor front
(Central Street) units dedicated to artist live/work space. Improvements are to be in compliance with the
Approved Plan approved by the Salem Redevelopment Authority and all other applicable boards.Plan is in
compliance with the Heritage Plaza East Urban Renewal Plan. Any alteration(s) of use must first receive
written approval from the SRA. No such approval may be sought earlier than one (1) year from the
Construction Commencement Date.
a. The deed shall state the conditions restricting use of the Property, and shall provide Seller
with a right of entry after notice and reasonable period for Buyer(and/or Lender(s))to cure in the event that
the Property ceases to be used for such purposes.
b. Improvements will be in compliance with plans acceptable to the Salem Redevelopment
Authority,the City of Salem acting through the Salem Planning Department,and other applicable boards and
review entities. In its construction of the Improvements, the Buyer shall insure that there is no deviation
from such approved Design Documentation in connection with the appearance of the Improvements,except
and only to the extent that changes have been requested in writing and have been approved in writing by the
Seller. Approval by the Seller does not supersede or circumvent the requirements of any local, state or
federal law or regulations.
C. Buyer shall use due diligence and best efforts to market the two designated artist live/work
space. In the event that these units prove unmarketable after such due diligence and best efforts then the
Buyer or Mortgagee in possession may petition Seller for a release of such restriction, which shall not be
unreasonably withheld or delayed. Buyer's written request for release shall include a summary of all its
marketing efforts in this regard. In no event,however,shall such request for release be granted prior to one
9
(1) year of such marketing efforts after the Construction Commencement Date.
Improvements and Submission of Plans
a. Buyer hereby agrees to submit to the Salem Redevelopment Authority and all other
government authorities any and all documents necessary to secure approvals,permits or other permission to
construct and expedite the Improvements; to notify the Seller of such submissions; and to forward to the
Seller copies of all approvals, permits or other permissions received from the above entities upon receipt.
In the event the Buyer shall reasonably fail to comply with the foregoing requirements in proceeding
with construction or modification of all or any part of the Improvements,the Seller may,within a reasonable
time after discovery thereof,direct in writing that the Buyer modify or reconstruct such portion or portions of
the Improvements as deviate from the approved Design Documentation or any change with respect thereto in
order to bring them into conformance therewith. The Buyer shall promptly comply with such a directive. In
addition to any other remedies available to it under law or under the Agreement,the Seller may enforce these
provisions by an action in a court of appropriate jurisdiction.
Time for Commencement and Completion of Improvements
a. Buyer has submitted a final Construction Schedule to the Seller. See attached Exhibit D.
Buyer shall begin the construction of the Improvements, in accordance with the Approved Plan and
Construction Schedule and shall diligently proceed to completion of the construction of the Improvements
and shall substantially complete such construction by October 15, 2004, unless extended by the parties.
During the construction on a monthly basis, Buyer shall meet with the Executive Director of the SRA to
provide a progress report of the Construction and whether on schedule.
When Improvements Completed
The construction of the Improvements shall be deemed completed for the purpose of this Agreement
when a Certificate of Occupancy is issued by the Building Inspector. Promptly after receiving notice of
completion by the Buyer's architect and after the certificate of occupancy is obtained,the Seller shall inspect
10
the Property to insure substantial completion of the Improvements in accordance with the requirements of
the Design Documentation,this Agreement and the Request for Proposals; after which time the Seller will
furnish the Buyer with a Certificate of Completion so certifying. Such certification by the Seller shall be
conclusive determination of satisfaction of the agreements and covenants in this Agreement and in the
relevant Deed with respect to the obligations of the Buyer to construct such Improvements.
Buyer agrees that Seller shall be under no obligation to issue a Certificate of Completion until such
time as the Seller has had a reasonable opportunity to inspect the Improvements constructed pursuant to the
provisions of this Agreement, after written request from the Buyer that the Seller issue a Certificate of
Completion,provided further that such issuance shall not be unreasonably withheld or delayed. The Seller
shall provide a detailed list of work needing to be completed or corrected in accordance with original or
agreed upon amended plans within 30 days after receiving the Buyers request for a Certificate of
Completion,if the Seller does not provide said Certificate. Seller agrees that Buyer may presell units before
the issuance of a certificate of completion, but this provision does not relieve Buyer of its responsibilities
under this Agreement.
