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HomeMy WebLinkAbout24-91 Acting through Water Activity Enterprise approving a Purchase and Sale Agreement with Shaun Dolan 10-09-2024RESOLUTION NO.24-91 A RESOLUTION OF THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO, ACTING BY AND THROUGH ITS WATER ACTIVITY ENTERPRISE APPROVING A PURCHASE AND SALE AGREEMENT WITH SHAUN DOLAN WHEREAS, Shaun Dolan desires to convey certain water rights which the Town of Firestone ("Town"), acting by and through its Water Activity Enterprise, desires to purchase, subject to the terms and conditions set forth in a Purchase and Sale Agreement. WHEREAS, the Town agrees to leaseback the Godding Ditch Shares to Shaun Dolan at no cost for up to five (5) years following the closing, and Shaun Dolan shall pay all Godding Ditch Company assessments for the duration of the leaseback. WHEREAS, after purchase of the water rights, the water rights will need to go through the adjudicatory process to change the use from irrigation to municipal use. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO: 1. The Purchase and Sale Agreement ("Agreement") between the Town of Firestone, acting by and through its Water Activity Enterprise ("Buyer"), and Shaun Dolan ("Seller") for Water Rights is approved in substantially the same form as the copy attached hereto and made a part of this resolution, and the Mayor is authorized to execute the Agreement on behalf of the Town acting by and through its Water Activity Enterprise. 2. The Town Manager and other officers, employees and agents of the Town are further authorized to execute and deliver all documents necessary in connection with the closing of the purchase of the Water Rights, and to do all things necessary on behalf of the Town to perform all obligations of the Town under the Agreement, including without limitation the execution and delivery of all documents necessary or required with closing. 3. The Town Manager and other officers, employees and agents of the Town are further authorized to do all things necessary on behalf of the Town to adjudicate a change in use of the water rights, including submitting a request to change the water rights to the Godding Ditch Company, filing an application in the Division One Water Court and prosecuting the same to completion. INTRODUCED, READ, AND ADOPTED this 9th day of October, 2024. TOWN OF FIRESTJDNE, COLORADO Don Deputy Town Clerk PURCHASE AND SALE AGREEMENT (Water Rights) This Purchase and Sale Agreement ("Agreement") by and between the Shaun Dolan ("Seller"), and the Town of Firestone, acting by and through its Water Activity Enterprise ("Buyer"). Seller and Buyer may be referred to individually as a "Party" or collectively as "Parties." RECITALS WHEREAS, Seller owns and wishes to convey certain water rights as described below to Buyer; and WHEREAS, Buyer desires to acquire said water rights pursuant to the terms and conditions contained hereafter; NOW, THEREFORE, in consideration of mutual promises and covenants contained herein, the Parties hereby agree as follows: 1. Description of Water Rights. The Seller is the owner of three (3) shares of Godding Ditch Company represented by Share Certificate No. 333 (the "Ditch Shares"). The Ditch Shares have been historically used on the property located in the W%2 NW '/4 of Section 15, Township 2N, Range 68 W of the 6'" P.M. in Weld County, Colorado (the "Property"). The Parcel No. in Weld County is 131315200006. 2. Historical Use & Transfer. As further consideration, Seller, or Seller's agent agrees to provide Buyer any and all due diligence materials, on or prior to the date of approval by the Board of the Town of Firestone ("Effective Date"), stating the manner in which the Ditch Shares have been used by Seller, identifying which acreage has been historically irrigated with the Ditch Shares, the method of irrigation and what crops have historically been irrigated on the acreage with the Ditch Shares. Seller, or Seller's agent agrees to cooperate and participate in good faith with any request necessary to complete any Catlin approval process of the Godding Ditch Company or any court proceedings as may be required to change the use of the Ditch Shares. 3. Purchase Price. The Purchase Price for three (3) Ditch Shares shall be three hundred thousand dollars ($300,000.00). 