Loading...
HomeMy WebLinkAboutSD-23-11 - Supplemental - 1200 Dorset Street (10)OPTION AGREEMENT This Option Agreement (the “Agreement”) is by and between MICHAEL J. ANDERSON and KELLY L. LORD (“Anderson and Lord”), of South Burlington, Vermont and HIGHLANDS DEVELOPMENT COMPANY, LLC, of Fairfax Vermont (“Optionee”), and is made and entered into as of the date of execution by the last party to execute this Agreement (the “Effective Date”). Background 1. Optionee owns approximately 1.29 acres of land, more or less, in South Burlington, Vermont on the east side of Dorset Street (“Optionee’s Property”). Optionee's Property is located in the “SEQ-NR” zoning district of the Southeast Quadrant under the City of South Burlington Land Development Regulations (the "LDRs") and qualifies as a “Receiving Area” for the transfer of development rights (“TDRs”) under the LDRs. 2. Anderson and Lord hold one or more TDRs reserved unto them as the former owner of a parcel of land containing 14 acres, more or less, located at 127 Hidden Meadow Lane in South Burlington, Vermont (the “TDR Land”). 3. Optionee is seeking permits and approvals to construct two residential units on Optionee's Property (the “Project”). In order to construct the Project, Optionee requires one (1) unit of additional density, or one (1) TDR. 4. Anderson and Lord and Optionee enter into this Agreement in order to grant Optionee the exclusive option and right to purchase up to one (1) TDR from Anderson and Lord, pursuant to Article 9, Section 9.05 of the LDRs, subject to the terms and conditions of this Agreement. NOW, THEREFORE, In consideration of the foregoing and the mutual covenants and agreements herein set forth, the parties hereby agree as follows: Section 1. Grant of Option. Anderson and Lord hereby grant to Optionee the exclusive right and option (the “Option”) to acquire one (1) TDR from Anderson and Lord (the “Anderson and Lord TDRs”). Under the LDRs, one (1) units of density at 1.2 units per acre (or .83 acres per unit) corresponds with 0.83 acres of land. Section 2. Option Deposit. On the Effective Date of this Agreement, Optionee shall deposit he amount of One Thousand Dollars ($1,000.00) into the Trust Account of Bauer Gravel Farnham LLP for the grant of the Option to purchase the Anderson and Lord TDRs (the “Option Deposit”). The Option Payment shall be refundable in the event that the contingencies set forth in Section 5 hereinbelow are not satisfied, and shall be applied to the Final Purchase Price in the event that Optionee exercises the Option. Section 3. Term of Option. The Option granted to Optionee to purchase the Anderson and Lord TDRs shall be for a term (the “Term”) that shall commence on the Effective Date of this Agreement, and shall terminate at 12:01 a.m. on July 31, 2023 (the “Expiration Date”), unless extended by written agreement of the parties. Section 4. Exercise of Option. Optionee shall exercise its Option for one (1) TDR, if at all at any time during the Term by written notice mailed to Anderson and Lord on or before the Expiration Date by first class mail, or by electronic mail, at the address provided in Section 24 of this Agreement. The date that Optionee mails its written notice to Anderson and Lord is hereinafter defined as the “Exercise Date.” Section 5. Optionee’s Obligations. Optionee shall be solely responsible for initiating and pursuing all proceedings before every regulatory authority, including the South Burling ton Development Review Board necessary to effectuate Optionee’s acquisition of the Anderson and Lord TDRs or any portion thereof, under this Agreement and shall pay all costs and expenses associated therewith. In the event that Optionee is unable to obtain approval from the City of South Burlington on or before the Expiration Date, then Optionee may notify Anderson and Lord of its intention to terminate this Option Agreement on or before the Expiration Date by first class mail, or by electronic mail, at the address provided in Section 24 of this Agreement. In the event that this Option Agreement is terminated due to Optionee’s inability to obtain necessary approvals, or due to a title defect pursuant to Section 9 hereinbelow, then the Option Deposit will thereafter be refunded to Optionee. Section 6. Purchase and Sale. In the event Optionee exercises the Option as provided herein, the parties shall proceed with the purchase and sale of the Anderson and Lord TDRs according to the remaining terms and conditions of this Agreement. Section 7. Purchase Price. The purchase price for the Anderson and Lord TDRs shall be Fourteen Thousand Dollars ($14,000.00) (the “Purchase Price”), as it may be adjusted pursuant to Section 11 of this Agreement, payable in good collected funds drawn from the real estate IOLTA Trust Account of Bauer Gravel Farnham LLP at the Closing (as defined below) upon the transfer of title to Optionee. The Option Payment paid pursuant to Section 2 shall be applied to the Final Purchase Price payable at the Closing. Section 8. Closing. The closing and transfer of title (the “Closing”) shall take place at a mutually agreeable location within thirty (30) days after the Exercise Date, or on such earlier date as the parties may mutually agree. Section 9. Title. Optionee shall cause title to the Anderson and Lord TDRs to be examined and shall notify Anderson and Lord in writing on or before the Exercise Date of the existence of encumbrances and defects in the title that are not excepted in this Agreement and which render Optionee’s use of the Anderson and Lord TDRs unusable for the Project. Anderson and Lord shall use good faith reasonable efforts to remove such defects. If, on the date set for Closing, Anderson and Lord are