ARTICLE IV
PROVISIONS RELATING TO OPERATION AND MAINTENANCE
Maintenance and Operation
The Buyer shall, at all times during ownership keep the Property and all Improvements in good and
safe condition and repair, and in the occupancy, maintenance and operation of such Improvements, the
Property and the Improvements shall comply with all laws, ordinances, codes and regulations applicable
thereto.
Facade Easement
The Seller and Buyer shall enter a Fagade Easement Agreement prior to the date of closing which
shall be recorded with the Deed to the property. See attached Exhibit L.
I1
ARTICLE V
INDEMNIFICATION
Reimbursement of Seller in Respect of Certain Liti ation
Provided that Seller prevails,after exhausting all rights of appeal,the Buyer shall pay all reasonable
costs(including attorney fees),expenses,judgment,decrees or damages which may be incurred by the Seller
in any proceeding brought to enforce the obligations of the Buyer set forth in the provisions of this
Agreement. The Buyer shall indemnify and hold harmless the Seller from any claims due to the Buyer's
breach or default hereunder arising in connection with this Agreement.
ARTICLE VI
INSURANCE
Insurance Coverage
The Buyer shall keep the Improvements and personalty used in connection therewith insured by
general comprehensive liability insurance and builder's risk property insurance to the same extent and
amount which is normally required by mortgagees with respect to similar properties in the City of Salem.
The Buyer shall provide evidence of insurance to the Seller. In the event of a property insurance claim,
proceeds shall be used for completion of construction,as determined in consultation with first mortgagee of
the premises.
Non-Cancellation Clause
All insurance policies shall provide that any cancellation,change or termination thereof shall not be
effective with respect to the Seller until after at least thirty(30)days prior notice has been given to the Seller
and first mortgagee to the effect that such insurance policies are to be canceled, changed or terminated at a
particular time.
12
ARTICLE VII
RIGHTS, REMEDIES AND PROCEDURES IN THE EVENT OF A BREACH BY BUYER
Default by Buhr
If, at any time, after delivery of the Deed the Buyer shall fail or refuse to commence, diligently
pursue or complete construction in accordance with the terms and conditions of this Agreement,or shall fail
or cease to use the Property for purposes authorized(specifically,a residential condominiums with two units
dedicated to artist live/work space on the first floor of Central Street as in the Plan), or shall otherwise
violate or fail to comply with conditions set forth in this Agreement, the Seller shall in writing notify the
Buyer and First Mortgagee of such failure or violation. The Buyer shall thereupon have sixty(60)days from
the receipt by it of such written notice to cure such failure or violation. The First Mortgagee shall have the
option, but not the obligation, to cure such failure or violation within said sixty (60) day period.
A. If the Buyer or First Mortgagee does not cure such failure or violation within the 60 day
period(or within such extended period of time as may be reasonably established by the Seller acting solely
in its discretion) or where cure requires more than 60 days, if Buyer or First Mortgagee does not promptly
begin such cure and thereafter diligently prosecute the same to completion, an event of default ("Event of
Default") shall be deemed to exist.
i. If there is an Event of Default, the Seller may, at its election, terminate this
Agreement and all rights of the Buyer hereunder by written notice to Buyer, provided
however, that the First Mortgagee shall also receive such written notice and shall have an
additional sixty(60)days to cure or begin diligent efforts to cure such default. The Seller,at
its election, shall also have the right to reenter and take possession of the Property and all
Improvements thereon and to terminate and revest in the Seller title to the fee simple estate
therein, unless the First Mortgagee has begun foreclosure proceedings in which event the
Seller shall stay its right of reentry until after foreclosure is completed and the Buyer at
13
foreclosure auction(or the Buyer in lieu of foreclosure)has a reasonable opportunity to cure
the default. The Deed shall reference the Seller's right of entry for condition broken in the
event of an Event of Default.
ii. If there is an Event of Default,the Seller hereto may in addition to or in lieu of other
remedies set forth herein or allowed by law institute such actions and proceedings as may be
appropriate,including actions and proceedings to compel specific performance and payment
of all damages, expenses and costs, provided however if the First Mortgagee has begun
foreclosure proceedings that such actions shall be stayed until after foreclosure is completed
and the Buyer at foreclosure auction (or the Buyer in lieu of foreclosure) has a reasonable
opportunity to cure the default.
iii. Neither these remedies nor that class of remedies more particularly described in this
Agreement shall be exclusive unless expressly stated.
