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RECEPTION NO. F0060388 75.00 PG: 0001-013
743 RECORDED IN JEFFERSON COUNTY, COLORADO 5/25/95 14:00
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DEVELOPMENT AGREEMENT
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This DEVELOPMENT AGREEMENT is dated this 28th day of April, 1995,
("Effective Date") among the CITY OF WHEAT RIDGE, a Colorado Home
Rule Municipal Corporation (hereinafter referred to as the / /'~
"City"), 38TH & SHERIDAN LTD. PARTNERSHIP, a Colorado Limited /'
Partnership (hereinafter referred to as "Owner") and DILLON
COMPANIES, INC., a Kansas corporation doing business as KING
SOOPERS, INC. (hereinafter referred to as "King Soopers"),
together collectively referred to herein as the "Parties".
RECITALS
WHEREAS, Owner owns certain real property and improvements
thereon located at 5305 38th Avenue, Wheat Ridge, Colorado,
which is a neighborhood shopping center known as Ridge
Village Shopping Center ("Shopping Center") the legal
description of which is set forth on Exhibit A attached
hereto and made a part hereof ("Property"); and
WHEREAS, King Soopers is the anchor tenant of the Shopping
Center; and
WHEREAS, King Soopers desires to expand its current facility
by approximately 17,500 square feet; and
WHEREAS, the expansion of the King Soopers facility will
result in increased tax revenues for the City and projected
additional traffic on 38th and Sheridan; and
WHEREAS, the City, in anticipation of the projected
increased traffic count, as well as, the long term goal to
expand and improve the corner of 38th and Sheridan, has
agreed to acquire, by purchase or, if necessary, other legal
means, the property located at the northwest corner of 38th
and Sheridan, as more particularly described on Exhibit B
attached hereto and made a part hereof (hereinafter referred
to as the "Redevelopment Area"); and
WHEREAS, the parties have agreed that the Redevelopment Area
shall be developed and utilized in accordance with the terms
of this Agreement and that all future owners of the Property
shall be bound thereby; and
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WHEREAS, the parties have furthermore agreed that certain
modifications to the curb cuts on the Property are
necessitated as a result of the modifications made to 38th
and Sheridan; and
WHEREAS, the parties desire to set forth their mutual
responsibilities and agreements with respect to
modifications to the Property and the Redevelopment Area;
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NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
AGREEMENT
1. City's Acquisition of the Redevelopment Area. The City
agrees that it shall acquire by purchase or, if necessary,
other legal means, the Redevelopment Area from its current
owners. The City agrees to complete such acquisition by no
later than August 1, 1995. Any and all costs associated
with the acquisition of the Redevelopment Area shall be the
sole responsibility of the City.
2. Demolition of Existing Improvements. The City agrees to use
its best efforts to demolish and remove, on or before August
1, 1995, the existing improvements located on the
Redevelopment Area. Any and all costs associated with such
demolition and removal shall be the sole responsibility of
the City.
3. Construction of Improvements on Redevelopment Area. The
City agrees that it shall use its best efforts to:
a. Right-of-Way. On or before March 1, 1996 (weather
permitting) construct the improvements to the right-of-
way along 38th and Sheridan Streets, including the
acceleration and deceleration lanes, side walks, curbs
and gutters, all as more particularly described on
Exhibit C attached hereto and made a part hereof; and
b. Redevelopment Area. On or before August 1, 1995 pave,
with asphalt, the remaining portion of the
Redevelopment Area, stripe same for parking and install
appropriate lighting commensurate with existing
lighting on the Property.
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Any and all costs and expenses associated with such construction
of the right-of-way improvements and the improvements on the
balance of the Redevelopment Area shall be the sole
responsibility of the City, except that Owner shall reimburse
City for paving and striping costs incurred by the city in the
remaining portion of the Redevelopment Area. City agrees to
provide Owner with appropriate invoices depicting actual costs
incurred which Owner shall pay within thirty (30) days after
receipt. The City agrees to use its best efforts to minimize the
portion of the Redevelopment Area required for the right-of-way
and maximize the portion of the redevelopment Area available for
parking.
