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HomeMy WebLinkAboutExchange Agreement L & H Farms, Ltd.-12/12/2011EXCHANGE AGREEMENT THIS EXCHANGE AGREEMENT is entered into this I day of W , 2011, by and between the City of Waterloo, a municipal corporation ("City"), and L and H Farms, Ltd., an Iowa general partnership ("LHF"). WHEREAS, City has offered to purchase approximately 50 acres more or less of Black Hawk County agricultural land described on the attached Exhibit "A" (hereinafter "Farm Land") for the sum of $750,000.00 on or before Thursday, December 15, 2011, if LHF will agree to accept a conveyance of the Farm Land in exchange for 24.5 acres of development land located at the intersection of U.S. Highway 20 and Ansborough Avenue; and WHEREAS, LHF is the owner of 24.5 acres of real property located at the southeast corner of the intersection of U.S. Highway 20 and Ansborough Avenue described on the attached Exhibit "B" and depicted on the aerial photograph as parcels comprised of 7.61 acres more or less and 16.89 acres more or less on attached Exhibit "C" (hereinafter "Development Land"); and WHEREAS, LHF is willing to convey the Development Land to City in exchange for the Farm Land so as to qualify the transaction for the non -recognition of gain under Internal Revenue Code Sec. 1031 (such exchange being hereafter referred to as the "Exchange"). NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Section 1. Construction and Interpretation. This Agreement shall be carried out, governed by, and construed in accordance with the laws of Iowa and, to the extent necessary or appropriate, to obtain like -kind exchange treatment under Internal Revenue Code Sec. 1031. The parties agree to execute any additional documents required to allow this transaction to so qualify. LHF agrees to bear any expenses associated with document preparation necessary to qualify the Exchange for like -kind exchange treatment. Section 2. Contingencies. 2.1 City's obligations herein are subject to and conditioned upon the following: A. The City Council for the City of Waterloo, Iowa, adopting a resolution authorizing City to take assignment of the contract to purchase the Farm Land pursuant to the agreed-upon terms and conditions of the assignment set forth in Section 3 below, and further authorizing City to purchase the Farm Land for the sum of $750,000.00 pursuant to the terms and conditions of said contract; B. The City Council for the City of Waterloo adopting a resolution authorizing City to convey the Farm Land to LHF in exchange for the Development Land by directing the Section 5. Form of Conveyance 5.1 City shall cause the current owner of the Farm Land to convey said real property directly to LHF by Warranty Deed. LHF shall convey the Development Land to City by Warranty Deed. Title shall be merchantable title in accordance with the lowa Title Standards. 5.2 All liens or clouds on title shall be removed prior the Exchange. 5.3 If title cannot be made merchantable within a reasonable period of time, this Exchange Agreement shall become mill and void. Section 6. Closing. The closing on the Exchange contemplated herein shall occur contemporaneously with the closing on City's purchase of the Farm Land. It is expected that the closing will occur on or before December 15, 2011. Section 7. Property Taxes. 7.1 LHF acknowledges that City will receive a credit against the $750,000.00 purchase price for the Farm Land in an amount equal to the annual real estate taxes on the Farm Land prorated through the closing date, and that as a result of such credit, the seller of the Farm Land will expect City and its successors to pay the installments of property taxes due on and after March 31, 2012. LHF agrees to assume responsibility for making the general property tax payments for the Farm Land due March 31, 2012, and all subsequent installments. 7.2 LHF will pay the property taxes on the Development Land that are due March 31, 2012. LHF will also pay one hundred percent (100%) of the installment of general real estate taxes due on September 30, 2012. City shall be responsible for real estate taxes attributable to the Development Land due March 31, 2013, and all subsequent installments of general real estate taxes attributable to the Development Land, if any. Section 8. Survey. If the parties determine that a survey of the Development Land, or any part thereof, is required, then City shall reimburse LHF for the cost of procuring a plat of survey for the Development Land. The plat of survey must be completed and filed of record in the office of the Black Hawk County Recorder prior to the completion of the Exchange contemplated herein. Section 9. Abstracting. 9.1 The current owner of the Farm Land will provide City with an updated abstract of title for the Farm Land prior to City having to complete its purchase of the Farm Land. Upon receipt of the abstract of title, City shall deliver it to legal counsel for LHF. Legal counsel for LHF shall examine the abstract of title and confirm that the current owner of the Farm Land possesses marketable title to the real estate as required by this Exchange Agreement. Section 14. Enforceability. This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors, executors, personal representatives and assigns. No party to this Agreement may assign their/its rights or interests hereunder without the prior written consent of each of the other parties. Section 15. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same document. Section 16. Limitation of Rights. With the exception of the rights herein expressly conferred, nothing expressed in this Agreement is intended or shall be construed to give to any person or entity, other than the parties hereto, any legal or equitable right, remedy or claim under or in respect to this Agreement or any covenants, agreements, conditions and provisions herein contained, this Agreement and all of the covenants, agreements, conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto. Section 17. Severability. If any provision of this Agreement shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or any constitution or statute or rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. Section 18. Intent. It is the intent of the parties that this Exchange Agreement shall permit each party to complete a like -kind exchange pursuant to Internal Revenue Code Sec. 1031 and it is intended to comply with the requirements of the regulations thereunder, including, but not limited to, Reg. 1.1030(k)-1. To the extent that any provisions herein conflict with the requirements of the safe harbor provisions contained therein, the requirements and the conditions of the statute and the regulations shall control. [SIGNATURE PAGE FOLLOWS.] STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ) This instrument was acknowledged before me on the (day of be-COv e� ; 2011, by Ernest G. Clark as Mayor and Suzy Schares as City Clerk of the City of Waterloo, Iowa, an Iowa municipal corporation. 1otary"ublic in and or Black k County, Iowa i STATE OF IOWA ) ) ss. COUNTY OF BLACK HAWK ) This instrument was acknowledged before me on the day of 2011, by Curtis G. Hollis as President of Lanehaven Farms, Inc., an Iowa corporation, General Partner of L and H Farms, Ltd., an Iowa general partnership. Notary Public in and for Black Hawk County, Iowa EXHIBIT "B" Development Land The Southwest Quarter of the Northwest Quarter (SW'/ NW'/) of Section No. 9, Township No. 88 North, Range No. 13 West of the Fifth Principal Meridian, City of Waterloo, Black Hawk County, Iowa, EXCEPT Parcel "B" conveyed to the City of Waterloo by deed dated March 16, 2010 and filed May 5, 2010 as Doc. No. 2010-20575; and EXCEPT Tract "A" in a right-of-way plat dated January 19, 1979, and filed May 30, 1980, as 539 Lot Deed 982-991; and EXCEPT Tract "B" (Easement) in the same right-of-way plat filed as 539 Lot Deed 982-991, and EXCEPT Fee Tract "B" in the Acquisition Plat filed July 11, 2005 as Document No. 2006873; AND The North 43 feet of the North Half of the Southwest Quarter (N'1 S W'14) in Section No. 9, Township No. 88 North, Range No. 13 West of the Fifth Principal Meridian, Black Hawk County, Iowa; AND That part of the West Half of the Northeast Quarter of Section No. 9, Township No. 88 North, Range No. 13 West of the Fifth Principal Meridian, in the City of Waterloo, Black Hawk County, Iowa, described as beginning at the Center of said Section; thence North 0 degrees 03 minutes West 1033.5 feet along the West line of said Northeast Quarter; thence South 89 degrees, 191/4 minutes East 920.5 feet; thence South 26 degrees 56 minutes West 508.5 feet; thence South 0 degrees 54'/2 minutes West 561.8 feet to a point on the South line of said Northeast Quarter; thence South 89 degrees 21'1 minutes West 680.4 feet along said South line to the point of beginning (Tax Parcel No. 8813-09-251-004). Subject to easements, restrictions, covenants, ordinances and limited access provisionsof record and not of record.