REDEVELOPMENT CONTRACT THIS REDEVELOPMENT CONTRACT, made and entered into this the day of, 2017 by and between the City of Gastonia, a North Carolina municipal corporation (hereinafter City ) and CNB 1920, LLC, a North Carolina limited liability company (hereinafter Developer ). W I T N E S S E T H WHEREAS, the Developer has offered to purchase and City is willing to sell certain real property located in a Redevelopment Area as defined by N.C.G.S. 160A-500, et seq., which is more particularly described in Exhibit A which is attached hereto and incorporated by reference (the Property ); and WHEREAS, the parties recognize that the Property must be developed in harmony with the Redevelopment Plan adopted by the Gastonia City Council on June 15, 1999, whereby Developer will create a mixed use development that will create jobs, provide for the establishment of new businesses within the City s downtown business district and increase the property tax base; and WHEREAS, it is the purpose of this agreement to set out the terms of sale and the requirements for the development of the Property; and WHEREAS, the City Council acting as the Redevelopment Commission finds that the sale of the Property described herein will not be prejudicial to the sale of other parts of the Redevelopment Area, nor in any other way prejudicial to the realization of the Redevelopment Plan; and WHEREAS, the redevelopment of the property will result in revitalization and additional employment in other parts of the Redevelopment Area as well as the City; and WHEREAS, it is the purpose of this agreement to set out the terms of sale and the requirements for the development of the Property subject to the upset bid procedures for the sale of said Property pursuant to N.C.G.S. 160A-269. NOW THEREFORE, for and in consideration of the mutual covenants and conditions contained herein, the parties agree as follows: 1. PURCHASE PRICE. (a) Subject to all of the terms and conditions of this agreement, the City will sell the property to the Developer for and the Developer agrees to purchase the Property from the City for the sum of $324,800.00 (the Purchase Price ) which shall be payable as hereinafter defined. The sale will be subject to the upset bid provisions of N.C.G.S. 160A-269, and if the Developer is not the successful high bidder after all upset periods have expired, this agreement shall be null and void and the deposit referenced set forth below shall be returned to Developer with neither party having
any further obligations hereunder. The Developer shall deposit with the City, the sum of $16,240.00 upon execution of this agreement which shall equal 5% of the Purchase Price ( Deposit ). (b) If the Developer is the successful bidder, the Developer agrees to pay the balance of the purchase price in the amount $308,560.00 ( Balance ) over a period of six (6) years at 3.75% interest per annum. Developer shall pay interest only for the first year in twelve equal monthly payments of $964.25 and thereafter shall make 60 equal monthly payments of $5,647.86 beginning on the first anniversary of the Closing, with any balance due payable six (6) years after closing. Developer shall execute a promissory note for the Balance which shall be secured by a deed of trust on the Property. (c) Developer also agrees to install a fire protection sprinkler system and security system on all four (4) floors of the building within a year of the Closing and obtain all inspections and permits related to such system. (d). (e) Developer shall have the right to pay off or pay in full the Balance, or such principal amount as may be left on said Balance, without penalty for pre-payment, prior to end of the six year period. 2. CONVEYANCE OF PROPERTY. (a) If there is no upset bid received or the Developer is the successful highest bidder after all upset bid periods have passed, the City shall convey the Property to the Developer by General Warranty Deed. (b) At closing, the City shall deliver the General Warranty Deed to the Property on such date as the parties may mutually agree (the Closing Date ) but in no event later than forty-five (45) after the date the final upset bid is accepted by City Council. Provided, however, that if the Developer has failed to perform any obligations hereunder which are to be performed prior to the Closing Date, the City may terminate this contract as hereinafter provided in this agreement, and shall have no obligation to convey the Property. (c) Deed. (d) Developer shall pay for the cost of preparation and recording of the General Warranty City shall pay for all revenue stamps, if applicable, and all legal advertisements. 3. CONDITION OF PROPERTY. (a) The Developer expressly agrees and acknowledges that the Property shall be conveyed to the Developer as is with no warranties, express or implied, by the City as to conditions of soil, geology or topography, presence of asbestos, presence of lead paint or the presence of any other known or unknown faults, environmental or otherwise. It shall be sole responsibility of the 2