4. Modifications to Curb Cuts. Owner agrees that the current
curb cut and entry way to the Shopping Center located on
Sheridan, in closest proximity to 38th, shall be moved as
set forth on Exhibit D attached hereto and made a part
hereof. The City agrees to pay for any and all costs of
relocating the curb cut, including, but not limited to,
concrete removal, concrete replacement, asphalt removal and
asphalt replacement and re-striping of those parking areas
affected by the change in curb cut.
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5. Minimize Disruption. The City agrees to use its best
efforts to minimize any disruption to patrons, tenants,
invites, King Soopers and Owner of the Shopping Center
during any period of construction. In the event any current
means of ingress or egress is required to be restricted or
terminated, the City agrees to provide Owner and King
Soopers with at least ten (10) business days advance notice.
6. Variances. The parties agree that variances from applicable
city land use requirements concerning parking and setbacks
may be desirable or required to accommodate the proposed
King Soopers expansion. Owner and/or King Soopers shall be
responsible for making the pursing proper application for
such variances. The City shall support such applications
and urge their prompt hearing and approval by the Board of
Adjustment, but the City cannot and does not guarantee that
the Board of Adjustment will approve such applications. The
Parties understand and agree that review of variance
applications by the Board of Adjustment is a quasi-judicial
function.
7. Ground Lease. The City agrees to lease the parking spaces
located within the Redevelopment Area to Owner, its
successors and assigns, for a term equal to the King Soopers
Lease and any additional option periods, commencing on the
date such improvements to the Redevelopment Area have been
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completed for a total rental of $10.00 ("Ground Lease") for
the entire term. Any and all costs of maintaining the
parking spaces within the Redevelopment Area, including,
without limitation, costs for repaving, painting striping,
snow removal and related items which shall be the
responsibility of the Owner during the term of the Ground //
Lease. Such responsibilities shall include capital ~
reconstruction and repair to maintain the Redevelopment Area
in the same condition as the Shopping Center parking lot.
It is the intention of the Parties that Owner shall be
responsible for all costs of operation and maintenance of
the Redevelopment Area, of whatever kind or nature,
throughout the entire term of the Ground Lease. Owner
hereby agrees to indemnify and hold harmless the City from
and against any and all claims, and any and all damages,
injuries or including costs and attorneys' fees, arising out
of or in any manner related to the Redevelopment Area.
Owner shall continuously maintain liability insurance
covering the Redevelopment Area, naming the City as an
insured party thereon, in amounts and coverages no less than
any policy or policies of insurance maintained for the
balance of the Shopping Center parking lot. Because of the
potential for extensions to the original lease agreement,
the City requires the owner to provide it with any and all
extensions, amendments and/or modifications and any and all
written notices of King Soopers intention to exercise its
options to renew its lease.
8. Collateral Assignment of Ground Lease. The City
acknowledges that the Shopping Center is currently subject
to a certain first deed of trust for the benefit of
Commonwealth Life Insurance Company, a Kentucky corporation
and Peoples Security Life Insurance Company, a North
Carolina corporation (collectively "Lender"). The city
agrees that Owner may collaterally assign the Ground Lease
to Lender or any further lender as additional security for
Owner's current and any future obligations.
9. Temporarv Construction Easement. Owner agrees to provide
the City with a temporary construction easement across the
Property for purposes of completing the modifications to the
right-of-ways and any relocation of utilities associated
therewith, as permitted hereby. Such easement shall be in
locations and widths to be mutually agreed upon for ingress
and egress for engineering, inspection and construction
purposes. Such temporary easement shall automatically
terminate upon completion of the right-of-ways and the
improvements on the Redevelopment Area.
