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1997-0313_GRUBB & ELLIS_Representation Agreement0 • REPRESENTATION AGREEMENT (EXCLUSIVE AUTHORIZATION TO SELL) THIS IS INTENDED TO BE A LEGALLY BINDING AGREEMENT The undersigned, City of San Juan Capistrano, ("Seller") hereby employs Grubb & Ellis ("Agent") and grants to Agent, for a period of time (the "Term") commencing on date of signature, 1997, and ending at midnight three hundred and sixty five (365) days after receipt of signature, 1998, and subject to extension as set forth in paragraph 8 below, the exclusive and irrevocable right and authority to sell that certain real property (the "Property") located on Camino Capistrano north of Junipero Serra and further described as Orange County Assessor's Parcel #649-361-02, City of San Juan Capistrano, County of Orange, State of California, and additionally described as 3.83 acres of vacant, unimproved real property. Any portion of this Agreement which is not numbered and fully completed shall have no force or effect. TERMS AND CONDITIONS 1) PURCHASE PRICE: The purchase price for the property is Two Million dollars ($2,000,000) payable at close of escrow pursuant to the terms stated herein. 2) DEPOSIT: There shall be a minimum deposit of Twenty -Five Thousand dollars ($25,000) which shall be credited to the purchase price at close of escrow. Agent is authorized to accept such deposit on behalf of Seller. Said deposit to be held uncashed by Agent until opening of escrow. 3) NEW LOAN: Seller will, allow Sixty (60) days for a loan contingency. 4) ESCROW: Within Five (5) days of Agent's acceptance of DEPOSIT, Agent shall open escrow with an acceptable Escrow Company ("Escrow Holder") by the simultaneous deposit of a copy of the Purchase Agreement and Buyer's Deposit with Escrow Holder (defined as "opening of escrow"). Seller and Buyer shall execute such further documents or instruments as Escrow Holder may deem necessary to close this transaction within Escrow Period. Close of Escrow ( or the "Closing Date") shall mean the date on which the deed transferring the title to the Property is recorded, and shall occur within Sixty (60) calendar days from the opening of Escrow. Escrow fees shall be paid 1/2 - Seller, 1/2 - Buyer. All other closing costs shall be paid in accordance with the custom in the county where the property is located. 5) TITLE: Within Five (5) calendar days after acceptance of Purchase Agreement, Seller shall procure, and cause to be delivered to Buyer a preliminary title report issued by an acceptable Title Company (the "Title Company) on the Property. Within Twenty -One (21) calendar days following the receipt thereof, Buyer shall deliver to Seller written notice of any -2 - exceptions to which Buyer reasonably objects. Failure of Buyer to object within this period is a waiver of exceptions to title. If Buyer objects to any exceptions, Seller shall within Seven (7) calendar days after receipt of Buyer's objections, deliver to Buyer written notice that either (i) Seller has removed the exception(s) to which Buyer has objected, or (ii) Seller is unwilling or unable to eliminate said exception(s). If Seller fails to so notify Buyer or is unwilling or unable to remove any such exception by the Closing Date, Buyer within 48 hours of time period set forth above, may elect to terminate the Purchase Agreement and receive back the entire Deposit in which event Buyer and Seller shall have no further obligations under the Purchase Agreement; or, alternatively, Buyer may elect to purchase the Property subject to such exception(s). Sell shall convey by Grant Deed to Buyer ( or to such other person or entity as Buyer may specify) marketable fee title subject only to the exceptions approved by Buyer in accordance with Purchase Agreement. Title shall be insured by a standard California Land Title Association owner's policy of title insurance issued by the Title Company in the amount of the purchase price with premium paid by Seller. 7) COMMISSION: In consideration of the brokerage services to be rendered by Agent, Seller agrees to pay to Agent a commission equal to: 6% of the first $1,000,000 of sales price; 5% of the second $1,000,000 of sales price and 4% of the sales price over $2,000,000. Commissions shall be paid through escrow upon the closing of sales or exchange transactions; absent an escrow, commission shall be paid upon recordation of a deed or upon delivery of such deed or other instrument of conveyance if recordation is deferred more than one month thereafter. In the event of a contract or agreement of sale, joint venture agreement, business opportunity or other transaction not involving the delivery of a deed, commission shall be paid upon the mutual execution of the agreement evidencing the transaction. COMMISSION EXCLUSION: A) In the event the Buyer is not represented by a real estate broker/agent and the property is in Escrow by April 15, 1997, Agent shall assume all responsibilities involved to negotiate and process the offer and shall receive fifty percent (50%) of the COMMISSION. B) If the Buyer is represented by a real estate broker/agent, Agent shall assume all responsibilities involved to negotiate and process the offer and share equally the COMMISSION with the procuring broker. 