1. Agr Awd Sale Carousel Bldg CITY OF SALINA
P,~QUE. ST FOR COMMISS ION ACTION DATE TIME
AGENDA SECTION: AdrainistraQon ORIGINATING DEPARTMENT: APPROVED FOR
N0. City Manager AGENDA:
ITEM
NO. 1 Dennis M. Kissinger ~
18¥: BY:
Resolution Number - 90-ql9q
Regarding Authorization of Contracts for Sale of the Carousel Building to Kansas
Independent Networks, Inc. (KINI)
Background:
In 1986, the State of Kansas Department of Commerce provided an Economic
Development program loan to Revels, Inc., for a food service business operating out
of the Carousel Restaurant building. The City of Salina was the grantee agency for
the purpose of loan administration. No local government funds were involved in the
loan.
In 1988, Revels ceased business in the Carousel Building and defaulted on the state
loan. As the grantee agency, the City had responsibility of recovery efforts for the
state loan. As part of this effort, the City gained title to the Carousel Building,
and placed it on the market for resale. The previous owners of the building had
retained a first mortgage, having priority over the state loan.
In administering the state loan recovery efforts, City staff established three
primary objectives:
1. Comply with all applicable laws, regulations, and procedures
regarding loan recovery efforts, including the City's fiduciary
responsibilities in sale efforts.
2. Recover all delinquent local taxes and all City costs of our
temporary building ownership and loan recovery efforts.
3. Attempt to find a buyer and future user which would m~miZe
economic development and job opportunities.
COMMISS ION ACTION
MOTION BY SECOND BY
TO:
CITY OF SALINA
REQUEST FOR COIV~ISS ION ACTION DATE TIME
~+:00 P.M.
AGENDA SECTION: ORI Gl NATI NG DEPARTMENT: APPROVED FOR
NO. AGENDA:
NO.
BY: BY:
~he proposal to sell p~esented to the Comm~.~s~on tod~ satisfies these objectives.
Proposal:
Sale of the Carousel Building and associated personal property for a total price of
$275,000 to Kansas Independent Networks, Inc., KINI. (An economic development
fact sheet from the Chamber of Commerce is attached. )
Recommended Action: Approve Resolution authorizing the two related contracts
enclosed.
COIv~IISS ION ACTION
MOTION BY SECOND BY
TO:
AGREEMENT FOR PURCHASE OF REAL ESTATE
This Agreement is entered into this day of///W~V ,
1990, by and between the City of Salina, a Kansas municipal
corporation ("City"), Charles W. Walker and Carolyn L. Walker,
husband and wife, ("Walkers"), and Kansas Independent Networks,
Inc. ("KIN") .
FOR GOOD AND VALUABLE CONSIDERATION the City and the Walkers
agree to sell and KIN agrees to purchase the property described
below upon the following terms and subject to the conditions and
requirements set forth below.
1. Description of Property.
A. Real estate. The real estate to be sold by the City to
KIN is known as 621 Westport Boulevard, Salina, Kansas,
and is legally described as follows:
Ail of Lots One (1), Two (2), Three (3), and Twelve
(12), Block One (1), Westport Exchange Addition to
the City of Salina, Saline County, Kansas;
together with all appurtenances, permanent improvements
and fixtures (the "Real Estate").
B. Personal property. The personal property to be sold by
the Walkers to KIN shall include all of the personal
property currently located within the building located
on the Real Estate including, but not limited to the
restaurant and bar equipment, furniture, and office
equipment (the "Personal Property").
2. Purchase Price. The purchase price for the Real Estate and
the Personal Property shall be the sum of Two Hundred Seventy-
five Thousand Dollars ($275,000), payment of which is to be
made in the following manner and at the following times:
A. Twenty-five Thousand Dollars ($25,000) to be paid to the
escrow agent upon the execution of this Agreement.
B. The balance of the purchase price in the amount of TWo
Hundred Fifty Thousand Dollars ($250,000) shall be paid
in cash at the time of closing.
