Flippin Fabulous Transferee Agreement TRANSFEREE AGREEMENT
THIS TRANSFEREE AGREEMENT (this "Agreement"), is made and entered into this
i ""day of I'jccyt ii , 2023 (the"Effective Date")between and among the CITY OF SALINA,
KANSAS, a municipal corporation duly organized under the laws of the State of Kansas (the
"City"), and 125 N. SANTA FE, LLC, a Kansas limited liability company ("Transferee")
(collectively, the "Parties" and each a "Party"). SALINA 2020, INC., a Kansas corporation (the
"Master Developer")is joining this Agreement for the purposes of consenting to the transfer to the
Transferee as further described throughout the Agreement and for consenting to the rights and
benefits granted to Master Developer as described herein.
RECITALS:
A. City and Master Developer have entered into that certain Development Agreement
(the "Development Agreement") dated as of January 23, 2017, as amended by the First
Amendment to Development Agreement dated as of January 12,2018 and the Second Amendment
to Development Agreement dated as of November 5, 2018 (as amended, the "Development
Agreement") concerning development of a mixed-use project located generally within downtown
Salina, Kansas as more specifically described in Section 3.01 of the Development Agreement(the
"Project"). Capitalized terms which are not otherwise defined herein shall have the meanings
assigned to them in the Development Agreement.
B. Article IX of the Development Agreement provides for assignment by the City and
Master Developer of certain obligations, covenants, and agreements under the Development
Agreement to third parties. Accordingly, the City and the Master Developer desire to transfer
certain obligations, covenants, and agreements to Transferee in accordance with Article IX with
respect to the portion of the Project to be completed by the Transferee (the "Transferee Project")
as described in the Public Financing Application attached hereto as Exhibit A (the "Public
Financing Application"). A legal description and boundary map of the location of the Transferee
Project the ("Project Area") shall be included in the Public Financing Application.
C. The Parties desire to enter into this Agreement so that the Transferee shall
acknowledge, assume and agree to perform those obligations, covenants and agreements under the
Development Agreement (as well as additional terms described herein) as the same pertain to the
design, construction, completion and operation of the Transferee Project.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual
covenants and agreements herein contained,and other good and valuable consideration,the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Incorporation of Recitals. The Parties understand and agree that the Recitals set forth
above are hereby incorporated as though more fully set forth herein.
2. Definitions of Words and Terms. For all purposes of this Agreement, except as otherwise
provided or unless the context otherwise requires, the words and terms used in this
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Agreement shall have the meanings set forth in Section 1.01 of the Development
Agreement.
3. Term of Agreement. This Agreement shall commence upon the Effective Date and shall
terminate upon that date which is the earlier of(i)the last day of the CID Collection Period,
(ii) the date that the Transferee has been reimbursed for all Eligible Transferee Costs by
Public Finance Proceeds, or(iii)the date this Agreement is terminated pursuant to Section
6 or Section 14 herein(the "Term").
4. General Acknowledgement and Assumption. Transferee hereby acknowledges, assumes
and agrees to perform each and every obligation, covenant and agreement under the
Development Agreement, except as modified below, but only to the extent that the same
shall pertain to the design, construction, completion and operation of the Transferee
Project, each of which is hereby incorporated as though more fully set forth herein.
Transferee hereby understands and agrees that the City may enforce the same directly
against Transferee. Notwithstanding the foregoing, the description of the Transferee
Project shall be defined by the Public Financing Application attached hereto as Exhibit A
to this Agreement. Transferee acknowledges that it has received a copy of the Development
Agreement and any amendments thereto, and has reviewed the terms of same with counsel
of its own election.
5. Specific Acknowledgement and Assumption.
a. Development Agreement Provisions Assumed by Transferee. In connection with
the Transferee Project, Transferee specifically acknowledges, assumes and agrees
to perform the following obligations, covenants and agreements, set forth in the
Development Agreement, as modified in certain instances below:
i. All of the terms and conditions in Article I (Definitions and Rules of
Construction).
ii. All of the representations and warranties of the Master Developer made in
Article II. In addition, Transferee makes the following representations:
1. No Material Change. There has been no material adverse change in
the business, financial position,prospects or results of operations of
the Transferee which could affect the Transferee's ability to perform
its obligations pursuant to the Agreement.
2. Compliance with Laws. Transferee, to the best of its knowledge, is
in compliance with all valid laws, ordinances, orders, decrees,
decisions, rules, regulations and requirements of every duly
constituted governmental authority, commission and court
applicable to any of its affairs,business, operations as contemplated
by this Agreement and the Development Agreement.
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3. Construction Permits. Except for Permitted Subsequent Approvals,
all governmental permits and licenses required by applicable law to
construct, occupy and operate the Transferee Project have been
issued and are in full force and effect or, if the present stage of
development does not allow such issuance, the Transferee
reasonably believes, after due inquiry of the appropriate
governmental officials,that such permits and licenses will be issued
in a timely manner in order to permit the Transferee Project to be
constructed.
iii. All of the terms and conditions set forth in Article III, Article IV, Article
VI,Article VII,Article VIII, Article IX,as the same relate to the Transferee
Project and rights, duties and obligations of the Third Party Developer of
the Transferee Project.
iv. All of the terms and conditions in Article X (General Provisions).
b. Non-Exclusive. Each of the foregoing provisions is hereby incorporated by
reference and Transferee hereby understands and agrees that the City may enforce
the same against Transferee in connection with the Transferee Project. Further,the
Parties understand and agree that if and to the extent the various exhibits attached
to the Development Agreement are referenced in the obligations that are
acknowledged and assumed by the Transferee, such exhibits are hereby
incorporated by reference as though more fully set forth herein. Notwithstanding
the foregoing, the Transferee Project to be completed by the Transferee shall be
defined by the Public Financing Application attached hereto as Exhibit A to this
Agreement,which shall control with regard to description of the Transferee Project.