8) EXTENSION OF TERM: If any agreement or letter of intent for the sale of the Property is executed by all necessary parties, and/or an Escrow is opened, and if said agreement or letter of intent is revoked, rescinded or otherwise terminated, and/or the Escrow account is subsequently cancelled, the Term shall be extended by the number of calendar days during which the sale agreement or letter of intent was in effect or the Escrow was open, whichever is longer. The maximum extension permitted hereunder shall be the number of days remaining on the Term from the date of the sale agreement or letter of intent was executed, or Escrow 0 0 -3- opened, whichever event occurred earlier. Notwithstanding the foregoing, the Representation Agreement shall expire in all cases no later than six (6) months after the original termination date stated above. The purpose of this extension provision is to allow Agent the opportunity to expose the Property to the marketplace for the full period of time contemplated by this Agreement. 9) ARBITRATION: If a controversy arises with respect to the subject matter of this Agreement or the transaction contemplated herein, (including but not limited to the parties' rights to the Deposit or the payment of commissions as provided for herein), Seller and Agent agree that such controversy shall be settled by final, binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgement upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. 10) Owner agrees to defend, indemnify and hold Broker harmless from any and all claims, demands, liabilities and damages arising from any incorrect information supplied by Owner or any information which Owner fails to supply. 11) Owner hereby authorizes Broker to represent and serve as agent for any prospective purchaser of the Property or of any interest therein, and Owner hereby waives any conflict of interests which might arise as a result thereof. The undersig d Seller and A agree to the terms and conditions set forth in the Representation Agreemen lltr and Agen cknowledge receipt of an executed copy hereof. TITLE: DATE: ,Me 1%i°�I�,`� 32400 Paseo Adelanto San Juan Capistrano, CA 92675 DATE: DATE: • March 17, 1997 dww, Imlo�ro��m IfINIIlH6 19b1 1776 Mr. Jim Cunningham, Vice President Grubb & Ellis 4000 MacArthur Boulevard, Suite 1500 Newport Beach, California 92660 Re: Representation Agreement Dear Mr. Cunningham: MEMBERS OF THE CITY COUNCIL COLLENE CAMPBELL JOHN GREINER WATT HART GIL JONES DAVID M. SWERDLIN CITY MANAGER GEORGESCARBOROUGH Enclosed for your records is a fully -executed copy of the Representation Agreement for 3.83 acres in San Juan Capistrano described as Assessor's Parcel No. 649-361-02. Very truly yours, Cheryl John on City Clerk Enclosure cc: Mary Laub (with agreement) 32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493-1171 Grubb&Ellis March 11, 1997 Mrs. Mary Laub City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 RE: Representation Agreement Dear Mary: Enclosed you will find two executed col Spragins, Senior Vice President and Disti Please have the appropriate person sign the agreement on behalf of the City and return one copy to us. As soon as we have received the fully executed agreement, we shall begin making the financial investment in signs and brochures. Also enclosed is an aerial we think we will use on the brochure. We invite your comments. Sincerely, GRUBB & ELLIS COMPANY COMMERCIAL REAL ESTATE SERVICES im Cunningham Vice President JC: cmp *' lL.— Jim Auther Senior Associate MAR 12 1597 Grubb & ELlis Company 4000 MacArthur Boulevard, Suite 1500, Newport Beach, California 92660 jcunningA1wb2 (714) 833-2900 Fax (714) 833-8037 0 WAlft mlo 19661f mnnuem 1776 January 24, 1997 Mr. James L. Cunningham Grubb & Ellis 4000 MacArthur Boulevard, No. 1500 Newport Beach, California 92660 Re. Property Listing for Sale of Site Dear Mr. Cunningham: MEMBERS OF THE CITY COUNCIL COLLENE CAMPBELL JOHN GREINER WYATT HART GIL JONES DAVID M. S W ERDLIN CITY MANAGER GEORGESCARBOROUGH At their meeting of January 21, 1997, the City Council of the City of San Juan Capistrano authorized the City Manager to negotiate and sign a property listing and sales agreement with Grubb & Ellis Company for marketing the City -owned 3.83 -acre site on Camino Capistrano north of Junipero Serra Road, also known as Assessor Parcel No. 649-361-01. Please feel free to contact Mary Laub at 443-6303 if you have any questions. Very truly yours, Cheryl Johns n City Clerk 12400 PASEO ADELANTO. SAN JUAN CAPISTRANO. CALIFORNIA 92675 0 (714) 493-1171 • + 6. APPROVAL OF SPECIFICATIONS FOR REMOVAL AND INSTALLATION OF FENCING AND SOLE SOURCE PURCHASE OF FENCING - EL CAMINO REAL PARK (600.30) As set forth in the Report dated January 21, 1997, from the Director of Engineering and Building, the following were approved: (a) The specifications for the removal and installation of fencing at the El Camino Real Park; and (b The sole source purchase of 2,530 feet of Typhoon Welded Mesh Security fencing from Secure Technology Company in the amount of $44,871. Staff was authorized to appropriate $50,000 from Capital Improvement Project No. 471 to fund this project. 