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HomeMy WebLinkAbout99-235 Resolution No. 99-235 RESOLUTION AUTHORIZING EXECUTION OF A LETTER OF UNDERSTANDING WITH THE UNION PACIFIC RAILROAD COMPANY FOR THE ACQUISITION OF A PORTION OF THE ABANDONED EAST ELGIN INDUSTRIAL LEAD RAILROAD LINE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Joyce A. Parker, City Manager, be and is hereby authorized and directed to execute a letter of understanding on behalf of the City of Elgin with the Union Pacific Railroad Company for the acquisition of a portion of the abandoned East Elgin Industrial Lead Railroad Line, a copy of which is attached hereto and made a part hereof by reference . s/ Ed Schock Ed Schock, Mayor Presented: September 8, 1999 Adopted: September 8 , 1999 Omnibus Vote : Yeas 7 Nays 0 Attest : s/ Dolonna Mecum Dolonna Mecum, City Clerk UNION PACIFIC RAILROAD COMPANY Real Estate Department R.D.Uhrich J.L.Hawkins Assistant Vice President UNION PACIFIC Director-OperationsSupport Su rt J.A.AnthonyI I I I 1 I M.E.Heenan Director-Contracts Director-Administration&Budgets D.D.Brown D.H.Lightwine Director-Real Estate Director-Real Estate M.W.Casey T.K.Love General Director-Special Properties 1800 Famam Street Director-Real Estate J.P.Gade Omaha,Nebraska 68102 Director-Facility Management Fax(402)997-3601 August 5, 1999 1750-79 WILLIAM A. COGLEY CORPORATION COUNSEL CITY OF ELGIN 150 DEXTER COURT ELGIN, IL 60120-5555 Dear Mr. Cogley: This letter is to confirm the understandings reached between James L. Harrel on behalf of Union Pacific Railroad Company (Railroad Company) and the City of Elgin(Purchaser) covering possible conveyance by the Railroad Company to the Purchaser of certain property (Property) as hereinafter defined in Elgin, Kane County, Illinois. The undersigned is willing to recommend to the Railroad Company's Management a sale of the Property subject to the following terms and conditions: 1. Description of Property: The Property to be conveyed shall consist of a parcel of land totaling approximately 1.90 acres, as generally depicted on the print attached hereto marked Exhibit "A. " The exact area to be conveyed will be determined by the Railroad Company from existing deed and title records and a legal description prepared accordingly for incorporation into the instrument of conveyance. In the event a field survey of the property is required or desired by the Purchaser, such survey will be the Purchaser's sole cost and expense. 2. Consideration - Sale Price: The sale price (Sale Price) for the Property shall be $280,212.00, which is computed as follows: {81,457sq. ft. (1.87 acres) x $3 .44/sq. ft = $280,212.00, } The remaining .03 acres being two additional parcels located at the corners of Douglas/Division and Chicago/Springs Street will be included at no cost in return for the Purchaser releasing $5, 080.97 in weed cutting charges. Area is subject to certification by our Senior Manager-descriptions and any adjustments from the 1.90 acres will be prorated in determining final consideration. 3. Terms - Conveyance - Possession: Terms of the sale will be cash or cashier's or certified check upon delivery of deed and possession of the Property will be given at that time. The Property will be conveyed by Quitclaim Deed, as is, where is, without any warranties, and subject to all conditions, restrictions, reservations, easements and encumbrances whether recorded or otherwise applicable to the Property. Notwithstanding the foregoing, Railroad Company shall cooperate with and assist Purchaser to effect the closing of and complete this transaction and shall furnish the Purchaser with whatever records, prints, archival information or other evidence, which Railroad Company may have bearing upon the use of or title to the Property, during the time the Property was owned by the Railroad Company and/or its predecessors. Purchaser assumes the risk of and agrees to indemnify and hold Railroad company harmless, and to defend Railroad Company against and from any claims, costs, liabilities, expenses (including, without limitation, court costs and attorney fees) , or demands of whatsoever nature or source for any defects or environmental problems, latent or obvious, discovered or undiscovered in the Property being conveyed. 4. Title Insurance and Abstract of Title: The Railroad Company will not furnish Title Insurance nor an Abstract of Title to the Property. It is understood and agreed the Purchaser will be ordering a title commitment and title insurance for the property. Within ten days following the execution hereof the Railroad Company will provide the Purchaser with a legal description of the property and a right-of-way map to scale showing the location and dimensions of each parcel of the property. The Purchaser thereafter will order a title commitment at its own expense. If the title commitment fails to provide the Railroad Company as holding fee simple title to the property or otherwise discloses any exceptions which are unacceptable to the Purchaser, the Purchaser at its option may so notify the Railroad Company in writing of its decision to terminate this agreement and this letter of understanding and the Purchaser's obligation to purchase the property shall be terminated and null and void. 5. Offer-Closing: This offer shall continue in full force and effect for a period of thirty-five (35) days from the date hereof. In the event this offer is not accepted by the Purchaser within such thirty/f( l day period, then this offer shall be null and void. This transaction shall close on or before October 1, 1999 after acceptance by the Purchaser and approval by Railroad Company Management as hereinafter set forth. 