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HomeMy WebLinkAboutC17-153 The Conservation FundOFFICE OF THE BOARD OF COMMISSIONERS 976-328-8665 FAX: 976-328-8629 eag lead m i n Cal eag I ecou nty. u s www.eaglecounty.us May 9, 2017 Mr. Thomas T. Macy Ms. Christine Quinlan The Conservation Fund 1942 Broadway, Suite 323 Boulder, CO 80302 f�GL-ECOUNTY Re: Fee Agreement for Purchase of Hardscrabble Ranch Dear Tom and Christine: JILL H. RYAN KATHY CHANDLER -HENRY JEANNE MCQUEENEY Eagle County, Colorado, a body corporate and politic acting by and through the Eagle County Board of County Commissioners ("Eagle County"), has requested the transactional and financial assistance of The Conservation Fund (the "Fund") to acquire the 1,540 -acre Hardscrabble Ranch from Brue Capital Partners, LLC and its related entities (the "Owners"). The property is located south of the Town of Eagle, along both sides of Brush Creek Road, as depicted on the attached map (the "Property"). The Property is a top priority for addition to Eagle County's Open Space Program because of its excellent wildlife, recreational, riparian and scenic characteristics, including 2.5 miles of Brush Creek and Salt Creek frontage. The Property will provide opportunities to create new trail connections from the Town of Eagle to the surrounding federal and state lands, and serves as the scenic gateway to surrounding public lands which include Sylvan Lake State Park, the Holy Cross Wilderness, and the Tenth Mountain Division Hut System. The Fund executed a contract to purchase the Property by July 31, 2017 for the price of $15,500,000, subject to agreement on water rights to be included with the Property, inspection and due diligence on the Property, and availability of funding. In order to complete the purchase, funding of $10,200,000 will be provided to the transaction by Eagle County through its Open Space Fund and other funding partners. Specifically, $9,000,000 will be provided by Eagle County, subject to budgeting and appropriation by the Eagle County Board of County Commissioners; $500,000 will be contributed by the Town of Eagle and $700,000 will come from the Eagle Ranch Wildlife Committee. Eagle County will coordinate delivery of its funds as well as the contributions from the Town of Eagle and Eagle Ranch Wildlife Committee in connection with the closing on the conveyance of fee title to the Fund. In addition, the Fund will advance up to $5,300,000 from its revolving fund, as may be necessary to acquire the Property - The Fund will apply for a grant of $3,000,000 from Great Outdoors Colorado (GOCO) for the fee title acquisition and $100,000 to off -set direct transaction costs. If approved, the GOCO funds will be awarded by June 15, 2017, prior to the July 31, 2017 purchase of the Property by the Fund. After the Fund acquires the Property, a conservation easement will be placed on the Property to restrict development and protect the Property's conservation values, while allowing for agricultural and passive recreational uses to continue. At the time of the grant of the conservation easement, GOCO's $3,000,000 DENVMOI:1019197.2 C17-153 will go toward repaying the funds advanced by the Fund from its revolving fund. It is anticipated that the conservation easement will be conveyed by the Fund and the GOCO funds received by October 15, 2017 (120 days following the grant award). As the final step in the project, the encumbered fee title to the Property will be conveyed to Eagle County, at which time the remaining balance of the funds advanced by the Fund from its revolving fund, including interest thereon at a rate of 3.5%, will be repaid by Eagle County. The Fund estimates that the interest on Eagle County's use of the revolving fund will be approximately $42,000 as it is anticipated that the Property will be conveyed to Eagle County by November 1, 2017. In any event, Eagle County will pay the remaining balance of funds advanced by the Fund from its revolving fund, including interest as set forth above, on or before December 31, 2017. Eagle County is engaging the assistance of the Fund to provide professional and technical assistance to facilitate the project, including negotiating, contracting and closing on the purchase from the Owners; providing possible bridge funding in an amount up to $5,300,000 if necessary to acquire the Property; pursuing GOCO funding; obtaining appraisal; negotiating for adequate water rights to support the Property's conservation values; obtaining and reviewing title and working to resolve title matters, if any; conducting other required due diligence on the Property; drafting and finalizing the terms of the conservation easement in coordination with Eagle Valley Land Trust (EVLT) as the holder and in coordination with and subject to the approval of Eagle County, in its sole discretion, as the ultimate fee title owner, and in coordination with the Town of Eagle and Eagle Ranch Wildlife Committee as third party funders to the Project; and conducting closings on the conservation easement conveyance to EVLT, and the fee title conveyance to Eagle County. In recognition of the considerable time, effort and services provided by the Fund with respect to the project, Eagle County agrees to pay the Fund a fee of $300,000 (the "Project Fee"), payable at the time of closing on the fee title conveyance to Eagle County. However, in the event closing on the conveyance of the Property to Eagle County is delayed beyond the anticipated November 1, 2017 closing date, then $150,000 of the Project Fee shall be paid by Eagle County to the Fund no later than November 30, 2017 and remaining $150,000 of the Project Fee shall be paid upon closing of the conveyance to Eagle County. Eagle County also agrees to reimburse the Fund for its out-of-pocket