3. Approval by KDOC. This Agreement shall be conditional upon
its written approval by an authorized representative of the
Kansas Department of Commerce ("KDOC"). In the event KDOC
approval of this Agreement cannot be obtained, the earnest
money deposit shall be returned to KIN, and this Agreement
shall be cancelled.
4. Conditional Use Permit. The Real Estate is currently zoned
c-7 Highway Commercial. The use contemplated by KIN requires
a conditional use permit to be conducted in the C-7 Highway
Commercial zone. KIN agrees that it will file an application
for conditional use permit with the Salina Planning Department
by June 1, 1990, in order for the application to be heard at
the July 3, 1990, meeting of the Salina Planning Commission.
The city agrees to pay the filing fee and publication costs
related to the application. This Agreement shall be
conditional upon the approval of the conditional use permit
by the Salina Planning Commission. In the event approval of
the conditional use permit cannot be obtained, the earnest
money deposit shall be returned to KIN and this Agreement
shall be cancelled.
5. Closing. Closing shall be on or before July 5, 1990;
provided, however, that in the event merchantable title has
not been furnished as of that date, then the closing shall be
the day following the date on which a commitment for title
insurance is provided to KIN. KIN acknowledges: (a) its
awareness that prior to delivering merchantable title the City
must obtain the release of a number of tax liens imposed by
the United States and the State of Kansas resulting from tax
obligations of a prior owner of the Real Estate; (b) that in
certain instances a determination of the purchase price was
necessary before the lien release could be obtained; and (c)
that the procedures required to obtain the release of such tax
liens may delay the closing. The City represents that it
shall diligently pursue the procedures required to obtain the
release of such liens following final approval of this
Agreement.
6. Escrow Agent. The Millwood Agency of Salina, Kansas, is
designated as the escrow agent of the parties and shall hold
this Agreement, deed, bill of sale, title insurance policy,
and all other papers of transfer pending the complete
fulfillment of this contract. The escrow agent shall receive
and disburse all payments to be paid hereunder.
7. Evidence of Title. The City shall provide KIN with a policy
of title insurance in the amount of the purchase price showing
good and marketable title in and to the Real Estate to be in
the City, free and clear of all liens and encumbrances, except
easements and restrictions of record. In the event the City
cannot furnish such a commitment for title insurance to the
Real Estate, then this contract shall be cancelled and the
earnest money deposit shall be refunded to KIN.
8. Deed and Bill of Sale.
A. Real Estate. The City shall convey marketable title to
the Real Estate by general warranty deed to be delivered
--2--
to KIN at the closing upon receipt of the total purchase
price, free and clear of all liens and encumbrances,
except easements and restrictions of record.
B. Personal Property. The Walkers shall convey title to the
Personal Property by a bill of sale to be delivered to
KIN at the closing.
9. Possession. The City and Walkers shall give possession to the
Real Estate and the Personal Property to KIN immediately
following closing. Pending the closing of this Agreement,
authorized representatives of KIN shall be allowed reasonable
access to the building located on the Real Estate in order to:
(a) examine and inventory the Personal Property in preparation
for sale of part or all of the Personal Property after
closing; and (b) examine the building for the purpose of
developing plans or bids for work to be done to the building.
10. Mechanics liens. The City shall pay all contractors,
subcontractors, laborers, materialmen or suppliers for all
work done or material furnished to the Real Estate prior to
the closing of the Agreement which might form the basis of a
mechanic's lien. The City shall indemnify and hold KIN
harmless from any obligation for payment of any amounts by
reason of any mechanic's liens which may be filed for labor
performed or material furnished prior to the closing of this
Agreement.
11. Casualty loss.
A. Real Estate. The City shall bear all risk of loss and
keep up fire and extended coverage insurance on the Real
Estate until this transaction is closed; thereafter, all
risk of loss shall be borne by KIN. In the event of
partial loss prior to closing, the City shall repair the
Real Estate or they may assign the insurance proceeds to
KIN. In the event of total destruction of the Real
Estate prior to closing, the insurance proceeds shall be
retained by the City and this contract shall be
terminated and the earnest money deposit refunded to KIN.