6. Tax Proration: Local property taxes, if any, and other assessments applicable to the Property shall be prorated as of the date of closing. 7. Submission to Railroad Company Management: Following receipt of the Purchaser's acceptance and approval of this Letter of Understanding, this proposal will be submitted to Railroad Company Management for review and approval. If the Letter of Understanding and the sale contemplated herein is approved by such Management, the Railroad Company shall promptly advise the Purchaser and prepare the necessary documents to complete this transaction. The parties hereto shall promptly thereafter take the necessary steps to close this transaction as provided for herein. 8. Letter of Understanding: It is understood and agreed that this document is a Letter of Understanding and not an Agreement to Purchase/Sell until accepted by the Purchaser and approved by Railroad Company Management. Either of the parties hereto shall have the right to terminate negotiations for the Sale/Purchase of the Property at any time prior to such acceptance and approval without any obligation by either of the parties hereto to the other party. 9. Negotiations: Negotiations relative to this transaction have been carried on by both parties without the intervention of any person which will give rise to any valid claim against either of the parties hereto, for brokerage commission or other like payment. Each party hereto shall indemnify and hold harm- less the other party against and from any and all claims for brokerage commission or other like payments arising out of this transaction. 10. Transfer Documentation and Excise Tax: All real estate transfer, documentation and/or excise taxes resulting from this transaction will be paid for by the Purchaser. 11. Subdivision Map Act: It may be necessary to comply with provisions of the Subdivision Map Act. In obtaining approvals from the appropriate governing body, various requirements may be established with regard to street widths, street improvements, drainage, plan approvals, design, related surveys and map preparation, fees and various matters. Any and all expenses in this regard, including dedications and/or parcel maps, will be done by and at the sole cost and expense of the Purchaser. 13. Eminent Domain: The parties acknowledge that the City of Elgin has the authority to condemn the Property under its power of eminent domain. The City of Elgin represents that it will institute eminent domain proceedings in the event that the Railroad Company does not sell the Property upon the demand pursuant to this agreement. The parties further acknowledge that the Railroad Company intends to treat the sale of the Property as sold under imminent threat of condemnation pursuant to section 1033 of the Internal Revenue Code of 1986 (26 U. S. C.) . Purchaser acknowledges that James L. Harrel is a licensed real estate Broker and is acting in this transaction as the agent(and employee) of the Railroad. If the foregoing reflects your understanding of the arrangement reached between the Railroad Company and the Purchaser with respect to the purchase/sale of the Property, please secure the execution of this Letter of Understanding and return to me the copy of this letter marked "Duplicate Original-Railroad Copy, " advising the correct legal entity in which the Purchaser desires to take title to the Property. Yours 7../1) , , i/e) / D. D. Brown Director - Real Estate Accepted and approved on this 8th day of September , 19 99 CIT O' ELGIN 411( B / ore ,' Parker, City Manager Title to the Property will be taken in the following name: City of Elgin, a municipal corporation State of Incorporation Illinois Mailing Address 150 Dexter Court, Elgin, Illinois 60120-5555 AUG 05 '99 09:57 FR UPRR CONT AND R/E 402 997 3602 TO 918479315610 P.02/03 w UNION PACIFIC RAILROAD COMPANY Elgin,Kane County, Illinois EXHIBIT "A" A strip of land in the Town of Elgin,Kane County,Illinois more particularly described as follows: Parcel One: A 60 foot wide strip of land in Block 10,Kemball's 2nd Addition to the Village of Elgin, being the same as conveyed to the Galena and Chicago Union Railroad Company, predecessor to Union Pacific Railroad Company recorded August 10, 1849 in Book 14, Page 432 Official Records. Parcel Two: A 60 foot wide strip of land in Block 9,Kemball's 2nd Addition to the Village of Elgin, being the same as conveyed to the Galena and Chicago Union Railroad Company, predecessor to Union Pacific Railroad Company recorded August 10, 1849 in Book 14, Page 432 Official Records. Parcel Three: That portion of the Union Pacific Railroad Company right of way as presently exists bound on the southeast by the west line of Brook Street,on the northeast by the easterly line of the property as described in deed to Galena and Chicago Union Railroad recorded dated July 6, 1849, on the north by the south line of Franklin Street, on the southwest by the northeast line of the property conveyed to Oehler Enterprises Inc.,by deed dated September 27, 1962,also on the southwest by the northeast line of the property conveyed to C. R.Ware Oil Company, by deed dated November 25, 1960. Parcel Four That portion of Lot 67 of P. J. Kimball JR's. Second Addition to the