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HomeMy WebLinkAboutItem 04 Approval of the First Amendment to the Purchase and Sale Agreement between the City of Ocoee and the Chevron Land and Development CompanyMeeting Date: December 5, 2023 Item #: 4 Contact Name: Craig Shadrix Department Director: Craig Shadrix Contact Number: Ext. 6434 City Manager: Robert Frank Background Summary: On October 17, 2023, the City Commission authorized the assignment of the Purchase and Sale Agreement between the City of Ocoee and the Chevron Land Development Company, which was approved by the City Commission on May 18, 2023, to Montierre Development PLLC subject to the City Manager and City Attorney's completion of any remaining tasks. In order to address several responsibilities under the Purchase and Sale Agreement, the City entered into a Development Agreement with Montierre Development PLLC on May 18, 2023, which further defines the obligations of Montierre with respect to the terms and conditions of the Purchase and Sale Agreement, amongst which includes the purchase at the expense of Montierre, a liability insurance policy that protects the City and Chevron from any future liabilities arising from the sale. The Purchase and Sale Agreement specifies that the City as purchaser retains its indemnification obligations to Chevron even in the event of an assignment; therefore, the only means necessary for completion of the arrangement was for Montierre to purchase said insurance for the City and assume the City's obligations to Chevron per the requirements of the Development Agreement. An additional obligation necessary for closing was that the parties enter into a Brownfield Site Rehabilitation Agreement (BSRA) with the Florida Department of Environmental Protection (FDEP). The City Commission also authorized the City Manager and City Attorney to finalize any remaining details necessary for its completion pursuant to the obligations of the Purchase and Sale Agreement as assigned. During recent discussions with Chevron, it has become apparent to all parties that the review and comment timelines would not be conducive to an expedited timeline for closing. To address this, Chevron submitted to the City a draft First Amendment to the Purchase and Sales Agreement that includes the following: 1. A clarification that the BSRA is no longer required to be executed prior to closing; 2. An addition of language clarifying the type, duration, and the terms of the liability insurance that would be purchased by Montierre Development PLLC for satisfaction of both the terms of the Purchase and Sales Agreement and the Development Agreement. These additions are beneficial to both the City and Chevron, and are further proposed as part of the Development Agreement between the City and Montierre Development PLLC. City of •-- a i Avenue - Ocoee, Florida 34761 .1 *1 11 • •-- • • Page 18 of 593 Issue: Should the Honorable Mayor and City Commissioners approve the First Amendment to the Purchase and Sale Agreement between the City of Ocoee and the Chevron Land and Development Company? Recommendations: Staff recommends the Honorable Mayor and City Commissioners approve the First Amendment to the Purchase and Sale Agreement between the City of Ocoee and the Chevron Land and Development Company Attachments: 1. First Amendment to PSA (0 Chevron) Financial Impacts: Type of Item: Consent City • Ocoee - 1 N. Bluford Avenue - Ocoee, •. 34761 Phone: (407) 905-3100 - www.ocoee.org Page 19 of 593 L Ii. 1/ \ 1 U \ . �: I:T. \ _/ '7:1�7t ► _ 1 U 1 THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is made as of November _, 2023 (the "Amendment Effective Date"), by and between CHEVRON LAND AND DEVELOPMENT COMPANY, a Delaware corporation ("Seller") and CITY OF OCOEE, FLORIDA, a Florida municipal corporation ("Purchaser"). Seller and Purchaser are collectively sometimes referred to herein as the "Parties". RECITALS: A. Seller and Purchaser executed that certain Purchase and Sale Agreement and Joint Escrow Instructions dated on or about June 20, 2023 (the "Agreement"), pursuant to the terms and conditions of which Seller agreed to convey and Purchaser agreed to purchase certain real estate located in the City of Ocoee, Orange County, Florida as further described therein (the "Property"). B. Section 4.2 of the Agreement requires Purchaser to secure a Brownfield Site Rehabilitation Agreement (`BSRA") with the Florida Department of Environmental Protection prior to Closing (as defined in the