B. Notwithstanding the foregoing, prior to exercising its rights under Article VII(A)above, the Seller
shall use reasonable efforts to cure the default through recourse to any performance bond(s)provided
by the Buyer for the benefit of the Seller.
C. If a mortgagee of Buyer or any owner of the Property or any portion thereof,through the operation of
its contract to finance the Project or a part thereof required by this Agreement to be constructed by
the Buyer, by foreclosure or otherwise, acquires title to the Property or any part thereof that was
covered by the mortgagee's mortgage prior to the issuance of the Certificate of Completion in
accordance with the provisions of this Agreement, such mortgagee shall have the following rights:
(i). to complete construction of the Project in accordance with the Plan and this Agreement; or
(ii). to sell, assign,or transfer title to the property or any part thereof, whether at foreclosure sale
or otherwise,to a purchaser,assignee or transferee who shall expressly assume all of the covenants,
agreements and obligations of the Buyer under this Agreement in respect to the Project,by written
14
instrument recorded forthwith in the Essex South Registry of Deeds.
In the event that a mortgagee elects to complete construction,or sells,assigns or transfers the
Property, the Seller shall extend the time limits set forth in this Agreement as shall be reasonably
necessary to complete construction of the Project, and upon such completion, the mortgagee,
purchaser, assignee or transferee,as the case may be,shall be entitled to a Certificate of Completion
in accordance with this Agreement.
If a mortgagee of Buyer or any owner of the Property or any portion thereof, through the
operation of its contract to finance the acquisition of the Property and/or the development of the
Project or a part thereof required by this Agreement to be constructed by the Buyer,by foreclosure or
otherwise, acquires title to the property or any part thereof that was covered by the mortgagee's
mortgage after the issuance of a Certificate of Completion in accordance with the provisions of this
Agreement,such mortgagee,and anyone claiming,by through or under such mortgagee,shall comply
with any applicable provisions of this Agreement for the period during which said mortgagee, or
anyone claiming by, through or under such mortgagee, holds such title.
ARTICLE VIII
CONDITIONS OF CONVEYANCE
Conditions Subsequent to Conveyance
Not less than ten(10)days prior to the construction commencement(not including abatement and subsurface
remediation) date, the Buyer shall satisfy the following conditions:
a. The Buyer shall provide the Seller with a copy of performance and payment bonds or other
assurance of completion of the Improvements satisfactory in form and amount to the Seller,not less than the
amount of the contract price for the Improvements.
b. The Buyer shall provide the Seller with a copy of the contract documents for completion of
15
the Improvements described in this Agreement.
The Buyer shall at all times keep the Seller fully and currently advised of the status of all aspects of
the Buyer's progress in meeting the conditions of the Agreement with respect to the Improvements,
including, without limiting the generality of the foregoing, securing of financing and arrangements for
construction. All contracts entered into by the Buyer respecting the development of the Property shall
obligate the parties thereto act in a manner consistent with the obligations of the Buyer under this
Agreement. During the implementation of any such contracts the Seller shall have the right to review all
aspects of the work performed thereunder in order to insure that such work is being undertaken in manner
consistent with the obligations of the Buyer under this Agreement.
ARTICLE IX
ANTI-DISCRIMINATION; HIRING
Anti-Discrimination; HAA
The Buyer agrees that in the construction of the Improvements and otherwise in the
performance of this Agreement,it shall comply and shall cause all contractors to comply with all applicable
laws, ordinances, regulations and orders from time to time in effect relating to non-discrimination, equal
employment opportunity, contract compliance and affirmative action.
ARTICLE X
MISCELLANEOUS PROVISIONS
Transfer and Assignment of Rights
Buyer shall be prohibited from transferring the property or assigning any of its rights under this
Agreement without the express, written consent of the Seller.
16
Obligations and Rights and Remedies Cumulative and Separable
The respective rights and remedies of the Seller and the Buyer provided by this Agreement or by law
shall be cumulative, and the exercise of any one or more of such rights or remedies shall not preclude the
exercise, at the same or different times of any other such rights or remedies.
Amendment
This Agreement shall constitute the entire agreement between the parties hereto;it may be amended
only by an instrument in writing signed by the Seller and the Buyer.
How Agreement Affected by Provisions Being Held Invalid
If any provisions of this Agreement are held invalid,the remainder of this Agreement shall not be
affected hereby,if such remainder would then continue to conform to the requirements of applicable laws.