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10. Landsca9in~. The City agrees to install landscaping, in
appropriate locations of the redevelopment area. Owner shall
annually during the period of the Ground Lease, reimburse
the city for the City's cost to maintain such landscaping.
11. Utilities. To the extent that any existing utilities must
be relocated as a result of the reconfiguration of the
rights-of-way or the Redevelopment Area, the city agrees to
complete such relocations at its sole cost and expense.
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12. Kin~ Soogers' Exoansion. Subject to and conditioned upon
the City's performance hereunder and the Owner's performance
hereunder and under that certain Third Amendment to Lease, a
copy of which is attached hereto as Exhibit E and made a
part hereof, King Soopers agrees to commence its expansion
by no later than October 1, 1995 and to diligently pursue
completion thereof.
13. Termination of Tenancies. Owner and King Soopers
acknowledge and agree that City shall have no responsibility
to participate in any required payments to tenants of the
Shopping Center for termination of leases or relocation
costs resulting from King Sooper's expansion.
14. Lender Consent. Within thirty (30) days after the Effective
Date of this Agreement, Owner shall procure in form and
content reasonably satisfactory to City and King Soopers, a
written consent from Lender for this Agreement and an
acknowledgement by Lender to be bound by the terms hereof.
In the event such consent is not obtained within that time
(or within such additional time as the Parties, by written
amendment hereof may agree), this Agreement shall be null,
void and of no effect.
15. Covenants fulnnina with the Land Recordin~. The parties
intend that the benefits and burdens created by this
Agreement shall be restrictive covenants running with the
land and binding the parties hereto, their successors and
assigns and all future owners of the Property. To that end,
this Agreement shall be filed for record with the Clerk and
Recorder of Jefferson County, Colorado.
16. Amendment or Termination of this Agreement. Other than as
provided at Paragraph 14, and subject to Subparagraph 19(m),
hereof this Agreement may be amended or terminated only by
an instrument in writing signed by all Parties hereto or
their duly authorized successors or assigns.
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17. Maximum amount to be expended by the City. Not-with-
standing any provision in this agreement, the City shall
only expend a maximum total sum of $800,000 to fulfill its
obligations under this agreement. Any costs in excess of /
the aforementioned $800,000 must gain prior approval and yo
authorization of the expenditure by city Council.
18. Ri~ht to Purchase. Owner shall have the right to purchase
the entire parking area of the redevelopment area, for fair
market value, at the time of exercise, at any time during
the term of the ground lease as described in paragraph 7 of
this agreement by providing a written notice of its intent
to exercise its right to purchase the parking area. Fair
market value shall be determined by the city on the basis of
an independently contracted MAl real property appraisal of
value. Owner shall acquire the property within a period of
180 days after its written notice of intent to exercise its
right to purchase.
19. Enforcement. The performance by the City, King Soopers or
Owner of their respective obligations set out in this
Agreement shall be in strict compliance with all applicable
laws and the rules and regUlations of all governmental
agencies, municipal, county, state and federal, having
jurisdiction. This Agreement may be enforced according to
its terms by the City, King Soopers or Owner by an action at
law, and/or in equity, by decree of specific performance,
injunctive relief, damages and/or pursuant to such other
legal and/or equitable relief as may be available under
Colorado law.
20. Notices. All notices hereunder shall be given to the
following by hand delivery or by certified mail, return
receipt requested:
CITY:
Mayor of the City of Wheat Ridge
7500 West 29th Avenue
P.O. Box 638
Wheat Ridge, CO 80034
Copy to:
The Wheat Ridge City Administrator
7500 West 29th Avenue
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P.O. Box 638
Wheat Ridge, CO
80034
Copy to:
Gerald E. Dahl
Gorsuch Kirgis, L.L.C.
P.O. Box 17180
Denver, CO 80217-0180
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OWNER:
Robert E. Perry and Jeffrey W. Bailey
38th & Sheridan Ltd. Partnership
6500 S. Quebec, #300
Englewood, CO 80111
Copy to:
Robert Preeo
Elrod, Katz, Preeo, Look, Milson & Silverman,
P.C.
