2003-058-RES AUTHORIZE CITY MGR TO EXECUTE CONTRACT OF PURCHASE BETWEEN COP, TAXING ENTITIES AND PARIS HISTORICAL ASSN
RESOLUTION NO. 2003-058
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
PARIS, TEXAS, APPROVING AND AUTHORIZING THE CITY
MANAGER TO EXECUTE AND THE CITY CLERK TO ATTEST TO AN
EXTENSION OF CONTRACT OF PURCHASE BY AND BETWEEN THE
CITY OF PARIS AND OTHER TAXING EN'IlTlliS AND THE PARIS.
mSTORICAL ASSOCIATION, L.L.C., TO PROVIDE A NINETY (90) DAY
EXTENSION TO THE ORIGINAL CONTRACT FOR PURCHASE OF THE
PARIS GRAND THEATER; MAKING OTHER FINDINGS AND
PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN
EFFECTIVE DATE.
WHEREAS, the City Council of the City of Paris, Paris, Texas, approved and adopted
Resolution No. 2002-198 on December 23, 2002, accepting a proposal for the purchase of the
Paris Grand Theater and authorizing the City Manager to negotiate and execute a Purchase
Contract in a form approved by the City Attorney; and,
WHEREAS, as a consequence of said authorization, the City Manager of the City of
Paris, along with other appropriate officials of other affected taxing entities, the same being the
Paris Independent School District, Lamar County, Texas, and Paris Junior College, as Sellers of
said property, entered into a Contract of Purchase, hereinafter referred to as the "Original
Contract", with the Paris Historical Association, L. L. c., as Purchaser, for the sale of the Paris
Grand Theater; and,
WHEREAS, Section 3e of the aforesaid Original Agreement extended the Purchaser the
opportunity to conduct due diligence and complete inspections on the aforesaid property for a
period of time referred to therein as the Inspection Period, ending March 14, 2003; and,
WHEREAS, contingent on said Inspection Period, the aforesaid Original Agreement
likewise provided at Section 6a for a closing date of April 1, 2003; and,
WHEREAS, the Purchaser has provided information sufficient to the City Council of the
City of Paris to justify the grant of an extension of ninety (90) days for completion of the due
diligence and inspection process and the subsequent closing on the property; and,
WHEREAS, the Purchaser has likewise proposed as additional compensation to the City
of Paris and the other taxing entities that should the Purchaser be unable to complete the
transaction, then the Purchaser shall provide to the City and other interested taxing entities all due
diligence reports and other materials associated with the due diligence and inspection period for
future use by the City and other interested taxing authorities; and,
WHEREAS, the Purchaser has proposed and the City Council is prepared to accept an
addendum to the Original Agreement granting the aforesaid extension of time as requested by the
Purchaser; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCn.. OF THE CITY OF PARIS, PARIS,
TEXAS:
Section 1. That the findings set out in the preamble to this resolution are hereby in all
things approved.
Section 2. That a proposed amendment to the Original Agreement containing an extension
of ninety (90) days to the inspection period and closing date as set out in the Original Agreement,
said amendment being entitled Extension of Contract of Purchase attached hereto as Exhibit A and
for all purposes incorporated herein, shall be and is hereby accepted, and the City Manager is
hereby authorized to execute and the City Clerk to attest to the aforesaid Extension of Contract
of Purchase.
Section 3. That this resolution shall be effective from and after its date of passage.
PASSED AND APPROVED this 12111 day of March, 2003.
~~
Michael J. Pfiester, Mayor or
Richard Manning, Mayor Pro Tern
ATTEST:
.
APPROVED AS TO FORM:
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7859073
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PIDLIP B. SMITH, JR.
ATTORNEY AT LAW
1700 Place
1700 FM 195
Paris, Texas 75462
Phone: (903)785-9070
Fax: (903)785-9073
March 6, 2003
Via Facsimile
(903)782-9721
Larry Schenk, Esq.
City Attorney
City of Paris
Paris, Texas
Re: Request by Purchaser for Extension of Term of Inspection Period and of
Closing Under Contract of Purchase Regarding the Paris Grand Theater
Dear Larry:
In accordance with our telephone conversations, yesterday, I have been asked by Henry
VanBuren, the spokesperson for the Purchaser named in the Contract (The Paris Historical
Association, L.L.C.), to request an extension of the Inspection Period and ofthe Time ofthe Closing.
The Purchaser hereby requests the extension of the Inspection Period for the completion of
Purchaser's due diligence with regard to the Property until June 16,2003, and an extension of the
Time of Closing until July 1, 2003. Included within this request for an extension of the Inspection
Period is the concept that the Purchaser may still receive a refund of the Earnest Money (of$25,OOO)
at any time during the extended Inspection Period and for any reason during that period of time up
until the final time and date of the extended Inspection Period ofJune 16,2003 at 5:00 o'clock P.M.