then unable to convey the TDRs in such a condition that the TDRs would be usable for the Project, Optionee in full satisfaction of Optionee’s obligations hereunder, shall either: (a) Accept such title to the Anderson and Lord TDRs as Anderson and Lord can convey without reduction in the Final Purchase Price; or (b) Terminate this Agreement, in which case all further rights and liabilities of the parties hereto by reason of this Agreement shall terminate. As used herein “unusable for the Project” shall mean that the City of South Burlington Development Review Board, the City of South Burlington Planning & Zoning Office or the City of South Burlington City Attorney has issued a written determination that the Anderson and Lord TDRs may not be used to increase the density of the Project for any reason, including, without limitation, because of the existence of liens or encumbrances of record, including, without limitation, any zoning, subdivision, Act 250 or other land use law violations which may subject the Optionee to an enforcement action or claim by any permitting authority exercising jurisdiction over the Anderson and Lord TDRs or any protective covenants and/or easements which substantially impair the Anderson and Lord TDRs for Optionee's intended purposes. Section 10. Transfer Documents. Anderson and Lord shall deliver to Optionee, at the Closing, against payment of the Final Purchase Price, in form satisfactory to Optionee and its counsel, as needed, the following: (a) A Deed, sufficient to convey good, and marketable title to the Anderson and Lord TDRs. (b) A completed Vermont Property Transfer Tax Return. (c) In the event the sale of the Anderson and Lord TDRs are not exempt from Land Gains Tax, a certificate issued by the Vermont Department of Taxes certifying the amount of the Vermont Land Gains Tax due pursuant to the provisions of 32 V.S.A. §§ 10001 et. seq. or certifying that no such tax is due on account of the transaction contemplated by this Agreement. (d) A partial discharge and/or termination statement for any existing mortgage, security interest, lease, lien or encumbrance on the Anderson and Lord TDRs. (e) Such affidavits, reports and agreements as may be required by the company issuing title insurance to Optionee and to the institution providing financing to Optionee, if any, to permit such title insurance company to issue the title insurance policy without standard exceptions for mechanic's liens or parties-in-possession. Section 11. Adjustments to Purchase Price. All real estate taxes, personal property taxes, and other municipal charge shall be prorated as of the date of Closing. Apportionments shall be made in accordance with the then prevailing practice in Chittenden County, Vermont, it being expressly understood and agreed however, that the real estate taxes assessed by the City of South Burlington shall be apportioned based on the fiscal year for which such taxes are collected. Should any tax, charge or rate be undetermined on the date of the Closing, the last determined tax, charge or rate shall be used for the purposes of apportionment; provided, however, that such apportionment shall be subject to later adjustment between the parties when the actual amounts of any such tax, charge or rate is finally determined, if the cumulative adjustment exceeds five hundred dollars (US $500.00). Section 12. FIRPTA Certificate. Unless Anderson and Lord provide a certificate and affidavit at Closing complying with the provisions of 26 U.S.C. §1445 (FIRPTA), Optionee may withhold from the payment of the Purchase Price and shall pay to the U.S. Internal Revenue Service an amount equal to fifteen percent (15%) of the Purchase Price. Section 13. Vermont Non-Resident Withholding Tax. Unless Anderson and Lord provide a certificate complying with the provisions of 32 V.S.A. §5847, Optionee may withhold from the payment of the Purchase Price and shall pay to the Vermont Department of Taxes an amount equal to two and one-half percent (2.5%) of the Purchase Price. Section 14. Vermont Property Transfer Tax and Land Gains Tax. Anderson and Lord and Optionee shall execute and deliver such Vermont Property Transfer Tax and Vermont Land Gains Tax form as may be required by the State of Vermont. Optionee shall pay the Vermont Property Transfer Tax due on the transfer of the Anderson and Lord TDRs and Anderson and Lord shall pay the Vermont Land Gains Tax, if any. Unless Anderson and Lord provide Optionee with a certificate at Closing complying with the provisions of 32 V.S.A. §10007 or proof that the proposed transaction is exempt from Vermont Land Gains Tax, Optionee may withhold from the Purchase Price and shall pay the Vermont Department of Taxes an amount equal to ten percent (10%) of the Purchase Price. Section 15. Default and Termination. (a) If after the Exercise Date, Optionee shall fail to complete the purchase as provided herein for any reason, other than for the reasons set forth in Section 5 or Section 9 herein, Anderson and Lord may terminate this Agreement, retain the Option Deposit and pursue all legal and equitable remedies provided by law. (b) If after the Exercise Date, Anderson and Lord shall fail to complete said sale as provided herein for any reason, or are otherwise in default, Optionee may receive back the Option Deposit and pursue all legal and equitable remedies provided by law, including, without limitation, damages and/or specific performance. (c) In the event that a legal action is instituted arising out of a breach of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees and costs. Section 16. Commissions and Fees. The parties hereto warrant and represent to each other that they have no knowledge of any real estate broker or agent to whom a commission may be payable as a result of this transaction or any such knowledge of any other finder’s fees or commissions related thereto. Each party agrees to indemnify and hold harmless the other for all claims or demands of any other real estate agent or broker claiming by, through or under such party. This indemnification shall also include payment of costs and attorneys’ fees incurred by a party in defense of a claim for such real estate commissions or fees. Section 17. Successors and Assigns. This Agreement shall bind and inure to the benefit of the parties hereto and their respective representatives, successors and assigns. Section 18. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Vermont, without giving effect to such jurisdiction's principles of conflict of laws. Section 19. Notice of Option. Anderson and Lord shall execute, acknowledge and deliver to Optionee a Notice of Option, in substantially the form attached as Exhibit A hereto, which may be recorded in the City of South Burlington Land Records. Section 20. Assignment by Optionee. It is expressly understood and agreed that Optionee may assign its rights under this Agreement to any entity which is owned by Optionee or its members, or affiliated therewith (including but not limited to Douglass Properties, LLC and McDonald Holdings, LLC), upon providing Anderson and Lord with adequate information to enable Anderson and Lord to consent to said assignment, which consent shall not be unreasonably withheld. Section 21. Entire Agreement; Amendment. This Agreement embodies the entire agreement and understanding between the parties relating to the subject matter hereof and there are no covenants, promises, agreements, conditions or understandings, oral or written, except as herein set forth. This Agreement may not be amended, waived or discharged except by an instrument in writing executed by the party against whom such amendment, waiver or discharge is to be enforced. Section 22. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Section 23. Captions; Headings. The captions and section numbers appearing in this Agreement are inserted only as a matter of convenience. They do not define, limit, construe or describe the scope or intent of such sections, nor in any way affect this Agreement or have any substantive effect. Section 24. Notice. Any notice required herein may be sent to the parties at the following addresses: Buyer: Highlands Development Company, LLC 31 Arbor Meadow Road Cambridge, VT 054444 caseydouglass01@gmail.com Seller: Michael J. Anderson and Kelly L. Lord 1435 Spear Street South Burlington, VT 05403 kellyllord@gmail.com Section 25. Incorporation by Reference. All exhibits hereto and the terms contained therein are made a part of this Agreement and the contents thereof are hereby incorporated by reference. Section 25. Survival. All of the terms, conditions, covenants and representations of this Agreement shall survive the Closing and execution of the Density Reduction Easement and shall be in full effect and enforceable after the Closing. DATED at ________________ this ___ day of February, 2023. HIGHLANDS DEVELOPMENT COMPANY, LLC ______________________________ Casandra Douglass, Member, Optionee ______________________________ Ryan McDonald, Member, Optionee STATE OF VERMONT COUNTY OF CHITTENDEN This instrument was acknowledged before me on February ___, 2023 by Before me: ________________________________ Notary Public, State of Vermont Print Name: Commission No.: Commission expires: 1/31/25 _____________________________ Michael J. Anderson _______________________________ Kelly L. Lord STATE OF VERMONT COUNTY OF CHITTENDEN This instrument was acknowledged before me on February ___, 2023 by Michael J. Anderson and Kelly L. Lord. Before me: ________________________________ Notary Public, State of Vermont Print Name: Commission No.: Commission expires: 1/31/25 NOTICE OF OPTION FOR PURCHASE OF A TRANSFERABLE DEVELOPMENT RIGHT Notice is hereby given of an Option Agreement (hereinafter “Option Agreement”), dated February ____, 2023, by and between MICHAEL J. ANDERSON and KELLY L. LORD (“Seller”), of South Burlington, Vermont, and HIGHLANDS DEVELOPMENT COMPANY, LLC, a Vermont limited liability company (“Buyer”). WITNESSETH: 1. The names and addresses of the parties to the Option Agreement are as follows: Buyer: Highlands Development Company, LLC 31 Arbor Meadow Road Cambridge, VT 054444 Seller: Michael J. Anderson and Kelly L. Lord 1435 Spear Street South Burlington, VT 05403 2. The date of the Option Agreement is as set forth above and shall expire at 12:01 a.m. on August 1, 2023, unless earlier terminated in accordance with the terms and conditions of the Option Agreement. Upon expiration of the Option Agreement without exercise by Buyer, the Option shall be automatically terminated and of no further force and effect, without the recording of any further instrument. 3. The Option Agreement grants Buyer the option to acquire from Seller one (1) transferable development right (“TDR”) under section 0.05 of the City of South Burlington Land Development Regulations on a parcel of land containing 11.4 acres, more or less, located at 127 Hidden Meadow Lane in South Burlington, Vermont, which TDR (among others) was reserved by 1600 Hinesburg Road, LLC in its Warranty Deed to Lawrence Parker and Valerie Parker dated January 29, 2010 and recorded in Volume 917 at Page 289 of the City of South Burlington Land Records and subsequently conveyed to Seller by Agreement between 1600 Hinesburg Road, LLC and Michael J. Anderson and Kelly L. Lord dated December 9, 2016 and recorded in Volume 1355 at Page 64 of the City of South Burlington Land Records.