{"id":41668,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/5th-avenue-and-110th-street-new-york-ny-property-development.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"5th-avenue-and-110th-street-new-york-ny-property-development","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/land\/5th-avenue-and-110th-street-new-york-ny-property-development.html","title":{"rendered":"5th Avenue and 110th Street (New York, NY) Property Development Letter of Intent &#8211; Edison Schools Inc. and Museum of African Art"},"content":{"rendered":"<pre>                      [LETTERHEAD OF EDISON SCHOOLS, INC.]\n\n\n\n\n                                                                  April 10, 2000\n\nMuseum for African Art\n593 Broadway\nNew York, New York  10012\nAttn:  Ms. Elsie McCabe\n\n                          PROPOSED DEVELOPMENT BY EDISON SCHOOLS, INC. AND\n                           THE MUSEUM FOR AFRICAN ART (\"MAA\") OF PROPERTY\n                         AT 5TH AVENUE AND 110TH STREET, NEW YORK, NEW YORK\n\nLadies and Gentlemen:\n\n                  We are pleased to present you this letter of intent (this\n\"LETTER OF INTENT\"), which sets forth the major business points we have agreed\nupon with respect to the acquisition and development of the property referenced\nabove as a mixed-use project consisting of commercial office space, a school and\na museum (collectively, the \"PROJECT\"). We are very excited about this\nopportunity and the prospect of working with you on this Project.\n\n         1.       THE PROJECT.\n\n                  We currently anticipate that the Project will consist of the\n                  following elements:\n\n         -        Museum -- approximately 75,000 to 84,000 square feet to be\n                  used for the Museum for African Art, including space for uses\n                  ancillary to the operation of the museum, such as office\n                  space, museum store and cafeteria and\/or restaurant\n                  (collectively, the \"MUSEUM\").\n\n         -        School -- approximately 63,200 to 75,000 square feet as a\n                  school for grades K-5, to be operated by Edison, possibly\n                  including ancillary office and other facilities in connection\n                  with the operation thereof (collectively, the \"SCHOOL\").\n\n         -        Offices -- approximately 80,000 to 90,000 square feet of\n                  office space (the \"OFFICE SPACE) to be used as the corporate\n                  headquarters of Edison Schools, Inc. and\/or its affiliate(s)\n                  (\"EDISON\"), and for non-profit entities involved in the\n                  operation of the School and other educational, community or\n                  charitable purposes.\n   2\n                                        2\n\nThe actual square footage of each portion of the Project shall be determined in\naccordance with the design development drawings approved by the parties in\naccordance with Section 5 hereof.\n\n         2. THE SITE; OWNERSHIP. Edison has entered into a contract (the \"CASTLE\nCONTRACT\") to acquire from Castle Senior Living LLC, Block 1615, Lot 1 (the\n\"FIFTH AVENUE PARCEL\") for a purchase price of $10 Million. There are four\nparcels of land adjacent to the Fifth Avenue Parcel, Block 1615, Lots 5, 7, 66\nand 68 (the \"CITY PARCELS\") which are currently owned by the City of New York.\nMAA has been in active negotiation with various agencies of the City with\nrespect to the location of the Museum on the City Parcels and it is anticipated\nthat the City Parcels will be donated by the City to MAA or the Venture or\nconveyed to MAA or the Venture at nominal cost. While the parties intend that\nEdison will cause the Fifth Avenue Parcel to be contributed to or acquired by\nthe Venture and MAA will cause the City Parcels to be contributed to or acquired\nby the Venture, neither party intends to effect such contribution until such\ntime as the sum of (i) valid pledges for philanthropic contributions, (ii)\ngovernmental or quasi-governmental grants, (iii) equity investment in the Office\nSpace, (iv) the Office Loan (as hereinafter defined), as evidenced by a valid\nwritten loan commitment and (v) debt or equity investment in the School, is\nsufficient to enable the construction lender to close the Office Loan\n(collectively, the \"FUNDING CONDITION\"). The parties will agree upon appropriate\ndeadlines for the satisfaction of the Funding Condition.