The Transferee acknowledges that the provisions of the Development Agreement
referenced in this Section are not exclusive of the provisions of the Development
Agreement assumed by Transferee in connection with the Transferee Project, and
that Transferee assumes all provisions of the Development Agreement applicable
to the Transferee and the Transferee Project regardless of specific inclusion within
this Section.
c. Provisions Specifically Not Assumed by Transferee. Notwithstanding anything set
forth herein which is seemingly to the contrary, the Parties hereby acknowledge
and agree that Transferee shall have no obligation to perform any of the obligations
under the following provisions, nor shall Transferee have any rights related to the
following provisions:
i. All of the terms and conditions set forth in the Development Agreement
regarding development, financing, and operation of(or otherwise applying
to) any other Project Component other than the Transferee Project.
ii. All of the terms and conditions set forth in Article V (STAR Bond
Issuance).
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6. Construction of Transferee Project. Transferee represents that it has constructed the
Transferee Project in a good and workmanlike manner in accordance with the terms of this
Agreement, the Development Agreement and the Public Financing Application attached
hereto as Exhibit A, which shall include the description of the Transferee Project, the
Project Schedule and the Project Budget. Upon reasonable advance notice, the Transferee
shall meet with the City to review and discuss the completed construction of the Transferee
Project in order to enable the City to determine that construction of the Transferee Project
has been performed and completed in accordance with this Agreement and the
Development Agreement. Upon such investigation and conclusion by the City that
Transferee has completed the Transferee Project in accordance with this Agreement and
the Development Agreement,the City shall issue a Certificate of Completion as defined in
Section 3.07 of the Development Agreement. Issuance of such Certificate of Completion
shall be conclusive evidence of the satisfaction of Transferee's requirement to complete
the Transferee Project in accordance with this Agreement and the Development
Agreement. If the City determines that Transferee has not completed the Transferee Project
in accordance with this Agreement and the Development Agreement,the City shall provide
written reasons for such conclusion to Transferee. Transferee shall then promptly
undertake work to satisfy the conditions which would permit the City to issue a Certificate
of Completion within the reasonable discretion of the City.
7. Public Finance Proceeds.
a. Conditions Precedent to Access Public Finance Proceeds. Prior to access to Public
Finance Proceeds for purposes of partially financing the Transferee Project and the
right to submit a Certification of Expenditures for reimbursement for Eligible
Transferee Costs (as defined below) through Public Finance Proceeds pursuant to
the provisions of the Development Agreement, Transferee must have obtained a
Certificate of Completion for the Transferee Project as defined in Section 3.07 of
the Development Agreement(the "Public Finance Access Condition"). Following
Transferee's satisfaction of the Public Finance Access Condition, City will provide
Transferee access to Downtown CID Proceeds up to a maximum of$178,121 from
the Existing Retail Improvements CID Fund (the "Public Financing Cap"). The
calculation of the Public Financing Cap is inclusive of both Eligible Transferee
Costs expended through development and completion of the Transferee Project and
a straight-line calculation of amortized interest at a rate of 5% per annum on all
Eligible Transferee Costs.
b. Certification of Expenditures. All Downtown CID Proceeds shall be used by
Transferee solely for financing those costs of the Transferee Project identified in
the column labeled CID Proceeds in the Project Budget (collectively, the "Eligible
Transferee Costs"). Such Eligible Transferee Costs shall in all cases be
reimbursable only subject to and in accordance with the terms of the Development
Agreement, this Agreement, the Bond Trust Indenture, and Kansas law. In order
to access the Downtown CID Proceeds allocated for reimbursement of Eligible
Transferee Costs, Transferee shall submit a Certification of Expenditures to the
City in a manner consistent with Article VI of the Development Agreement.
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c. Pay-Go Reimbursement. Transferee hereby acknowledges and agrees that Public
Finance Proceeds shall be available to Transferee on a pay-as-you-go basis in
accordance with the terms of the Development Agreement and that City and Master
Developer do not guarantee any specific amount of Public Finance Proceeds will
actually be available to Transferee for reimbursement of Eligible Transferee Costs.
Further, Transferee hereby acknowledges and agrees it shall not commence or join
any cause of action or other legal recourse under this Agreement,the Development
Agreement, or in law or equity against City or Master Developer (and
acknowledges that it possesses no such cause of action or legal recourse) in the
event Transferee receives reimbursement for Eligible Transferee Costs through
Public Finance Proceeds in an amount less than Transferee's Public Financing Cap.
All costs of developing the Transferee Project, including Eligible Transferee Costs,
in excess of the Public Finance Proceeds actually received by Transferee shall be
the sole responsibility of Transferee.
d. Line Items. The Parties agree that increases in line item amounts in the columns
labeled "CID Proceeds" in the Project Budget may be made by Transferee as long
as(a)no such increase represents more than a fifteen percent(15%)change per line
item, and (b) Transferee provides the City Manager's office with prior written
notice of each such change. No increase will be effective without such notice to
the City Manager's office and Transferee shall submit a modified Project Budget
reflecting such change. In the event the Developer wants to increase one or more
such CID line items in the Project Budget in excess of fifteen (15%) per line item,
then any such modifications may be requested by Transferee in writing and must
be approved by the City Manager's office in its reasonable discretion. However,
no such proposed increase shall be permitted within any category that no amount,
"-" or $0.00 is included in the "CID Proceeds" column in the Project Budget.
