05-08-2018 Trinity-Sunroad, LLC Real Estate Transfer Tax Exemption AppealRECORD OF DECISION
RE: TRINITY-SUNROAD, LLC REAL ESTATE TRANSFER TAX EXEMPTION
APPEAL
BEFORE THE AVON TOWN COUNCIL
This Record of Decision is adopted by the Avon Town Council concerning the Real Estate Transfer Tax
Exemption Appeal filed by Trinity-Sunroad, LLC.
FINDINGS OF FACT: Trinity-Sunroad, LLC ("Applicant") filed an Application for Exemption from
Real Property Transfer Tax on January 19, 2018 ("Application"). The Application seeks exemption from
the payment of the Real Property Transfer Tax imposed by Chapter 3.12 — Real Property Transfer Tax
of the Avon Municipal Code on the transfer of property located at 15 Sun Road, Avon, Colorado
("Property") on January 17, 2018. The Application did not indicate an applicable basis of the application
for exemption on the Application for Exemption form provided by the Town of Avon. The Real Propery
Transfer Declaration stated the "Total Sales Price" as $8,190,340.00 and included an addendum which
stated that Buyer and Seller agreed that the "Real Property Value" was $4,059,850.00 and that the
"Existing Lease Value" was $4,130,490.00.
The Town of Avon Finance Department denied the Application on February 14, 2018. The Applicant
filed an appeal on March 15, 2018, in accordance with Avon Municipal Code Section 3.12.070(d)
("Appeal'). The Appeal includes an Assignment and Assumption of Lease as Exhibit 2 wherey the
Applicant assigned the existing lease for the Property to the Buyer, 15 Sun Road, LLC, simultaneously
with the conveyance of the Property. Applicant indicated that the assigned lease continues to October 31,
2087.
DECISION: The Appeal was filed within 30 days of the date of the Denial Letter and is
therefore timely under Avon Municipal Code Section 3.12.070(d).
AMC §3.12.030 — Imposition of Tax states, "Except as provided in Section 3.12.060,
there is imposed a tax on all transfers of interests or possessory rights in and to real estate
located in the Town by deed, lease, assignment of lease, agreement for sale of stock or
contract. The tax imposed is and shall constitute a tax payable with respect to the transfer, and
the tax is due and payable at the time of the transfer." The transer of Property includes the
assignment of the lease for the Property, which lease is greater than 25 years. The Applicant
has not indicated that any exemption in Avon Municipal Code Section 3.12.060 applies. No
exemption in Avon Municipal Code Section 3.12.060 applies to the Application.
Avon Municipal Code ("AMC") §3.12.020 defines Consideration in part to mean and
include the actual cash paid and/or value of the property delivered, or contracted to be paid or
delivered, in return for the transfer of ownership or title to, or any other possessory interest
in, real property, and shall include the amount of any lien, mortgage, contract indebtedness or
other encumbrance, either given to secure the purchase price or any part thereof, or remaining
unpaid on the property at the time of sale. [emphasis added]. The Application provides both
statements and evidence that the consideration paid for the transfer for $8,190,340.00 which
included transfer of title and assignment of the lease which lease is greater than 25 years.
WHEREFORE, the Appeal is hereby DENIED.
This Decision is limited to the Appeal.