\n\n                  Edison and MAA contemplate that the Site will be subjected to\ncondominium ownership, consisting of one or more units for the Office Space and\nSchool and one or more units for the Museum, and they will negotiate an\nappropriate condominium declaration providing for fair and reasonable\nallocations of operating costs (to the extent it is not possible for the Edison\nand Museum portions of the Project to be operated as independent physical\nplants) and appropriate repair and maintenance obligations.\n\n         3. THE VENTURE. Edison and MAA shall form a Delaware limited liability\ncompany (or such other entity as may be mutually agreed by the parties) (the\n\"VENTURE\") the structure and ownership of which has not been determined. Control\nof the Venture will be set forth in the definitive Venture agreements but the\nparties intend that all major decisions of the Venture will require the consent\nof both MAA and Edison. The Venture shall acquire and develop the Fifth Avenue\nParcel and the City Parcels (collectively, the \"SITE\"). A third party developer\nand\/or investor(s) may be retained by the Venture or participate with Edison in\na sub-venture or other arrangement in order to facilitate the development of the\nOffice Space. Edison and MAA will also consider the possibility of having an\nappropriate state or city agency hold title to all or a portion of the Project\nand lease or convey same to the Venture if mutually beneficial to the parties.\n\n         4. LAND USE APPROVALS. The Site is currently zoned for residential and\ncommunity facility use. Such zoning would permit development of the Museum and\nSchool but not the Office Space. Edison intends to seek a re-zoning of the Site\nand all other land use approvals\n   3\n                                        3\n\nnecessary to develop the Office Space (the \"LAND USE APPROVALS\"). Edison will be\nprimarily responsible for obtaining the Land Use Approvals and MAA will be\nprimarily responsible for the acquisition of the City Parcels. Edison and MAA\nacknowledge and agree, however, that the political and administrative issues and\nprocesses involved in obtaining the Land Use Approvals are inextricably tied to\nthe political and administrative issues and processes involved in the donation\nof the City Parcels. Consequently, MAA and Edison will regularly consult with\neach other and endeavor to adopt a unified and consistent strategy with respect\nto these political and administrative processes and shall keep each other fully\napprised of all developments and contacts with City or State officials. ULURP\napplications for the Land Use Approvals and the disposition of the City Parcels\nwill be filed as \"related applications\" with the intention of being certified\nand reviewed simultaneously; provided, however, that at the option of MAA, the\napplication for disposition of the City Parcels may provide for alternative\ndispositions to (i) the Venture upon satisfaction of the Funding Condition or\n(ii) to MAA in the event that this Letter of Intent is terminated, the Venture\nis dissolved or the Funding Condition is not satisfied. Neither Edison nor MAA\nshall submit or cause to be submitted any ULURP or other written application or\nmaterials with respect to the Site to any governmental authority without the\nprior approval of the other party which approval shall not be unreasonably\nwithheld. All portions of the Site would be combined into a single zoning lot.\n\n                  The Venture shall retain land use counsel and other\nconsultants from time to time reasonably satisfactory to MAA and Edison in\nconnection with such re-zoning and related matters. MAA and Edison and their\nrespective counsel shall cooperate in the process of obtaining the Land Use\nApprovals and the acquisition of the City Parcels, and shall, if necessary or\ndesirable, join in the applications and appear before governmental entities and\nofficials in order to obtain the Land Use Approvals.\n\n                  Subsequent to the acquisition of the Site by the Venture,\n(unless such demapping is necessary to obtain the Land Use Approvals for the\nscope of the Project agreed upon in the preliminary schematic drawings, in which\ncase such demapping will be sought simultaneously with the Land Use Approvals)\nthe Venture may seek the demapping of the crescent-shaped parcel of land between\nthe Site and Frawley Circle (the \"DEMAPPING PARCEL\") and to acquire either title\nto or right of use of the Demapping Parcel or other arrangements for the use of\nthe Demapping Parcel. If the Venture is successful in demapping the Demapping\nParcel and obtaining either title or use rights with respect thereto, Edison and\nMAA agree that no permanent structure shall be erected upon such parcel and that\nsuch parcel shall be utilized predominantly as on open space.