Developer at Developer s expense, to investigate and determine if any such conditions exist and to take any action necessary to place the Property in a condition suitable for its development. (b) In this connection, Developer shall have the right of full access to the Property prior to the Closing Date for the purpose of conducting soil tests, termite infestation inspections and/or any other inspections, tests or studies related to development of the Property; provided, however, that the Developer shall indemnify and defend and hold harmless the City and its employees and agents from and against any and all claims, losses, injuries, liabilities and costs or expenses arising out of or resulting in any way from such access or testing. (c) In the event the results of soil, structural, mechanical, electrical, plumbing or environmental tests, or tests or inspections for other hazards, reasonably demonstrate that the development of the property as described in paragraph 4 and in the Redevelopment Proposal referenced therein cannot be accomplished within the investment amount described in paragraph 4, then Developer shall have the sole and absolute right to void this Contract and Agreement and the Deposit described in paragraph 1 (a) shall be returned, and Developer shall have no further obligation to proceed to Closing or to further comply with any terms or conditions of this Agreement. 4. DEVELOPMENT OF PROPERTY. a) Developer shall develop the Property in accordance with the Redevelopment Proposal attached hereto and incorporated herein as Exhibit B. Developer shall invest a minimum of $2,124,800 (which includes the $324,800 purchase price) in redeveloping the Property. The Property shall be developed in accordance with the Redevelopment Proposal, the Redevelopment Plan, and all applicable state and local laws and regulations and generally in accordance with the design documents, photographs, or other representations and construction documents described in herein. b) Developer agrees to create or cause to be created at least fifteen (15) permanent full-time or permanent full-time equivalent job positions at pay wages at or above the median retail employee wage for Gaston County as listed annually by the NC Department of Commerce Finance Center. These positions will be created and filled within three years of the execution of this agreement. This commitment may be partially waived by the City if failure to comply with the provisions of this Agreement is determined to be beyond the control of the Developer including an unfavorable, unforeseeable occurrence of severe economic conditions and where such waiver will not substantially affect the development of the Property as described herein. 5. GRANT AGREEMENT. By separate grant agreement, the City will consider other incentives associated with the improvement and revitalization of the Property. 3
6. ASSIGNMENT OF LEASE. The City shall assign its lease with the Art Guild, and all associated payments upon request of the Developer. Developer may elect to enter into a new lease arrangement with the Art Guild; however, in either event, Developer agrees to allow the present Art Guild tenants to remain on the Property for a period of three (3) years after closing with specific location to be in the sole discretion of Developer. Lease payments made by the Art Guild to the Developer shall not increase over those currently received by the City. In the event the Art Guild should, unilaterally and through no fault of the Developer, terminate said lease, vacate the property occupied pursuant to said lease, or otherwise elect not to renew or honor said lease during the three year period after closing, Developer s obligation to allow the Art Guild tenants to remain on the Property under this paragraph 6 shall end. 7. TIME FOR COMMENCEMENT. Construction of the improvements described in Exhibit B shall commence within ninety (90) days of the Closing Date and shall be completed within thirty-six (36) months after the Closing Date. 8. TIME FOR SUBMISSION OF DOCUMENTS. (a) Prior to closing, members of the Developer shall have submitted evidence of their financial condition and experience. This evidence shall include financial statements for the previous three years. In connection with the delivery of the evidence, members of the Developer will affirm that the evidence is correct and will acknowledge that the City is relying on the evidence in conveying the Property. (b) Prior to the execution of this agreement, Developer shall have submitted a Redevelopment Proposal to the City, a copy of which is incorporated herein as Exhibit B. Development shall be in substantial compliance with the Redevelopment Proposal. Any substantial deviations from the Redevelopment Proposal shall not be accepted unless approved by the City in writing. (c) Developer shall submit evidence satisfactory to the City as to the sources for equity capital and any commitment necessary for mortgage financing sufficient to complete construction of the improvements as set forth in Exhibit B. This shall include but not be limited to: accurate copies of all equity or loan commitments, for both interim and permanent loans, letters of credit, and such other evidence demonstrating sufficient funds are actually available to Developer to fully pay the costs of construction. Throughout the entire period of construction, City will be entitled to receive, at reasonable intervals, from Developer, progress reports as to the status of construction and payment of the costs of construction and other evidence reasonably satisfactory to the City that the above described equity capital and financing commitments are available and sufficient to complete construction of all improvements. 