B. Personal Property. The Walkers shall b94~r ,all~ig~k of~.%~
loss and maintain insurance coverage ~on ~ne Fersona±' -
Property until this transaction is closed; thereafter,
all risk of loss shall be borne by KIN. In the event any
of the Personal Property is damaged or destroyed prior
to closing, KIN agrees to accept an assignment of the
insurance proceeds as full consideration for any loss of
value.
-3-
12. Property Taxes.
A. Real Estate. Ail real property taxes on the Real Estate
for 1989 and prior years shall be 9aid by the City. Ail
real property taxes for 1990 shall be prorated between
the City and KIN as of the date of closing.
B. Personal Property. Ail personal property taxes on the
Personal Property for 1989 and prior years shall be paid
by the Walkers. All personal property taxes for 1990
shall be prorated between the Walkers and KIN as of the
date of closing.
13. Inspections. KIN shall have access to the Real Estate for ten
(10) working days to inspect the Real Estate or to have the
Real Estate inspected by qualified persons at KIN's expense
to determine the presence of termite infestation, and to
determine the acceptability of the plumbing, electrical,
heating and air conditioning systems, roof, structure,
foundation, and electric reader-board sign. KIN shall, within
two (2) business days following the end of the period for such
inspection, provide the City with notice, in writing, of any
deficiencies. If KIN does not provide such a written notice,
it shall be conclusively presumed that the Real Estate and
Personal Property are acceptable. In the event written notice
is given, the parties shall agree in writing on the manner in
which any deficiencies are to be corrected or any one of the
parties may elect to cancel this Agreement and the earnest
money deposit shall be refunded to KIN. The City and the
Walkers shall deliver and KIN shall accept the Real Estate and
the Personal Property in the condition as found upon such
inspection, except as provided above in the event of a
casualty loss.
14. Flood Plain. The City discloses and KIN acknowledges that the
Real Estate is located in the Flood Fringe designation (Zone
A).
15. Default. In the event KIN defaults in the payment of any sums
due hereunder when due, then in addition to any other remedies
available and at the option of the City and the Walkers, the
City and/or the Walkers shall have the right to (a) begin an
action to require the specific performance of the Agreement
by KIN; (b) seek damages for the failure of KIN to perform
this Agreement according to the conditions herein stated, or
(c) elect to cancel the contract and to retain the earnest
money payment as liquidated damages.
16. Real Estate CommissioD. The City shall be responsible for the
payment of the real estate sales commission due at the time
of and conditional upon the closing of this Agreement.
--4--
17. Assignment. KIN shall not have the right to assign or
transfer this Agreement, or any interest thereunder, without
the prior written consent of the City and the Walkers.
18. Bindinq Effect. This Agreement shall be binding upon the
heirs, executors, administrators, devisees, legatees,
successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties have hereunto set their hands
the day and year first above written.
Robert E. Frank, Mayor
[SEAL]
ATTEST:
Jacqueline Shiever, City Clerk
Charles W. Walker
Carolyn L. Walker
Kansas Independent Networks, Inc.
-5-
AGREEMENT FOR ALLOCATION OF PURCHASE PRICE
This Agreement is entered into this day of May, 1990, by
and between the City of Salina, a Kansas municipal corporation
("City") and Charles W. Walker and Carolyn L. Walker, husband and
wife, ("Walkers").
Recitals
A. The city and the Walkers have entered into an Agreement For
Purchase of Real Estate and Personal Property dated May__,
1990, (the Purchase Agreement) with Kansas Independent
Networks, Inc. ("KINI") for the building and contents located
at 621 Westport Boulevard, Salina, Kansas.
B. The Purchase Agreement describes the real estate to be sold
to KINI by the City and the personal property to be sold to
KINI by the Walkers, establishes a combined purchase price of
Two Hundred Seventy-five Thousand Dollars ($275,000), and
establishes a closing date of July 5, 1990.
C. The City and the Walkers desire to address the manner in which
the combined purchase price shall be allocated between them,
payment of outstanding personal property taxes against the
personal property, and payment of the Walker's mortgage lien
against the real estate to which the City's first mortgage
lien has been subordinated.
