R-2015-049 2015-03-23RESOLUTION NO. R2015-49
A Resolution of the City Council of the City of Pearland, Texas,
authorizing a Letter of Intent to donate real property to the University of
Houston System on behalf of the University of Houston Clear Lake,
Pearland Campus.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That certain Letter of Intent by and between the City of Pearland and
the University of Houston System, a copy of which is attached hereto as Exhibit "A" and
made a part hereof for all purposes, is hereby authorized and approved.
Section 2. That the City Manager or his designee is hereby authorized to execute
and the City Secretary to attest a Letter of Intent with the University of Houston System.
PASSED, APPROVED and ADOPTED this the 23rd day of March, A.D., 2015.
ATTEST:
APPROVED AS TO FORM:
DARRTN M. COKER
CITY ATTORNEY
TOM1EID
MAYOR
K-15-00378
Resolution No. R2015-49
Exhibit "A"
Binding Letter of Intent to Donate Real Propert.
April 6, 2015
VIA EMAIL
City of Pearland
Attn: Darrin M. Coker, City Attorney
3519 Liberty Drive, Pearland, TX 77581
Email: dcoker@ci/pearland.tx.us
RE: Binding Letter of Intent to Donate Land in Pearland of .Approx. 14.44
Acres
Dear Dr. Staples:
The purpose of this Letter of Intent (this "Letter") is to summarize the basic terms of the
proposed donation by the City of Pearland ("City") to the University of Houston System
on behalf of the University of Houston Clear Lake ("University") of the following real
property ("Property"):
Approximately 14.44 acres, being a portion of Lot 1, Block 1, of the H.T. & B
R. R. Co. survey, Abstract — 233, in Pearland, Brazoria County, Texas, as
depicted in Exhibit A, together with all improvements, fixtures (excluding
trade fixtures), equipment (excluding trade equipment), leases, permits and
licenses associated therewith, save and except all oil, gas and mineral rights in
and under and that may be produced from the Property which shall be retained
by City; provided however, that the City waives its rights to ingress and egress
to and from said Property for any purposes, including for the purpose of
exploring for and producing said oil, gas and minerals. All future leases or
conveyances of all or any part of the oil, gas and minerals herein reserved by
the City shall be subject to and burdened by the foregoing surface waiver
provisions and automatically shall be construed to contain a contractual waiver
by lessee or grantee (as applicable) of the right to enter upon the surface of the
Property. The foregoing provision shall be a covenant running with the
Property binding upon any party owning an interest in any such reserved
Page 1 of 12
minerals and inuring to the benefit of, and directly enforceable by, all future
owners of all or any part of the surface estate of the Property.
City and University may be referred to herein singularly as a "Party" and collectively as the
"Parties." The terms of this Letter are binding, and the Parties hereto acknowledge same.
1. Texas Revenue Bonds. The University will be requesting from the 84'h Texas Legislative
Session certain funding through tuition revenue bonds in an amount sufficient to fund the
construction of a new educational facility ("TRB").
2. Donation. Upon approval of the TRBs by the 84th Texas Legislature and subject to
University's satisfactory due diligence reviews and the Conditions Precedent as set forth
herein, the City shall donate the Property to the University on the Closing Date (defined
below).
3. Inspection Period. For a period of ninety (90) consecutive days following the
approval of the TRBs by the 84`" Texas Legislature, and in accordance with its
terms, University shall have the option and right to conduct such investigations,
inspections, audits, analyses, surveys, tests, examinations, studies, and appraisals (the
"Inspection Period") of the Property and to examine all applicable books and records
relating to the Property and its operation and maintenance, as University deems necessary
or desirable, at University's sole cost and expense, to determine if the Property is suitable
for University's purposes. During the Inspection Period, the City shall:
(i) Cooperate with University and University's representatives insofar as allowing access
to the Property for the purpose of conducting inspections, environmental audits,
examinations and tests, including without limitation, hazardous waste and engineering
inspections, testing and studies; and,
(ii) Promptly deliver to University, at University's sole cost and expense, the following
items: (a) a Commitment for Owner's Policy of Title Insurance on the Property,
together with full, complete and legible copies of all exception documents, (b) a
survey of the Property acceptable in all respects to the title company selected by
University (the "Title Company"), which shall include any and all action to subdivide
the Property by plat; (c) copies of all current environmental reports, tests, reports and
inspections pertaining to the existence of any hazardous materials in, on, under, near
or about the Property which are in the possession of or under the control of City or
City's representatives; and (d) a detailed list of all personal property, if any, to be
conveyed to University with the Property.
At any time during the Inspection Period, if the University determines that it does
not desire the Property, for any reason, in its sole and absolute discretion, the
University will notify the City in writing, at which point this Letter of Intent shall be
of no further effect.
4. Closing. The consummation of this transaction (the "Closin ") will take place at the
offices of the Title Company within thirty (30) calendar days following expiration of the
Inspection Period and/or satisfaction of the Conditions Precedent described in Paragraph 6
below (the "Closing Date"). At Closing, City shall convey to University fee simple title to
Page 2 of 12
the Property by special warranty deed in the form attached hereto as Exhibit B (the
"Deed").
5. Appraisal and Title Insurance. At University's sole cost and expense, City shall obtain
an appraisal of the Property, and deliver to University, at Closing, an Owner's Policy of
Title Insurance with the survey/area and boundary deletion in the Title Policy, in the full
amount of the appraised value of the Property, issued by the Title Company, insuring that
University is the owner of the Property with good and indefeasible fee simple title to the
Property, subject to no liens or encumbrances other than those identified in the Deed as
"permitted exceptions."
6. Conditions Precedent. This Letter of Intent and Closing of the transaction is subject to
the following conditions (the "Conditions Precedent"):
University's authority to acquire the Property from City is expressly contingent
upon: (i) approval of University's Board of Regents, if applicable; (ii) approval of the
Texas Higher Education Coordinating Board, if applicable; (iii) approval of the
Texas Bond Review Board, if applicable; and (iv) any other approvals mandated
under Texas law, regarding the acceptance of the Property or the acceptance and/or
issuance of the TRBs.
City's authority to donate the Property to University is expressly contingent upon: i) the
amendment of Lease Agreement between the City and the University entered into in
2008, as may be amended and/or modified from time to time (" Lease"), to release the
Property from the terms of the Lease; ii) the Right of Reversion as described in Exhibit
B of the Deed; and iii) the subdivision, by plat, of the property that is the subject of the
Lease to establish two (2) separate tracts, which the City shall use best efforts to timely
approve.
7. Release of All Encumbrances. The City shall take all necessary action, including
providing any legal documents necessary, to effect a release of the Property from any and
all encumbrances, including, but not limited to, the Lease. The Parties hereto agree and
acknowledge that this Letter of Intent is not meant to trigger Section 52 of the Lease, and
instead the Property will be fully released from the Ground Lease.
8. Warranties and Representations. City warrants that: (i) there are no outstanding lawsuits
regarding title to the Property or otherwise which would prevent City from conveying title
of the Property to University as set forth herein; and (b) upon Closing, City shall make
immediately available to University, exclusive and peaceful occupancy of the Property.
The Agreement contains additional required warranties and representations.
9. Prorations; Expenses. Taxes and other customarily apportioned items shall be prorated
or apportioned as of Closing as set forth in the Agreement.
10. Marketing. Upon execution of this Letter of Intent, City shall not directly or indirectly
market the Property for sale or lease to third -parties so long as University acts in good faith
to complete the negotiation and consummation of the transaction.
Page 3 of 12
, ._,0378
University and City acknowledge that this Letter constitutes a binding statement of mutual
intention. If the foregoing accurately reflects University's intentions, please execute and return
this Letter to the undersigned. The City represents it has caused this Letter to be executed on
its behalf on the date below by a representative authorized to bind City with respect to the
undertakings and obligations contained herein.