Time of Essence; Covenants to be Enforceable
Time is of the essence in the performance of this Agreement,and the parties hereto shall diligently,
promptly and punctually perform the obligations required to be performed by each of them and shall
diligently,promptly and punctually fulfill the conditions applicable to each of them.
Seller's Staff and Officers Barred From Interest
a. No member, official or employee of the Seller shall have any personal interest, direct or
indirect,in this Agreement or the Buyer,nor shall any such member,official or employee participate in any
decision relating to this Agreement which affects his personal interest or the interests of any corporation,
partnership,or association in which he is,directly or indirectly,interested. No member,official or employee
of the Seller shall be personally liable to the Buyer or any successor in interest in the event of any default or
breach by the Seller or for any amount which may become due to the Buyer or to its successor or on any
obligations under the terms of this Agreement.
b. The Buyer covenants that he has not employed or retained any company or person(other than
a full-time bona fide employee working for the Buyer)to solicit or secure this Agreement, and that he has
17
not paid or agreed to pay any company or person (other than such an employee) any gift,contribution, fee,
commission, percentage, or brokerage fee, contingent upon or resulting from the execution of this
Agreement.
Approvals and Notices
Where the consent or approval of the Seller is required hereunder, such consent or approval shall not
be unreasonably withheld, conditioned,or delayed,but the same shall be valid and binding only if given in
writing signed by a duly authorized official, provided, however, that if the Buyer has requested approval
from Seller such approval shall be deemed granted after a 30 day period of non-reply from the date of
Buyer's request.
Notices shall be deemed given when deposited in the United States mail and sent registered or
certified mail,postage prepaid,to the principal office of the party to whom it is directed,which is initially as
follows:
Buyer: HERITAGE PLAZA ENTERPRISES, LLC
Philip Singleton, Mgr.
Jack French, Mgr.
One Newbury Street
Peabody, MA 01960
With copy to: Stephen Lovely, Esq.
14 Story Street
Salem, MA 01970
Seller: Salem Redevelopment Authority
Executive Director
120 Washington Street
Salem, MA 01970
With copy to: City Solicitor
Salem City Hall
93 Washington Street
Salem, MA 01970
The parties shall promptly notify each other of any change of their respective addresses set forth
above.
18
SRA Minutes
Eecutive Session
February 3,2005
Page 1 of 2
EXECUTIVE SESSION MINUTES
OF THE BOARD MEETING
OF THE SALEM REDEVELOPMENT AUTHORITY
HELD ON MARCH 3, 2005
REDEVELOPMENT AUTHORITY PROJECT: OLD SALEM JAIL
Discussion of Purchase/Exchange based on Pro Forma Analysis Results and Implications
Peter Smith addressed the board concerning the cost estimates. He gave a rough estimate of$200 per square
foot for just construction costs. Typically new construction costs $120 to$140 per square foot. He stated
that under the most favorable conditions condos would be most likely. He estimated a 4%profit. It will be a
risky development with challenges.
The base pro forma was discussed. The biggest drivers would be sale values and construction costs. The
need is for bigger condo units with the empty nester market. Ambiance and water views from the upper
levels would be the draw,although the units would not have balconies or decks.
Ms. Sullivan asked if the shortage of windows would have an affect. Mr. Cecil answered that by code certain
areas will require windows. He said that these could be designed,but that it would be tough,especially in the
jail itself. A mezzanine would probably have to be designed,otherwise,the units would be flat and low.
Ms. Sullivan suggested that there is the possibility that they would be harder to sell a unit inside a jail and
referred to the difficulty of selling a condo in a church. Mr. Smith agreed,but referred to the Dedham jail
and its conversion. He added that the board will be looking for a great architect and that the project will be a
great challenge.
Ms.Duncan asked about the idea of all condos and no mixed use. Mr. Cecil said that a base program was
used and live/work units are a possibility and that some would be willing to pay the same for square footage.
Ms. Duncan asked if the 4%profit was for an all condo project. Mr.Brennan said that this did not seem
feasible.
Mr. Smith reviewed the pro forma. The profit would be under 4%. He said that there will be challenges. If
an additional four units could be built as new construction on the site,the developer could add$600,000.00.
Parking for small units could allow 1 space per unit. Mr. Cecil referred to the 9 spaces up front being close to
balance out parking on site.
Ms. Sullivan asked about the Jailer's House. Mr. Smith said that he thought 2 units would be possible. Ms.