The reasons for these requests for extensions are several. Most importantly, Mr. VanBuren
has consulted with two architectural groups concerning the quality of the existing building and
estimated costs to renovate it; and both groups have given estimates that far exceed the equity capital
which the purchasing entity will be able to raise. Then, too, potential mortgage lenders are
apprehensive about the project due to the age and deteriorated condition ofthe theater building, and
Mr. VanBurn has not obtained a mortgage loan commitment. Instead he believes that the proj eet will
have to be funded from equity capital raised within the purchasing entity. He is still hopeful that this
can be done and requests the additional time to complete his efforts. Thus, the investor group is still
not complete, for additional equity capital must be raised from new investors.
EXHIBIT A
Mar 06 2003 1:47PM
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~ ,7859073
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Larry Schenk, Esq.
March 6, 2003
Page 2
During this period of time since the execution ofthe Contract, Mr. VanBuren has also been
able to consult with a potential contractor and an engineer. Mr. VanBuren has been able to obtain
a written report from the engineer, which includes environmental assessments, but he has not been
able to complete a contract with an architect or a general contractor to confirm all of the costs of
renovating the proj ecL
Ifthe governmental entities which now own the Grand Theater are not willing to grant these
extensions, Mr. VanBuren will have no alternative at this time but to terminate the Contract before
March 14,2003, as is presently provided therein, and receive a full refund of the Earnest Money
from Stone Title Company, Inc. Mr. VanBuren does not want to pursue termination, but would
rather use the additional ninety day extensions of the Inspection Period to see ifhe cannot proceed
forward with the intended purchase and renovation.
Please present these requests to the Paris City Council, so that a decision may be reached
before March 14, 2003. Also enclosed with this letter is a proposed Extension of Contract of
Purchaser for all parties to sign.
Very Tm1y Yours,
~@:~r-
Philip B. Smith, Jr.
cc: Via Facsimile (903)785-3858
Judge Chuck Superville
Lamar County, Texas
Lamar County Courthouse
Paris, Texas 75460
cc: Via Facsimile (903)737-7484
Paris LS.D.
Attn: Mr. Paul Trull, Superintendent
cc: Via Facsimile (903)782-0370
Paris Junior College
Attn: Mr. Bobby Walters, President
Mar 06 2003 1:47PM
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p.3
Extension of Contract of Purchase
STATE OF TEXAS ~
COUNTY OF LAMAR ~
THIS EXTENSION OF CONTRACT OF PURCHASE (this "Extension") is
made and entered into by and between Lamar County, Texas, in its
capacity as Trustee for the City of Paris, Texas, the Paris
Independent School District, Lamar County, Texas and Paris Junior
College (hereinafter, whether one or more, referred to as "Seller")
and The Paris Historical Association, L.L.C. (hereinafter referred
to as "Purchaser") _ To the extent that any other taxing or
governmental entities are the owners of any Land, Improvements or
Personalty (as each is hereinafter defined), such entities shall be
deemed for the purposes of conveyance only to be included herein as
a Seller.
RECITALS:
A. The Purchaser has not been able to complete all of the
inspections, survey work, title examination and other
inquiries which it must make with regard to the Property
described in the Contract within the Inspection Period (ending
March 14, 2003) defined in Section 3e of the Contract. It is
essential that Purchaser complete all of the due diligence
described in Section 3 of the Contract before Purchaser waives
his right to terminate the Contract and places the Earnest
Money at risk.
B. Purchaser still believes that Purchaser may be able to
favorably complete all of the inspections and other due
diligence described in Section 3 of the Contract if the Seller
agrees with the Purchaser to allow an extension of the
Inspection Period and of the time before Purchaser's Earnest
Money is placed "at risk," for another ninety (90) days, so
that the Inspection Period is extended until June 16, 2003.
C. Purchaser also requests an extension of the Time for the
Closing until July 1, 2003.
NOW, THEREFORE, for and in consideration of the recitals and
other good and valuable consideration, the Seller and the Purchaser
hereby agree as follows:
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1. The Inspection Period for completing all of the examinations,
tests, studies, inspections and other inquiries into the
Property described within Section 3 of the Contract is
extended from March 14, 2003 until June 16, 2003 at 5: 00
o'clock P.M. It is agreed that Purchaser may provide the
written notice to Seller and the Title Company of termination
of the Contract at any time prior to 5:00 o'clock P.M. June
16, 2003, and receive a refund of the Earnest Money, and
Section 3e(ii) is amended accordingly.
2. The Time of Closing described in Section 6a of the Contract is
extended from April 1, 2003 until July 1, 2003 at 11:00
o'clock A.M. The Place of the Closing will continue to remain
at Stone Title Company, Inc., as stated in the Contract.
3. All other terms and provisions of the Contract, except to the
extent hereby extended or amended, shall remain in full force
and effect, as written.
4. All capitalized terms used in this Extension shall have the
same meaning as defined with respect to them in the Contract.
IN WITNESS WHEREOF, this Extension is executed by the Seller
and the Purchaser on the dates set forth in the respective
signatures below.
SELLERS:
City of Paris, Texas
By:
Larry Schenk, City Attorney
Date:
Paris Independent
District
School
By:
Print Name:
Print Title:
Date:
2
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Paris Junior College
By:
Print Name:
Print Title:
Date:
Lamar County, Texas
By:
Chuck Superville,
County Judge
Date:
PURCHASER:
The Paris Historical
Association, L.L.C.
By:
Paul Ngoyi, Manager
Date:
3