Very truly yours,
CITY OF PEARLAND
By: .<,y t0it
Nar�ie• ay j /arson
Title: City ,Mipavr
2
Date: Marc 23, 15
AGREED AND ACKNOWLEDGED:
UNIVERSITY OF HOUSTON SYSTEM, on behalf of the University of Houston Clear
Lake
By: \/\�,r)�1.0,..,a-
Name: VJ i"l(Vim • 51-ao IeS
Title: Tresi a Ani vtvsrlv'+kotar-Lake
Date: _ 2.. /s
Bv: i / 1(2- 1 '
o� Name:r en IA Kh(3du'
Title:e t Uvy Jniuc,s vE -446).ettY\545-4etn
Date: !AI I.5
APPROVED AS TO FORM BYt
IL IllEeffinta.0011114111ri.
twIrmistoltsiosree
Page 4 of 11
Q378
EXHIBIT A
PROPERTY DESCRIPTION
Page 5 of 12
CO
Q._ ;0
F/C&C1R,c 1
U1 -1'L
Fkrog LAMP GAM Pa
9 1 2 4
SCALE IN
' F `T INCREMENTS
it•I/ 1-
K-15-00378
EXHIBIT B
SPECIAL WARRANTY DEED
THE STATE OF TEXAS §
COUNTY OF BRAZORIA §
KNOW ALL MEN BY THESE PRESENTS:
THAT THE CITY OF PEARLAND, a Texas Home Rule Municipality ("Grantor"),
for and in consideration of its donative intent to UNIVERSITY OF HOUSTON SYSTEM, a system
of public institutions of higher education and agencies of the State of Texas under Chapter 111 of the
Texas Education Code ("Grantee"), has GRANTED, GIVEN AND CONVEYED, and by these
presents does GRANT, GIVE, AND CONVEY, unto Grantee (i) that certain approximately 14.44
acre tract of land located in Brazoria County, Texas, described as "Tract 1" in Exhibit A hereto, by
reference made a part hereof (the "Land"), and (ii) all buildings and improvements located on the
Land (all of the foregoing being hereinafter referred to, collectively, as the "Property"), including all
of Grantor's right, title and interest in any improvements and buildings on or under the Property and
any streets, alleys, strips, gores and rights-of-way adjacent to or appurtenant to the Property, save
and except all oil, gas and mineral rights in and under and that may be produced from the Property
which shall be retained by Grantor; provided however, that the Grantor waives its rights to ingress
and egress to and from said Property for any purposes, including for the purpose of exploring for and
producing said oil, gas and minerals. All future leases or conveyances of all or any part of the oil,
gas and minerals herein reserved by the Grantor shall be subject to and burdened by the foregoing
surface waiver provisions and automatically shall be construed to contain a contractual waiver by
lessee or grantee (as applicable) of the right to enter upon the surface of the Property. The foregoing
provision shall be a covenant running with the Property binding upon any party owning an interest in
any such reserved minerals and inuring to the benefit of, and directly enforceable by, all future
owners of all or any part of the surface estate of the Property.
This conveyance is executed by Grantor and accepted by Grantee subject to the
matters set forth in Exhibit A hereto, by reference made a part hereof (collectively, the "Permitted
Encumbrances"), but only to the extent that same are still valid and in force and effect.
TO HAVE AND TO HOLD the Property, together with all and singular the rights and
appurtenances thereto in anywise belonging, unto the said Grantee, its successor and assigns, forever;
and, subject to the Permitted Encumbrances, Grantor does hereby bind itself and its successors to
WARRANT and FOREVER DEFEND all and singular the Property unto the said Grantee, its
successors and assigns, against every person whomsoever lawfully claiming or to claim the same, or
any part thereof, by, through or under Grantor, but not otherwise.
Page 7 of 12
K-15-00378
EXECUTED this 1.L40day of Su 11 .20_157
THE CITY OF PEARLAND, a Texas
By:
Na : Clay Pearson
Title: Citv Manaeer
The mailing address of Grantee is as follows:
University of oustyo-.n-,S stem
lYt�►Ct 04 tai LSt�¶G SRN ICe
SG CIC' Cl.. \ -F Tree watt
t))ulkikin . Su► #e 1113
Attention:
THE STATE OF TEXAS §
COUNTY OF HARRIS §
This instrument was acknowledged before me on the f/Aday of -1,1 . 2016"
C_.Y
by Q.‘ POI 13.Pta R.S6A1 •C Kiri M ANk G1 -R of the
City of Pearland. a Texas , on behalf of said entity.