ADOPTED MAY 8, 2018
c
By:6h MAttest:
N'lennie Fancher, Mayor Debbie Hoppe, T
ATTACHMENTS:
1. Application for Exemption from Real Property Transfer Tax, dated January 19, 2018
2. Denial letter from Avon Finance Department, dated February 14, 2018
3. Appeal dated March 15, 2018
OF
f S E A ,
�OORPD
AVOn TOWN OF AVON
APPLICATION FOR EXEMPTION
FROM REAL PROPERTY TRANSFER TAX
Grantee(s) (Buver(s)): 15 Sun Road, LLC
Mailing Address: One Aspen Drive, Suite 85, Loveland CO 80538
Phone Number: See attached
Date of Conveyance/Closing:
Complex Name: N/A
January 17, 2018
E -Mail Address: See attached
Purchase Price/Consideration: See attached
Building/Unit: N/A
Street Address: 15 Sun Road, Avon, CO
Title Company: Fidelity National Title
E -Mail Address: teresa.hott@fnf.com
The undersigned hereby applies for exemption of the above real estate transaction from the payment of the Town
of Avon Real Property Transfer Tax. The basis of the application for exemption is as follows:
13 (1) -Transfer to or from Governmental Entity
C3 (2) - Gift/Charity
13 (3) - Termination of Joint Tenancy
13 (4) - Death, Will, or Decree of Distribution
13 (5) - Capital Investment or Reorganization
of Trusts, Corporations, LLCs, etc
13 (6) - Bankruptcy
C3 (7) - Correction of Previously Recorded Transfer
13 (8) - Cemetery Lots
13 (9) - Condemnation
(10) - Lease < 25 Years
(11) - Mineral or Royalty Interest
0 (12) - Debt Security
0 (13) - Foreclosure, Sheriff's, Public Trustee, or
Treasurer's Deeds
13 (14) - Deed Restricted Housing
O (15) - Primary Residence ($26 fee)
13 Request 90 Day Move In Extension
13 (16) — Subsequent Primary Residence ($26 fee)
0 Request 90 Day Move In Extension
13 (17) — IRS Tax Free or Tax Deferred trade
Explanation (Attach additional information as needed. See instructions.):
See attached Addendum
I herebyc0erpenaltypf perjury that theforegoing statements ore true and correct.
iniad 44C
la.1g
C- s, i Date Grantee(s) Date
Avon Real Property Transfer Tax
Exemption Application Approved:
Town Manager or Designee
Date
***Allow Up to 30 Days for Processing per Chapter 3.12 of the Avon Municipal Code***
Finance Department
Fee Paid (if applicable): Initials:
ADDENDUM ATTACHED TO AND MADE A PART OF THE
TRANSFER TAX EXEMPTION APPLICATION
For the Property at:
15 Sun Road, Avon, Colorado
On January 17, 2018, Trinity-Sunroad, LLC conveyed property located at 15 Sun Road, Avon,
Colorado to 15 Sun Road, LLC. The total sale price for the transaction was $8,190,340.00, which
included two elements:
(1) $4,059,850 as value for the real property, and
(2) $4,130,490 for the existing lease value.
These numbers are reflected on the Real Property Transfer Declaration (Form TD -1000) executed
by the Grantee and submitted to the Eagle County Clerk and Recorder contemporaneous with the
recording of the deed of conveyance, a copy of which is enclosed.
In order to avoid any possibility of imposition of a lien by the Town of Avon, at the closing of the
transaction, the Town of Avon Real Property Transfer Tax was remitted based on the total sale
price. The payment to the Town was in the amount of $164,236.80. However, as noted above, the
total sale price includes consideration for other than an interest in real property as defined by the
Town of Avon Real Property Transfer Tax Ordinance, memorialized in Chapter 3.12 of the Avon
Municipal Code.
Trinity-Sunroad LLC hereby claims payment under protest, and exemption from payment of the
real estate transfer tax for the non -real property portion of the sale price—that is, the difference
between the total sale price and the sale price paid for the real property interest. Trinity-Sunroad
LLC calculates the proper payment due under, and overpayment of, the Town of Avon Real
Property Transfer Tax Ordinance as follows:
(A) Actual payment to the Town: $164,236.80
(B) Transfer tax on consideration for real property interest: $81,197.00
(C) Overpayment: $83,039.80
Trinity-Sunroad, LLC hereby requests prompt refund from the Town of the same.
For further information, please contact Grantor's counsel:
Sarah J. Baker
Sarah J. Baker PC
1099 Capitol Street #204
Post Office Box 4551
Eagle, CO 81631
Telephone: (970) 331-0799
E -Mail: sbaker(a-)sbakerpc.com
THE PROPERTY CONVEYED HEREBY SHALL NOT BE REGARDED AS RESIDENTIAL.