\n\n         5. DESIGN. MAA and Edison acknowledge that architectural design is a\ncritical element to the success of the Project and that the parties are\ninterested in insuring a design that is compatible with their respective space\nprograms and institutional identity and that will exert a positive influence on\nthe neighborhood. The parties shall jointly select an architect and shall agree\nupon a mutually satisfactory design development process, to be reflected in the\ndefinitive agreements. The parties generally agree that any design must comply\nwith relevant bulk\n   4\n                                        4\n\nrestrictions and not require any additional Land Use Approvals, and that the\nProject will be designed such that the Museum will occupy a position of\nprominence on Fifth Avenue and that the design scheme will reinforce the\nseparate and distinct architectural identity of the Museum, Office Space and\nSchool, at least from a visual standpoint, except to the extent that the design\nincludes Fifth Avenue frontage for the Office Space. To the maximum extent\nfeasible, the Office Space, School and Museum will be designed with separate\nphysical plants such that operating costs can be directly attributed to each\nunit with minimal allocation of common systems costs. The parties acknowledge\nthat the conceptual drawings attached hereto as Exhibit A set forth a design\nthat satisfies the design criteria set forth in this Section 5 (except that the\ndrawing attached as Exhibit A-2 does not satisfy all relevant bulk restrictions)\nand represents the parties present consensus as to an acceptable design concept;\nprovided, however, that neither party shall be obligated to proceed with such\ndesign and either MAA or Edison may subsequently reject such design concept for\nany reason or no reason.\n\n         6. DEVELOPER. It is anticipated that the Venture will enter into a\ncontract with an experienced developer mutually acceptable to the parties (the\n\"PROJECT DEVELOPER\"), who will be retained to develop the Project in accordance\nwith the design approved by the parties, the terms and conditions of the Land\nUse Approvals or acquisition of the City Parcels and a construction budget and\nschedule acceptable to the parties. The Project Developer or an affiliate may\nalso be the investor in the Office Space.\n\n         7. DEVELOPMENT BUDGET. The parties will develop a budget for the\nProject (the \"DEVELOPMENT BUDGET\"). The Development Budget shall include all\nhard and soft costs for the Project (collectively, \"PROJECT COSTS\").\n\n         8. PROJECT FINANCING. MAA and Edison currently anticipate that Project\nCosts will be funded as follows:\n\n         -        Projects Costs allocated to the Museum will be funded by a\n                  combination of philanthropic donations and available grants,\n                  if any from applicable government, quasi-government or private\n                  entities.\n\n         -        Projects Costs allocated to the School will be funded by\n                  philanthropic donations and grants and\/or third party debt or\n                  equity investors.\n\n         -        Projects Costs allocable to the Office will be funded by a\n                  construction loan (the \"OFFICE LOAN\") by a commercial lender\n                  (the \"OFFICE LENDER\") and\/or an equity investment by Edison,\n                  the Office Space developer or a third party. The Office Loan\n                  will be secured by a mortgage on the Project, with customary\n                  provisions for release of liens upon creation of the\n                  condominium units and payment of Project Costs; provided,\n                  however, that the terms and conditions of the Office Loan\n                  and\/or the Venture agreements will contain provisions\n                  reasonably acceptable to MAA\n   5\n                                        5\n\n                  and Edison to protect the interests of the parties in the\n                  event of a default under or foreclosure of the Office Loan.\n\n                  Costs not directly allocable to any specific portion of the\nProject (such as architectural, engineering and design and other soft costs and\nland acquisition costs) shall, except as otherwise provided herein, be allocated\namong the Museum, School and Office Space on an equitable basis to be set forth\nin the definitive documents.