9. APPROVAL OF DOCUMENTS. (a) The City shall have the right to approve all plans and documents submitted pursuant to this agreement, including but not limited to the design documents, photographs and other representations, and construction and renovation documents which approval will not be unreasonably withheld. All building and site plans shall be in general conformance with the conceptual site plan, and floor(s) layout as shown in attached Exhibit B. All building and site work and signage shall comply with the Unified Development Ordinance of the City of Gastonia for the applicable zone in which the Property is located. All renovations to the exterior of the property 4
shall also be subject to approval by the Gastonia Central Business District Design Review Committee as specified in the City s Unified Development Ordinance. The City shall, if each of the documents to be approved is promptly submitted within the time schedule above and within any extended time provided under the terms of this agreement, complete its review of any document submitted within ten (10) days of submission. If the document to be approved conforms to the provisions of the Plan, this agreement, and the reasonable expectations of the City, all documentation previously submitted and approved by the City, all applicable laws, ordinances rules and regulations, and is in a form satisfactory to the City, as submitted, the City shall indicate approval within the ten (10) day period. All approvals shall not be unreasonably withheld. If no action is taken by the City within the ten (10) day period then the Construction time period will extended by that additional time period. (b) If the City rejects any documents to be approved in whole or in part as not being acceptable under the criteria mentioned above, or requires additional documents or information, the Developer shall submit such corrected documents or additional information within ten (10) business days after written notification. 10. COVENANTS RUNNING WITH THE LAND AND RESTRICTIONS ON USE. The Developer agrees for itself, its successors and assigns, that the Property shall be developed in accordance with the Redevelopment Plan, that the General Warranty Deed shall contain covenants on the part of the Developer for itself its successors and assigns, that the Developer shall promptly begin and diligently complete the redevelopment through the construction of improvements. It is intended and agreed and the General Warranty Deed shall so expressly provide that these agreements and covenants shall be covenants running with the land, except as to those covenants which shall be deemed completed and removed upon filing of the Completion Certificate referenced herein and in the Deed Restrictions and binding for the benefit of the community and the City, and enforceable by the City against the Developer, and its successors and assigns to or of the Property or any part of it or any interest in it. The parties further recognize that due to change in market conditions or community demand, Grantee may desire or need to transfer or convey the property to a subsequent Purchaser, who may wish the change the use or request removal of one or more of the foregoing restrictions, and Grantee may therefore need to petition Grantor for removal of one or more of such restrictions to aid in the sale or transfer of the Property. In recognition of such foreseeable contingency, it is agreed that so long as the Completion Certificate has been filed and recorded, and so long as the purchase price for the Property meets or exceeds the then-current tax assessment, Grantee s request for removal of one or more of the foregoing restrictions to aid in the sale, transfer or conveyance of the Property will not be unreasonably withheld. 11. PROHIBITION AGAINST TRANSFER OF PROPERTY. The Developer will not make or create, and prior to the completion of the improvements as certified by the City, make or suffer to be made any sale, assignment, conveyance, or transfer in any other form of or with respect to this agreement or the Property, any part of or interest in the Property, or contract or agree to do any of the above mentioned acts, without the prior written approval of the City, except Developer may assign this Agreement to a single-purpose entity created specifically to own and to operate the Project without requiring the City s consent. Upon the completion of the improvements, the 5