4. Earnest Money. The day that the Buyer executes this Agreement, Buyer shall deliver and deposit with Land Title Guarantee Company earnest money payable in sum of Ten Thousand Dollars ($10,000.00) ("Earnest Money"), which shall become nonrefundable upon completion of the Due Diligence Period as defined in Paragraph 7 of this Agreement. The Earnest Money shall be applied to the purchase price at Closing. 5. Dry -Up Covenant. Attached as Exhibit A to this Agreement is the form of a dryup covenant acceptable to Buyer (the "Dry -Up Covenant"). The Dry -up Covenant includes a permanent restriction of irrigation on the Property with water from the Godding Ditch Company with the exception that continued irrigation of the Property may be allowed for up to five (5) years pursuant to the leaseback contemplated in Paragraph 9 of this Agreement. Seller warrants that any and all liens or encumbrances on the Property are subordinate to the Dry -up Covenant and Seller shall be responsible for acquiring all necessary agreements to ensure any liens or encumbrances are subordinate to the Dry -up Covenant. Seller and/or Seller successors and assigns shall be responsible for any revegetation of the Property historically irrigated by the Water Rights and ensure the Property is kept free of any noxious weeds as defined by C.R.S. §35-5.5-101, et seq. 6. Warranty and Title. The Seller warrants that the title to the Ditch Shares will be conveyed free and clear of all liens, encumbrances, assessments, and leases of any kind. Seller agrees to warrant and forever defend the Buyer against all and every person claiming any interest in the Ditch Shares by and through Seller. This warranty shall survive the Closing of the transaction and continue in full force and effect subsequent to such Closing. Subject to payment as above provided, and in compliance with the other terms and conditions by the Buyer, Seller shall execute and deliver a Special Warranty Deed and Stock Assignment for the Ditch Shares to Buyer at the date of Closing. 7. Due Diligence. Buyer shall have 43 days following the deposit of the Earnest Money ("Due Diligence Period") to terminate this Agreement if Buyer is dissatisfied with the Ditch Shares to be acquired hereunder for any reason, in which case the Earnest Money deposit shall be immediately returned to Buyer. It shall be conclusively presumed that Buyer is satisfied with the Ditch Shares if Buyer fails to send written notice to Seller to the contrary on or before the expiration of the Due Diligence Period. 8. Assessments. All assessments levied by the Godding Ditch Company for the year 2024 and prior years shall be paid by Seller. The Seller shall be responsible for the assessments for the duration of the leaseback as contemplated in Paragraph 9. Once the leaseback is terminated, the Buyer will assume responsibilities for assessments in all future years. 9. Leaseback. Buyer shall lease the Ditch Shares to the Seller at no cost for up to five (5) years following the Closing. The leaseback shall allow the Seller continued use of the Ditch Shares for irrigation on the Property. The Seller shall pay all Godding Ditch Company assessments for the duration of the leaseback. The Dry -Up Covenant, attached as Exhibit A, will not go into effect until either, (1) the Seller no longer needs the leased water from the Ditch Shares and relinquishes the leaseback, (2) the Seller sells the Property, or (3) the five year term expires. 10. Transfer and Escrow Fees. Any fees by Godding Ditch Company to complete the transfer of the Ditch Shares shall be paid by the Buyer. Seller and Buyer agree to equally pay escrow fees to Land Title Guarantee Company. 11. Delivery of the Stock Certificate. Possession of the original certificate evidencing ownership of the Ditch Shares shall be delivered to the Buyer at the time of Closing together with properly executed and notarized Dry -Up Covenant, Special Warranty Deed, Stock Assignment, and any and all other documents necessary to effectuate the transfer of the Ditch Shares from Seller to Buyer. 12. Closine. The closing of the purchase and sale of the Ditch Shares ("Closing") will take place on or before November 29, 2024. 13. Default. Time is of the essence herein and if any payment or any other condition thereof is not made, tendered, or performed by either parry, then this Agreement, at the option of the Party who is not in default, may be terminated in which case the non -defaulting party may recover such damages as may be proper. 