Title
Order: That the Mayor be authorized to sign a Letter of Intent with Jefferson Apartment Group for purchase of office space for use as City Hall
Order: That the Mayor be authorized to sign the attached Letter of Intent with Jefferson Apartment Group for purchase of space for use as City Hall:
RE: City Hall Office Condominium/City of Malden
Proposed Purchase Price and Terms
On behalf of Jefferson Apartment Group, LLC ("JAG"), I am pleased to issue this proposal outlining the terms and conditions by which JAG will sell an office condominium to the City of Malden for its use as a Malden City Hall.
1. |
Property: |
The property being referenced is approximately 42,225 sf to be contained within the so-called 'North Building' as part of Jefferson Apartment Group's proposed redevelopment of Malden Government Center located at 200 Pleasant Street in Malden, MA. The property will be conveyed as a condominium unit to the City of Malden. The proposed location is illustrated on the attached Exhibit A. The parties expressly agree that the City of Malden shall retain no construction oversight rights or responsibilities, nor shall the City retain any cost exposure except as it pertains to any changes requested by the City as outlined in section 3, 'Additions to Purchase Price', and that the city is entering into an agreement to purchase an office space condominium and not entering into a construction agreement. The City's responsibilities and rights shall be limited to approval of the shell to be delivered in accordance with Exhibit B. Seller shall deliver the Property in the condition described in Exhibit B and to establish the appropriate condominium regime to enable a fee simple transaction. |
2. |
Purchase Price: |
The Purchase Price will be Ten Million, Eight Hundred Thousand Dollars ($10,800,000) which will be paid in two installments: a) Four Million Dollars ($4,000,000) will be paid simultaneous with JAG's closing on the Malden Government Center property as a non-refundable deposit, released to JAG at closing of the land and b) The parties agree to work together in good faith to establish a backstop provision relative to the additional Six Million Eight Hundred Thousand Dollars ($6,800,000) to be funded through the approval of the HDIP plan. Specifically, the parties agree that prior to the P&S, mutually agreeable terms will be outlined to mitigate the exposure between delivery of the condominium space to the City and the date of HDIP approval. |
3. |
Additions to Purchase Price: |
The Purchase Price will be increased by the amount of any change orders, that are approved at the sole request of the City that expand the scope of the delivery requirements beyond that agreed to in Exhibit B - Delivery Requirements and further accepted and approved as part of the Construction GMP Drawing Set Approval as set forth in Paragraph 4 of this Term Sheet. |
4. |
Approval of Development Plans |
The City shall formally approve the Development Plans for the office building to confirm conformance with the Delivery Requirements defined in Exhibit B at the following milestones: a) Design Development b) Building Permit Submission c) Construction GMP Drawing Set At each of these milestones, the City shall provide notice of their approval, in writing, within 10 business days of receipt of the plans. Any discrepancies should be noted in writing and JAG shall have fifteen business days to revise the drawings and resubmit for approval by the City. The City's approval shall not be unreasonably withheld. |
5. |
Housing Development Incentive Program: |
The City of Malden will pursue participation in the Housing Development Incentive Program administered by the Commonwealth of Massachusetts Department of Housing and Community Development. The Malden Government Center property and abutting parcel will be included within the designated HDIP zone and thereby eligible for participation in the program. Upon successful final certification of the Project under the HDIP program, and approval of a 100%, 20 year tax abatement related to the residential taxes for units contained within the Government Center property, the escrowed portion of the Purchase Price will be released to the City. |
6. |
Negotiation of Agreement: |
The City of Malden shall have Ninety (90) days from the acceptance of this Term Sheet to pursue the 16e exemption process and negotiate a Purchase and Sale Contract to be executed. All costs associated with the 16(e) process and any other processes necessary for the City to confirm its ability to consummate this transaction shall be borne by the City. |
7. |
Closing: |
The Closing shall occur on a date reasonably acceptable to Seller and JAG which is fifteen (15) days following a) an approved Core and Shell inspection of the premises by the City of Malden Building Department and b) acceptance and approval of the Property as conforming with the Construction GMP Drawing Set Approval as set forth in Paragraph 4 of this Term Sheet; such acceptance and approval not to be unreasonably withheld. |
8. |
Closing Conditions: |
The following shall be conditions to be satisfied prior to closing the contemplated transaction: A) Approved Core and Shell Inspection of the Property B) JAG to deliver clean, lien free title to property C) JAG must have obtained a partial release of any mortgage as necessary to consummate a sale of the condominium D) City Approval and Acceptance of Property as conforming with approved GMP Construction Drawings E) Condominium Documents and Plans that are agreed upon by both parties as to form F) Initial condominium budget for shared expenses shall be approved by buyer; approval not to be unreasonably withheld |
9. |
Building Plans: |
JAG agrees to proceed expeditiously to obtain site plan and zoning approvals as well as building permits once site plan approvals are complete. It is estimated that site plan and zoning approvals will take 6-8 months and the building permit approvals will take an additional 6-8 months. JAG will commence the permitting process upon successful completion of Feasibility under the LDA to purchase the Malden Government Center Property. |
10. |
Broker Commissions: |
JAG and the City of Malden hereby confirm that no broker was involved in this transaction. Both parties shall hold each other harmless from any real estate broker claiming it is entitled to a commission based on this transaction. |
Should the above proposal be acceptable to you, please execute a copy of this term sheet in the space provided below. Upon execution of this letter, the City agrees to formally commence the 16(e) notice process. Once the 16(e) process is complete, we can move forward to prepare a formal agreement incorporating these terms and any additional terms to which we may mutually agree.