Sullivan referred to the old police station condo conversion and suggested that there may be interest in the
house as one large unit.
Ms. Duncan stated that the only way to add new units would be if the bam comes down. Mr. Cecil
mentioned the adjacent church property and the possibility of townhouses and a strategy for more units on
site.
Mr. Smith stated that the barn really does need to come down. Ms. Sullivan stated that Barbara of Historic
Salem,Inc. is a reasonable person. Ms. Duncan added that Mass Historic Commission will have to be
consulted.
SRA Minutes
Executive Session
February 3,2005
Page 2 of 2
Ms. Duncan added that the renovation must comply with the standards of the Secretary of the Interior. Mr.
Cecil said that it would be a matter of interpretation and that demolition is done all of the time,but that they
would have to get them to go along with it.
Mr. Smith said that a Mass H storic review is a must. Ms. Duncan recommended that they approach with
Historic Salem,Inc. Mr. Cecil agreed and said that it would be critical.
Mr. Smith said that a developer couldn't afford to do restoration on the slate roof and estimated that it would
cost$200,000.00. Mr. Cecil said that a visually similar asphalt roof could be done versus restoring the slate.
Mr. Smith added that this could be made a negotiation point. Mn Cecil noted that other renovations to be
done would be the cupolas,lintels, etc. Mr. Smith said that the window restoration can be argued to be
changed to aluminum. Mr. Cecil said that the appearance can be negotiated since they will be custom.
Ms. Sullivan mentioned roof work done on the old Bleachers building and at 18 Crombie St. Ms. Gingrich
said that those roofs were slate looking asphalt shingles. Mr.Vickers and Mr.Brennan questioned the cost.
Ms. Sullivan said that they could negotiate the roof and the barn. Mr. Smith said that the roof and the
windows and maybe a few more items.
Mr.Vickers recommended meeting with Mass Historic and negotiating these items so that an agreement can
be made. Mr. Smith answered that he was not sure that they could get a definitive answer. Mr. Smith said
that the board has good material to negotiate with. Mr.Vickers recommended getting an
agreement/understanding into the bidders hands so that they would have some confidence.
Ms. Duncan said that she hoped to convey that Mass Historic would look favorably.
Mr. Cecil spoke about the barn. Its removal would unlock potentially an additional$500,000.00-$600,000.00.
The windows worry him less since all will have to be replacement and will have to be custom anyway. The
roof shingles versus slate may not be a deal killer. At least you can open the eyes of the developer with the
negotiations.
Ms. Sullivan asked if the extra units were to be had would there be some mixed use in the main building. Mr.
� Cecil-spoke of zoning and use and-if designed the right way then it might be perfectly ok to have a loft and
graphic studio unit. It may work and someone might be willing to pay for the whole package.
Ms. Duncan recommended putting the zoning in place before the project goes out for RFP. Mr. Smith
recommended doing the project as a PUD with flexibility. Ms. Duncan said that if they went to the
downtown zoning,B5,it would create more opportunity.
Mr. Cecil referred to the issue of the Assessor's map and the location in an urban renewal area. If the map is
right,although they don't think that it is, then the City may have to amend the urban renewal plan. The two
are linked. The City could contract with the SRA to dispose of the public property that is not within the
urban renewal district.
Ms.Duncan said that they would have to go to the City Council to dispose of any property. Mr. Cecil said
that if it is not in an urban renewal area then they should check legal agreements in place.
Mr. Smith also recommended doing thezoning in a timely fashion. There may be real risks in putting out the
RFP without it. Ms. Duncan said that they should look at extending the downtown zoning district and the
urban renewal plan because they currently have City Council support.
Mr. Cecil added that new construction may have a density problem. Rezoning opens up other uses and will
need careful thought not to raise expectations. The rationale needs to be explained.
SRA Minutes
Executive Session
February 3,2005
Page 3 of 3
Ms. Sullivan stated that they should maximize the opportunities. Ms.Duncan said that they should reduce
the risks for a developer. Mr. Smith said that if they rezone, then 15%profit would then be ok versus 20%.
Mr. Smith reviewed the strategies to reduce costs. Each developer will have a different way of looking at the
project. He based his work on the industry norm. People will bring different market,design,and cost
experience to this. He suggested the consideration of a soft second mortgage as a possibility and asked the
board to consider subsidizing the development with$500,000.00. There may be no way to do it,but he
wanted the board to consider it. This would be of value to the developer for obtaining financing. It will be a
competitive process. Ms.Duncan said that there is no money available.