City promptly will execute a written document in recordable form that certifies the completion of the improvements (the Completion Certificate ) and will provide it to Developer, who, upon receipt, is authorized to file and to record the Completion Certificate in the same office or offices where the General Warranty Deed was filed and recorded. Any prohibition against Transfer will end upon the execution of the Completion Certificate. 12. LIMITATION ON ENCUMBRANCE OF PROPERTY. Prior to the completion of the improvements as certified by the City and noted in the Completion Certificate, neither the Developer nor any assignee or successor in interest to the Property shall engage in any financing or any other transaction creating any mortgage or other encumbrance or lien to be made on or attach to the Property, except for the purposes of obtaining (a) funds to pay of the Balance or any principal amount remaining on the Balance as described in paragraph 1 (b);and/or (b) funds to the extent necessary for making the improvements and/or, (c) such additional funds, if any, in an amount not to exceed the Purchase Price and/or (d) funds necessary for architects, surveyors, legal and title fees, and other costs in connection with the development of the improvements. 13. MORTGAGEES NOT OBLIGATED TO CONSTRUCT. Notwithstanding any of the provisions of this agreement, including but not limited to those which are intended to be covenants running with the land, the holder of any mortgage authorized by this agreement, including any holder who obtains title to the Property or any part of it as a result of foreclosure proceedings or action in lieu of foreclosure, but not including (a) any other party who afterward obtains title to the Property or part of it from or through the mortgage holder or (b) any other purchaser at foreclosure sale (other than the holder of the mortgage itself), shall not be obligated by the provisions of this agreement to construct or complete the construction of the improvements or to guarantee such construction, or completion; nor shall any covenant or any other provision in the deed be construed to so obligate the mortgage holder. Nothing in this section or any other section or provision of this agreement shall be deemed or construed to permit or authorize any holder of any mortgage to devote the Property or any part of it to any uses, or to construct any improvements on it other than those uses or improvements provided or permitted in the Redevelopment Plan and this agreement. However, in the event any Mortgagee or purchaser at any foreclosure sale shall come into possession of the Property prior to the filing or recording of the Completion Certificate, such Mortgagee or purchaser shall be bound only by such restrictions that are intended by the parties to continue following the filing of the Completion Certificate, and may transfer, sell or convey the Property subject only to such restrictions. 14. REMEDIES. (a) Except as otherwise provided in this agreement, in the event of any default in or breach of the agreement, or any terms or conditions, by either party to this agreement, or any assignee or successor to such party, the party (or assignee or successor) shall upon written notice from the other, proceed immediately to cure or remedy the default or breach, and, in any event, within thirty (30) days after receipt of such notice. In case action is not taken or not diligently pursued, or the default or breach shall not be cured or remedied within a reasonable time, the aggrieved party may institute proceedings necessary or desirable in its opinion to cure and remedy the default or breach, including, but not limited to, proceedings to compel specific performance by the party in default 6
or breach of its obligations. If the defaulting or breaching party is the Developer (or its assignee or successor), the City also shall give a copy of notice of the default or the breach that is given to the Developer (or its assignee or successor) to each person that has provided equity funding with respect to the Property and the improvements thereon (each, an Equity Investor ) to the address of each Equity Investor provided subsequently to the City, and each Equity Investor has the right, but not any obligation, to cure or to remedy the default or the breach, and, if an Equity Investor cures or remedies the default or the breach, the City will accept the cure or the remedy as if the Developer (or its assignee or successor) had made it. (b) In the event that prior to conveyance of the Property, the Developer fails to pay the purchase price and take title to the Property upon tender of conveyance by the City, or defaults in any other provision contained herein, then this agreement and any rights of the Developer in this agreement may, at the option of the City, be terminated by the City and the Deposit retained by the City as liquidated damages except as provided in Paragraph 3. Upon such termination, City shall be relieved of any obligation to transfer the Property to Developer. (c) In the event that the City fails to tender conveyance or possession of the Property under this agreement, then this agreement at the option of the Developer may be terminated. Upon termination by the Developer pursuant to this subsection, the Deposit held by the City shall be returned to the Developer. (d) Any delay by the either party in instituting or prosecuting any actions or proceedings or otherwise asserting its rights shall not operate as a waiver of its rights or to deprive it of or limit its