Agreement). Purchaser has advised Seller that it anticipates that it will not be able to secure such BSRA prior to the scheduled date of Closing, and the Parties have agreed that securing the BSRA will no longer be a condition to Closing. In connection therewith, Seller has required that Purchaser list Seller as an additional named insured on the pollution legal liability insurance to be obtained by Purchaser as a condition to Closing. C. Seller and Purchaser have agreed to modify the provisions of the Agreement such that obtaining the BSRA is no longer a condition to Closing and requiring Purchaser to list Seller as an additional named insured on the pollution legal liability insurance to be obtained by Purchaser as a condition to Closing, subject to the terms and provisions hereinafter set forth. AGREEMENT: NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows: 1. Capitalized Terms. All capitalized terms used but not otherwise defined in this Amendment shall have the meanings ascribed to them in the Agreement. 2. Waiver by the Parties. Notwithstanding anything contained in the Agreement to the contrary, with the Parties execution of this Amendment, both Purchaser and Seller waive their right to terminate this Agreement prior to the expiration of the Due Diligence Period, as permitted by Section 3.3 as to Purchaser and Section 3.4 as to Seller. Purchaser's execution of this Amendment shall be deemed Purchaser's delivery of the Notice to Proceed referenced in Section 3.3. In addition, notwithstanding anything contained in the Agreement to the contrary, on or before three (3) business days following the full execution of this Amendment, Purchaser shall deposit the Additional Deposit in the amount of US$25,000.00 with Escrow Agent. Amendment to Agreement. The Agreement is amended as follows: The following definitions are added to Section 1.1 to the Agreement: Page 20 of 593 "Approved PLL Policy Form" has the meaning given in Section 4.2(B) of this Agreement. `PLL Policy" has the meaning given in Section 4.2(B) of this Agreement. "Renewal Payment Notice" has the meaning given in Section 4.2(C) of this Agreement. "Renewal Premium Notice" has the meaning given in Section 4.2(C) of this Agreement. Section 4.2 of the Agreement is deleted in its entirety and in its place is inserted the following: 4.2. Purchaser's Obligations. (A) The Parties hereby acknowledge and agree that during the Due Diligence Period the City designated the Property as a Brownfield Area pursuant to the FBRA. Prior to the Date of Closing, Purchaser will have submitted to the FDEP its application for a Brownfield Site Rehabilitation Agreement (`BSRA'), which application will include Seller. Seller agrees to cooperate with Purchaser in its efforts to obtain FDEP's agreement on the terms and conditions of a BSRA. The Parties agree to use their best efforts to obtain FDEP's approval of the BSRA in substantial form as the Model BSRA provided in FDEP's public website for the Florida Brownfzelds Program at https:l/floridadep.gov/wastelwaste- cleanup/content/brownfields program as soon as reasonably possible, with the BSRA not to be effective until Purchaser has acquired title to the Property. (B) On or before Closing, Purchaser shall procure a commercially available Pollution Legal Liability insurance policy or policies (`PLL Policy'), paid for in full, with respect to the Property, to be held in the name of the City, with Purchaser (if different than the City), Seller and such other Persons from the Seller Group as Seller may designate listed as additional named insureds. The PLL Policy will also satisfy each of the requirements set forth below and will be issued in the Approved PLL Policy Form (as defined below). Purchaser shall provide Seller and its insurance representatives with copies of any written quotes it receives from insurance companies for the PLL Policy and allow Seller the opportunity to participate in any calls Purchaser has with any underwriters or similar representatives from such insurance company or companies where the form or substance of the PLL Policy, including endorsements to the Policy, will be discussed. Purchaser shall also promptly provide Seller with copies of any specimen policies and draft endorsements it receives for the PLL Policy and allow Seller or its insurance representatives to comment on them. On or before 30 days prior to Closing, Purchaser shall deliver to Seller the final proposed PLL Policy and endorsements to the PLL Policy for Seller's review and approval, in