IT IS THEREFORE agreed by the parties:
1. Allocation of purchase price. The purchase price to be paid
by KINI pursuant to the Purchase Agreement shall be allocated
between the Walkers and the city as follows:
A. Walkers. As payment for the personal property the
Walkers shall be allocated from the combined purchase
price that amount necessary to pay the outstanding
personal property taxes on such personal property,
including:
a. any personal property tax liability which accrued
during ownership of the personal property by
Revel's, Inc., including any penalties and interest;
b. any personal property tax liability which has
accrued since the Walker's reacquired ownership of
the personal property pursuant to their security
agreement with Revel's, Inc., including any
penalties and interest; and
c. the prorated personal property tax obligation for
1990 to be paid by the Walkers pursuant to the
Purchase Agreement.
Based upon information currently available from the
office of the Saline County Treasurer, the personal
property tax obligation described above shall be as of
July 5, 1990, approximately $ .
B. City. As payment for the real estate the City shall be
paid the balance of the combined purchase price.
2. Mortgage lien. From its proceeds for the real estate the City
shall pay to the Walkers at closing the sum of One Hundred
Fifty Thousand Dollars ($150,000) in full satisfaction of the
Walker's unpaid mortgage lien against the real estate, to
which the first mortgage lien of the City against the real
estate was subordinated. The Walkers agree that such payment
shall satisfy its mortgage lien in full and that upon such
payment they shall immediately release the mortgage lien.
3. Contingent upon closing. This Agreement shall in all respects
be contingent upon the closing of the Purchase Agreement.
4. Binding Effect. This Agreement shall be binding upon the
heirs, executors, administrators, devisees, legatees,
successors and assigns of the respective parties.
IN WITNESS WHEREOF, the parties have hereunto set their hands
the day and year first above written.
Robert E. Frank, Mayor
[SEAL]
ATTEST:
Jacqueline Shiever, City Clerk
Charles W. Walker
Carolyn L. Walker
_ J AREA
- .., CHAMBER OF COMMERCE
120 West Ash / P.O. Box 586
Salina, Kansas 67402-0586
Telephone (913) 827-9301
May 29, 1990
(KINI)
29 independent telephone companies in Kansas that have formed a
cooperative under the name Ks. Independent Networks, Inc. (KINI) to
market the new service.
KINI has been capitalized with 8 million from the 29 companies.
Plans are to have 25 towers up and operating by March 1991.
The first areas scheduled to receive cellular service this year
include McPherson, Wilson, followed by Victoria, Grove, Brewster,
Bennington, Woodbine and Agenda.
KINI has licenses pending to serve 65,000 sq.miles of Kansas which
will require a total of 35 towers and about 27 million.
Employment:
In Office TQ~al
12 months ago 2 Employed
Now 18 Employed 23
(Plan to hire 3 more in office in June. As of now they are
ahead of their projection.)
End of 90 projection 35 55
5 Yr. Projection 69
Payroll:
1990 - i Million
1991 - 2 Million
5 Yrs. - 2.4 Million
Economic Impact - Meetings:
Training Seminars (200 agents) $ 72,000
Special Meeting 9,000
Board of Directors 10,800 (usually bring spouses)
Shareholder Meeting 48°000 ( ..... 25-30%)
$139,800
Consultants will be coming in and staying at different times
throughout the year.
ALL-AMERICA CITY
'ifil'
Retail Outlet:
Selling cellular phone equipment and service.
Capital Expenditures:
Minimum renovation - $135,000
Furniture Replacement - 150,000
Parking Lot Sealing - ¢?)
$285,000
Carousel is the best location - five locations were considered.
Other comunities which have made offers to KINI are Wichita,
Hutchinson, Moundridge. Several families have already moved
into the com~unity from other states and Kansas counties.
For further information, contact:
Char Chapman,
Assistant Vice President
Econondc Development Division
Salina Area Chamber of Commerce
120 West Ash Street
Salina, Kansas 67401
913/827-9301