14. Contingencies: Delivery and Consumptive Use. This Agreement is contingent on a determination by Buyer, in its sole discretion, that there is adequate consumptive use transferable for the agreed price. This Agreement shall be contingent on any diversion structures, storage structures or other devices necessary for the delivery and use of this water being undamaged and in good working condition. Should any of the contingencies herein not be met between the date of this contract and the date of Closing, this Agreement may, at the option of the Buyer, be declared null and void. 15. Costs and Expenses. Each Parry shall pay their own consulting, attorney, and brokerage fees and costs incurred as part of this transaction. 16. Notices. All notice and operational communications under this Agreement shall be in writing (including electronic form) except as otherwise provided for in this Agreement. All such notices and communications shall be deemed to have been duly given on the date of delivery , if delivered personally, if sent via e-mail on the date the e-mail was sent, if sent via regular mail on the date five days after communication was deposited in the mail, or if sent via courier (Federal Express, UPS, USPS or similar courier service) or certified mail the date the communication was delivered. All notices which are delivered by US Mail, email , courier service or certified mail shall be addressed to the following address unless otherwise agreed upon by the Parties: Buyer: Town of Firestone Attn: Julie Pasillas 9950 Park Ave. Firestone, CO 80504 Seller: Shaun Dolan (all communications shall be sent via e-mail) tallshaun@gmail.com With copies to: Jeff Kahn —jkahn@lyonsgaddis.com Dave Keown — ddenverdave@aol.com 17. Entire Agreement. This Agreement represents the complete agreement between the Parties and no oral modification shall be recognized. Any amendment or additions shall be made in writing and signed by both parties. 18. Survival of Closing. The representations, warranties and indemnities made by the Parties to this Agreements and the covenants and agreements to be performed or complied with by respective Parties under this Agreement before the Closing date shall be deemed to be continuing and shall survive the Closing. 19. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, administrators, successors, and assigns. 20. Counterparts. The Parties may execute this Agreement in counterparts which, when taken together, shall constitute one agreement. 21. Jurisdiction and Venue. This Agreement shall be governed and its terms construed under the laws of the State of Colorado and venue shall be in the County of Weld. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by the Effective Date. 1111040 i TOWN OF FIRESTONE I By: �a Title: Date: SELLER: SHAUN DOLAN Name: Oct 1.2024 Date: 20240930 Purchase and Sale Agreement - Dolan Final Audit Report 2024-10-01 Created: 2024-09-30 By: Michelle Soule (msoule@lyonsgaddis.com) Status Signed Transaction ID. CBJCHBCAABAHgaK80GdILPOLoOOKXOMjSe3OLY-g_o-9 "20240930 Purchase and Sale Agreement - Dolan" History Document created by Michelle Soule (msoule@lyonsgaddis.com) 2024-09-30 - 10:16:48 PM GMT L: Document emailed to tallshaun@gmail.com for signature 2024-09-30 - 10:21:03 PM GMT Email viewed by tallshaun@gmail.com 2024-10-01 - 4:52:50 PM GMT Signer tallshaun@gmail.com entered name at signing as Shaun Dolan 2024-10-01 - 4:54:01 PM GMT Document e-signed by Shaun Dolan (tallshaun@gmail.com) Signature Date: 2024-10-01 - 4:54:03 PM GMT - Time Source: server Agreement completed. 2024-10-01 - 4:54:03 PM GMT Q Adobe Acrobat Sign WATER LEASE AGREEMENT Godding Ditch Shares THIS WATER LEASE AGREEMENT ("Lease") is entered into as of the Effective Date (as defined below in Section 6 below) by and between the Town of Firestone, acting by and through its Water Activity Enterprise ("Lessor"), and Shaun Dolan ("Lessee"). Lessor and Lessee may be referred to individually as a "Party" or collectively as "Parties." RECITALS WHEREAS, Lessor owns and has the right to lease 3 shares of Godding Ditch Company ("Ditch Company"), currently represented by Stock Certificate No. 333 ("Shares"), and the right to use the water derived therefrom (the Shares together with the right to use such water hereinafter referred to as the "Subject Water Rights"); WHEREAS, the Subject Water Rights were historically used to irrigate the real property described in Exhibit A attached hereto ("Irrigated Land"); WHEREAS, Lessor desires to lease the water derived from the Subject Water Rights ("Leased Water") in order that the Subject Water Rights continue to be used for irrigation purposes on the Irrigated Land for up to five (5) years; WHEREAS, Lessee owns or has the right to farm the Irrigated Land; and WHEREAS, Lessor and Lessee desire to enter into a Lease whereby Lessor shall lease the Leased Water when such water is available. NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Lease, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties hereto agree on all the terms and conditions set forth below. 