\n\n                  The foregoing notwithstanding, Edison acknowledges that it\nshall take the primary responsibility for raising philanthropic contributions\nsufficient to fund 100% of the Project Costs allocated to the Museum and School\n(less any equity or debt investment in the school), plus an additional\n$10,000,000 for the endowment of MAA; provided, however, that in no event shall\nEdison have any liability to MAA arising from any failure to raise such funds or\notherwise in connection with or relating to its efforts in fund raising or the\nmanner in which the fund raising program was conducted. MAA shall cooperate\nfully and actively participate in fund raising efforts both independently and as\ndirected by Edison as part of its overall fund raising effort for the Project.\nSubject to the terms and conditions set forth in the definitive Venture\ndocuments, Edison would also assist MAA in its fund raising efforts even after a\ntermination of this Letter of Intent or dissolution of the Venture.\n\n                  Upon approval by MAA and Edison of the Development Budget\npercentages shall be established for (i) the fraction, the numerator of which is\nthe $10,000,000 contribution to the endowment of MAA to be included in the\nProject Budget and the denominator of which is the total Project Costs\n(including for this purpose the $10,000,000 endowment contribution) allocable to\nthe Museum (the \"ENDOWMENT PERCENTAGE\") and (ii) the fraction, the numerator of\nwhich is the portion of the total land acquisition costs allocable to the Museum\nand the denominator of which is total Project Costs (including for this purpose\nthe $10,000,000 endowment contribution) allocable to the Museum (the \"LAND\nREIMBURSEMENT PERCENTAGE\"). As and when any amount of available funds are\napplied to pay Project Costs allocable to the Museum (\"AVAILABLE MUSEUM FUNDS\")\n(A) an amount equal to the Endowment Percentage of such Available Museum Funds\nshall be paid to MAA for application to MAA's endowment, (B) an amount equal to\nthe Land Reimbursement Percentage of such Available Museum Funds shall be paid\nto Edison in reimbursement of the portion of the total land acquisition costs\nallocable to the Museum and (C) the remainder of such Available Museum Funds\nshall be applied to the payment of Project Costs other than the portion of the\ntotal land acquisition costs allocable to the Museum or contributions to the\nendowment of MAA. The Endowment Percentage and the Land Reimbursement shall each\nbe subject to re-computation in the event that either Edison of MAA receives\nphilanthropic contributions in connection with fund raising for the Project that\nare earmarked for either MAA's endowment or land acquisition costs, as the case\nmay be. For avoidance of doubt, the $10,000,000 numerator of the fraction\ndescribed in clause (i) above would be reduced by contributions earmarked for\nMAA's endowment and the numerator (i.e., the\n   6\n                                        6\n\nportion of total land acquisition costs allocable to the Museum) of the fraction\ndescribed in clause (ii) above would be reduced by contributions earmarked for\nland acquisition costs.\n\n\n                  The Parties intend that the Venture agreement will provide a\nmechanism in the event that either Edison and MAA are unable to raise sufficient\nmoney to fund the Project, such that the parties shall endeavor in consultation\nwith the Project Developer to identify ways to value engineer or otherwise scale\nback the scope of the Project (or the applicable portion thereof) such that the\nfunds available, are sufficient to pay 100% of the Project Costs.\n\n         9. PREDEVELOPMENT. In order to facilitate the continued progress of the\nproject, Edison shall advance those Project Costs set forth on the\npre-development budget attached hereto as Exhibit B prior to the execution of\ndefinitive documents or completion of the process of fund raising in order to\nexpedite the process of designing the Project and obtaining the Land Use\nApprovals or acquiring the City Parcels. Such advances, along with any costs\nadvanced by Edison with respect to the acquisition of the Fifth Avenue Parcel\nshall be reimbursed to Edison out of funds raised to pay Project Costs; provided\nthat such reimbursement shall be made only after satisfaction of the Funding\nCondition, except and to the extent that any contribution received by Edison are\nearmarked for any items included in the predevelopment budget.\n\n                  In no event shall the proceeds of any philanthropic\ncontributions be applied to any construction costs allocable to the Office Space\nunless (i) such application is agreed to by each of Edison and MAA, each in its\nsole and absolute discretion and (ii) such funds are to be reimbursed from the\nproceeds of the Office Loan and reapplied to other Project costs.\n\n                  Anything to the contrary provided herein notwithstanding\nneither MAA nor Edison shall have any liability to the other in the event that\nsuch party is unable to raise sufficient funds to finance its allocable share of\nProject Costs.\n\n         10. DEVELOPMENT SCHEDULE. Edison and MAA will agree on a preliminary\nschedule for the development of the Project (the \"DEVELOPMENT SCHEDULE\"), which\nDevelopment Schedule will be updated as necessary during the course of\ndevelopment. The Development Schedule will set forth, inter alia, the schedule\nfor obtaining Land Use Approvals and acquisition of the City Parcels, design\ndevelopment, negotiation of definitive agreements between MAA and Edison and\nother parties with respect to the Venture, closing of the purchase of the Fifth\nAvenue Parcel and other key milestones in the development process. The parties\nintend that on or before June 15, 2000 the parties shall agree upon and, where\napplicable, execute and deliver definitive Venture documents, schematic drawings\nfor the Project, a cost estimate for the Project, a preliminary Development\nBudget and Development Schedule, a business and operating plan for each portion\nof the Project and a fund raising plan for the Project.\n   7\n                                        7\n\n         11. LETTER OF INTENT ONLY. This Letter of Intent is indicative of our\ncurrent intentions with respect to this matter and the terms set forth herein\nare subject to negotiation, execution and delivery of definitive agreements, and\nto the appropriate approvals from the boards of directors or trustees of Edison\nand MAA.\n\n         12. PRESS RELEASES; CONFIDENTIALITY. Edison and MAA will consult with\neach other with respect to press releases and other publicity with respect to\nthe relationship contemplated hereby and the Project, and may, if mutually\nagreed, cause the Venture to retain the services of a public relations\nconsultant. If any materials delivered to Edison or MAA are clearly identified\nas confidential, the party receiving such materials shall keep them confidential\nand shall not disclose same except (i) to their affiliates and their respective\ndirectors, officers, employees, agents, consultants, attorneys, accountants,\narchitects, governmental officials and employees, Lenders and others who need to\nknow such information in connection with the transactions contemplated by this\nLetter of Intent and who are informed of the obligation to keep such materials\nconfidential or (ii) as required by applicable law.\n\n         13. COSTS. Each party shall bear its own costs in connection with the\npreparation and negotiation of this Letter of Intent and the definitive\nagreements between Edison and MAA and any documentation and any due diligence\ninvestigations with respect thereto and such costs shall not be included in the\nDevelopment Budget. Each party shall be responsible for and pay any fees payable\nor other compensation payable to any broker, finder, investment banker or other\nperson or entity due as a result of any dealings that the applicable party had\nwith such person or entity.\n\n                                                  Sincerely,\n\n                                                  EDISON SCHOOLS, INC.\n\n\n                                                  By:\/s\/ Benno C. Schmidt, Jr.\n                                                     _______________________\n                                                     Name: Benno C. Schmidt, Jr.\n                                                     Title: Chairman\n\nAGREED AND ACCEPTED\nthis ___ day of April, 2000\n\nMUSEUM FOR AFRICAN ART\n\n\nBy:\/s\/ Elsie Crum-McCabe      \/s\/Robert Rubin\n   _______________________    _______________\n   Name: Elsie Crum-McCabe    Robert Rubin\n   Title: President           Co-chair\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7412],"corporate_contracts_industries":[],"corporate_contracts_types":[9603,9579],"class_list":["post-41668","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-edison-schools-inc","corporate_contracts_types-land__ny","corporate_contracts_types-land"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41668","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41668"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41668"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41668"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41668"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}