Notwithstanding the foregoing, no increase to any particular line item or line items
shall result in cumulative reimbursement to Transferee of Public Finance Proceeds
in an amount exceeding Transferee's Public Financing Cap or in excess of the
Public Finance Limitation(as defined below).
e. Public Finance Proceeds Annual Allotment. Pursuant to the terms of that certain
Supplemental Agreement,Transferee's Public Finance Proceeds Annual Allotment
from the Existing Retail Improvements CID Fund is $9,375 of Downtown CID
Proceeds. Such Public Finance Proceeds Annual Allotment shall only be
reimbursed to the Transferee in accordance with the terms of this Agreement, the
Development Agreement, and the Supplemental Agreement. For purposes of
clarification, in no event shall interest accrue upon certified Eligible Transferee
Costs, and in event of a shortfall in Downtown CID Proceeds available to fund
Transferee's Public Finance Proceeds Annual Allotment in any given year of the
Term no interest shall be added to or compound upon any deficit in funding
Transferee's Public Finance Proceeds Annual Allotment in such year.
f. Public Finance Limitation.
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i. In addition to the foregoing conditions applicable to the disbursement of
Downtown CID Proceeds to Transferee, the ratio of Downtown CID
Proceeds reimbursed to Transferee for Eligible Transferee Costs to the
amount of the actual costs expended by Transferee to complete the
Transferee Project ("Total Project Costs") shall not exceed the ratio
between Eligible Transferee Costs to Total Project Costs shown on the
Project Budget within Exhibit A,plus five percent(5%)(which in no event,
however, shall neither exceed fifty percent(50%)of Total Project Costs nor
permit reimbursement of Downtown CID Proceeds in excess of the Public
Financing Cap) (the "Public Finance Limitation"). The remainder of all
Total Project Costs not reimbursed to Transferee as Eligible Transferee
Costs shall be paid by Transferee through a combination of private debt and
equity (the "Private Contribution").
ii. The Certification of Expenditures submitted by Transferee shall include
evidence of payment for all Total Project Costs paid by Transferee in
completing the Transferee Project, including those costs paid with the
Private Contribution which shall not be reimbursed as Eligible Transferee
Costs, in order to satisfy compliance with the Public Finance Limitation. In
the event the ratio between Transferee's Public Financing Cap and the Total
Project Costs certified in the Certification of Expenditures exceeds the
Public Finance Limitation, Transferee's Public Financing Cap shall be
reduced pro rata so that the ratio of such amended Public Financing Cap to
Total Project Costs equals the Public Finance Limitation. The reduction to
Transferee's total Public Financing Cap pursuant to this paragraph shall not
alter Transferee's Public Finance Proceeds Annual Allotment.
8. Insurance. Each Third Party Developer shall keep the Transferee Project continuously
insured against such risks and in such amounts, with such deductible provisions as are
customary in connection with the operation of facilities of the type and size comparable to
the Transferee Project.
9. Indemnification of City and Master Developer. Transferee agrees to indemnify and hold
the City and Master Developer, and the employees, agents, officers, officials and
independent contractors and consultants of the City and the Master Developer(collectively,
the "Indemnified Parties") harmless from and against any and all suits, claims, costs of
defense, damages, injuries, liabilities, judgments, costs and/or expenses, including court
costs and reasonable attorneys' fees, ("Losses") resulting from, arising out of, or in any
way connected with:
a. Transferee's actions and undertaking in implementation of the Transferee Project,
the Development Agreement, this Agreement, and the CID Petition;
b. the negligence or willful misconduct of Transferee, its employees, agents or
independent contractors, consultants, affiliates, and any other party related to
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Transferee or under its control, in connection with the management, design,
development, redevelopment and construction of the Transferee Project; and
c. any delay or expense resulting from any litigation filed against Transferee by any
member or shareholder of Transferee,any prospective investor,prospective partner
or joint venture partner, lender, co-proposer, architect, contractor, consultant or
other vendor.
d. This Section shall not apply to Losses to the extent that such Losses arise from the
willful misconduct or gross negligence of the City or Master Developer or the
officers, employees or agents of City or Master Developer. This Section includes,
but is not limited to,any repair,cleanup,remediation,detoxification,or preparation
and implementation of any removal, remediation, response, closure or other plan
(regardless of whether undertaken due to governmental action) concerning any
hazardous substance or hazardous wastes including petroleum and its fractions as
defined in (i) the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"; 42 U.S.C. Section 9601, et seq.), (ii) the Resource
Conservation and Recovery Act("RCRA";42 U.S.C. Section 6901 et seq.)and(iii)
Article 34,Chapter 65,K.S.A. and all amendments thereto,at any place where such
Transferee owns or has control of real property pursuant to any of Transferee's
activities under the Development Agreement and this Agreement. The foregoing
indemnity is intended to operate as an agreement pursuant to Section 107(e) of
CERCLA to assure, protect, hold harmless and indemnify City and Master
Developer from liability.
10. Payment of Taxes and Liens. Transferee hereby agrees as follows:
a. Payment of Property Taxes. During the Term of this Agreement, Transferee and
its respective Affiliates shall pay when due all real estate taxes and assessments on
the property it owns within the Districts. However,the obligation to pay real estate
taxes and assessments on such property shall not be a personal obligation of the
Transferee and its respective Affiliates but is subject to the same provisions related
to enforcement and collection of real estate taxes and assessments under laws of the
State. In the event that the Transferee or its Affiliates shall fail to pay all such
applicable real estate taxes and assessments after any notice and cure periods set
forth in Section 8.02 of the Development Agreement, the Transferee understands
and agrees that, among other things, the City may (i) terminate financing of the
Transferee Project through Public Finance Proceeds, (ii) suspend all
reimbursements of Eligible Transferee Costs through Public Finance Proceeds
during any time that such real estate taxes and assessments on the property owned
by Transferee and its respective affiliates within the Districts remain unpaid or(iii)
exercise any other remedies under this Agreement and/or the Development
Agreement. Notwithstanding the foregoing, nothing contained in this Agreement
shall prohibit the Transferee and its respective affiliates from contesting the
assessed value of the properties, improvements or the taxes thereon in good faith
by appropriate proceedings; provided however that each such party shall pay any
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and all amounts that are contested under protest while any such proceedings are
pending. The Transferee and its respective affiliates shall promptly notify the City
in writing of a protest of real estate taxes or valuation of property owned by the
Transferee or its respective affiliates within the Districts.