rights in any way; nor shall any waiver, in fact, made by a party with respect to any specific default by the other party under this agreement be considered or treated as a waiver of the rights of the first party with respect to any other defaults by the other party under this agreement or with respect to the particular default except as specifically waived in writing. (e) Any material default or breach of this Agreement shall be considered a default under any financing agreements between the City and Developer, including but not limited to, any promissory note and/or deed of trust representing the purchase price, and shall entitle the City to pursue any remedies provided by such financing agreements. (f) Termination of this agreement shall not preclude either party from pursuing any other available legal remedies including but not limited to an action for money damages. 15. CONFLICT OF INTEREST. No member, official, or employee of the City shall have any personal interest, direct or indirect, in this agreement; nor shall any such member, official, or employee participate in any decision relating to this agreement which affects his or her personal interests. 16. PROVISIONS NOT MERGED WITH DEED. No provision of this agreement is intended to or shall be merged by reason of any deed transferring title to the Property from the City to the Developer or any assignee or successor in interest. Any such deed shall not be deemed to affect or impair the provisions and exhibits of this agreement. 7
17. FORCE MAJEURE. In the event either City or Developer is unable, in whole or in part, by reason of Force Majeure to carry out its obligations, other than to tender the Purchase Price, it is agreed that on giving notice of such Force Majeure as soon as possible after the occurrence of the cause relied upon, then the obligation of City or Developer, so far as each may be affected by such Force Majeure, shall be suspended from performance hereunder during the continuance of any inability so caused, and such cause shall as far as possible, be remedied with all due speed. The term Force Majeure shall mean acts of God, strikes, lockouts or other industrial disturbances, acts of public enemy, war blockades, riots, landslides, droughts, storms, floods, washouts, arrests and restraints of governments and people, civil disturbances, explosions, unavoidable breakage, states of emergency, mandatory restrictions and any other cause not within control of City or Developer, as applicable, which by the exercise of reasonable diligence by City or Developer, as applicable, is not preventable; provided, that an event or condition shall not constitute Force Majeure hereunder to the extent such event or condition is the result of the negligence, gross negligence or willful misconduct of the party which would benefit from such declaration of Force Majeure. 18. INVALID TERMS. Should any one or more of the provisions contained in this Agreement be held invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained in the Agreement shall not in any way be affected or impaired thereby, and this Agreement shall otherwise remain in full force and effect. 19. CONTROLLING LAW/SUCCESSORS AND ASSIGNEES BOUND. This Agreement and the rights and obligations of the parties hereunder shall be construed and interpreted in accordance with the laws of the State of North Carolina and shall be binding upon and inure to the benefit of the successors and, with consent of the other party, which consent shall not be unreasonably withheld, the assigns of either party hereto. The parties hereto agree that any action brought by either party to enforce the terms of this Agreement shall be filed in the Superior Court of Gaston County, State of North Carolina. 20. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original. Electronically transmitted copies of executed signature pages shall be deemed to be an original. 21. ENTIRE AGREEMENT. This Agreement, together with any exhibits attached or referenced herein, reflects and contains the entire and only agreement between the parties relating to the subject matter herein, and as such supersedes all prior negotiations, commitments, undertakings and agreements, whether oral or otherwise, between the parties relating to the subject matter herein. 22. AMENDMENT. This Agreement may be amended only by an instrument in writing executed by both parties hereto. It is understood by both parties that a lender and/or an investor may require modifications, and both parties agree to work in good faith to accommodate such requests. 8