Seller's sole, but good faith discretion. Seller shall have 15 days from its receipt of the final proposed PLL Policy to approve or disapprove the final proposed PLL Policy, which approval or disapproval notice must be in a written notice to Purchaser. If the proposed PLL Policy is disapproved, then the written notice will speck the reason for such disapproval. If Seller fails to either approve or disapprove of the proposed PLL Policy as specified above within said 15-day period and said failure Error! Unknown document property name. Page 21 of 593 continues for an additional 5 Business Days after notice to Seller from Purchaser of the failure, then the proposed PLL Policy will be deemed approved by Seller. If Seller disapproves of the, form of the PLL Policy or any endorsements to the PLL Policy as specified above, then, notwithstanding anything contained in this Agreement to the contrary, the Closing Date shall be extended for a period not to exceed 60 days in order to allow Purchaser and Seller, after acting in good faith, to resolve Seller's issues with respect to the PLL Policy. If, after acting in good faith, Seller fails to approve the PLL Policy within such 60 day extension period, this Agreement will immediately terminate on such 60th day, and neither Party shall have any further obligations to the other under this Agreement except for those obligations which are expressly stated to survive such termination. In such event, the Deposit will be returned to Purchaser. Once Seller approves or is deemed to have approved the proposed PLL Policy and the endorsements to the Policy, together they will be referred to in this Agreement as the Approved PLL Policy Form ". The PLL Policy will be written by an insurer reasonably acceptable to Seller and rated not lower than `A " X or better by A.M. Best & Company or similar rating agency reasonably acceptable to Seller. (C) The PLL Policy will be in an amount of at least US$10,000,000 per incident and in the aggregate, and US$5, 000, 000 of that amount will be sublimited exclusively for coverage related in any way to unknown pre-existing conditions on the Property that predate the Closing; provided that Purchaser may elect to obtain limits higher than US$5, 000, 000 per incident and US$10, 000, 000 in the aggregate for coverage, and will expressly allow renewal by Purchaser (if different than the City) and Seller as if the Purchaser or Seller was the named insured under the Policy. In addition, the PLL Policy may provide for coverage of lands in addition to the Property. The PLL Policy will have a policy term of at least 10 years for unknown pre-existing conditions. Any deductible under the PLL Policy will not exceed US$250, 000 per pollution condition, and during the initial 10 year PLL Policy term Purchaser shall be solely responsible for the payment of any such deductible. The PLL Policy will be non -cancelable, except upon 60 days advance written notice to Seller. However, the PLL Policy will, at a minimum, be in effect for 10 years as provided above. The PLL Policy will expressly provide coverage for: (1) on -site and off -site cleanup coverage for new conditions, (2) on -site and of third party bodily injury and property damage claims coverage including diminution of value and natural resource damages liability for new conditions, (3) on -site and off -site cleanup coverage for unknown pre-existing conditions, subject to any exclusions for known conditions, (4) on -site and off -site third party bodily injury and property damage claims coverage including diminution of value and natural resource damages liability for unknown pre-existing conditions and to the maximum extent possible for those related to known pollution conditions, (5) reopener cleanup coverage for any excluded known pollution conditions following final regulatory closure, (6) cleanup and third party bodily injury and property damage liability including diminution of value and natural resource damages at non -owned disposal sites, and (7) business interruption coverage. Purchaser shall also make commercially reasonable efforts to minimize known pollution condition exclusions. (D) Subject to the City's (and Purchaser if different than the City) receipt of prior written notice from Seller electing to pay the renewal premium as specified below received at least 120 days prior to the expiration of the term of the original Error! Unknown document property name. Page 22 of 593 PLL Policy, Purchaser shall use commercially reasonable efforts