b. Liens. Transferee and its respective Affiliates further agree that no mechanics' or
other liens shall be established or remain against the Transferee Project or the
property within the Districts, or the funds in connection with any of the Transferee
Project, for labor or materials procured by Transferee and furnished in connection
with any acquisition,construction,additions,modifications,improvements,repairs,
renewals or replacements so made. However, Transferee shall not be in default if
mechanics' or other liens are filed or established and the Transferee and its
respective Affiliates contests in good faith said mechanics' liens and in such event
may permit the items so contested to remain undischarged and unsatisfied during
the period of such contest and any appeal therefrom.
c. Sales Tax Collection. If Transferee is engaged in the business of selling tangible
personal property at retail or rendering or furnishing services taxable pursuant to
the provisions of the Kansas retailers' sales tax act and amendments thereto(K.S.A.
79-3601 et seq.) within any of the Districts, Transferee shall collect, and make
returns of, all taxes levied under the Kansas retailers' sales tax act and any CID
Sales Tax imposed within the District in which Transferee is engaged in such
business, all in the manner and at the times prescribed by applicable law. The
Transferee shall be obligated to provide the City, along with its submission to the
Kansas Department of Revenue, copies of the monthly sales tax returns for
Transferee's businesses within the Districts, if any, for which Transferee is
obligated to submit sales tax returns to the Kansas Department of Revenue. To the
extent it may legally do so, information obtained pursuant to this Section shall be
kept confidential by the City in accordance with Applicable Law and Requirements,
including but not limited to K.S.A. 79-3657.
11. Damage, Destruction or Condemnation.
a. In the event of damage to or destruction of any portion of the Transferee Project
(other than the public roads, public right of way and public lands within the
Transferee Project) resulting from fire or other casualty during the Term (a
"Casualty"), or in the event any portion of the Project Area is condemned or taken
for any public or quasi-public use or title thereto is found to be deficient during the
Term,the net proceeds of any insurance relating to such damage or destruction,the
net proceeds of such condemnation or taking or the net proceeds of any realization
on title insurance shall be paid into, and used in accordance with a construction
escrow agreement reasonably satisfactory to the City, Transferee, and Transferee's
construction or permanent lender("Casualty Escrow").
b. If, at any time during the Term, the Transferee Project or any part thereof(other
than the public roads,public right of way and public lands within the Project) shall
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be damaged or destroyed by a Casualty (the "Damaged Facilities"), Transferee, at
its sole cost and expense, shall commence and thereafter proceed as promptly as
possible to repair, restore and replace the Damaged Facilities as nearly as possible
to their condition immediately prior to the Casualty and shall be entitled to draw
upon the Casualty Escrow for payment of said costs.
c. If at any time during the Term, title to the whole or substantially all of the portion
of the Project Area owned by Transferee (or its Affiliate) shall be taken in
condemnation proceedings or by right of eminent domain, Transferee, at its sole
discretion, may terminate this Agreement as of the date of such taking. For
purposes of this Section, "substantially all of the Project Area" shall be deemed to
have been taken if the City and Transferee, each acting reasonably and in good
faith, determine that the untaken portion of the Project Area cannot be practically
and economically used by Transferee for the purposes and at the times
contemplated by this Agreement.
d. In the event of condemnation of less than the whole or substantially all of the
portion of the Project Area owned by the Transferee (or its Affiliate) during the
Term, Transferee, at its sole cost and expense, shall commence and thereafter
proceed as promptly as possible to repair, restore and replace the remaining part of
the Transferee Project, as nearly as possible, to its former condition, and shall be
entitled to draw upon the Casualty Escrow for payment of said costs.
e. Nothing in this Section will require the Transferee to expend funds in excess of the
Casualty Escrow or to perform any obligation in addition to those obligations
contained in the Development Agreement or in this Agreement.
12. Rights of Access and Inspection.
a. Representatives of the City shall have the right of access to the Transferee Project,
without charges or fees, at normal construction hours during the period of
construction, for the purpose of ensuring compliance with this Agreement,
including, but not limited to, the inspection of the work being performed in
constructing, renovating, improving, equipping, repairing and installing the
Transferee Project, so long as they comply with all safety rules. Except in case of
emergency, prior to any such access, such representatives of the City will check in
with the on-site manager. Such representatives of the City shall carry proper
identification, shall insure their own safety, assuming the risk of injury, and shall
not interfere with the construction activity.
b. The Transferee shall maintain complete, accurate, and clearly identifiable records
with respect to the Transferee Project, Eligible Transferee Costs and any other
documents created pursuant to, or arising under,this Agreement, including,but not
limited to, as applicable: all general contractor's sworn statements, general
contracts, subcontracts, material purchase orders,waivers of lien, and paid receipts
and invoices(collectively,the"Records"). The Records shall be maintained during
the term of this Agreement, and for a period of two (2) years thereafter (the
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"Retention Period"); provided, however, that if any litigation, claim or audit is
commenced prior to the expiration of the Retention Period, then the Retention
Period shall be extended until all litigation, claims or audit findings have been
completely terminated or resolved, without right of further appeal.
c. During the Retention Period, Transferee further agrees that the City, with
reasonable advance notice and during normal business hours, shall have the right
and authority to review, inspect, audit, and copy, from time to time, all of
Transferee's Records as pertinent to the purposes of, or to ensure compliance with,
this Agreement. In addition, Transferee agrees to provide the City with copies of
such Records,upon request. The City shall periodically report the findings of such
inspections to Master Developer in writing; provided, however, that nothing
contained herein shall create an affirmative obligation of the Master Developer to
perform any inspections of the Transferee Project or evaluate the adequacy of the
construction of the Transferee Project.
