HomeMy WebLinkAboutL&H Farms - Exchange Agmnt - 2/26/2018Please return this copy to:
City Clerk & Finance Dept.
715 Mulberry St.
Waterloo, IA 50703
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT is entered into this btlA day of'&W
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b�_, by and between the City of Waterloo, Iowa, a municipal corporation("City' and
L & H Farms, Ltd., an Iowa general partnership ("LHF").
WHEREAS, City has offered to purchase approximately 33.1 acres more or less of Black
Hawk County agricultural land described on the attached Exhibit "A" (hereinafter "Farm Land")
for the sum of $415,405.00 on or before March 1, 2018, if LHF will agree to accept a conveyance
of the Farm Land in exchange for 9.54 acres of development land located at the intersection of
U.S. Highway 20 and Ansborough Avenue; and
WHEREAS, LHF is the owner of 9.54 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 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 § 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 $415,405.00 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
sellers of the Farm Land to convey it directly to LHF in accordance with the terms of that
certain Option Exchange Agreement between City and LHF dated March 8, 2010, as
amended on March 30, 2015;
C. City completing its purchase of the Farm Land prior to closing on this exchange with
LHF.
2.2 LHF's obligations herein shall be subject to and conditioned upon City completing its
purchase of the Farm Land.
Section 3. Terms of Assignment.
City will be taking assignment of an existing contract to purchase the Farm Land. A copy of said
contract, as amended, is attached to this Agreement as Exhibit "D." A copy of the Assignment is
attached as Exhibit "E."
Section 4. Conveyance of Property.
4.1 City agrees to require the current owners of the Farm Land to convey said real property
directly to LHF by warranty deed as consideration for LHF's conveyance of the
Development Land to City by warranty deed;
4.2 City agrees to accept the conveyance of the Development Land in accordance with the
terms and conditions of this Exchange Agreement.
4.3 In recognition of LHF's role in identifying and pre -approving the Farm Land for
acquisition by City for purposes of this Agreement, LHF agrees to accept the conveyance
of the Farm Land "as is," subject to all conditions, easements, restrictions and other
characteristics, and hereby acknowledges that City has not made and will not make any
representation or warranty with respect to the Farm Land, whether as to merchantability
of said land, its fitness for any particular purpose, or otherwise.
4.4 The parties agree that the Farm Land shall be deemed to have a value of $414,405.00 for
purposes of this transaction, and the Development Land shall be deemed to have a value
of $364,100.00 for purposes of this transaction. LHF will loan City the sum of
$51,305.00 to acquire the Farm Land, and City will pay the balance of the purchase price
in cash. As consideration for the conveyance of the Farm Land to LHF in this exchange,
LHF will convey the Development Land to City and forgive the loan in the amount of
$51,305.00.
4.5 No cash consideration will be exchanged between the parties.
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 Iowa 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 null 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 March 1, 2018.
Section 7. Property Taxes.
7.1 LHF acknowledges that City will receive a credit against the $
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, 2018. LHF agrees to assume responsibility for making
the general property tax payments for the Farm Land due March 31, 2018, and all
subsequent installments.
7.2 LHF will pay the property taxes on the Development Land that are due March 31, 2019
and all prior installments. City shall be responsible for real estate taxes attributable to the
Development Land due September 30, 2019, 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 or
title report for the Farm Land prior to City having to complete its purchase of the Farm
Land. Upon receipt of the abstract of title or title report, City shall deliver it to legal
counsel for LHF. Legal counsel for LHF shall examine the abstract or title report and
confirm that the current owner of the Farm Land possesses marketable title to the real
estate as required by this Exchange Agreement.
9.2 LHF will provide City with an updated title report for the parcel of real estate that
includes the Development Land. City acknowledges that the title report will include other
real estate. City shall bear the expense of paying the abstract company to prepare a
separate abstract of title for the Development Land. City may defer the preparation of this
abstract of title until such time as it is prepared to sell all or a portion of the Development
Land.
Section 10. Other Closing Costs.
Each of the parties agrees to pay any closing costs not specifically addressed herein in the manner
customarily paid by buyers and sellers as part of real estate transactions in the State of Iowa.
Section 11. Option to Rent.
