20-1235ORDINANCE NO. 7,Q— I Z3
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER TO
EXECUTE A FOURTH AMENDMENT TO THE CONTRACT FOR SALE, BETWEEN THE
CITY, AS BUYER, AND SARATAN CORPORATION I, AS SELLER, REGARDING THE
PURCHASE OF 909 N. LOOP 288, DENTON, DENTON COUNTY, TEXAS;
AUTHORIZING THE ADDITIONAL EXPENDITURE OF FUNDS UP TO $165,000.00 FOR
ASBESTOS REMEDIATION EXPENSES RELATED TO THE PROPERTY BEING
PURCHASED; AND, PROVIDING AN EFFECTIVE DATE.
WHEREAS, through Ordinance No. 20-837, the City Council approved both a Contract
for Sale for the purchase of 909 N. Loop 288 (the "Property") from Saratan Corporation I, a
Texas corporation, Seller, and an Amendment to the Contract for Sale regarding the purchase
price for the Property (collectively, "the Contract"); and
WHEREAS, Section 4.1 of the Contract provides the City with an "Absolute Review
Period" to determine suitability and feasibility of the Property for the City's purposes; and
WHEREAS, the City's inspection during the Absolute Review Period has revealed
potential issues that require further investigation and remediation before the Property is suitable
and feasible for the City's purposes; and
WHEREAS, on June 16, 2020, the City Manager signed the Second Amendment to the
Contract for Sale, extending both the Absolute Review Period and the Closing Date; and
WHEREAS, on June 23, 2020, the City Manager signed the Third Amendment to the
Contract for Sale, again extending the Absolute Review Period and the Closing Date; and
WHEREAS, to address the City's concerns, the parties have agreed to modify the
Contract so that before closing:
(1) all leases shall have been terminated and tenants shall have vacated the property;
(2) all roof repairs needed on the Property shall be completed; and
(3) asbestos remediation of the Property shall be completed, inspected and reported.
WHEREAS, after the above items are completed and the City closes the transaction, the
City, as part of the transaction, will reimburse Seller for fifty percent (50%) of the asbestos
remediation costs up to a maximum of One Hundred Sixty -Five Thousand Dollars
($165,000.00); and
WHEREAS, City staff recommends and Council has determined that amending the
Contract as specified above is in the best interest of the City; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON IIEREBY ORDAINS:
SECTION 1. The recitals contained in the preamble of this ordinance are incorporated
by reference as if set out fully herein.
SECTION 2. The City Manager, or his designee, is authorized to execute the Fourth
Amendment to Contract for Sale, after review and approval of the same by the City Attorney, or
his designee, that contains provisions that accurately reflect the following:
A. As conditions precedent to closing:
(1) all leases shall have been terminated and tenants shall have vacated the
Property;
(2) all roof repairs needed on the Property shall be completed; and
(3) asbestos remediation of the Property shall be completed, inspected, and
reported; and
B. The expenditure from available funds to reimburse Seller, as part of the
transetion, for fifty percent (50%) of the asbestos remediation costs up to a maximum of
One Hundred Sixty -Five Thousand Dollars ($165,000.00).
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
The motn to approve this ordinance was made by and
dAj
seconded by ,the or finance was pass and approved by
the following vo L"I - _Q] :
John Ryan, District 4:
Deb Armintor, At Large Place 5:
Paul Meltzer, At Large Place 6: V
Nay Abstain Absent
-Aye
Mayor Chris Watts:
Gerard Hudspeth, District 1:
Keely G. Briggs, District 2:
Jesse Davis, District 3:
John Ryan, District 4:
Deb Armintor, At Large Place 5:
Paul Meltzer, At Large Place 6: V
PASSED AND APPROVED this the -3Aay of , 2020.
ATTEST:
ROSA RIOS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTORNEY
BY:
CHRIS WATTS, M YOR
Fourth Amendment to Contract of Sale
This Fourth Amendment to Contract of Sale ("Amendment"), between the City of Denton, a Texas
home -rule municipal corporation ("Buyer"), and Saratan Corporation I, a Texas corporation
("Seller," and collectively with the City as the "Parties"), amends the Contract of Sale and First
Amendment between the Parties, approved by the City Council through Ordinance No. 20-837 on
April 21, 2020, the Second Amendment to Contract of Sale approved by the City Manager on June
16, 2020, and the Third Amendment to the Contract approved by the City Manager on June 23,
2020 (all collectively, "Contract"), regarding the certain tract of land, being approximately 5.106
acres out of the MEP & PRR Survey, Abstract, 927, Denton County, Texas, as more fully described
in Document Number 2004-98930 recorded in the Denton County. Deed Records and in Exhibit
"A" to the Contract. This Fourth Amendment is effective as of the Effective Date.
The Parties agree to the following amendments to the Contract:
Article VII, Section 7.1 is deleted in its entirety and replaced with the following:
7.1 Date and Place of Closing. The Closing (herein so called) shall take place in the offices
of the Title Company and shall be accomplished through an escrow to be established with the Title
Company, as escrowee. The Closing Date (herein sometimes called), shall occur seven (7) days
after the conditions precedent set forth in Article V, Section 5.1 (h) and Section 5.2 (e) have been
confirmed completed by the Seller by written notice to the Buyer.
2. Article V, Section 5.1 (h) is deleted in its entirety and replaced with the following;
(h) All Leases, as defined in Article V, Section 5.2(a), and which includes, but
is not limited to, the Leases for United Hands — Adult Dayhab and New Generation
Child Care Center (NGCCC), shall have expired or otherwise been terminated, and
any and all tenants shall have vacated the Property, including without limitation, all
personal property of any such tenants or parties, on or before the date of Closing.
This is a condition precedent to the Closing.
The following Section 5.2 (e) is added:
(e) Seller had filed a claim for roof damage during the Feasibility Review
Period. An inspection report of the roof conducted by Real Property Inspections,
LLC (a copy of the Commercial Inspection Report ("Report") has been provided to
Seller). Seller has agreed that the following will be completed, and as a condition
precedent, to Closing:
(i) Roof. The roof shall be repaired as specified in the report by Tarrant
Roofing, LLC, the inspector retained by the Buyer. It will consist of
replacing the TPO membrane, the damaged ISO foam panels, five foot wide
second layer of TPO for walkaround areas at each HVAC RTUs, corner
pads at corners of curbs, repair existing HVAC condensate line as
necessary, replace broken 4x4 wood blocks wrapped in TPO under the gas
Fourth Amendment to Contract of Sale (City of Denton/Saratan) Page 1 of 4
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lines and electrical conduits, replace damaged boots over the vents, redo
existing scuppers, and edge metal on the perimeter. The standing seam
metal panels do not have structural damage but have cosmetic dents not
visible from the ground level. If a standing seam panel on mansard is
damaged during installation of the membrane and ISO boards, it will be
replaced. To improve color match, the contractor will endeavor to segregate
older panels and new panels on one face.
With regard to the in -progress inspections of the roofing project, the
Tarrant Roofing and CSI Renovations & Roofing, LLC, will coordinate that
among themselves.
Seller acknowledges and agrees that any and all warranties related
to the repaired roof received by the Seller shall be issued, or transferred, to
the Buyer within thirty (30) business days after Closing. This obligation
shall survive Closing.
(ii) Asbestos remediation. The asbestos remediation shall be completed
in accordance with recommendations of the Report and the third -party
inspection and reporting of the remediation shall be completed by Precision
Environmental Services ("Precision") at the Seller expense, except as noted
in 4 (f) below and with a certificate from the State of Texas.
The scope of abatement as specified by Precision Environmental
Services is as follows:
Drywall w/ Joint Compound/ Texture - The walls & ceilings throughout are
to be removed and disposed of as asbestos waste. The studs/ fire walls will
remain after removal and the insulation will be removed as needed.
Floor Tile & Mastic - The floor tile and mastic under carpet
throughout the building is to be removed and disposed of as asbestos waste.
The abatement will meet DSHS regulations and project
specifications.
(iii) The Buyer may designate one person each, as identified above, to
inspect the roofing work in progress and the abatement in progress, and their
identities shall be provided to the Seller in advance. The companies of the
representatives must provide certificate of insurance naming SCI as
additionally insured and a hold harmless statement satisfactory to the Seller,
holding the Seller and its representatives harmless and taking full
responsibility for any and all liability resulting from the representative being
on the Seller's property.
(iv) Interior of Property. After the completion of the asbestos
remediation, Seller agrees that:
a. The floor covering, adhesives, or any other substance shall
have been removed as identified by Precision for abatement from
the foundation slab; and
Fourth Amendment to Contract of Sale (City of Denton/Saratan) Page 2 of 4
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b. The interior walls shall be free of drywall, paneling, or any
other similar wall covering materials as identified by Precision for
abatement.
4. The following Section 5.2 (f) is added:
(f) Within ten (10) calendar days after the completion of the asbestos
remediation and submission of remediation closing documents to the State, Seller
shall deliver to Buyer, an affidavit as to the remediation. At Closing. Buyer shall
pay Seller the lesser of fifty percent (50%) of the total cost of the asbestos
remediation or $165,000.00.
5. The following Section 6.7 is added:
6.7. Notices Regarding Conditions Precedent in Sections 5.1(h) and 5.2(e).
Seller shall notify Buyer when the conditions precedent have been met because the Seller
has been issued an approval of the roofing repairs by the City Building Inspector, the
closing documents have been submitted to the State of Texas on the Asbestos remediation
and the tenant leases are terminated and the building is vacant. At such time of notification,
the Buyer shall close the sale within Seven (7) days and if not closed the Seller shall have
the right to specific performance of the Contract.
6. The following Section 6.8 is added:
6.8. Contract Automatically Terminated in 180 Days. If the Closing has not occurred
within 180 days from the date Buyer approves this Fourth Amendment, it is agreed by the parties
that this Contract is automatically terminated and the Title Company, without further instruction
from the Seller, shall immediately return the Earnest Money to Buyer, and Buyer and Seller shall
have no further obligations under this Contract, one to the other.
The provisions of the Contract not amended herein shall remain in full force and effect.
---------- Signature Pages Follow ---------
Fourth Amendment to Contract of Sale (City of Denton/Saratan) Page 3 of 4
SELLER
Saratan Corporation I, a Texas corporation
�uda Bhagwat, Aesident
Signed on the 2' ( day of 12020.
BUYER
ation
City of ent , a Tegasboa
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Todd Hileman, Citf Manager
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Signed on the day of J k4 -1v-2_
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ATTEST:
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Rosa Rios, City Secretary
By:�/_Y
APPROVED AS TO LEGAL FORM:
Aaron Leal, City Attorne
By:
Fourth Amendment to Contract of Sale (City of Denton/Sawan) Page 4 of 4