8.6 Contingent Contract for Sale of Real Estate First AmendmentCITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
10/15/2012 4:00 P.M.
AGENDA SECTION
NO: 8
ITEM
NO. 6
Page 1
ORIGINATING DEPARTMENT:
City Manager’s Office
BY: Mike Schrage, Deputy City Mgr.
APPROVED FOR
AGENDA:
BY:
ITEM: Resolution No. 12-6939
A resolution authorizing a First Amendment to Contingent Contract for Sale of Real Estate located at
629 North Ohio to Wohlgemuth & Daniel Investments, LLP, locally known as Midway Wholesale.
BACKGROUND:
The North Ohio Overpass project required the acquisition of selected parcels of land adjoining the
Ohio Street corridor in order to provide for the widening and relocation of Ohio Street as well as the
installation of the overpass. Upon completion of the project, City staff reviewed the reconfigured
roadway and identified the right-of-way to be retained in order to maintain the roadway, embankments
and landscaping.
As a result of that review, surplus property was identified. Additionally, the identified surplus property
was reviewed to determine whether it was sufficient in terms of lot dimensions, road access, etc. to
meet applicable zoning requirements and be a stand alone developable lot or not. The lots identified
as being developable were appraised by Jeff Holgerson of Real Estate Appraisal Services, Inc.
In the midst of that process, Midway Wholesale approached the City indicating a need to expand their
operations on York Street and expressing a need to expand their operations in order to continue
business operations in Salina and indicating an interest in acquiring any surplus property adjoining their
property. Staff met with representatives of Midway Wholesale and their design professional in multiple
Development Review Team meetings to review their intended development of the site in light of
applicable zoning regulations as well as the North Ohio Overlay District. At that time it was recognized
that it would be necessary for Midway Wholesale to replat the properties and secure approval of a
Planned Development District in order to configure their site in the manner they intended.
On July 16, 2012, a contingent real estate contract was executed between the City of Salina and
Wohlgemuth & Daniel Investments, LLP. The agreement provided for the need for review and
approval of an application for Planned Development District and provided for purchase of the property
in question at its appraised value in the event that the contingencies of the contract were met.
The contingent contract did not obligate the Planning Commission or City Commission to favorably
consider their application for a PDD. Rather, it provided Midway Wholesale assurance that they may
purchase the property at the specified price of $30,000 if they receive the necessary approvals
thereby giving them enough assurance to invest the time and money in developing plans and
submitting an application.
Midway acknowledged the aesthetic expectations of the North Ohio Overlay District and confirmed
that it intended to propose a siteplan and architectural design that they believed would be in keeping
with the intent of those standards. This project also represented an opportunity to remove two
buildings on the current Midway Wholesale site that are extremely close to the York Street roadway.
With respect to the options to dispose of this particular piece of surplus property, multiple options
were identified: 1) Solicit bids either through sealed bids or auction; 2) List the property for sale; or 3)
Direct sale to Midway Wholesale.
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
10/15/2012 4:00 P.M.
AGENDA SECTION
NO: 8
ITEM
NO. 6
Page 2
ORIGINATING DEPARTMENT:
City Manager’s Office
BY: Mike Schrage, Deputy City Mgr.
APPROVED FOR
AGENDA:
BY:
Direct sale to Midway Wholesale was identified as being advantageous in this case since the buyer is
willing to purchase the property for its appraised value while complying with the intent of the North
Ohio Overlay District and improving their current site. On the contrary, either a bid/auction process or
listing the property for sale would have required competitive bids in order to insure a sale price that
was equivalent to the appraised value of the property. Less than favorable bids could have placed the
City in the position of declining to sell the property or selling it at less than its full value. Presumably,
listing it for sale would have resulted in an immediate offer from Midway Wholesale placing the
property under a contingent contract at the City’s list price.
The contingent real estate contract provided that “Within ninety (90) days from the effective date of
this Agreement, Buyer shall initiate all procedures and file all applications necessary to obtain the
Approvals; and Buyer must thereafter pursue the Approvals diligently and in good faith throughout the
Approval process, including but not limited to preparing and executing all necessary application forms
and providing testimony at all hearings in support of the applications.” The 90 day deadline equated
to October 14, 2012.
Prior to execution of the contract, Wohlgemuth & Daniel had hired local architect Warren Ediger to
assist them in this process, and he has been working with staff to develop a siteplan and PDD
application. However, it is not ready for submission at this time.
Mr. Ediger has reported that “Filling a PDD will require an agreement on the drainage issues and
confirmation of the property configuration. We have not completed the storm water detention study
(showing the original amount required vs. the SCS method, and incorporating various on site storage
methods in addition to a dedicated 'pond'), and have not received a final survey, but expect to do so
soon. That will require further discussion with engineering to confirm the results and reach an
agreement on the amount and method of detention. Midway Wholesale will then want to assess the
cost of meeting the detention option(s) and determine the feasibility of continuing with acquisition of the
property. Assuming their assessment confirms proceeding with the project, we will need to prepare and
submit the PDD after confirming the lot survey information and legal description with the City.”
Consequently, Mr. Ediger and Wohlgemuth & Daniel have requested a 90 day extension of the PDD
filing deadline.
CONFORMANCE WITH STRATEGIC PLAN:
The proposed action is consistent with the following components of the City’s shared vision statement:
Salina will be a city that is exciting to live in and thriving both economically and socially.
The city of Salina will be attractive and well maintained. It will be evident that good
housekeeping and high community standards are valued.
