HomeMy WebLinkAboutLate Communication 09-27-2017 Steering Committee.pdf SM, ORANGE COUNTY SANITATION DISTRICT
Memorandum
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September 27, 2017
TO: Steering Committee
Orange County Sanitation District
FROM: Kelly A. Lore
Clerk of the Board
SUBJECT: LATE COMMUNICATION
The Clerk ofthe Board received late communication thatthe attached Addendum described
in the Standard Offer, Agreement and Escrow Instructions (Item No. 3A), was inadvertently
excluded from the original packet.
3. PROPERTY ACQUISITION FOR 18350 MT. LANGLEY STREET, FOUNTAIN
VALLEY (Rob Thompson)
RECOMMENDATION: Recommend to the Board of Directors to:
A. Approve a Standard Offer, Agreement and Escrow Instructions for Purchase of
Real Estate (Purchase Agreement) with K&A Investments LP for Property at
18350 Mt. Langley Street, Fountain Valley, in a form approved by General
Counsel, for$10,150,000; and
B. Authorize the General Manager and General Counsel to Execute the following:
1. Preliminary Title Report Consistent with the Standard Offer, Agreement
and Escrow Instructions;
2. Title Approval Letter;
3. Deeds and other evidences of title to the parcels of property that are the
subject of the Purchase Agreement;
4. Preliminary Change of Ownership Report;
5. Acceptance of the Grant Deed to certain real property from K&A
Investments LP;
6. Approved Estimated Closing costs;
7. Seller's Mandatory Disclosure Statement acknowledging receipt of this
document;
8. Property Information Sheet acknowledging receipt of this document;
9. Natural Hazard Disclosure Report acknowledging receipt of this
document; and,
10. Any and all other instruments related to the transaction.
ADDENDUM#1
ADDENDUM TO THE STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR
PURCHASE OF REAL ESTATE ("Agreement"), DATED SEPTEMBER 12, 2017 BY AND BETWEEN
K&A INVESTMENTS L P ("K&A" OR "SELLER");
AND
ORANGE COUNTY SANITATION DISTRICT("OCSD" OR"BUYER"),
FOR THE SALE OF THE PROPERTY KNOWN AS 18350 MT. LANGLEY, FOUNTAIN VALLEY,
CALIFORNIA ("PROPERTY")
The terms herein shall be incorporated to and become a part of the Agreement between the
parties.
27. ESCROW: Escrow shall be opened within five (5) days of the Purchase &Sale Agreement
being fully executed by both Buyer and Seller. Escrow shall close thirty (30) days after Seller
exercises the "Put Option" or Buyer notifies Seller of the Close of Escrow as described in
Paragraph 31 below.
28. CONTINGENCIES: Notwithstanding anything contained in Paragraph 9 of the Agreement,
Buyer shall have a 45-day due diligence period from the opening of escrow to approve or reject
all stated due diligence items at Buyer's sole and absolute discretion.
29. INSPECTIONS: With advance notice to Seller and coordination with Sellers property
manager, Buyer shall have the right to access the property(including access to all tenant suites,
common areas, roof areas, mechanical rooms,and other areas of the building and project)during
normal business hours during the due diligence period and bring their consultants,architects and
engineers in addition to the typical inspections conducted in the regular course of escrow. Buyer
shall not conduct any invasive inspections without Seller's written approval. All inspections shall
be at Buyer's expense. Buyer shall indemnify and hold Seller harmless against any claims of loss
or injury rising by virtue of such inspections.
30. DISAPPROVALS: In the event Buyer disapproves of any due diligence items as referenced
above in Paragraph 9, within the respective time periods, by giving written notice to the Escrow
Holder,escrow shall be canceled and Buyer shall be entitled to the return of its deposit, including
interest (less any cancellation charges and escrow costs), without further action by either party
and without liability to Escrow Holder.
31. PUT OPTION: After the expiration of the contingency period described above,Seller,at their
option, may search for a property or properties to purchase to satisfy its Internal Revenue Code
section 1031 deferred exchange requirement. At any time, during the first 12 months following
the expiration of the Contingency Period, Seller shall have and can exercise a "Put Option" to
Buyer, in writing, in which case Buyer shall be obligated to complete the purchase and close
escrow within thirty(30)days thereafter. In the event Seller has not exercised their"Put Option"
within twelve(12)months after expiration of the contingency period,Buyer may proceed to close
the escrow by providing a written thirty (30) days' notice to Seller. In the event Seller exercises
"Put Option"to Buyer and Buyer does not close within thirty(30)days,Seller may elect to cancel
the escrow and the Buyer's Two Hundred Fifty Thousand Dollars ($250,000.00) shall be
considered liquidated damages in favor to the Seller.
32. CONDITION OF PROPERTY/ESCROW PERIOD. Seller shall deliver the Property in an "as-Is"
"where is" condition. Seller shall maintain the property in first class condition and repair
throughout the escrow period,and properly maintained at the same standard prior to closing of
escrow. Upon mutual execution of the Agreement, Seller will not enter into any new leases, nor
execute any lease extensions with existing tenants at the Building during the escrow period
without consultation and written approval of Buyer. Five (5)days prior to close of escrow, Seller
and Buyer shall conduct a joint walk-through of the Property to verify that the building is
acceptable and in substantially the same condition under the terms agreed upon by the Buyer
and Seller.
33. TITLE INSURANCE: Seller will provide Buyer with the standard CLTATitle Insurance Policy.
AGREED&ACCEPTED;
BUYER: Orange County Sanitation District
BY: Gregory C.Sebourn, PLS Date
Its: Board Chairman
ATTEST:
BY: Kelly A. Lore,CIVIC Date
Its: Clerk of the Board
OWNER: K&A Investments LP
BY: Date
Its: