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09/18/2018 09 Surplus Property at 2312 West Nob Hill Boulevard1 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 9. For Meeting of: September 18, 2018 ITEM TITLE: Resolution acknowledging prior declaration that City -owned property located at 2312 W. Nob Hill Boulevard is surplus to the uses and needs of the City of Yakima, authorizing disposition and approving Agreement of Purchase and Sale for said property to JAG Retail Properties, Inc. SUBMITTED BY: Jeff Cutter, City Attorney SUMMARY EXPLANATION: In February 2014, the City of Yakima purchased the subject property (2312 West Nob Hill Boulevard) along with three other properties from Tiger Oil Corporation for the public purpose of environmental remediation and site clean-up. Following completion of necessary cleanup, the City's intention has been to return the properties to the private sector for beneficial economic development. The City has worked with the Washington State Department of Ecology to achieve cleanup on this site. The property has not yet been determined subject to issuance of a "No Further Action" letter from the Department of Ecology, but has been deemed amendable to construction in accordance with the environmental covenants previously granted to the Department of Ecology by the City on December 11, 2015. The subject property was determined surplus to the uses and needs of the City of Yakima by action of the Council under Resolution R-2015-089 and is therefore subject to disposition. By instrument dated September 7, 2018, the City of Yakima has received from JAG Retail Properties, Inc. an "Agreement of Purchase and Sale and Escrow Instructions" ("Purchase and Sale Agreement"), whereby the buyer proposes to purchase the subject property for $420,000. This amount is $40,000 less than the appraised value of the property, said appraisal being based upon an assumption that the property is free of any environmental restrictions. The City believes that the current offer under consideration by the Council represents a fair value for the property given its current environmental status. The terms of the Agreement also require that the City continue to monitor the status of the site for the next 20 years, or until a "No Further Action" letter is issued by the Department of Ecology, whichever first occurs. Monitoring costs will be covered by remaining funds currently held by the City from the trust fund that was provided by Tiger Mart corporation as part of the purchase agreement when the City bought the four properties. In addition, to date the Department of Ecology has been willing to underwrite much of the mitigation activities for the four properties. It is expected that this support would continue if necessary. The attached Resolution acknowledges the prior declaration of Council that the property is surplus to the uses and needs of the City of Yakima and may be disposed of and further approves the Agreement of Purchase and Sale and Escrow instructions. ITEM BUDGETED: NA STRATEGIC PRIORITY: Neighborhood and Community Building APPROVED FOR SUBMITTAL: STAFF RECOMMENDATION: Adopt Resolution BOARD/COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date d Resolution -Tiger -2312 VV Hill BI\ed-JAG Inc -9 7 2018 9/7/2018 Tiger Mart -2312 W Nob Hill \Tiger Property -2308 W Hill -PSA -FINAL Signed JAG 9-7 2018 Type Resd ution 9/7/2018 tract 2 A RESOLUTION 3 RESOLUTION NO. R -2018 - acknowledging the prior City Council determination declaring the property located at 2312 West Nob Hill Boulevard, Yakima Washington, to be surplus to the uses and needs of the City of Yakima and subject to disposition; and approving Agreement of Purchase and Sale. WHEREAS, in February 2014 the City of Yakima (City) purchased the subject property (2312 West Nob Hill Boulevard), along with three other properties from the Tiger Oil Corporation for the public purpose of environmental remediation and site clean-up; and WHEREAS, substantial site remediation was accomplished in cooperation with the Department of Ecology (DOE) to remove hazardous waste from the site; DOE has not yet determined it is appropriate to issue a "No Further Action" decision for the site, but that the site is presently amenable to development subject to the Environmental Covenant granted by the City to DOE on December 11, 2015; and WHEREAS, the City Council previously determined that the subject property is surplus to the uses and needs of the City of Yakima and may be disposed of, by action of Resolution R-2015- 089; and WHEREAS, by instrument dated September 7, 2018, the City of Yakima received from JAG Retail Properties, Inc. an "Agreement of Purchase and Sale and Escrow Instructions" ("Purchase and Sale Agreement"), a copy of which is attached hereto and incorporated herein by this reference, whereby the purchaser proposes to purchase the subject property for $420,000, which amount is $40,000 less than the appraised fair market value of said property when valued as if clean and free of any environmental contamination; and WHEREAS, as a condition of the Purchase and Sale Agreement the City agrees to continue to provide any necessary well monitoring on the site for twenty years or until a "No Further Action" letter is issued by DOE; and WHEREAS, the City Council acknowledges the previous declaration of surplus property and determination that the property may be disposed of; the Council further determines that acceptance of the Purchase and Sale Agreement are in the best interests of residents of the City of Yakima and will promote the general health, safety and welfare; now, therefore BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: Section 1. The Agreement of Purchase and Sale and Escrow Instructions attached hereto and incorporated herein by this reference is hereby approved; the City Manager is hereby authorized to execute and administer such Agreement for and on behalf of the City of Yakima, and to execute all documents necessary or appropriate to accomplish such sale. Section 2. The City Manager is authorized to dispose of the property by any means deemed necessary and appropriate in accordance with applicable codes and laws of the State of Washington and the Agreement of Purchase and Sale approved in Section 1 above. The City Manager is further authorized to prepare and execute a deed of conveyance to accomplish such sale in accordance with the terms and conditions above, and to deliver such deed for recording by the purchaser upon payment in full to the City of Yakima of the consideration described above; 4 ADOPTED BY THE CITY COUNCIL this 18th day of September, 2018. ATTEST: Kathy Coffey, Mayor Sonya Claar Tee, City Clerk AGREEMENT OF PURCHASE AND SALE AND ESCROW INSTRUCTIONS This Agreement of Purchase and Sale and Joint Escrow Instructions ("Agreement"), dated for reference purposes only as of September 6, 2018 is entered into by and between, The City of Yakima, (collectively, the "Seller"), and, JAG Retail Properties Inc, a California corporation (or an assignee or nominee), (collectively, the "Buyer"). This Agreement is effective as of the date it is executed by the later of Buyer and Seller, approval of the Yakima City Council and upon receipt by Escrow ("Effective Date") (Seller and Buyer may collectively be referred to as the "Parties"). Buyer and Seller shall prepare and execute such escrow instructions as may be necessary and appropriate to close the transaction in accordance with the terms of this Agreement. Each party directs and authorizes Escrow Holder to close escrow pursuant to the terms and conditions of this Agreement should either party fail to execute the escrow instructions. Seller hereby agrees to sell to Buyer and Buyer agrees to purchase from Seller all of the following: a. Certain real property known as 2312 W Nob Hill Blvd, City of Yakima, County of Yakima, State of Washington (APN #'s 181326-42051) ("Land"). b. All rights, privileges, obligations (other than as specifically defined herein), buildings, improvements, easements, tenements, hereditaments, rights of way and appurtenances which belong to or appertain to the Land and/or are owned by Seller, including, without limitation, rights to all minerals, oil, gas and other hydrocarbon substances on and under the Land, as well as all development rights, air rights, water, water rights and water stock, if any, relating to the Land (collectively, "Appurtenances"); and c. All intangible property owned or held by Seller in connection with the Land or with the use thereof including, without limitation, all permits, maps, surveys, plans, leases, guarantees, licenses, rental contracts and agreements (collectively, "Intangible Property"). The Land, Appurtenances and Intangible Property are hereinafter collectively referred to as the "Property". Seller lBuyer J G 5 6 1. TERMS OF PURCHASE: 1.1 Purchase Price - The purchase price ("Purchase Price") for the Property shall be four hundred twenty thousand dollars and no cents ($420,000.00). 1.2 Payment of the Purchase Price - The Purchase Price for the Property shall be payable by Buyer as follows: a. Upon mutual acceptance of this Agreement, Buyer shall deposit with Fidelity Title Insurance (the "Escrow Holder"), an amount equal to fifteen thousand dollars and no cents ($15,000.00) ("Deposit"). Upon Escrow Holder's receipt of the Deposit, Escrow Holder, shall automatically release ten dollars and no cents ($10.00) to Seller to validate this contract. The remaining Deposit shall remain with Escrow Holder per the terms of this Agreement. b. The Deposit held in escrow under this Agreement shall be placed in an interest-bearing account as directed by Buyer with all interest being credited to Buyer. The Deposit shall be refundable in full to Buyer until all Conditions Precedent described in Paragraph 4 below have been approved or waived by Buyer, at which time the Deposit shall become non-refundable, except in the event of either a right under this Agreement for Buyer to obtain a refund of the Deposit or Seller's default. If Buyer cancels escrow for any reason whatsoever prior to the expiration of the Diligence Period as described in paragraph 4, then Buyer's deposit shall be fully refundable to Buyer, and no additional signatures from Seller shall be necessary in order to refund the Deposit to Buyer. At Closing such deposit shall be applied to the Purchase Price or be treated as liquidated damages as provided in Paragraph 10 below. c. Buyer shall cause the remainder of the Purchase Price to be paid through Escrow prior to Closing. 2. CLOSING: The closing of the purchase and sale of the Property ("Closing") shall take place at Escrow Holder's office on or before thirty (30) days after the expiration of the Diligence Period, which shall be after the approval or waiver of all Conditions Precedent provided for in Paragraph 4. Seller J G 2Buyer 3. TITLE: 3.1 Title - Seller shall deliver title to the real property to Buyer by General Warranty Deed, and an ALTA lenders title policy insuring the Property is free and clear of all liens, financial encumbrances, licenses, leases, other third party rights of record, except as approved by Buyer in writing. 4. BUYER'S CONDITIONS PRECEDENT ("Conditions Precedent"): The performance by Buyer of its obligations herein to close are expressly contingent upon the satisfaction or waiver by Buyer at the sole and absolute discretion of Buyer, of the conditions herein set forth within the time periods provided ("Diligence Period"). The failure of Buyer to give written notice of satisfaction or waiver within the specified time frame above or below, as applicable, shall be deemed to constitute Buyer's disapproval of any of the following matters, conditions and contingencies: Seller 4.1 Seller Document Delivery - Concurrent with the execution of this Agreement, Seller hereby agrees to make available or to furnish Buyer with clearly legible copies of all required documents as described in Paragraph 4.1.a thru 4.1.m, within seven (7) days of opening escrow. Buyer shall have until the expiration of the Diligence Period described in paragraph 4.2 to review and approve each of the documents. Documents shall include: a. A current preliminary title report ("Title Report") from Pacific Alliance Title (311 N. 4th Street, Suite 102, Yakima, WA) with respect to the Land, and clearly legible copies of all underlying documents referred to in the Title Report. If any objectionable exceptions are set forth in any notice from Buyer to Escrow Holder and Seller prior to the end of the Diligence Period, then Buyer shall have the right to elect at any time prior to the Closing to terminate this Agreement and receive a full refund of the Deposit if such objections are not removed by Seller prior to the Closing. If Seller gives Buyer written notice that Seller does not intend to remove any such objectionable item, Buyer may elect, at any time prior to the Closing to either terminate this Agreement or to waive its disapproval and accept title in its then condition. Notwithstanding the foregoing, Seller covenants and agrees to remove at the Closing any and all monetary encumbrances on the Property, except for non -delinquent real property taxes. In addition to the review of the Title Report, if during the Diligence Period, the Title Company adds an exception to the coverage of the Title Report not previously disclosed by the Title Report ("New Title Matter") relating to the status of title to the JG 3Buyer 7 8 Property, Buyer shall, within five (5) days after receipt of the added exception, be entitled to object to any such New Title Matter by giving written notice to Escrow Holder and Seller. In the event such notice to Seller is given, the procedures in the foregoing paragraph shall apply to such New Title Matter. b. Copy of Seller's most current ALTA survey. c. Copies of Seller's title policy together with all title exception documents in Seller's possession. d. Copies of all environmental studies, indemnities, UST studies and reports, agency correspondence and notices and related documents ("Environmental Documents"). e. Copies of permits, tax bills, and any other contract(s) related to the property. £ Copy of any leases and or sub leases and all related guaranty documentation. g. Copy of any building condition reports in Sellers possession. h. Copy of any notices from municipalities or other governing entities regarding on going conditions or future Property development. i. Copy of any vendor contracts. j. Plans and Specifications k. Three (3) year operating history 1. Third party contracts encumbering the Property. m. Copies of such other documentation related to the Property in Seller's possession or under its control which is reasonably requested by Buyer during the Diligence Period. 4.2 Buyers Investigations ("Diligence Period") - Buyer shall have until February 19, 2019 to complete, to its sole satisfaction a physical and economic examination of the property. During that time Buyer shall have the right and opportunity to inspect and review the physical condition of the Property, including the right to have Buyer's consultants enter the Property and inspect the Land and prepare written reports regarding the same, on the following terms and conditions. Seller grants Buyer and its consultants, engineers and other agents and contractors the right to enter upon the Property during reasonable business hours for the purpose of conducting such examinations and tests as Buyer may desire (with any invasive testing requiring Seller's approval as to type and placement, which approval shall not be unreasonably withheld Seller 4Buyer J G or delayed). Buyer shall keep the Property free and clear of any mechanic's liens arising out of Buyer's entry on the Property and, in the event of any damage or alteration caused by such entry, shall promptly and fully restore the Property to its condition existing prior to such entry on the Property. Buyer shall indemnify Seller and hold Seller harmless from and against any and all claims, demands, actions, damages, liability, loss or costs whatsoever (including without limitation, reasonable attorneys' fees and costs), directly arising out of the entry, inspections, negligence or willful misconduct of Buyer or Buyer's agents, employees, consultants, and engineers on the Property. Buyer shall be responsible for the costs of Buyers' reports and studies. All reports that Buyer completes during this inspection shall be provided to Seller should Buyer decide to terminate this Agreement. a. Buyer may elect to obtain a new ALTA survey or an update to the Seller's ALTA survey. b. Buyer may elect to obtain a new environmental study or an update to the Environmental Reports. c. d. Buyer may elect to obtain new soils reports or update existing reports. Buyer shall complete such economic studies as it deems necessary to determine the Property's economic viability and suitability for its intended use. e. Buyer shall have the right to market the property to a prospective tenant, and Buyer shall have the right to enter into discussions and/or negotiations with any future or current tenant. If Buyer chooses to cancel Escrow at any time during the Diligence Period by providing notice in writing to Seller and Escrow, for any reason whatsoever, then Buyer's deposit shall be refunded in full, less Buyer's share of the escrow cancellation costs, and neither party shall have any further liability towards one another. 4.3 Performance Contingencies - Buyers' obligation to close escrow is conditioned upon Buyer obtaining (a) expeditious review of Buyer's complete development application; upon completion of said review City shall notify Buyer when necessary permits may be issued for the "Proposed Project". Seller 5Buyer 9 (b) Buyers receipt of notice that sewer and water utilities reasonably necessary to serve the Proposed Project (collectively, the "Public Infrastructure") are either completed and in place at the property line at the Closing or that the City will construct and install uncompleted Public Infrastructure prior to planned completion of the Proposed Project or on a schedule otherwise reasonably satisfactory to Buyer. (c) Buyer, as determined in its sole and absolute discretion, will notify Seller within twenty one (21) days after receipt of the notice identified above as to (i) satisfaction, (ii) waiver or (iii) non satisfaction of each item in this paragraph 4.3. 5. MUTUAL COSTS: 5.1 Seller - Seller to pay for, at closing, an ALTA Lenders Policy of title insurance in favor of Buyer with Fidelity Title Insurance, in the amount of the Purchase Price; any transfer tax; Seller's legal fees and expenses; one-half (') of the escrow fees; deed preparation and recording charges; and all other costs and expenses incurred by Seller. 5.2 Buyer - Buyer to pay for Buyer's legal fees and expenses; one-half (') of the escrow fees, deed recording charges; and all other costs or expenses incurred by Buyer. 6. PRORATIONS AND CLOSING ADJUSTMENTS: Except as hereinafter specifically provided to the contrary or unless required to be paid directly by the Tenant, rents, insurance, real estate taxes, rents, personal property taxes, other taxes and assessments (whether general or special), all utilities, water and sewer charges, shall be adjusted and prorated as of the day preceding the Closing Date. Buyer shall be deemed the owner of the Property, for the preparation of these calculations, for the entire Closing Date. Seller will credit Buyer at Closing for any and all Tenant security deposits and prepaid rents under any Lease. 7. DAMAGE OR CONDEMNATION OF PROPERTY: In the event the Property is either damaged or destroyed due to a casualty or is the subject to a condemnation or other taking, Buyer shall have the right to terminate this Agreement, and the Deposit shall be returned to Buyer; or to proceed with the transaction and secure from Seller an assignment of any and all Seller 6Buyer J G 10 insurance or condemnation or taking proceeds paid or payable in connection with the damage or destruction of the condemnation or taking. 8. EXISTING LEASES AND CONTRACTS: After the Effective Date, Seller shall not execute new leases and contracts pertaining to the Property, or modify or terminate the Lease or any such contracts prior to Closing without Buyer's prior written approval, which shall not be unreasonably withheld upon receipt by Buyer of a written request of Seller. If there are existing leases and/or contracts on the property, Seller acknowledges and understands Buyer will contact and correspond directly with the Tenant/s, licensees, licensors, or any other 3rd party contract holder, during Escrow and such action(s) shall not violate the terms of the agreement. Buyer shall have no liability and Seller shall hold Buyer harmless, indemnify, release, and defend Buyer from and against any actions of Tenant, licensees, licensors, or any other 3rd party contract holder, resulting from such correspondence. At Closing, Seller shall assign to Buyer the Lease and/or 3rd party contracts to Buyer, at Buyer's sole discretion, and all related lease documentation and lease guaranties pursuant to a form of Lease Assignment provided by Buyer, which form shall be subject to Seller's approval, not to be unreasonably withheld, within three (3) business days of receipt. At Closing, Seller shall assign to Buyer any contracts related to the Property which Buyer elects in writing to assume pursuant to a form of Contract Assignment provided by Buyer, which form shall be subject to Seller's approval, not to be unreasonably withheld, within three (3) business days of receipt. 9. WARRANTIES AND GUARANTEES: In addition to the representations and warranties contained elsewhere in this Agreement, Seller hereby makes the following representations and warranties, each of which individual representations and warranties shall be true and correct as of the date hereof and again as of the Closing. Seller (a) At the Closing, to Seller's best knowledge, title to the Property shall be delivered free and clear of all liens, claims and other third party rights of record except those encumbrances and easements expressly approved by Buyer, in the title insurance policy to be delivered by Seller to Buyer. (b) To the best of Seller's knowledge, Seller has not received any written notice of any condemnation proceedings or proposed zoning changes with respect to any portion of the Property or any written notice from any insurance carrier for the Property or the Tenant that requests or requires improvements, repairs or maintenance to the Property. 7Buyer(76 11 Seller (c) To the best of Seller's knowledge, Seller has the authority to transfer the Property to Buyer and the person executing this Agreement on behalf of Seller is duly authorized by Seller to execute this Agreement. (d) To Seller's best knowledge, the Property is not in violation of any laws, codes, rules, regulations or ordinances; other than disclosed to Buyer in writing. (e) To the best of Seller's knowledge, there are no lawsuits filed or, to Seller's best knowledge, threatened which may affect the Property. (f) Except as may be set forth in the Environmental Documents, to the best of Seller's knowledge, Seller has received no written notice that the Property is in violation of any laws governing the generation, handling, manufacturing, treatment, storage, use, transportation, spillage, leakage, dumping, discharge or disposal (whether accidental or intentional) of Hazardous Materials. As used herein, the term "Hazardous Materials" means hazardous waste, toxic substance, polychlorinated biphenyls, asbestos or related materials, and also includes but is not limited to, substances defined as (a) "hazardous substances" or "toxic substances" in the Comprehensive Environmental Response Compensation Liability Act of 1980, as amended, 43 USC Section 9063, et seq., and Hazardous Material Transportation Act, as amended, 49 USC 6901 et seq., and The Resources Conservation and Recovery Act of 1976, 42 USC 6901 et seq.; and the Toxic Substances Control Act, 15 USC 2601 et seq. and (b) "hazardous waste", "extremely hazardous waste" or "restricted hazardous waste" under Sections 25155, 25117 or 25112.7. (g) Seller warrants and represents that the property is subject to an Environmental Covenant granted to the Washington State Department of Ecology by the City of Yakima on the 11th day of December, 2015 and recorded with the Yakima County Auditor. The parties specifically understand and agree that all uses and activities occurring on the property must comply with the terms of the referenced Covenant. The Seller will deliver the property free and clear of any underground storage tanks, if tanks are in existence on the Property. Such removal shall be solely at the cost of the Seller. Seller further represents that as part of this Agreement, should the Department of Ecology require additional site monitoring Seller shall be financially responsible for the Department of Ecology monitoring costs associated with the Environmental Covenant attached to the subject property for a period of twenty (20) years following the date of closing, or until the Department of Ecology issues a No Further Action letter for the 8Buyer J G 12 13 property, whichever shall first occur; thereafter Buyer shall be solely responsible for any and all further environmental costs associated with the property. (h) Seller represents that both Buyer and Seller shall enter into a license agreement that provides for existing and continuous monitoring wells on the property that shall include the following language with additional reasonable language which shall be provided for Seller's review prior to the expiration of the due diligence: (h.i.) Seller shall indemnify, defend, release, and hold harmless Buyer, its successors and assigns, subsidiaries, affiliates, Tenants (its employees), from and against any and all claims, lossess, causes of action, judgements, settlements, fines, penalties, damages including economic and direct damages, injuries to persons, damages to property, costs and expenses, including reasonable attorney fees and costs (collectively "Claims") arising out of, in connection with, resulting from: (a) prior and existing contamination of Hazardous materials on the site, (b) the monitoring of wells on the property, (c) any intentional misconduct or negligents acts, errors or omissions by City of Yakima, its agents, employees, representatives, consultants, or any other person acting directly or indirectly through such, (d) any actual violation by the City of any applicable federal, state, or local laws, regulations, ordinances, administrative orders or rule, (e) any actual breach by the City of any representations, warranties or obligations. (h.ii.) Existing Monitoring wells shall be closed as appropriate, and shall not unduly disrupt the operation of any future development. Costs of replacing existing monitoring wells due to damage or development design shall be the responsibility of Buyer. (h.iii.) Insurance: City of Yakima shall maintain appropriate insurance reasonably acceptable to both parties for such ongoing monitoring. ALL OF THE REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT SHALL SURVIVE THE CLOSING. 10. LIQUIDATED DAMAGES FOR BUYER'S DEFAULT: IF BUYER COMMITS A MATERIAL DEFAULT UNDER THIS AGREEMENT AND THE CLOSE OF ESCROW FAILS TO OCCUR BY REASON OF SUCH DEFAULT, BUYER AND SELLER AGREES THAT BASED UPON THE CIRCUMSTANCES NOW EXISTING, KNOWN AND UNKNOWN, IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO ESTABLISH SELLER'S DAMAGE BY REASON OF BUYER'S DEFAULT. ACCORDINGLY, BUYER AND SELLER AGREE THAT IT WOULD BE REASONABLE AT Seller 9Buyer G SUCH TIME TO AWARD SELLER "LIQUIDATED DAMAGES" EQUAL TO THE TOTAL OF ALL DEPOSITS PLACED INTO ESCROW BY BUYER PURSUANT TO THIS AGREEMENT LESS ANY OF ESCROW HOLDER'S CHARGES. FOR THE PURPOSE OF THE FOREGOING PROVISIONS OF THIS PARAGRAPH 10, BUYER SHALL BE DEEMED TO HAVE COMMITTED A MATERIAL DEFAULT UNDER THIS AGREEMENT AT THE TIME BUYER IS IN FACT IN DEFAULT AND/OR BUYER NOTIFIES SELLER OF BUYER'S ELECTION TO TERMINATE THIS AGREEMENT AND THE ESCROW AT A TIME WHEN BUYER DOES NOT HAVE THE RIGHT UNDER THE TERMS OF THIS AGREEMENT TO SO TERMINATE THIS AGREEMENT OR THE ESCROW. SELLER AND BUYER ACKNOWLEDGE AND AGREE THAT THE APPLICABLE FOREGOING AMOUNTS OF LIQUIDATED DAMAGES ARE REASONABLE AS LIQUIDATED DAMAGES AND SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY IN LIEU OF ANY OTHER RELIEF, RIGHT OR REMEDY, AT LAW OR IN EQUITY, TO WHICH SELLER MIGHT OTHERWISE BE ENTITLED BY REASON OF BUYERS DEFAULT. ACCORDINGLY, IF BUYER FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY AND SUCH FAILURE CONSTITUTES A BREACH OF THIS AGREEMENT, SELLER MAY INSTRUCT THE ESCROW HOLDER TO CANCEL THE ESCROW WHEREUPON SELLER SHALL BE RELIEVED FROM ALL LIABILITY HEREUNDER, AND, PROMPTLY FOLLOWING ESCROW HOLDER'S RECEIPT OF SUCH INSTRUCTION, ESCROW HOLDER SHALL (I) CANCEL THE ESCROW, (II) PAY ALL OF ESCROW HOLDER'S CHARGES FROM THE TOTAL AMOUNT OF THE DEPOSIT THEN HELD BY ESCROW HOLDER AND (III) DISBURSE TO SELLER THE REMAINING BALANCE OF THE DEPOSITS. SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS PARAGRAPH 10 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS. J6 SELLER'S INITIALS BUYER'S INITIALS 11. OTHER REASONS FOR FAILURE TO CLOSE; SELLER'S DEFAULT: IF THE CLOSE OF ESCROW FAILS TO OCCUR FOR ANY REASON OTHER THAN BUYER'S DEFAULT UNDER THIS AGREEMENT, ESCROW HOLDER SHALL DISBURSE TO BUYER ALL OF THE DEPOSIT THEN HELD BY ESCROW HOLDER, PLUS THE ACCRUED INTEREST THEREON, LESS BUYER'S SHARE OF ESCROW CANCELLATION CHARGES; AND IF ESCROW FAILS TO OCCUR BY REASON OF SELLER'S DEFAULT, BUYER SHALL HAVE ALL RIGHTS AND REMEDIES AVAILABLE TO BUYER WITH RESPECT THERETO UNDER LAW Seller 1OBuyer (7G 14 AND/OR IN EQUITY, INCLUDING THE RIGHT TO SPECIFICALLY ENFORCE THIS AGREEMENT. SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS PARAGRAPH 11 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS. (76 SELLER'S INITIALS BUYER'S INITIALS 12. TIME IS OF THE ESSENCE: All Parties expressly understand hereto that time is of the essence of each and every provision of this Agreement. 13. BROKER'S COMMISSION: Seller represents that it has not entered into any contracts with any brokers or finders nor has Seller obligated itself to pay any real estate commissions or finder's fees on account of the execution of this Agreement or the close of the transaction contemplated hereby. Mike Abrams of Heritage Moultray Real Estate Services, LLC has represented the Seller and Nick Ritch of Heritage Moultray Real Estate Services, LLC has represented the Buyer (collectively, "Brokers") during the negotiaton of this agreement. Seller agrees to pay Brokers a fee at Closing in an amount to be negotiated between the Seller and the Brokers in accordance with the terms of a separate agreement between Seller and Brokers. If no closing occurs no Broker's fee shall be paid. Buyer represents that it has not obligated itself to pay any real estate commissions or finder's fees in account of the execution of this Agreement or the close of the transaction contemplated hereby. Buyer and Seller hereby agree to indemnify, defend and hold each other harmless from any reasonable claims, damages, expenses, liabilities, liens and judgments (including cost, expenses and attorneys' fees in defending the same) which arise on account of any claim made by any person or entity, other than those set forth above (if any), for commissions or finders' fees with respect to the transaction contemplated hereby due to the breach of any of the representations and warranties made by the indemnifying Party in this Section 13. This indemnification shall survive the Closing or the cancellation and termination of this Agreement. The commission or other compensation payable to the broker or finders relating to this transaction shall only be payable, if at all, upon a Closing, and, notwithstanding anything to the contrary herein, in no event shall Buyer be liable to any broker or finders for all or any portion of any commission or other compensation arising out of this transaction, whether or not there is a Closing (even if the failure of the Closing is due to a default by Buyer of this Agreement or the escrow instructions executed in connection herewith). Seller JG 11Buyer 15 16 14. ENTIRE DOCUMENT: This Agreement supersedes any and all prior written or verbal arrangements, discussions, and representations and warranties between the Parties hereto or their agents regarding the Property or the subject matter of this Agreement. 15. CONSTRUCTION (GOVERNING LAW): The laws of the State of Washington shall in all respects govern this Agreement. Nothing contained herein shall be construed as to require the commission of any act contrary to law and whenever there is any conflict between any provision contained herein, any present or future statute, law, ordinance, or regulation contrary to which the Parties have no legal right to contract, the present or future statute, law, ordinance, or regulation shall prevail, but only the provision of this Agreement which is affected shall be limited or deleted to the extent necessary and the remainder of the terms and provisions of this Agreement shall not be affected. 16. DISPUTE RESOLUTION: Any controversy or claim arising between Buyer, Seller or Broker, including, without limitation, any claim or dispute involving this Agreement, or the breach or interpretation thereof, shall first be subject to mediation by the parties hereto, with each party equally sharing in the cost of a mutally acceptable mediator. In the event mediation is unsuccessful in resolving the dispute, the dispute shall be subject to the determination of a court of competent jurisdiction in Yakima County, Washington. The prevailing party, as determined by the court shall, in addition to such other relief as may be awarded, be entitled to recover attorneys' fees, expenses and costs of investigation as actually incurred. 17. NOTICES: All notices required or permitted to be given hereunder shall be in writing and shall be delivered to the Parties at the addresses set forth below, by any one or more of hand delivery, registered mail or certified mail, return receipt requested and postage prepaid, overnight courier or facsimile or electronic e-mail transmission. Any notice shall be deemed effective upon receipt or if given by registered or certified mail, three (3) business days after delivery of the notice to the postal service. If to Buyer: JAG Retail Properties Inc, 1626 Montana Ave, Suite 625 Santa Monica, CA 90403 Attn: Joshua Guthartz 310 310 2116 josh@jagretail.com With a copy to: n/a If to Seller: address on signature page Seller 12Buyer `7 ra 18. TIME OF ACCEPTANCE: This presentation of this Agreement to Seller constitutes an offer and this Agreement shall expire unless accepted by Seller by Seller signing and delivering this Agreement to Buyer on or before the close of business on September 21St, 2018. 19. PURCHASER'S 1031 TAX DEFERRED EXCHANGE: Buyer may make this transaction in order to complete a 1031 tax deferred exchange for an affiliate of Buyer. Seller agrees to cooperate with Buyer and its affiliate in order to accomplish such exchange at no additional liability or expense to Seller. 20. SELLER'S TAX ELECTION: Seller may elect to create a 1031 tax deferred exchange. In such event Buyer agrees to cooperate with Purchaser at no additional liability or expense to the Buyer. 21. CONFIDENTIALITY: The Seller is a Washington Municipal Corporation subject to the Washington State Open Public Record Act, RCW 42.56. Except as may be required by law all Parties hereto agree to keep the contents of this document and the terms of this transaction(s) confidential. Buyer shall have the right to market the property for lease, which shall not be a violation of this confidentiality. 22. SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective successors, and assigns. No consent shall be required in connection with any assignment or transfer related to this transaction. 23. COUNTERPARTS; FAX OR ELECTRONIC SIGNATURES: This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed by the exchange of facsimile or electronically transmitted signatures to identical counterparts with the same effect as if executed on the same instrument. The Parties expressly acknowledge and agree that, notwithstanding any statutory or decisional law to the contrary, the printed product of an e- mail transmission shall be deemed to be "written" and a "writing", and a signature delivered by facsimile or e-mail shall be as binding upon the delivering party as an original signature. 24. FURTHER ACTS: Each party shall, at the request of the other, execute, acknowledge (if appropriate) and deliver such additional documents, and do such other acts, as may be reasonably required in order to accomplish the intent and purposes of this Agreement. Seller V G 13Buyer 17 25. NON -BUSINESS DAYS: If the time period for the performance of any act or notice called for under this Agreement expires on a Saturday, Sunday, or any other holiday in which banking institutions in the State of Washington are authorized or obligated by law or executive order to close, the act or notice in question shall be performed on the next succeeding day that is not a Saturday, Sunday or holiday. 26. HEADINGS: The titles and headings of the various Articles and Paragraphs hereof are intended solely for means of reference and are not intended for any purpose whatsoever to modify, explain or place any construction on any of the provisions of this Agreement. 27. SEVERABILITY: If any of the provisions of this Agreement or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement by the application of such provision or provisions to persons or circumstances other than those as to whom or which it is held invalid or unenforceable shall not be affected thereby, and every provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Seller Signature Page to Follow on Separate Pages U6 14Buyer 18 IN WITNESS WHEREOF, THE PARTIES HAVE SIGNED THIS AGREEMENT ON THE DATE SET FORTH BELOW EACH SIGNATURE. BUYER: JAG RETAIL PROPERTIES, INC. a California corporation By: Jos´┐ŻuaGut´┐Żartz, Its President Phone: 310'310'2116 Email: josh@jagretail.com Dated 9-7-18 Seller 15Buyer 19 Seller ACCEPTANCE: The undersigned warrants that with City Council approval he/she/ has authority to execute this document on behalf of Seller, to accept the foregoing offer, to sell the Property described therein and to transfer marketable title to the Property to the Buyer on the terms and conditions therein set forth in said Agreement of Purchase and Sale, said acceptance conditioned entirely on the Yakima City Council's approval of said sale. AGREED: SELLER: By: The City of Yakima By: Dated Cliff Moore, City Manager Address Yakima City Hall 129 N. 2nd Street Yakima, WA 98901 16BuyerJO 20 EXHIBIT A LEGAL DESCRIPTION APN #'s 181326-42051) Seller 17Buyer UG JG 21