Mr. Cecil recommended that plans and diagrams be given to prospective developers. This would get them
thinking more creatively. He used the idea of 14 spaces at the church maybe as a long-term lease that could
allow the developer to do more townhouses. A deal could be made by the developer. Mr. Smith said that the
value of parking is about$50,000.00 a pair. Mr. Cecil said that the LDA needs to have a clear design review
function. You may get a preferred developer that way.
Mr. Smith suggested bonus points for good design.Mr.Vickers said that they will need a punch list. Mr.
Cecil stated that this should be done in advance and rules set. Mr.Vickers recommended specifying that in
the LDA. Ms. Duncan added that it should be in the RFP as well. Mr.Brennan said that the consultants will
make sure that it is in there.
Mr. Vickers added that this is a less specific project than other City projects. Mr. Cecil reminded the board
that they have the power to say no.
Mr. Smith asked if prevailing wage would be required on the project. Ms.Duncan did not think so since the
developer would be having the work done. Mr. Smith suggested getting that clear since the developer will be
on public property.
Mr. Smith spoke of gap issues and asked where they would go from there. Mr.Vickers asked what the
options were. Mr. Smith asked what things they could do. Ms.Duncan answered zoning,risk,and the bam.
-�Ms. Sullivanrecommended that they identify-things-that-could bring-the-profiNmargin-down and make rhe - ,•M
project more feasible.
Mr. Smith said that they will check with Mass Developemnt. Ms. Sullivan spoke of investment tax credits
versus new market tax credits.
h
BY-LAWS
SALEM REDEVELOPMENT AUTHORITY
(Revised and approved 12/1/86
ARTICLE I - THE AUTHORITY
Section 1. Name of Authority. The name of the Authority shall be the "Salem
Redevelopment Authority."
Section 2. Seal of Authority. The seal of the Authority shall be in the form of a circle
and shall bear the name of the Authority and the year of its organization.
Section 3. Office of Authority. The office of the Authority shall be located within the
City of Salem,Massachusetts.
ARTICLE II - OFFICERS
Section 1. Officers. The Authority shall be comprised of five (5) members as follows:
Chairman;
Vice-Chairman;
Treasurer;
Assistant Treasurer; and
Member.
Section 2 Chairman. The Chairman shall preside at all meetings of the Authority.
Except as otherwise authorized by resolution of the Authority,the Chairman shall sign all contracts,
deeds, checks, and other instruments made by the Authority. At each meeting the Chairman shall
submit such recommendations and information as he may consider proper concerning the business
affairs and policies of the Authority.
Section 3. Vice-Chairman. The Vice-Chairman shall perform the duties of the
Chairman in the absence or incapacity of the Chairman, and in case of a vacancy in the office of
Chairman.
Section 4. Treasurer and Assistant Treasurer. The Treasurer and any other of the
officers shall sign all orders and checks for the payment of money and shall pay out and disburse
such moneys under the direction of the Authority except as otherwise authorized by resolution of
the Authority.The Authority may by resolution designate one or more members to countersign such
orders and checks, and may from time to time qualify, change or cancel any such designation. The
Assistant Treasurer shall perform the duties of the Treasurer in the absence or incapacity of the
Treasurer, and in case of a vacancy in the office of Treasurer. The Treasurer and Assistant Treasurer
shall give bond for the faithful performance of their duties. Any member elected to the office of
Treasurer or Assistant Treasurer shall serve without compensation other than payment of necessary
expenses.
Section 5. Executive Director. The Executive Director of the Authority shall have general
supervision over the administration of its business and affairs, subject to the direction of the
Authority. He shall be charged with the management of the various projects of the Authority. He
shall have care and custody of all funds of the Authority and shall deposit the same in the name of
the Authority in such bank or banks as the Authority may select. He shall keep regular books of
accounts showing receipts and expenditures and shall render to the Authority, at each regular
meeting, or oftener when requested, an account of his transactions and also of the financial
condition of the Authority.
The compensation of the Executive Director shall be determined by the Authority and
he shall give bond for the faithful performance of his duties.
Section 6. Secretary. The Secretary shall keep the records of the Authority, shall act as
Secretary of the meetings of the Authority and record all votes, and shall keep a record of the
proceedings of the Authority in a minute book to be kept for such purposes (documents and
supplementary material forming a part of the minutes may be kept in a supplementary document
book) and shall perform all duties incidental to his office. He shall keep in safe custody the seal of
the Authority and shall have power to affix such seal to all contracts and instruments authorized to
be executed by the Authority.