costs related to this Project, including expenses for appraisal, title, legal fees, water rights analysis, environmental assessment, geologist's opinion, closing costs and title premiums, and actual and agreed upon EVLT costs including stewardship endowment, legal defense fund, project fee, legal fees, and closing and title costs (the "Direct Costs"). The Fund represents and warrants that it has or will enter into an agreement with EVLT to document Direct Costs related to EVLT. EVLT costs are identified in the summary of Direct Costs attached hereto. The Fund shall ensure that Eagle County will not separately owe EVLT any amounts for Direct Costs related to the project as those amounts will be paid by the Fund to EVLT. A summary dated April 24, 2017 of the actual and estimated Direct Costs of the project is enclosed. The Fund has incurred $59,346 in Direct Costs to date, and anticipates an additional $22,860 through the time of the purchase of the Property. In addition, Direct Costs to convey the conservation easement to EVLT are estimated to be $73,000, and an additional $18,500 to complete the final step of conveying the Property to Eagle County. The Fund will seek up to $100,000 from GOCO toward the Direct Costs of the project. Eagle County agrees to reimburse the Fund for that portion of the Direct Costs that are not approved and paid by GOCO. The Fund agrees to provide a written invoice of Direct Costs, including back up receipts and invoices from vendors, if requested, through the time of closing on the purchase, and through the time of conveyance to Eagle County, all payable by Eagle County at the time of closing on the conveyance of the Property to Eagle County. Eagle County further agrees to reimburse the Fund for costs of ownership of the Property, including but not limited to actual utilities and property taxes incurred by the Fund, (the "Ownership Costs"), payable by Eagle County at the time of conveyance of the Property to Eagle County. The Fund estimates the Ownership Costs for the Project to be $12,000, assuming the conveyance of the conservation easement can be completed by October 15, 2017, and the fee title conveyance to Eagle County can be completed by November 1, 2017. All funds to be paid by Eagle County as set forth herein are subject to budgeting and appropriation by the Eagle County Board of County Commissioners in an open meeting. It is anticipated that fee title to the Property will be conveyed to Eagle County on or about November 1, 2017, such that all amounts from the Fund's revolving fund, including interest, Ownership Costs, and Direct Costs will be paid to the Fund in 2017. In the event the conveyance of fee title to Eagle County is delayed to 201$, then the parties acknowledge and agree that Eagle County is subject to the TABOR Amendment such that no payments will be made for any period after December 31 of any calendar year without the written approval in accordance with a budget adopted by Eagle County Board of County Commissioners in compliance with the provisions of Article 25, Title 30 of the Colorado Revised Statutes, the Local Government Budget Law (C.R.S. § 29-1-101 et. seq.) and the TABOR Amendment (Colorado Constitution, Article X, Sec. 20). If Eagle County asks the Fund to terminate its purchase contract for the Property because GOCO funds are not awarded, or if for any reason the Property is not acquired by the Fund from the Owner (including but not limited to defects discovered during the Fund's due diligence review), Eagle County will reimburse the Fund for its Direct Costs incurred to date, including forfeited earnest money deposits, if any, payable within thirty (30) days of receipt of an invoice from the Fund. In such event, only $100,000 of the Project Fee shall be paid to the Fund. We appreciate the Fund's assistance and look forward to completing this important conservation project. Please indicate the Fund's concurrence with the provisions of this letter by signing below and returning a copy to us. Attest Regina O'Brien, Clerk to the Board Acknowledged and Accepted on the date set forth below: THE CONSERV IATT{7.- F[ TND By: Title: EAGLE COUNTY, COLORADO By and through the Board of County Commissioners M ]illian H. Ryan, Chair Date: _ 05/10/2017 Enclosures: Map of Property Summary of Actual & Estimated Project Costs MAP OF THE PROPERTY [See next page] Hardscrabble Ranch ,�-j WL R—.W. Q Pagel BOLMNY F-7 Rwa r. a -Em uon or ale a Mr yE- EMMr q PZ& -M RaM 31r., III ff-&M- TM I terra z1aw6 pall PT.,M al ESR FaM X- 7M 1 -ox E Ec Edi cfrg --r-,V zFe • parK rl; Area DIRECT COSTS [See next page] THE CONSERVATION FUND April 24, 2417 ACTUAL & ESTIMATED TRANSACTION COSTS Brue Capital+Hardscrahhle Ranch, CU Actual Exoznditures Io- DatebyTCF Phase I & Limited Phase II Environmental Assessment 510,307 Legar 520,463 WmrRights- Lego1 $6,216 water Rights - Engineering 515,031 Mapping $1,330 Appraisal $5,500 Subtoroi $59,346 Estimated to Cam piete ClosinE on Fee Title Acquisition Irom 9rue Ce pit al (7130J171 510,000 Legal 512,000 Water Rights- Legal 52,1300 Water Rights - Engineering $2,504 Appraisal $5,000 Mapping 5360 Closing Fees $1,0114 Sui6mta $22,864 Estimated tv Convey{ffnservetion EasemeuttoEVLT Legal WeeAey, easement drafting: 510,000 Baseline Report $9,000 EVLT Costs= Project Fee 510,000 Stewardship Endowment $30,000 Legal Defense $5,004 Legal Fees $7,500 Closing Fees & TM Insurance (GE) 56,500 Subtlita $73,000 Estimated to -Convey Fez Title to Eagle County 11111117) Legal 55,000 Closing Fees & Title Insurance $13,500 Propierty Taxes & LhilMes 512,004 Prgect Fee to The Conservation Fund 5300,000 Interest on TCPs Revolving Fund (3.595) 542,000 Subtormr $372,500 TOTAL 5527,706 Less GGCO Refmbwsemenr (SL40,001D) Total Eagle County Costs 4ActuaI & Estimated I 5427,706