1. Term of Lease. The term of this Lease shall commence on the Effective Date and can continue up until the end of 2029 irrigation season, but not beyond the last day of the calendar year (the "Term") unless (1) the Lessee no longer needs the leased water from the Subject Water Rights and the Lessee relinquishes this Lease early or (2) the Lessee sells or otherwise conveys the Irrigated Land. The expiration or earlier termination of this Lease shall not release the Lessee from any obligations or liabilities incurred pursuant to the terms of this Lease, as set forth below. Lessee hereby agrees, following the expiration or termination of this Lease, to execute any documentation requested by Lessor for the purposes of documenting such termination and to consent to the recording of the documentation in the real property records for the Irrigated Land. 2. Use of Leased Water. Lessee shall use the Leased Water solely for irrigation purposes on the Irrigated Land, attached hereto as Exhibit A. 3. Ouantity of Leased Water. Lessee agrees to take and put to beneficial use the entire amount of the Leased Water available from the Shares in accordance with the terms of this Lease as reasonably practicable for irrigating the Irrigated Land. 4. Assessments. Lessee shall be responsible for payment of annual Ditch Company assessments intended to cover the normal operating expenses of the Ditch Company associated with the Shares during the term of this Lease. Lessee shall not be responsible for Ditch Company assessments intended to fund capital improvements or expenditures of the Ditch Company. The Lessor will invoice Lessee for the annual assessment. Lessee shall pay the entire amount regardless of whether Lessee uses or has used any amount of Leased Water. Lessee shall pay Lessor no later than 30 days after the invoice is issued. If Lessee does not make the required payment by the due date, Lessor may give Lessee a notice of default. If the Lessee does not cure the default by making full payment within 30 days of receipt of any notice of default, then the Lessor, in addition to pursuing other remedies available to it, may declare this Lease terminated and cease Lessee's authorization to utilize the Subject Water Rights. Failure by Lessor to submit or cause to be submitted an invoice in a timely manner or at all shall not be deemed a waiver of the payment due, nor should such failure excuse payment of the ditch assessments by Lessee under the terms of this Lease. 5. Sublease of Leased Water. The Lessee shall not sublease the Leased Water. 6. Effective Date. This Lease shall be in full force and effect from the date of its execution by Lessor. 7. Water Quality. Lessor does not make any representations of the quality of the Leased Water. Lessor does not represent that the Leased Water will be acceptable for the Lessee. 8. Water Accountin¢ Resoonsibilities, Lessee shall report its use of the Leased Water to Lessor during the term of the lease. Lessee's reports shall include the acres irrigated, crops grown, the date irrigation commences, and the date irrigation ceases as well as any other matter as reasonably requested by Lessor in connection with the use of the Leased Water, or supplementation of the same. 9. Requirement to Maintain Structures. Lessee shall be responsible for the maintenance of headgates and measuring devices necessary to divert Leased Water from the Ditch to the Irrigated Land. 10. Delivery of the Leased Water. Delivery of the Leased Water shall be determined by the Ditch Company. 11. Pledee or Encumbrance. Lessee shall not pledge or otherwise encumber this Lease or the Leased Water for any purpose including, without limitation, securing debt. 12. Termination. Lessee may terminate this Lease upon notice to Lessor at any time between the dates of October 31 and January 31 of any year during the Term. Notice of termination must be in writing. 