1120 Lincoln Street, Suite 1100
Denver, CO 80203
KING SOOPERS:
Robert Letcher
Director of store Services
65 Tejon street
Denver, CO 80223
Russ Dispense
Vice President of Real Estate
65 Tejon street
Denver, CO 80223
Copy to:
James J. Soran, III, Esq.
Montgomery Little & McGrew, P.C.
5445 DTC Parkway, Suite 800
Englewood, CO 80111
Any party hereto may designate in writing, from time to
time, the address of substitute or supplementary persons to
receive such notices. The effective date of service of any
such notice shall be the date such notice is deposited in
the mail or hand delivered to the City, King Soopers or
Owner.
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21. Standard Contract Provisions. The following standard
contract provisions shall apply to this Agreement:
a.
Authority of City. This Agreement is expressly subject
to and shall not be or become effective or binding on
the City until approved by the Wheat Ridge City Council
and fully executed by all signatories of the City of
Wheat Ridge.
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b. Authority of Owner. Owner and the person executing
this Agreement on behalf of Owner warrants that Owner
is a limited partnership duly formed under the laws of
the state of Colorado and that the governing documents
of Owner authorize Owner and the person executing this
Agreement on behalf of Owner to enter into this
Agreement and to consummate the transactions
contemplated hereby.
c. Authority of Kina Soopers. King Soopers and the person
executing this Agreement on behalf of King Soopers
warrants that King Soopers is a corporation duly
authorized to do business' in Colorado and that the
governing documents of King Soopers authorizes King
Soopers and the person executing this Agreement, on
behalf of King Soopers, to enter into this Agreement
and to consummate the transactions contemplated hereby.
d. Force Majeure. No party shall be liable for failure to
perform hereunder if such failure is the result of any
cause beyond the reasonable control of such party, and
any time limit expressed in this Agreement shall be
extended for the period of any delay from any cause
beyond the reasonable control of the party required to
perform within such time limit. This provision shall
include delays incurred by the City from encountering
hazardous substances in the Redevelopment Area, Such
delays resulting from soil contamination shall not
exceed 45 days.
e. Time of the Essence. Except as provided under the
section of this Agreement entitled "Force Majeure",
time shall be of the essence with respect to
performance required under this Agreement,
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f.
Severability. If any provision of this Agreement shall
be declared by a court of competent jurisdiction to be
invalid, illegal or unenforceable, it shall not affect
or impair the validity, legality or enforceability of
any other provision of this Agreement, and there shall
be substituted for the affected provision a valid and
enforceable provision as similar as possible to the
affected provision.
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g. Captions for Convenience. All headings and captions
used herein are for convenience only and are of no
meaning in the interpretation of this Agreement.
h. Applicable Law. This Agreement shall be interpreted
and enforced according to the laws of the state of
Colorado. The parties agree that any action brought
with respect to this Agreement shall be brought and
maintained in the district court of Jefferson County,
State of Colorado.
i. Recitals and Exhihits Incorporated. All recitals and
exhibits to this Agreement are incorporated herein and
made a part hereof.
j. Costs of Leoal Proceedjnqs. In the event that any
party institutes legal proceedings with respect to this
Agreement, to the extent permitted by law the
prevailing party or parties shall be entitled to
recover, in addition to any other relief to which it is
entitled, its costs and expenses incurred in connection
with such legal proceedings, including, without
limitation, reasonable attorneys' fees.
k. Exculpation. The Owner of any portion of the Property
shall not be personally liable for the performance of
this Agreement after the Owner has conveyed its
interests in the burdened Property to a subsequent
owner. Any subsequent Owner shall be subject to the
terms and conditions set forth herein.
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Assi~nment.
of and shall
Parties.