At any regular or special meeting in the absence of the Secretary, a Secretary pro
temporo may be appointed from among the members of the Authority who shall serve without
compensation other than the payment necessary expenses.
Section 7. Duties of Members. The Members of the Authority shall perform such duties
as are incumbent upon them by reason of their election to any office and shall perform such other
duties and functions as may from time to time be required by the Authority or the by-laws, or which
may arise by reason of their appointment to serve on committees functioning within the Authority
or in cooperation with other persons or groups.
Section 8. Election or Appointment. The Chairman, Vice-Chairman, Treasurer and
Assistant Treasurer shall be elected at the annual meeting of the Authority from among the
Members of the Authority, and shall hold office for one year or until their successors are elected and
qualified.
The Authority shall appoint one person to fill the office of Secretary and one as the
Executive Director. Any persons appointed to fill the offices of Secretary or Executive Director, or
any vacancy therein, shall have such terms as the Authority fixes, but no Members of the Authority
shall be eligible to this office except as a temporary appointee.
Section 9. Vacancies. Should the office of Chairman, Vice-Chairman, Treasurer or
Assistant Treasurer become vacant, the Authority shall elect a successor from its membership at the
next meeting, and such election shall be for the unexpired term of said office.
Section 10. Additional Personnel. The Authority may from time to time employ such
personnel as it deems necessary to exercise its powers, duties and functions as prescribed by the
applicable laws of the Commonwealth of Massachusetts, as amended and all other laws applicable
thereto.
ARTICLE III -MEETINGS
Section 1. General Provisions. Annual meetings and regular meetings of the Authority
shall be held at such time and place as may designated by the Authority.All meetings shall be held at
the office of the Authority or any other meeting place which the Authority may determine.
Section 2. Annual Meetings. Annual meetings of the Authority shall be held without
notice during the month of October for the purposes of electing officers, receiving the annual report
of the Executive Director, and for the conduct of such other business as may come before the
meeting.
Section 3. Regular Meetings. Regular meetings of the Authority shall be held with proper
notice for the transaction of the business of the Authority.
Section 4. Special Meetings. The Chairman of the Authority, may when he deems it
expedient, and shall, upon the written request of two Members of the Authority, call a special
tY P
meeting of the Authority for the purpose of transacting any business designated in the call. The call
for a special meeting may be delivered to any Member of the Authority or may be mailed to his
business or home address at least two days prior to the date of such special meeting. At such special
meeting, no business shall be considered other than as designated in the notice, but if all the
Members of the Authority are present at a meeting, any and all business may be transacted at such
special meeting.
Section 5. Quorum. The powers of the Authority shall be vested in the Members thereof
in office from time to time. Three Members shall constitute a quorum for the purpose of conducting
its business and exercising its powers and for all other purposes, but a smaller number may meet and
adjourn from time to time until a quorum is obtained. When a quorum is in attendance, action may
be taken by the Authority upon a vote of a majority of the Members present.
Section 6. Order of Business. At the regular meetings of the Authority, the following
shall be the order of business:
1. Roll Call.
2. Reading and approval of the minutes of the previous regular meeting and any
intervening special meeting.
3. Bills and communications.
4. Unfinished business.
5. New business.
6. Adjournment.
All resolutions shall be in writing and shall be copied in a minute book of the Authority.
Section 7. Duties of Authority. The following duties shall be under the control of the
Authority:
1. Administration of the Heritage Plaza East and West Urban Renewal Plans;
r
2. Administration of the Capitalization Loan Program;
3. Design Review of all renovations, alterations,repairs, and new construction,
which occurs in the Heritage Plaza East and West Urban Renewal Areas.
Section 8. Manner of Votin¢.All issues which require the vote of the Authority shall be
presented in the form of motions or resolutions. The vote on all resolutions shall be by roll call, and
each resolution and motion shall be entered in full upon the minutes of the meeting. For all
resolutions,the ayes and nays shall be recorded.
ARTICLE IV -AMENDMENTS
Amen4no& to &y Laws The by-laws of the Authority shall be amended only by
resolution adopted by the affirmative vote of at least three Members of the Authority at a regular,
annual or special meeting, held after seven days notice in writing of the substance of the proposed
amendment shall have been sent to each Member.