WARRANTY DEED
THIS DEED, dated as of the 17th day of January, 2018, between
TRINITY-SUNROAD, LLC, a Georgia limited liability company, of the County
of Fulton, State of Georgia ("Grantor"), and 15 SUN ROAD, LLC,
a Colorado limited liability company, the mailing address of which, for
purposes of this Deed, is One Aspen Drive, Suite 85, Loveland, Colorado
80538, of the County of Larimer, State of Colorado ("Grantee").
WITNESSETH:
That Grantor, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, to Grantor in hand
paid by Grantee, the receipt of which is hereby confessed and
acknowledged, has granted, bargained, sold, and conveyed, and by these
presents does hereby grant, bargain, sell, convey, and confirm unto
Grantee, its successors and assigns, forever, all the real property,
together with improvements, if any, situate, lying, and being in the
County of Eagle, State of Colorado, which is legally described as
follows:
Lot 2, Second Amendment to the Sunroad Subdivision
according to Plat recorded June 14, 1993, in
Book 611 at Page 287 under Reception No. 507365,
County of Eagle, State of Colorado.
(Street Address: 15 Sun Road, Avon, Colorado)
TOGETHER WITH any water rights or utility taps owned by
Grantor which are appurtenant to the above-described property.
TOGETHER WITH all and singular the hereditaments and appurtenances
thereunto belonging, or in anywise appertaining, the reversion and
reversions, remainder and remainders, rents, issues, ,and profits
thereof; and all the estate, title, interest, claim, and demand
whatsoever of Grantor, either in law or equity, of, in, and to the
above -bargained premises, with the hereditaments and appurtenances.
TO HAVE AND TO HOLD the said premises above bargained and
described, with the appurtenances unto Grantee, its successors and
assigns, forever. And Grantor, for itself and its successors and
assigns, does covenant, grant, bargain, and agree to and with Grantee,
its successors and assigns, that at the time of the ensealing and
delivery of these presents it is well seized of the premises above
conveyed; has good, sure, perfect, absolute, and indefeasible estate of
inheritance, in law, in fee simple; and has good right, full power, and
lawful authority to grant, bargain, sell, and convey the same in manner
and form as aforesaid; and that the same are free and clear from all
former and other grants, bargains, sales, liens, taxes, assessments,
encumbrances, and restrictions of whatever kind or nature soever, and
Grantor does hereby warrant the title to the same, EXCEPT AND SUBJECT TO
those matters set forth on Exhibit "A" attached hereto and incorporated
herein by reference.
(HPG 1/12/18)
Grantor shall and will WARRANT AND FOREVER DEFEND the
above -bargained premises in the quiet and peaceable possession of
Grantee, its successors and assigns, against all and every person or
persons lawfully claiming the whole or any part thereof.
IN WITNESS WHEREOF, Grantor has executed this Warranty Deed as of
the date set forth above.
TRINITY-SUNROAD, LLC, a Georgia
limited li ility company
By
Vinc nt A, ggio, Manager
STATE OF GEORGIA )
ss.
COUNTY OF FULTON )
S The foregoing instrument was acknowledged before me this
day of January, 2018, by Vincent A. Riggio, as Manager of
TRINITY-SUNROAD, LLC, a Georgia limited liability company.
WITNESS my hand and official seal. -1 1
My commiss�4ptl(16RPp'Fes :
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Notary Public
(HF&G 1/12/18) - 2 -
EXHIBIT "A" ATTACHED .TO AND MADE A PART OF THE WARRANTY DEED BETWEEN
TRINITY-SUNROAD, LLC ("GRANTOR") AND 15 SUN ROAD, LLC ("GRANTEE")
TITLE EXCEPTIONS
1. The right of the proprietor of a vein or lode to extract and
remove his ore therefrom should the same be found to penetrate or intersect
the premises hereby granted as provided by law and right of way thereon for
ditches or canals as reserved by the United States Patent as set forth
below:
Recording Date: May 4, 1905
Recording No.: Book 48 at Page 272
2. Each and every right or rights of access granted to the
Department of Highways, State of Colorado recorded October 14, 1969, in
Book 216 at Page 168.