13. Assignment and Transfer of this Agreement. Assignment and transfer of any or all rights,
duties or obligations under this Agreement shall be governed by Section 9.03 of the
Development Agreement, which is expressly incorporated herein.
14. Defaults and Remedies. Events of Default and remedies therefore shall be governed by
Article VIII of the Development Agreement, which is expressly incorporated herein.
Except as otherwise expressly stated in this Agreement or the Development Agreement,
the rights and remedies of the Parties are cumulative, and the exercise by a party of one or
more of such rights or remedies under this Agreement or the Development Agreement
(pursuant to Section 14 herein) shall not preclude the exercise by it, at the same or different
times, of any other rights or remedies for the same default or any other default by the other
party.
15. Release of Master Developer. To the extent that Transferee has assumed any obligations,
terms or conditions of the Master Developer in connection with the Transferee Project
under the Development Agreement pursuant to execution of this Agreement, the City
hereby specifically agrees to release the Master Developer from such obligations, terms
and conditions.
16. Notice. Notice to City and Master Developer shall be as described in the Development
Agreement. Notice to Transferee shall be made to the following:
To the Transferee:
125 N. SANTA FE, LLC
Attention: Karie Bogart and Lisa Holmes
125 N. Santa Fe Avenue
Salina, Kansas 67401
Email: flippingfabuloussalina@gmail.com
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17. Time of the Essence. Time is of the essence of this Agreement. The Parties will make
every reasonable effort to expedite the subject matters hereof and acknowledge that the
successful performance of this Agreement requires their continued cooperation.
18. Required Disclosures. Each Party shall immediately notify the other Party of the
occurrence of any material event which would cause any of the information furnished to
other Party (by such furnishing Party) in connection with the matters covered in this
Agreement to contain any untrue statement of any material fact or to omit to state any
material fact required to be stated therein or necessary to make any statement made therein,
in the light of the circumstances under which it was made, not misleading.
19. Non-Binding Mediation. If a dispute or controversy arises between the City, Master
Developer, or Transferee under this Agreement, then any Party shall be entitled to request
non-binding mediation, and the City, Master Developer, and Transferee agree to
participate, in good faith, in any such mediation requested by any other Party. Any request
for mediation pursuant to this Section shall be made in writing and delivered to the other
Parties within thirty (30) days of the action or decision giving rise to the dispute or
controversy. The mediation shall occur in Salina, Kansas, and the cost of any such
mediation shall be divided equally between the Parties.
20. Tax Implications. The Transferee acknowledges and represents that (1) neither the City
nor Master Developer,nor any of their officials, employees, consultants,attorneys or other
agents has provided to the Transferee any advice regarding the federal or state income tax
implications or consequences of this Agreement and the transactions contemplated hereby,
and (2)the Transferee is relying solely upon its own tax advisors in this regard.
21. Survival. Notwithstanding the termination of this Agreement, Transferee's obligations of
insurance and indemnification set out herein shall survive the termination of this
Agreement to the extent that any incident giving rise to a claim, suit,judgment or demand
occurred during Term.
22. Kansas Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Kansas.
23. Counterparts. This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same Agreement.
24. Recordation of Agreement. The Parties agree to execute and deliver a memorandum of
this Agreement in proper form for recording in the real property records of Saline County,
Kansas, upon the request of a Party.
25. Cash Basis and Budget Laws. The Parties acknowledge and agree that the ability of the
City to enter into and perform certain financial obligations pursuant to this Agreement are
subject to the K.S.A. 10-1101 et seq. and K.S.A. 79-2935 et seq.
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26. Electronic Storage. The Parties agree that the transactions described herein may be
conducted and related documents may be received, sent or stored by electronic means.
Copies,telecopies,facsimiles,electronic files, and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original
documents for all purposes, including the filing of any claim, action or suit in the
appropriate court of law.
27. Master Developer Recusal. Transferee acknowledges that Section 3.10 of the
Development Agreement prohibits the Master Developer from making or participating in
the making of any Transferee Agreement in which the Master Developer or any of its
directors,officers,or shareholders has a substantial interest(as defined in K.S.A. 75-4301 a)
in the Third Party Developer entering into such Transferee Agreement. In such event, the
City and the Third Party Developer of such Project Component shall be the only parties
which enter into such Transferee Agreement. Any Transferee Agreement the Master
Developer makes or participates in making in violation of Section 3.10 of the Development
Agreement may be deemed void in part or whole at the reasonable discretion of the City.
28. Entire Agreement. This Agreement sets forth the entire agreement between the Parties in
regard to the subject matter hereof and supersedes any and all prior written or oral
agreements between the Parties, if any, in regard to the subject matter hereof.
Notwithstanding anything else contained herein to the contrary, nothing contained herein
nor in any other document shall be construed to provide Transferee rights as a third party
beneficiary to any other document to which City and/or Master Developer is a party or has
approved, including but not limited to the Development Agreement, Supplemental
Agreement, TIF Project Plan, and CID Petition. Nothing herein contained is intended or
shall be construed in any way to create or establish the relationship of partners or a joint
venture between Transferee and the City or the Developer.
[Remainder of page intentionally left blank. Signature pages immediately follow.]
12
77670042.4
91719430.2
I
IN WITNESS WHEREOF, the City has duly executed this Agreement pursuant to all
requisite authorizations as of the date first above written.