7. APPROVAL OF MUTUAL AID AGREEMENT FOR BUILDING DAMAGE SAFETY ASSESSMENT IN THE ORANGE COUNTY OPERATIONAL AREA 600.50 As set forth in the Report dated January 21, 1997, from the Engineering and Building Director, the Mutual Aid Agreement for Building Damage Safety Assessment was approved with Orange County to provide for the cooperative emergency response efforts of building engineers and inspectors to assess widespread building damage in the event of a major earthquake or other disaster. The Mayor was authorized to execute the Agreement on behalf of the City. 8. APPROVAL OF FINAL MAP- PARCEL MAP 96-140 - PROPERTY LOCATED AT THE SOUTHERLY TERMINUS OF VIA SANTA MARIA (0_(420.70) As set forth in the Report dated January 21, 1997, from the Director of Engineering and Building, the Final Map to subdivide a 3.255 -acre site located at the southerly terminus of Via Santa Maria into two parcels was approved, based on the finding that the Final Map is in conformance with the Subdivision Map Act and conditions set forth in Council Resolution No. 96-10-15-4. The City Engineer and City Clerk were authorized to execute the Final Map, and the City Clerk was directed to record the Map with the County Recorder. 9. AWARD OF CONTRACT FOR COMMERCIAL REAL ESTATE SERVICES - EAST SIDE OF CAMINO CAPISTRANO NORTH OF JUNIPERO As set forth in the Report dated January 21, 1997, from the Administrative Services Director, the City Manager was authorized to negotiate and execute a property listing and sales agreement with Grubb & Ellis Company for the marketing of the City -owned 3.83 -acre site located on Camino Capistrano north of Junipero Serra Road. City Coumil Minute. -4- 1/21/97 AGENDA ITEM January 21, 1997 TO: George Scarborough, City Manager FROM: Cynthia L. Pendleton, Administrative Services Director SUBJECT: Selection of a Real Estate Agent to Market the Vacant 3.83 Acre Site on Camino Capistrano North of]unipero Serra Road (AP#649-361-01) lu. By motion, authorize the City Manager to negotiate and execute a property listing and sales agreement with Grubb & Ellis Company for the marketing of the City owned 3.83 acre site on Camino Capistrano north of Junipero Serra Road (AP#649-3 6 1 -0 1). BACKGROUND AND SITUATION The City acquired the subject parcel in 1991 as part of the Northwest Open Space site, however, the site is not part of the Open Space Master Plan. In late summer 1996, the City began to receive statements of interest in the site. Because of these inquiries on the site, the City decided to post a "Site Available" sign on the property in order to determine what variety of possibilities existed for the property. Staff received many calls reacting to the sign and it was decided to market the site for sale and to retain the services of a real estate agent. On November 27,1996 the City sent correspondence to seventy (70) real estate firms and individuals soliciting listing proposals for the subject property. The mailing fist was composed of 1) those firms and individuals possessing current City business licenses, and 2) firms and individuals listed on the roster obtained from the local Association of Realtors. The City received six (6) complete proposals. The submitted proposals were reviewed and ranked on the basis of completeness of the proposal, the suggested sale price and marketing process, the sale commission percentage, and the professional experience and qualifications of the firm. The two firms which best met all the review criteria were Grubb & Ellis and Sperry Van Ness. FOR CRY COUNCIL AGED , D/9 AGENDA ITEM -2- January 21, 1997 The following is comparison of the proposals received (copies of the complete proposals are on file in the City Clerk's Office): Proposed List Amount Re/Max (Madeiros) 1,209,553 - 1,251,255 Re/Max (Hribar) not stated Re/Max (Hernandez) 509,652 - 594,594 Richard Thomas Cos. not stated Grubb & Ellis Sperry Van Ness 1,350,000 - 2,300,000 1,670,000 Sale Period 9 months 4 months 6 to 18 months Spring 1997 @12 months (not stated) Commission 5% 6% 6% not stated 6% on first million;5% on second million; 4%on sale amount over 2 million 6% For comparison purposes, if the property were to sell for $2,200,000 the Sperry Van Ness commission would be $132,000, the Grubb & Ellis commission would be $118,000: the difference being $14,000. Both firms are equally qualified to market the property: the Grub & Ellis commission would be the lesser of the two and it is on this basis that staff recommends listing the property with Grubb & Ellis. MRAHO-WINTLUM - 1�-. AVI._ 1 1 1� N/A 1 11 N/A NOTIFICATION The six (6) firms responding to the solicitation of proposals will be notified of the City Council decision. • 0 AGENDA ITEM ALTERNATE ACTIONS -3- January 21, 1997 By motion, authorize the City Manager to execute a property listing and sales agreement with Grubb & Ellis Company for the marketing of the City owned 3.83 acre site on Camino Capistrano north of Juniper Serra Road (AP#649-361-01). 2. Do not authorize the execution of a listing agreement with Grubb & Ellis. 3. Request more information from staff. RECOMMENDATION By motion, authorize the City Manager to execute a property listing and sales agreement with Grubb & Ellis Company for the marketing of the City owned 3.83 acre site on Camino Capistrano north of Junipero Serra Road (AP#649-361-01). Respectfully submmitte b , tMaiy d C thia leton�l�_ sub