MARIA E. RODRIGUEZ 1
Notary Public, State of Texas ti
My Commission Expires:
02/26/2017
Notary Public in and for the St 1te of 3i xas
ARIA e :T16 ae.tE uEZ._
Printed or Typed Name of Notary
My Commission Expires:
D� - .2�'OW /7
Page 8 of 12
TRACT 1: Description of the Land:
EXHIBIT A
Page 9 of 12
K-15-00378
-15-00378
EXHIBIT "B"
TO DEED
Right of Reversion
Subject to the terms and conditions set forth below, Grantor reserves, and Grantor shall
have the right and option, but not the obligation, to exercise its Right of Reversion of the
Property as described in this Exhibit B.
1. As used herein, "Construction Obligation" shall mean: (i) the substantial
completion of construction of a facility of no less than 20,000 square feet in size to be
built on the Property (the "Project") by the University of Houston System, which plans to
use the Project for academic, research and administrative uses, to provide services to
faculty, staff and students, as well as the public, as applicable, and/or for other uses or
services related to or benefitting the University of Houston System's role and/or mission;
and (ii) commencement of operations of the Project on the Property.
2. As used herein, "Operation Obligation" shall mean: The University of Houston
System's use and/or operation of the Property as an institution of higher education, for
academic, research and administrative uses, to provide services to faculty, staff and
students, as well as the public, as applicable, and/or for other uses or services related to or
benefitting the University of Houston System's role and/or mission.
3. Subject to the terms and conditions set forth below, Grantee grants to Grantor, and
Grantor shall have, the right and option, but not the obligation, to exercise a reversion of
the Property (the "Right of Reversion") if: i) the Construction Obligation fails to occur by
the expiration of twenty (20) years after the Effective Date of this Exhibit B which shall
be the date of execution and recording of the Special Warranty Deed to which this Exhibit
B is attached, unless such failure is due to a third party's actions, act of God or some other
event not under the direct control of Grantee; or ii) the Operation Obligation fails to be
maintained by the University Houston System until the first to occur of the following: (a)
a period of fifteen (15) years following the Effective Date of this Exhibit B which shall be
the date of execution and recording of the Special Warranty Deed to which this Exhibit B
is attached, or (b) Grantee obtains any portion of land adjacent to the Property pursuant to
Section 52 and/or 53 of that certain Lease Agreement between the City and the University
in 2008, as may be amended and/or modified from time to time, whichever occurs first.
(a) In order to exercise the Right of Reversion, Grantor must deliver written
notice to Grantee within 45 days after the date of the event triggering Grantor's
right under Section 2 above.
Page 10 of 12
(b)If Grantor exercises the Right g Reve io Granite Qa� rionthe
g �Y
Property to Grantor by special warranty deed free and clear of all liens and
encumbrances, with no title exceptions other than those existing on the date Grantor
conveyed the Property to Grantee.
(c) The Right of Reversion shall automatically terminate if Grantor does not give
the written exercise notice within the time period specified in Paragraph 2(a).
4. The illegality, invalidity or unenforceability of any provision of this Exhibit B shall
not affect the legality, validity or enforceability of any other provision of this Exhibit
B.
5. Notices. Any notice, demand or other communication required to be given or to be
served upon any party hereunder shall be void and of no effect unless given in accordance
with the provisions of this section. All notices, demands or other communications must be in
writing and delivered to the person to whom it is directed, either (i) in person or (ii) delivered
by a reputable non -electronic delivery service that provides a delivery receipt. Any notice,
demand or other communication shall be deemed to have been given and received when
delivered to the below stated address of the party to whom it is addressed. All notices,
demands and other communications shall be given to the parties hereto at the following
addresses:
If to Grantee:
with a Copy to: Office of General Counsel
University of Houston
311 Ezekiel Cullen Building
Houston, Texas 77204-2028
If to Grantor:
Grantor's Attorney:
City Manager
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
City Attorney
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Any party entitled to receive notices hereunder may change the address for notice
specified above by giving the other party ten days' advance written notice of such change
of address.
6. THIS EXHIBIT B MAY NOT BE AMENDED EXCEPT BY WRITTEN
Page 11 of 12
— 1 5—')O7A
DOCUMENT SIGNED BY THE THEN CURRENT OWNER OF T P OPER Y
AND GRANTOR, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
TEXAS AND IS BINDING ON THE PARTIES HERETO AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS.
7. The prevailing party in any legal proceeding regarding this Exhibit D shall be
entitled to recover from the other party all reasonable attorneys' fees and costs incurred in
connection with such proceeding.
Page 12 of 12