CITY OF SALINA, KANSAS
* /4.1, Litialtz4,_
-ST:11....
..44.1.---4.„'
! Li_ : s"� i William Longbine1 ayor
' 1070
' �:
T
IN WITNESS WHEREOF, the Transferee has duly executed this Agreement pursuant to all
requisite authorizations as of the date first above written.
TRANSFEREE:
125 N. SANTA FE, LLC, a
Kansas limited liability company
By: /i( CrImAO
Printed Name: L.co 40 r(1 S
Title: Ok,l) Qtr
Date: 3- - 0'1�
STATE OF Kansas )
ss.
COUNTY OF I I li f' )
On this 1 '1 day of VklA r(,k , 202/, before me personally appeared
t i 41.1044 to me personally known, who being by me duly sworn did say that he/she is the
0)Wn(Y of 125 N. SANTA FE, LLC, a Kansas limited liability company,
and that said instrument was signed and delivered on behalf of said limited liability company and
acknowledged to me that he/she executed the same as the free act and deed of said limited liability
company.
In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day
and year first above written.
MARISSAC. PATTON Notary Public
anasMNotary Publ.°-State of Kansas
My
y hppt.Expires 2 2-
Printed Name: M A rl'S P6`{-1-O✓\
My Commission Expires:
2 /26
77670042.4
91719430.2
r
JOINDER OF MASTER DEVELOPER
IN WITNESS WHEREOF,the Master Developer has duly joined this Agreement pursuant
to all requisite authorizations as of the date first above written for the purposes of consenting to
the transfer to the Transferee as further described throughout the Agreement and for consenting to
the rights and benefits granted to Master Developer as described herein.
MASTER DEVELOPER:
SALINA2020, INC.,
a Kansas corporation
By: 6/(-9
Trace
Trace Walker, .Se_c
STATE OF KANSAS )
) ss.
COUNTY OF JU'e, )
X24
On this 12 day of i'Vlarc t , z2022-3., before me personally appeared Trace
Walker, to me personally known, who being by me duly sworn did say that he is the
5kre}ary/17e6s1,t&of Salina2020, Inc., and that said instrument was signed and delivered on behalf
of said corporation and acknowledged to me that he executed the same as the free act and deed of
said corporation.
In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day
and year first above written. �
SHANDI L. WICKS StlJitJ 0
> Notary Public- State of Kansas NOTARY PUBLIC
MyAppt.Expires y-•27a.2^2
My Commission Expires:
291-2402
[SEAL]
77670042.4
91719430.2
EXHIBIT A TO TRANSFEREE AGREEMENT
PUBLIC FINANCING APPLICATION
[ATTACH PUBLIC FINANCING APPLICATION]
77670042.4
91719430.2
vVw
Business Plan
Salina 2020 CID Funds
Project Name:
125 N.Santa Fe, LLC
Address(es):
125 N.Santa Fe, 1251/2 N. Santa Fe, 127 N. Santa Fe,Salina, KS 67401
Applicants:
Karie Bogart, 1102 Highland Ave,Salina, KS(785-342-9965)
Lisa Holmes, 2321 Hillside Ave,Salina, KS (785-577-4283_)
flippingfabuloussalina@gmail.com
On October 12, 2022, 125 N. Santa Fe, LLC purchased the property listed above, documented at the
Saline County Parcel Search as 125 N. Santa Fe.
History of the building:
The front of the building is beautiful, with an artistic flair. It is located right in the middle of the
downtown district, within walking distance from the Salina Fieldhouse,The Alley, KU School of
Medicine,and numerous locally owned small businesses. I recently transitioned off of the Salina
Downtown Board of Directors, so my passion for downtown has been strong since 2015,when we
started in a small 500 square foot retail space 3 blocks South of our current location,where we've been
for 7 years. The living structure of the upstairs apartments/studio area that we hope to accomplish is
unique to our area -we've seen this structure work very well in college towns like Manhattan and
Lawrence, so we're excited to implement it in Salina as local colleges thrive and expand.
The Kansas Historic Resource Inventory states: A two-story brick commercial building first appears at
125-127 N Santa Fe on the 1911 Sanborn map with two stores (separated by a frame partition) with a
central stair leading from the street to the second story. The north portion; (127) housed a music store;
a dry goods store was in the south portion (125). In 1917,a drug store was at 127.Two unidentified
stores were located in 125& 127 in 1926, 1931, & 1947 (the last year of Sanborn coverage for Salina).At
some point later on, 127 N.Santa Fe housed the Shiffert Studio,which housed beautiful portrait art&
photography. Later,the building was utilized for Heyward's Dry Goods Company,which marked an
epoch in the mercantile life of Salina. I loved exploring the history of our building-it made me so
grateful we can be a part of the history of Salina, as well as part of its future.
Proposed Project(s)
125 N.Santa Fe
This space has been occupied by variations of Atlas Optical since the 1980s. Originally Howard's Optical,
owned by Howard Nordyke,the business is currently owned by Don Davis. Don has a devoted clientele,
and we would like to continue renting this space to him.The rear portion of that building does have an
office, and it is currently rented out by a local therapist.The property will need remodeled at some
point, as there have not been any renovations since the Nordykes purchased it in the 80's.
125 Y2 N.Santa Fe
Over the years,this has been a diverse space. It is reported that law offices occupied the space in the
1980s,after a family resided there for many years. Over the years, it's been rented to various individual
tenants,and over the years, it deteriorated aesthetically& mechanically.The previous owners did
minimal maintenance, allowing the tenants to run down the space. We have cleaned up the space and it
is currently rented out to a local shared living group. We have negotiated a 3-5 year lease with the
current tenants.
127 N.Santa Fe
In this space,we have relocated our existing business, Flipping Fabulous, from 104 N.Santa Fe, Suite A,
where we have been since 2015. Our business model has evolved over the years,from originally offering
used, refinished furniture,to what our business is today-a DIY superstore.Our business is unique,
offering products that are$2.99 up to$1599.We have a variety of revenue streams:
1. Pre-owned furniture
2. New,finished furniture
3. New,fully customizable unfinished furniture
4. DIY supplies for those who want to finish their own furniture/crafts
5.Artist supplies that are not sold in big box stores
6. Home decor
7.Vendor spaces
8.The Makery—this is the space that we are excited about, as it will bring artisans downtown to offer
their own workshops. Local artisans will have the opportunity to rent our workshop area at a low cost,
offering their craft—macrame,floral centerpieces, canvas art,technique art, charcuterie board
offerings, candle making, etc..This is a new branch of our business that will increase our revenue and
sales tax contributions. We have high expectations for this area. During times there are no workshops,
we will fill the area with local artisans. Over the last 6 months,we have steadily improved the space,
which is now complete and will open the last week of June (2023). Currently,we have 9 local artist who
have their craft throughout our store, and we will look to add 2-3 additional.We also offer several
Kansas made lines, including a candle line from Wichita, apothecary matches from Hays, signs from
McPherson, and we will be adding a candied food item line from Centerville, Kansas.
9.A fun fact about our business is that we are the second largest Redesign with Prima retailers in the
world. Our ecommerce sales have allowed us to be able to purchase the property. Prima Marketing
recently did a commercial featuring our store, and they have offered us a franchise opportunity. Our
Etsy store is in the top 1%of all Etsy stores worldwide.
Renovations& mechanical upgrades already completed as of 6/18/23:
1. HVAC system for 1251/2 & 127 N.Santa Fe. These units are currently not functional. The systems
were installed June 2023.
2. The property at 127 was completely renovated—new flooring, doors, awnings, drywall, paint,
electrical and lighting, as well as opening an area in the rear of the building to allow for freight
deliveries.
3. Plumbing upgrades to 1251/2 N.Santa Fe & 127 N. Santa Fe (127 did not have working plumbing
when we purchased the building, although the inspection did not indicate this).
Project Schedule
127 N. Santa Fe: We have just finished the renovation of this property June, 2023.The rear portion of
the renovation will be managed by Montey Construction, and he has demoed the rear of the property,
creating a wider freight loading area with a functional door.The building had some hidden surprises that
we had to overcome. For example, when they added onto the original structure, they left the upstairs
windows and simply put 1970's wall paneling nailed over it.We continuously modified our initial floor
plan—and we are thrilled to be (mostly) done! We have been downtown for over 8 years, which means
we've weathered a LOT of difficult times—from not having a front entrance for a year due to
construction, to being open by appointment due to COVID restrictions.We are dedicated to our
beautiful,thriving downtown. Our projections for our new location will offer almost 3x the sales tax
generating showroom of our existing space.
From our purchase date (October 12)to November 25th,we worked day in and day out (literally)to
clean up the dilapidated space. We did all of the cosmetic work ourselves—from taking down a faux
beamed ceiling to pulling out 30 year old carpet (1 out of 5 stars, I do not recommend)—and we will
continue to improve the space as we are able.We have invested thousands thus far and would love to
improve the property even more; CID funds would allow us continue to improve the property,
generating traffic and sales to the downtown area. People are constantly stopping in to tell us how
happy they are that someone "finally cleaned up the space." Prior to our renovation, the property had a
bullet hole through a window, deceased animals inside, 4 trailers full of junk, and had been vacant
almost a decade. So far, we have 3 days of our Makery rented out, creating excitement and traffic to
downtown.We have already conducted 5 children's art workshops, an adult sorority workshop, and
several private workshops in the area. We are thrilled with the new faces we see every day and excited
to be part of a vibrant,thriving downtown.
At this point, all construction is completed. We will continue to make improvements and renovations as
tenants cycle through the property as needed.
Property Details:
125 & 127 N. Santa Fe, Salina, KS
Legal Desc:
ORIGINAL TOWN OF SALINA,S13,T14, R3, Lot 96,SANTA FE AVE
6000 sq ft
Current Appraised Value:
Land: $44,400, Building: $318,200,Total: $362,600 (2022)
Project Costs:
Building Acquisition Cost:$362,000
Plumbing Estimated Costs: $3,000
Construction Montey Constuction: $8,000
HVAC Replacements for entire property: $29,539
Electrical safety/rewiring/lighting: $25,000
Drywall: $6,000
Contract construction labor: $15,000
Awnings: $9,859
Interior Painting& Flooring: $9,300
Door Renovation/Repairs: $8,900
Total costs:$476,598
Breakdown
125 N. Santa Fe, LLC-$357,448
Existing Business CID at 25%-$119,150
Funds already invested in the property:$113,998 as of application submission, not including the
acquisition cost of the property.
We are committed to maintaining sales tax generating tenants in both 125 N.Santa Fe&127 N.Santa
Fe for the duration of our ownership of the property.
How the CID or TIF funding will increase sales tax generating activity for this property:
• One goal for The Makery, which is the mezzanine located inside Flipping Fabulous (127 side) is
to have an open area for customers to shop Kansas(and surrounding states) hand crafted items,
host workshops, and offer a space for local artisans the opportunity to utilize for classes.
• To date,we have hosted 3 local artisans for short workshops. We aren't advertising the space
due to the confinements the unfinished portions of the space present. We are excited about the
unique, organic traffic these 3 pop up events have created. We have tracked the number of
those customers who mentioned they had not been downtown "lately" and were amazed at
how"cool" it had become. Specifically, it brought new customers to our store,which is our main
goal.