The City Commission of Salina will have committed to providing the highest quality City
services possible within available resources. The City Commission recognizes their role and
responsibility to provide the needed policy direction and resources to its administration. At the
same time, the City’s administrative personnel are committed daily to transforming this direction
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
10/15/2012 4:00 P.M.
AGENDA SECTION
NO: 8
ITEM
NO. 6
Page 3
ORIGINATING DEPARTMENT:
City Manager’s Office
BY: Mike Schrage, Deputy City Mgr.
APPROVED FOR
AGENDA:
BY:
and resources into the highest possible quality of municipal services, consistent with the
expectations of both the City Commission and the citizens of Salina.
Salina will encourage and be supportive of industrial development, economic expansion,
market-driven tax base growth, and home grown entrepreneurialism.
The proposed action is also consistent with the following goals contained in the City’s strategic plan:
Goal #1: The city will create a community of mixed-use, quality development and redevelopment.
FISCAL NOTE:
This action represents no additional expense to the City. Rather, it would result in $30,000 of
proceeds from the sale of the property.
RECOMMENDED ACTION:
Staff agrees with Mr. Ediger’s description of the remaining steps leading up to submission of a PDD
application as well as the need for completion of a survey in order to proceed.
Possible options for the City Commission’s consideration include:
1.) Vote to approve Resolution No. 12-6939 resulting in granting the requested extension.
2.) Vote to deny the Resolution No. 12-6939 resulting in denying the requested extension and the
expiration of the contingent real estate contract without proceeding to sale of the property.
In the event, that the contract is not extended, and it becomes necessary to consider alternate
approaches to dispose of the property as surplus, staff has identified the following options:
1.) Solicitation of bids through a sealed bid or auction process.
2.) List the property for sale thru a more typical real estate sale process
3.) Non-contingent sale to Midway Wholesale for the appraised value of the property
Staff believes that Wohlgemuth & Daniel have exhibited adequate due diligence in proceeding with
development of a siteplan and PDD application and recommends Option 1 - Approve Resolution 12-
6939 resulting in granting the requested extension.
Enclosure: Vicinity Map
Real Estate Contract
CC: Vern L. Jarboe, Sloan Law Firm
Jesse Prater, Midway Wholesale
Warren Ediger
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Surplus Property
Midway WholesaleReal Estate Contract
FIRST AMENDMENT
TO
CONTINGENT CONTRACT FOR SALE OF REAL ESTATE
This First Amendment to Contingent Contract for Sale of Real Estate (“First Amendment”)
is made and entered into this 15th day of October, 2012, by the CITY OF SALINA, KANSAS, a
Kansas municipal corporation (“Seller”), and WOHLGEMUTH & DANIEL INVESTMENTS,
LLP, a Kansas limited liability partnership (“Buyer”).
Recitals
A. Seller and Buyer entered into a Contingent Contract for Sale of Real Estate dated
July 16, 2012 (“Agreement”) for the purchase of certain real property located in Salina, Kansas, as
depicted on Exhibit A to the Agreement (“Real Estate”).
B. Under the Agreement, Buyer’s obligation to purchase the Real Estate is contingent
upon Buyer obtaining government approval of (1) a final development plan for a Planned
Development District affecting the Real Estate; and (2) and a replat of the Real Estate.
C. Pursuant to Section 3.4 of the Agreement, within ninety (90) days following the
execution of the Agreement, Buyer must initiate all procedures and file all applications required by
applicable law to satisfy the aforementioned contingencies.
D. Although Buyer has diligently pursued the satisfaction of the aforementioned
contingencies within the ninety (90) day period, Buyer has requested additional time to complete a
survey of the Real Estate that must be performed to satisfy the contingencies.
E. The parties desire to extend the deadline for Buyer’s satisfaction of the
contingencies to January 14, 2013.
FOR AND IN CONSIDERATION of the mutual and reciprocal promises and agreements
set forth herein, the parties agree as follows:
1. Extension of Contingency Deadline. The parties hereby agree that Buyer’s
deadline to satisfy the contingencies, as set forth in Section 3.4 of the Agreement, shall be extended
to January 14, 2013.
2. No Other Changes. Except as otherwise stated in this First Amendment, the
Agreement, as amended herein, shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have caused this First Amendment to Contingent
Contract for Sale of Real Estate to be signed by its duly authorized officers on the day and year first
above written.
CITY OF SALINA, KANSAS
By: ________________________________
Norman M. Jennings, Mayor
ATTEST:
By: _____________________________
Lieu Ann Elsey, CMC, City Clerk
Wohlgemuth & Daniel Investments, LLP
By: ___________________________________
_____________________________ [Name]
_____________________________ [Title]
RESOLUTION NUMBER 12-6939
A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE A FIRST
AMENDMENT TO CONTINGENT CONTRACT FOR SALE OF REAL ESTATE
AGREEMENT WITH WOHLGEMUTH & DANIEL INVESTMENTS, LLP.
BE IT RESOLVED by the Governing Body of the City of Salina, Kansas:
Section 1. That the Mayor is hereby authorized to execute a First Amendment to Contingent
Contract for Sale of Real Estate Agreement with Wohlgemuth & Daniel Investments, LLP (Midway
Wholesale), subject to the terms and conditions of the agreement.
Section 2. That the City Clerk is hereby directed to file the original agreement and retain
according to the City of Salina Records Management Policy.
Section 3. That this resolution shall be in full force and effect from and after its adoption.
Adopted by the Board of Commissioners and signed by the Mayor this 15th day of October, 2012.
Norman M. Jennings, Mayor
(SEAL)
ATTEST:
Lieu Ann Elsey, CMC, City Clerk