to renew the PLL Policy for a second 10 year term of coverage, on terms and conditions substantially similar to, or at least as protective of Seller, as the original PLL Policy and which are otherwise reasonably acceptable to Seller. At least 60 days prior to the expiration of the term of the original PLL Policy, Purchaser shall provide Seller with the amount of the premium required to be paid to renew the PLL Policy (the `Renewal Premium Notice'), if commercially available. Within 30 days after Seller's receipt of the Renewal Premium Notice, Seller may in its sole discretion notify Purchaser that Seller shall directly pay for the renewal premium (the "Renewal Payment Notice'). If Seller provides the Renewal Payment Notice, then Seller shall directly pay for the cost of the renewal premium within 30 days after Seller's receipt of an invoice for the renewal premium; provided, however, in no event shall Seller be required to pay for any portion of the renewal premium in excess of the amount of the premium set forth in the Renewal Payment Notice. If Seller does not deliver the Renewal Payment Notice within the above -referenced 30 days, Purchaser shall have no obligation under this Agreement to renew the PLL Policy. In the event that Purchaser fails to renew the PLL Policy after Seller has delivered the Renewal Payment Notice, then Seller may (in its sole and absolute discretion) renew the PLL Policy, and Purchaser shall reimburse Seller for any and all actual out-of-pocket costs incurred by Seller to so renew the PLL Policy in addition to the amount of the renewal premium stated in the Renewal Premium Notice (or the actual amount of the renewal premium, if less). (E) The provisions of this Section 4.2 will survive Closing. Section 8.1 (A) of the Agreement is deleted in its entirety and in its place is inserted the following: (A) Purchaser has performed and complied in all material respects with the terms and conditions of this Agreement required to be performed or complied with by Purchaser at or prior to Closing, including without limitation, designating the Property as a Brownfield Site pursuant to the FBRA, submitting the BSRA to the FDEP, and securing the PLL Policy. Section 8.2 (A) of the Agreement is deleted in its entirety and in its place is inserted the following: (A) Seller has performed and complied in all material respects with the terms and conditions of this Agreement required to be performed or complied with by Seller at or prior to Closing, including without limitation, such terms and conditions associated with Purchaser's obligations to (1) designate the Property as a Brownfield Site pursuant to the FBRA; (2) submit the BSRA to the FDEP.• and (3) secure the PLL Policy. The following is added as Section 10.3 (G) at the end of Section 10.3 of the Agreement: (G) The PLL Policy. 4. Conflicts. In the event of any conflict between the terms of this Amendment and the Agreement, the terms of this Amendment shall prevail. Error! Unknown document property name. Page 23 of 593 5. Headings. The heading or captions of the paragraphs in this Amendment are for convenience only and do not limit or expand the construction and intent of the contents of the respective paragraph. 6. BindingEect. This Amendment is binding upon and inures to the benefit of the Parties and their respective heirs, personal representatives, successors and permitted assigns. 7. Counterparts; Electronic Signatures. This Amendment may be executed and delivered in any number of counterparts, each of which so executed and delivered shall be deemed to be an original and all of which shall constitute one and the same instrument. Counterparts may be delivered via electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 8. Ratification. The Agreement as amended and modified by this Amendment is ratified and confirmed by the Parties and remains in full force and effect. [Signatures on following page] Error! Unknown document property name. Page 24 of 593 SIGNATURE PAGE TO FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment as of the date first above written. CITY OF OCOEE I: Rusty Johnson, Mayor Attest: Melanie Sibbitt City Clerk APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON 2023, UNDER AGENDA ITEM NO. FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA; APROVED AS TO FORM AND LEGALITY this _ day of , 2023. FISHBACK DOMINICK, P.A. By: City Attorney SELLER: CHEVRON LAND AND DEVELOPMENT COMPANY By: _ Name: Title: Error! Unknown document property name. Page 25 of 593