• One of our retail lines has offered us the opportunity to host a large scale, national series of
workshops in our store. We have attended several of these workshops in their new space in
Temecula, California,to learn the model they have had great success with.
• The rear of the mezzanine will be utilized by small, Kansas based businesses to host their items.
In the past year, we have shifted our purchasing patterns to include Kansas made items,which
local customers and Salina natives seem to love.We currently have two nationally recognized,
Kansas made products in our store (Nectar Republic candles and bath products from Wichita &
Made Market Matches from Hays), and are eager to expand that apothecary type area.
• Projected Revenue:
The
Makery Gross Revenue
Year Brick&Mortar Website Etsy Workshop Flipping Fabulous
2023 106,250.00 104,949.00 356,802.00 1,240.00 569,241.00
2024 132,812.50 115,443.90 392,482.20 1,240.00 641,978.60
$ $ $ $ $
2025 166,015.63 126,988.29 431,730.42 1,240.00 725,974.34
Basis for these projections:
• Brick& Mortar: We anticipate a 25% increase in sales for our Brick&Mortar year to year, based
on previous years revenue increases, as well as a substantial increase in square footage.At our
previous location,we operated on approximately 1200-1400 usable square footage for our sales
floor.The new property allows for a sales floor of approximately 2700 square foot and a 1200
square foot lofted mezzanine when all construction is complete.This almost triples our available
space (we occupy approximately 300 sq ft for work space and shipping space).
• Website: Our website is a little trickier to project, because we rapidly grew the first year.
Projections are 10%increase from year to year, based on 8% increase 2020-2021, and 14%
increase from 2021-2022.We have seen an increase of furniture items purchased from our
website; this is largely due to customers coming in to see an item, then going home, discussing
it, and then checking out online.
• Etsy: Our gross sales this year on Etsy have increased 30%, and I would attribute this to a larger
marketing budget on that platform. Etsy kind of forced our hand in this area, but it has worked
out as it should.We project a 10%increase year to year on this platform, as our supply lines
expand their portfolio.This platform does not generate much local sales tax, however,what it
does is increase the amount of capital we have to contribute to improving our brick& mortar
both cosmetically and structurally, expand product lines, &offer artisan workshops,just to
name a few.
• The Makery:This will occupy the mezzanine area.This projection is based on workshops&
spaces rented to local artisans.This does not account for the additional retail products we will
be able to offer in this extra 1200 square foot, or the sales tax generated from the customers
who shop before, during and after workshops,or who come in with a coffee from Ad Astra or a
pizza box from Blue Sky,where they have eaten prior to the workshop (or after!). We have been
thrilled with the number of customers who come in specifically for our jewelry pop up vendor
who have"made a day of it" and come in with bags from downtown boutiques and to go boxes
from downtown restaurants. For our cookie decorating workshop, 5 of the 12 attendees were a
group who went to Martinelli's prior to the workshop.This perfectly illustrates our goal of
contributing, both directly and indirectly,to a vibrant, prosperous downtown.
Financing Breakdown
First Bank is open to financing a portion of renovations and construction assuming other contributions
are obtained. Funding sources:
1. $38,250 of E-Community Loan Funds at 4.00% interest through Project Open
2. $5,000 grant through Project Open Business Development Grant
3. $6,750 through the Patterson Family Grant, administered by Network Kansas
4. $9,484 Downtown Façade Grant through Salina Downtown
5. $50,000 loan through South Central Kansas Economic Development's Small Business Association
of Kansas program
6. $252,800 loan, 15 year term, 6.25% interest rate through First Bank Kansas. First Bank Kansas is
also open to additional construction funds with the provision we secure partial funding from
outside sources—CID funds, etc.
7. Private revenue streams—our personal savings,family contributions
Managing Architect&Construction Partner
Montey Construction is providing small project management for most of the renovations. Hutton
Construction assisted with architectural renderings.
Market Research& Feasibility
The DIY market experienced substantial growth during the COVID pandemic. While other markets
plummeted, we were extremely fortunate to experience great growth. We took that opportunity to re-
invest that revenue back into our business, which catapulted us to the top of the arts commerce
community. Recently, we were approached by a new, up and coming company out of the United
Kingdom to be their sole U.S. distributor, referring to us as a "recognized, reputable staple in the
industry." We are a large retailer of Redesign with Prima —a multimillion dollar leader of DIY supplies
and artists-worldwide and have been asked to be a Midwest pilot of their Prima Marketing store, which
a larger space will help us accommodate. We have been nationally recognized in furniture competitions
(General Finishes) &featured on numerous websites, including feature photos in Flea Market Magazine.
We have grown year after year, since 2015.We continue to learn and expand our network, attending
conferences in and outside of the United States, listening to advice &constructive feedback, while
working diligently to integrate and evolve our business model to be sustainable in economic highs and
lows.
Budget Breakdown
Activity 125 N. Santa Fe, CID Fund Contribution Total
LLC Contribution at 25%funding granted
Building Acquisition Cost $271,500 $90,500 $362,000
Plumbing Costs $3,000 $750 $2,250
Construction $6,000 $2,000 $8,000
HVAC Replacements for $22,154 $4,431 $29,539
entire property
Awnings (125 N. & 127 N.) $7,395 $2,464 $9,859
Electrical $18,750 $6,250 $25,000
safety/rewiring/lighting 127
N.Santa Fe—D&W Electric
Interior Painting and $7,200 $2,400 $9,300
Flooring (127 N.)
Door Renovation/Repairs: $6,675 $2,225 $8,900
(127 N.)
Drywall (127 N.) $4,500 $1,500 $6,000
Contract construction labor $11,250 $3,750 $15,000
(127 N.)
Photoes ror N.f 125% Santa Fe(Loft)property upon acquisition &now
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