13. Condemnation. If any entity with the power of eminent domain, initiates or gives notice that it intends to initiate condemnation proceedings with respect to any interest in all or a portion of the Irrigated Land, Lessee shall notify Lessor in writing within seven (7) days and provide Lessor copies of all correspondence, pleadings and other documents regarding the proposed condemnation. If the Irrigated Land is condemned, then this Lease shall terminate. 14. Costs and Expenses. Each Party shall pay their own consulting, attorney, and brokerage fees and costs incurred as part of this transaction. 15. Notices. All notice and operational communications under this Lease shall be in writing (including electronic form) except as otherwise provided for in this Lease. All such notices and communications shall be deemed to have been duly given on the date of delivery if delivered personally, if sent via e-mail on the date the e-mail was sent, if sent via regular mail on the date five days after communication was deposited in the mail, or if sent via courier (Federal Express, UPS, USPS or other similar courier service) or certified mail the date the communication was delivered. All notices which are delivered by US Mail, e-mail, courier service or certified mail shall be addressed to the following address unless otherwise agreed upon by the Parties: Buyer: Seller: Town of Firestone Attn: Julie Pasillas 9950 Park Ave. Firestone, CO 80504 Shaun Dolan (all communications shall be sent via e-mail) tallshaun@gmail.com With copies to: Jeff Kahn —jkahn@lyonsgaddis.com Dave Keown — kdenverdave@aol.com 16. Entire Aereement, This Lease represents the complete agreement between the Parties and no oral modification shall be recognized. Any amendment or additions shall be made in writing and signed by both parties. 17. Bindine Effect. This Lease shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, administrators, successors, and assigns. 18. Counterparts. The Parties may execute this Lease in counterparts which, when taken together, shall constitute one agreement. 19. Jurisdiction and Venue. This Lease shall be governed and its terms construed under the laws of the State of Colorado and venue shall be in the County of Weld. IN WITNESS WHEREOF, the Parties hereto have executed this Lease by the Effective Date. BUYER: TOWN OF / rn By: 4 OR Title: SELLER: SHAUN DOLAN Name: Exhibit A Legal Description Lot B of the Amended Recorded Exemption No. 1313-15-2 AMRE-1060, located in a portion of the W �/2 of the NW '/4 of Section 15, T2N, R68W of the 6`h P.M., map recorded April 16, 2007 at the Reception No. 3469201, County of Weld, State of Colorado. Also known by street and number as WCR 7 and 20 1/2, Weld County, Colorado. DRY -UP COVENANT This Dry -Up Covenant ("Covenant") is made and entered into on this _ day of 2024, by Shaun Dolan ("Property Owner"). The term Property Owner shall include any successors and assigns of the Property Owner. WHEREAS, Property Owner owns the property located in the W �/2 NW '/4 of Section 15, Township 2N, Range 68W of the 6`h P.M. in Weld County, Colorado (the "Property"), Parcel No. 131315200006, that was historically irrigated by three (3) shares of Godding Ditch Company; WHEREAS, the Property Owner intends to sell three (3) shares of Godding Ditch Company represented by Share Certificate No. 133 are referred to as the "Ditch Shares"; WHEREAS, Shaun Dolan has a lease to utilize the Ditch Shares not to exceed the next five (5) years and the terms of this Covenant with respect to the restrictions of irrigation on the Property will not be effective until the property is sold or the lease expires by its terms; WHEREAS, Property Owner desires to record a perpetual dry -up covenant requiring the property described in the attached Exhibit A (the "Dry -Up Property") be removed from irrigation, except as otherwise provided in this Covenant; WHEREAS, the Dry -Up Property shall be permanently removed from irrigation supplied by the Godding Ditch Company subject the exceptions listed in Section 5 below; WHEREAS, Property Owner intends to sell the shares to the Town of Firestone ("Town"), and the Town intends to submit a Water Court application and/or Substitute Water Supply Plan approval request to change the beneficial use of the Ditch Shares to include municipal uses and other beneficial uses in such locations as it may determine