This agreement shall inure to the benefit
bind the successors and assigns of the
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m. Com~liance with Amendment One. It is the intention of
the Parties to comply with the provisions of Article X,
Section 20 of the Colorado Constitution, "Amendment
One" as adopted by the voters on November 3, 1992. To /0
that end, all obligations of the City herein are
specifically understood and agreed by the Parties to be
subject to annual appropriation. This Agreement does
not create any multi year fiscal obligation of the
City.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed as of the day and year first above
written.
CITY:
ATTEST:
CITY OF WHEAT RIDGE
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By' 5::)tfd-~,{~ 4,,~
Wanda Sang City Clerk ~
By:
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Dan Wilde, Mayor
RECOMMENDED AND APPROVED:
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~;~ert Mid~~U-;h: ~:yc-~~~;::i'~trator
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By:
Robert
Works
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Public
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OWNER:
38TH & SHERIDAN LTD. !
PARTNERSHIP, A Colorado Limited ~
Partnership
By: Perry & Bailey Limited
Liability Company, a
Wyoming Limited Liability
compan(j ~en('j' Partner
By: ~~~
Robert E. Perry
Managing Member
By:
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Je rey\W. Baj,.Xe
Managihg Memb~r
KING SOOPERS:
Dillon Companies, Inc.
a Kansas Corporation
dba King Soopers, Inc.
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By: lz:;V>-7----'~~
Its: _
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THIRD AMENDMENT TO LEASE
(Store #57)
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THIS THIRD AMENDMENT TO LEASE, made and entered into this
~ day of -rn(~ ' 1995, is by and between 38th &
Sheridan, Ltd. P~rtnership (hereinafter referred to as "Lessor")
and Dillon Companies, Inc., a Kansas corporation (hereinafter
referred to as "Lessee").
RECITALS
A. By Lease date July 30, 1981, Lessor's predecessor in
interest demised and leased unto Lessee certain premises located
in the Ridge Village Shopping Center, 3817 Sheridan Blvd." Wheat
Ridge, Colorado ("Shopping Center"), which Lease was thereafter
amended by the First Amendment to Lease, dated June 3, 1982
("First Amendment") and the Second Amendment to Lease dated
October 27, 1993 (the "Second Amendment").
B. The original lease and the First Amendment and Second
Amendment are collectively the "Lease".
C. Lessor and Lessee are desirous of amending and
modifying said Lease to the extent provided herein.
NOW, THEREFORE, in consideration of mutual covenants and
conditions contained herein and in the original Lease Agreement
and other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. Expansion. Lessee hereby exercises its option to
expand contained in Paragraph 8 of the Second Amendment. Lessee
and Lessor waive the requirement for twelve (12) months prior
written notice. The "Expansion Area" as defined in the Second
Amendment is modified to include approximately 700 square feet of
the south entrance and an area of up to 32 feet directly east of
the current premises extending the full width of the building in
a north-south direction. No additional minimum base rent shall
be payable for these portions of the Expansion Area. The new
Expansion Area is shown on Exhibit A attached hereto and
denominated "New Addition". Lessee agrees, subject to the
conditions set forth in Paragraph 2 below, to commence
construction of the Expansion Area on or before October 1, 1995.
2. Lessor Obliqation. Lessee's exercise of its option to
ti.expand is conditioned upon Lessor completing the following
obligations:
) A_
(a) Lessor shall no later than June 1, 1995 provide ~
Lessee with written commitments from existing
tenants to vacate the "Improved" 8,250 square feet
of Expansion Area as designated in Paragraph 8 of
the Second Amendment;
(b) Lessor shall on or before August 21, 1995 acquire
fee simple title or a leasehold interest by ground
lease extending for the full term of the Lease
plus any option periods to the area designated as
"Existing Restaurant" on Exhibit A excluding the
areas required by the City of Wheat Ridge for
intersection modifications (the area to be
acquired or leased is referred to as the "N~w
Parking Area");
(c) Lessor shall no later than August 21, 1995 deliver
possession of the "Improved" 8,250 square feet of
Expansion Area as designated in Paragraph 8 of the
Second Amendment;
In the event that Lessor fails to meet any of the
obligations provided for above, the Lessee's exercise of the
expansion option and this Third Amendment to Lease shall be null
and void and the parties' rights shall remain as contained in the
Lease as modified by the First Amendment and Second Amendment.