village of Elgin that lies northeasterly of the northeasterly line of the property as conveyed to Charles J. Pokorny by deed dated April 8, 1963. Parcel Five: That portion of the Union Pacific Railroad Company right of way as presently exists bounded on the south by the north line of North Ave. on the northwesterly by the easterly line of Brook Street,on the southwesterly by the northeasterly of the property as conveyed to the City of Elgin dated October 4, 1979, on the northeasterly by the southwesterly line of the property conveyed to Harold T, Seigle et ux.by deed dated April 11, 1967. AUG 05 '99 09:57 FR UPRR CONT AND R/E 402 997 3602 TO 918479315610 P.03/03 Parcel Six: A 50 foot wide strip of land in Block 6,H.N. Dexter's Addition to the Village of Elgin, being a portion of the property described in from S.N. Dexter to Galena and Chicago Union Railroad Company,predecessor to Union Pacific Railroad Company,recorded October 18, 1852 in Book 27 Page 377 Official Records. Parcel Seven: A 30 foot wide strip of land in Lot I Block 1,H.N.Dexter's Addition to the Village of Elgin,being a portion of the property described in from S.N.Dexter to Galena and Chicago Union Railroad Company,predecessor to Union Pacific Railroad Company, recorded October 18, 1852 in Book 27 Page 377 Official Records. Parcel Eight: A 33 foot wide strip of land in Lot 1 Block 2 of S.N Dexter's Addition to the Village of Elgin,being that property as conveyed to the Galena and Chicago Union Railroad Company,predecessor to Union Pacific Railroad Company,recorded August 10, 1849 in Book 14 Page 416 Official Records. Parcel Nine: A 33 foot wide strip of land in Lot 1,Block 15, in the Town of Elgin,being that property as conveyed to Galena and Chicago Union Railroad Company,predecessor to Union Pacific Railroad Company,recorded August 10, 1849 in Book 14 Page 429 Official Records. Containing an area of 1.90 acres,more or less Office of Real Estate Omaha,Nebraska July 28, 1999 Written by: JCO 175079.1eg ** TOTAL PAGE.03 ** - • - \l (b) July 1, 1999 MEMORANDUM TO: Joyce A. Parker, City Manager FROM: William A. Cogley, Corporation Counsel SUBJECT: Acquisition of Second Portion of the East Elgin Industrial Lead Railroad Line The matter of the acquisition of portions of the East Elgin Industrial Lead Railroad Line was discussed with the mayor and members of the city council in executive session on August 26, 1998 . At such executive session the city council preliminarily approved the acquisition of portions of the rail line property in two phases . The first phase of acquisition was to be pursuant to the Rails to Trails Act for the portion of the rail line from North Grove Avenue north to the northerly terminus of the rail line at Slade Avenue . The city completed this acquisition on April 29, 1999 . It is anticipated that the city and the Kane County Forest Preserve District will be entering into an intergovernmental agreement whereby the Kane County Forest Preserve District will be improving this segment of the former rail line property with a recreational trail . The second phase of acquisition was to have been after ; abandonment of the remainder of the rail line property at which time the city would acquire the rail line property from Douglas Avenue northwesterly to North Grove Avenue . This segment of the former rail line is the abandoned rail line in front of city hall and continuing northwest through the city-owned property north of North Street to approximately the intersection of Ann Street and North Grove Avenue. A map depicting this segment of the former rail line property is attached hereto. Please be advised that I have reached a tentative agreement with the Union Pacific Railroad for this second phase of acquisition of the rail line property. Union Pacific Railroad has agreed to sell to the city this portion of the rail line property for a price of $3 .44 per square foot, for a total price of $280, 212 . Union Pacific Railroad obtained an appraisal of the entire East Elgin Industrial Lead Line from Arthur Andersen LLP. Arthur Andersen appraised the downtown area segments of the rail line at $3 .44 per square foot . Union Pacific has apparently already agreed to sell several other downtown portions of the rail line property for $3 . 50 per square foot . r Joyce A. Parker Page -2- July 1, 1999 /-- The city has recently obtained an appraisal of a nearby commercial property from N. Steffens & Associates . Mr. Steffens appraised such nearby commercial property at $5 . 00 a square foot . Based upon these appraisals and my own experiences with other downtown real estate transactions the $3 .44 price per square foot appears to be reasonable and within the range of market value for downtown properties . The acquisition of this second portion of the rail line property is important to the city in a number of respects . The most important benefit to the city in acquiring this property will be to unify the city-owned parcels bounded by Kimball Street, Douglas Avenue, North Street and Brook Street . The rail line property is not being acquired through the Rails to Trails Act and therefore can be used and developed by the city in any manner permitted by the zoning ordinance . I recommend that the city proceed to acquire the second portion of the Union Pacific rail line property as outlined herein. Please place this matter on the executive session agenda for the city council meeting of July 14 , 1999 . en- GVW WAC mg Attachment