to be in its best interest as provided by Colorado law; and WHEREAS, Property Owner executes this Covenant to remove the Dry -Up Property from irrigation and ensure the consumptive use of irrigation water on the Dry -Up Property ceases, subject to the provisions of this Covenant. NOW THEREFORE, in consideration of the above facts and the covenants set forth below, the Property Owner covenants the following: COVENANTS Property Owner covenants for themselves and all future owners of the Dry -Up Property that the Dry -Up Property shall be dried up and shall not be irrigated, except as otherwise provided for under this Covenant, starting with irrigation season in year 2030 . The purpose of this covenant is to ensure that the Town of Firestone can claim the full amount of historic consumptive use credit associated with the use of the Ditch Shares on the Dry -Up Property. Property Owner further warrants and represent that this Covenant shall entitle the owner(s) of the Ditch Shares to the first and prior right to claim credit for the dry -up or non - irrigation of the Dry -Up Property. 2. The foregoing covenant is intended to be a real covenant burdening the Dry -Up Property for the benefit of the Ditch Shares, running with the Dry -Up Property and the Ditch Shares alike, inuring to the benefit of the owner(s) of the Ditch Shares, and to the limitation of Property Owner and future owners of the Dry - Up Property. 3. Property Owner and future owners of the Dry -Up Property shall take any action necessary to eliminate any consumptive use of water for irrigation purposes on the Dry -Up Property as may be determined and/or required by the Water Court or other court or tribunal of competent jurisdiction in the judgement and decree entered in any case involving the change or exchange of any of the Ditch Shares, and except as hereinafter may be specifically allowed, the Dry -Up Property shall no longer be irrigated after the termination of the lease of the Ditch Shares to Property Owner. This may include the elimination of crops or other vegetation which consume water via subirrigation, if any, which may be present on the Property. If all or part of the Dry -Up Property is not developed, then, Property Owner and any future owners of the Dry -Up Property shall plant and sustain vegetation cover of the type permitted in this paragraph on the Dry -Up Property, which will be watered solely via natural precipitation and/or the irrigation sources described in paragraph 5 below, including by way of example and not limitation: a dryland grass cover or dryland agricultural crops. Property Owner and any future owners of the Dry -Up Property shall comply with the provisions of the Colorado Noxious Weed Act, C.R.S. § 35-5.5-101, et seq., including protecting the Dry -Up Property from noxious weeds. 4. Unless otherwise required by any decree of the Water Court, this covenant shall not prohibit the Property Owner and any future owners of the Dry -Up Property from: a) irrigating the Dry -Up Property with water rights which may in the future be transferred to Dry -Up Property and approved for such use through an appropriate Water Court proceeding; b) irrigating the Dry -Up Property with water which is not tributary to the South Platte River or its tributaries including not-nontributary water that is duly augmented; c) irrigating the Dry -Up Property with treated water supplied by a municipality, water district or the treated water provider and d) irrigating the Dry -Up Property with water from wells; provided all such wells are authorized to pump pursuant to a Water Court approved plan for augmentation and only to the extent those structures(s) are fully augmented as required under the plan authorizing them to pump. The terms and provisions of this covenant shall not expire and shall be perpetual unless specifically released in writing by any owner of the Ditch Shares. M Shaun Dolan STATE OF COLORADO, COUNTY OF WELD The foregoing instrument was acknowledged before me on this _ day of , 2024 by WITNESS my hand and official seal My commission expires: Notary Public Exhibit A Legal Description Lot B of the Amended Recorded Exemption No. 1313-15-2 AMRE-1060, located in a portion of the W %2 of the NW '/4 of Section 15, T2N, R68W of the 6th p.M., map recorded April 16, 2007 at the Reception No. 3469201, County of Weld, State of Colorado. Also known by street and number as WCR 7 and 20 1/2, Weld County, Colorado.