3. Parking Area. Upon compliance with the terms and
conditions provided for in Paragraph 2 above, Lessor shall cause
the demolition of any improvements existing on the New Parking
Area and shall reconfigure the New Parking Area as shown on
attached Exhibit A or such other configuration as may be approved
by the City of Wheat Ridge and agreed upon by Lessor and Lessee.
4. Lender Consent. Within thirty (30) days of execution
of this Third Amendment, Lessor shall procure in form and content
reasonably satisfactory to Lessee a written consent from all
existing mortgagees for the Shopping Center to this Third
Amendment and an acknowledgment to be bound by the provisions of
Paragraph 1 of Article XXVIII of the Lease.
5. Terms and Conditions. Except as amended and modified
herein, all of the terms and conditions contained in the
aforementioned Lease shall remain in full force and effect and
are hereby ratified and affirmed by the parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Second
Amendment to the Lease as of the day and year first written
above.
LESSOR:
38TH & SHEflDAN, LTD.
By: CRt L--
Managing Partner
PARTNERSHIP
LESSEE:
DILLON COMPANIES, INC., a Kansas
corporation
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TELEPHONE: (303) 234-5900
7500WEST29THAVENUE . WHEATRIDGE,COLORAD080215
The City of
CWheat
GRidge
To:
Bob Middaugh
City Administrator
Steve SChmitz~
Economic Development Coordinator
From:
Date:
April 20, 1995
Re:
The Development Agreement for the expansion of the King Soopers store at 38th
and Sheridan with Perry and Bailey, the Dillon Corporation dba King Soopers and
the City of Wheat Ridge.
Attached to this memo is the development agreement which we have presented to Bob Perry and
Jeff Bailey for the expansion of the King Soopers store at the Fudge Village Shopping Center
Summary:
The agreement stipulates that King Soopers will expand their store by taking additional space
inside the shopping center and physically expand their store by to the east. This expansion and
the subsequent need for parking will require us to make improvements to the traffic flow on the
northwest corner of 38th Avenue and Sheridan.
Improvements encompass the construction of acceleration and deceleration lanes on Sheridan
southbound and 38th Avenue westbound. This project, in conjunction with the added
requirement for parking spaces necessitated by the King Soopers expansion will require the City
of Wheat Ridge to acquire the property currently occupied by the business known as Breakfast
Queen, raze the structures and prepare the area for both the traffic flow improvements and the
additional parking.
Benefit to the City of Wheat Ridge:
By King Soopers' estimates, this project will create a demand which will translate to sales of
approximately $30M annually This represents a 56% increase in current sales. Sales tax would
be expected to grow in equal proportions, Again, using the information provided by King
Soopers, the additional sales tax attributable to the Kings expanded operation would be
approximately $330,000 annually
Development Agreement ,., Page 2
Cost to the City of Wheat Ridge:
At this time, we cannot know what the actual cost to the City will be. Estimates have a wide
range and are based upon the extent to which the acquisition costs and the costs to remedy the
underground gas storage tank will be.
Our estimates for the project are as follows:
Acquisition of the corner property (15,000 sq.ft, @ $20) $
Relocation of the Breakfast Queen
Construction of public improvement.
Potential Storage Tank Remedy
Paving and striping
300,000
50,000
125,000
90,000
10,000
Total City Investment $
575,000
We believe that we have estimated these costs at a high level to take into account unforeseen
circumstances which could arise, Additionally, we wanted to provide King Soopers with a certain
level of certainty that the City had allocated sufficient funds to complete the project within the
time frames stipulated in the development agreement.
I am available to answer any questions you might have about this agreement.