23. NOTICE. All notices, requests, consents, demands and other communications required or which any party desires to give under this Agreement shall be in writing and, unless otherwise specifically provided herein, shall be deemed sufficiently given or furnished if delivered by personal delivery, by nationally recognized overnight courier service, by registered or certified United States mail, postage prepaid, or by facsimile (with a confirmatory duplicate copy sent by first class United States mail), addressed to the party to whom directed at the addresses set forth below (unless changed by similar notice in writing given by the particular party whose address is to be changed). Any such notice or communication shall be deemed to have been given either at the time of personal delivery or, in the case of courier or mail, as of the date of first attempted delivery at the address and in the manner provided herein, or, in the case of facsimile, upon receipt; provided, however, that service of a notice required by any applicable statute shall be considered complete when the requirements of that statute are met. Notwithstanding the foregoing, no notice of change of address shall be effective except upon actual receipt. If to City: If to Developer: City Manager CNB, 1920, LLC P.O. Box 1748 182 S. South Street Gastonia, NC 28053-1748 Gastonia, NC 28052 With a copy (which shall not constitute notice) to: L. Ashley Smith Nancy B. Paschall City Attorney for the City of Gastonia Mullen, Holland & Cooper P.O. Box 1748 PO Box 488 Gastonia, NC 28053-1748 Gastonia, NC 28053-0488 24. NO DOCTRINE OF CONSTRUCTION AGAINST THE DRAFTER. Both parties acknowledge and stipulate that this Agreement is the product of mutual negotiation and bargaining and that it has been drafted by Counsel for both City and Developer. As such, the doctrine of construction against the drafter shall have no application to this Agreement. IN WITNESS WHEREOF, the parties have caused this agreement to be executed in their names the day and year first above written. ATTEST: CITY OF GASTONIA City Clerk By: John D. Bridgeman, Mayor APPROVED AS TO FORM: City Attorney 9
DEVELOPER: CNB 1920, LLC By: Its: STATE OF NORTH CAROLINA COUNTY OF GASTON I,, a Notary Public of the aforesaid County and State, do hereby certify that personally appeared before me this day and acknowledged that she is the (Deputy) City Clerk of the City of Gastonia and that by authority duly given and as the act of the municipal corporation, the foregoing instrument was signed in its name by its Mayor sealed with its corporate seal and attested by her as its (Deputy) City Clerk. WITNESS my hand and Notarial Seal, this the day of, 20. My Commission Expires: Notary Public STATE OF NORTH CAROLINA COUNTY OF GASTON I,, a Notary Public for said County and State, do hereby certify that personally appeared before me this day and acknowledged that he is the of CNB 1920, LLC, a North Carolina limited liability company, and the due execution of the foregoing instrument by him on behalf of the limited liability company. WITNESS my hand and Notarial Seal, this day of, 20. My Commission Expires: Notary Public Agree1561.docx 10
EXHIBIT A Being locally known as 212 West Main Avenue, Gastonia, North Carolina, and being Gaston County Tax Parcel Number 105883 and lying and being in the County of Gaston, Gastonia Township, State of North Carolina and more particularly described as follows: BEGINNING at a point in the Northern right of way line of West Main Avenue in the City of Gastonia, North Carolina, common corner with that property conveyed to L P T Co. Inc., by The Citizens National Bank in Gastonia, North Carolina (now Independence National Bank) by that deed dated September 5, 1950 and recorded in the Gaston County Registry in Deed Book 534, at Page 427, said point being situated Due West 24.12 feet from the point of intersection of the Northern right of way line of West Main Avenue with the Western right of way line of South Street, and runs thence with the Northern right of way line of West Main Avenue North 89 degrees 0 minutes 21 seconds West 77.23 feet to a point in said Northern right of way line; thence continuing with said Northern right of way line South 89 degrees 57 minutes 09 seconds West 76.18 feet to a point in said Northern right of way line, common corner with that property conveyed to William T. Karagias and wife by that deed recorded in the Gaston County Registry in Deed Book 678, at Page 505; thence with the common line with said Karagias property North 0 degrees 13 minutes East 83.59 feet to a point in the Southern property line of the Atlanta & Charlotte Airline Railway Company (formerly Atlanta & Richmond Airline Railway Company in North Carolina); thence with the Southern property line of said Railway Company North 87 degrees 09 minutes 46 seconds East 75.76 feet to a point in said property line; thence continuing with said Southern property line North 86 degrees 11 minutes 50 seconds East 42.46 feet to a point in said Southern property line; thence South 0 degrees 50 minutes 46 seconds West 1 foot to a point; thence North 86 degrees 11 minutes 50 seconds East 36.51 feet to a point, common corner with the L P T Co., Inc.; thence with the common line with L P T Co., Inc. South 0 degrees 50 minutes 46 seconds West 92.86 feet to a point in the Northern right of way line of West Main Avenue, the point of the Beginning. The above described realty was conveyed to the grantor by deed dated June 30, 1980, from Independence National Bank formerly known as Citizens National Bank, and recorded in Deed Book 1334 at Page 570 of the Gaston County Registry. 11
EXHIBIT B The City of Gastonia, North Carolina Redevelopment Proposal for 212 West Main Avenue CNB 1920, LLC Tom Cox Jim Morasso 182 S. South Street Gastonia, NC 28052 12