City agrees that as long as City remains the titleholder to all or a portion of the Development
Land, Lanehaven Farms, Inc., shall be entitled to rent any and all undeveloped portions of the
Development Land on a year-to-year basis on the condition that Lanehaven Farms, Inc., enter
into a written lease agreement with City requiring, among other things, that Lanehaven Farms,
Inc., provide the same indemnification customarily required of tenants in a cash basis farm lease
and that Lanehaven Farms, Inc., procure customary liability insurance identifying City as an
additional insured. Annual rent for the first €eur{4)-three3 ears (through the 20''=2020-
2021 crop year) shall be $190.00 per acre. Thereafter, annual rent shall be mutually agreed upon
by the parties or in the absence of such agreement, it shall be set at the then prevailing fair rental
value as determined by a mutually agreeable farm management company such as Hertz Farm
Management. Rent shall be payable in December of each calendar year.
Section 12. Notices.
All notices, requests, demands, directions and other communications required or permitted to be
given pursuant to this Agreement shall be valid if in writing and if delivered personally, or sent
by certified or registered mail, return receipt requested, postage prepaid and addressed as follows:
To City: The City of Waterloo, a municipal corporation
Attention: Quentin M. Hart, Mayor
Attention: Kelley Felchle, City Clerk
315 Mulberry Street
Waterloo, Iowa 50703
To LHF: L & H Farms, Ltd., an Iowa general partnership
Lanehaven Farms, Inc., Partner
Attention: Curtis Hollis, President
7502 Hammond Avenue
Waterloo, Iowa 50701
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Section 13. Amendments.
This Agreement may not be modified except in a written instrument signed by the parties.
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.
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IN WITNESS WHEREOF, City and LHF have each caused this Agreement to be
executed, sealed and delivered as of the day and year first above written.
THE CITY OF WATERLOO, IOWA, A MUNICIPAL CORPORATION
By:
Quentin M. Hart, Mayor
By: 44U/—
Kelley
F chle, City Clerk
L & H FARMS, LTD.
By: LANEHAVEN FARMS, INC., Partner
By:
Curtis G. Hollis, President
STATE OF IOWA )
) ss.
COUNTY OF BLACK HAWK )
This instrument was acknowledged before me on the day of
2� L '9 'by Quentin M. Hart as Mayor and Kelley Felchle as City Clerk of the City of
Waterloo, Iowa, an Iowa municipal corporation.
L
Notary Publ c in"n for IhAcldfawk County, Iowa
•
NANCY HIGBY
o"'"`
COMMISSION NO.788229
,awe
MY COMMISSION EXPIRES
_3—
STATE OF IOWA )
) ss.
COUNTY OF BLACK HAWK )
This instrument was acknowledged before me on the JS day of 'M rj, ,
2c?/ , by Curtis G. Hollis as President of Lanehaven Farms, Inc., an Iowa corporation,
General Partner of L & H Farms, Ltd., an Iowa general partnership.
A, At 6 - 141z� 1 -
JONATHAN MOSELEY N ary Public in and fo lack Hawk County, Iowa
Notarial Seal - lo#,a
Commission n )MI
W COn' Ission Ex0es % zo�ly
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EXHIBIT "A"
The North 40 acres of the East 120 acres except the North 400 feet of the East 660 feet of the
Southeast Quarter, all in Section 20, Township 88 North, Range 13 West of the 5th p.M., in
Black Hawk County, Iowa (containing approximately 33.1 tillable acres).
EXHIBIT "B"
Development Land
Parcel
The South 184 feet of the North 1122.85 feet of the North Half of the Southwest Quarter
(N '/2 SW '/4) in Section No. 9, Township No. 88 North, Range No. 13 West of the Fifth Principal
Meridian, Black Hawk County, Iowa, EXCEPT that part thereof conveyed to the City of
Waterloo in a deed filed March 14, 2012 as Doc. No. 2012-16922 AND EXCEPT that part
thereof described in a deed dated April 29, 1996 and filed May 1, 1996, at Book 567 Land Deeds
at Page 633 AND EXCEPT that part thereof described in a deed dated April 4, 1997 and filed
April 4, 1997 at Book 569 Land Deeds at Page 042, all filed in the Office of the Black Hawk
County Recorder.
Subject to easements, restrictions, covenants, ordinances and limited access provisions of record
and not of record.
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EXHIBIT "C"
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EXHIBIT "D"
Anderson Contract
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EXHIBIT "E"
ASSIGNMENT OF REAL ESTATE CONTRACT
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