3. Covenants, conditions and restrictions but omitting any
covenants or restrictions, if any, including but not limited to those based
upon race, color, religion, sex, sexual orientation, familial status,
marital status, disability, handicap, national origin, ancestry, source of
income, gender, gender identity, gender expression, medical condition or
genetic information, as set forth in applicable state or federal laws,
except to the extent that said covenant or restriction is permitted by
applicable law, as set forth in the Restatement of and Sixth Amendment to
Declaration of Protective Covenants recorded April 23, 1985, in Book 411
at Page 960, and Amendment to Declaration recorded February 7, 1990, in
Book 522 at Page 721-
4. Easements, notes, terms, conditions, provisions, agreements and
obligations as shown on the following plats:
First Amendment to the Sunroad Subdivision recorded January 28,
1992, in Book 571 at Page 579.
Second Amendment to the Sunroad Subdivision recorded June 14,
1993, in Book 611 at Page 287.
5. Terms, conditions, provisions, agreements and obligations
contained in the Zoning Agreement as set forth below:
Recording Date: August 15, 1991
Recording No.: Book 559 at Page 953
6. Terms, conditions, provisions, agreements and obligations
contained in the Trench, Conduit and Vault Agreement as set forth below:
Recording Date: June 3, 1992
Recording No.: Book 581 at Page 369
7. Terms, conditions, provisions, agreements and obligations
contained in the Declaration of Utility Easement as set forth below:
Recording Date: July 8, 1992
Recording No.: Book 584 at Page 307
8. Terms, conditions, provisions, agreements and obligations
contained in the Stipulated Rule and Order as set forth below:
Recording Date: July 25, 1997
Recording No.: Book 732 at Page 963
(EF&G 1/12/18) - 3 -
PAGE 2 TO EXHIBIT "A" ATTACHED TO AND MADE A PART OF THE WARRANTY DEED
BETWEEN TRINITY-SUNROAD, LLC ("GRANTOR") AND 15 SUN ROAD, LLC
("GRANTEE")
TITLE EXCEPTIONS
(continued from Page 1 to Exhibit "A")
9. Subject as hereinafter provided, the Lease between
Trinity-Sunroad, LLC, a Georgia limited liability company, Lessor, and
Walgreen Co., an Illinois corporation, Lessee, as shown by Memorandum of
Lease recorded August 9, 2011, at Reception No. 201114754.
10. Subject as hereinafter provided, the terms, conditions,
provisions, agreements and obligations contained in the Memorandum of
Lease as set forth below:
Recording Date: August 9, 2011
Recording No.: Reception No. 201114754
11. Deed of Trust to secure an indebtedness in the amount shown
below:
Amount: $3,900,000.00
Trustor/Grantor: Trinity-Sunroad, LLC, a Georgia
limited liability company
Trustee: Public Trustee of Eagle County
Beneficiary: State Farm Life Insurance Company
Dated: January 25, 2013
Recording Date: January 25, 2013
Recording No.: Reception No. 201301751
Note: Assignment of Rents and Leases recorded January 25, 2013, at
Reception No. 201301752.
Note: Subordination, Non -Disturbance and Attornment Agreement
recorded January 25, 2013, at Reception No. 201301787.
12. Real property taxes for 2017 and subsequent years, a lien not
yet due and payable.
13. Any rights, interests, or claims which may exist or arise by
reason of the following matters disclosed by survey:
Job No.: 12059
Dated: November 9, 2012
Prepared by: J & K, Inc.
Matters shown: Electronic Messaging sign installed generally
within an area in which the Town has a utility and drainage
easement, no document recorded.
NOTWITHSTANDING EXCEPTIONS 9 AND 10 ABOVE, GRANTOR REPRESENTS AND
WARRANTS TO GRANTEE THAT THE "RIGHT OF FIRST REFUSAL" PROVIDED FOR IN
ARTICLE 25 OF THE SUBJECT LEASE AND IN THE RECORDED MEMORANDUM OF LEASE
WAS NOT EXERCISED WITH RESPECT TO THIS SALE AND CONVEYANCE, AFTER PROPER
NOTICE TO THE TENANT.
(HF&G 1/12/18) - 4 -
REAL PROPERTY TRANSFER DECLARATION
(TD -1000)
GENERAL INFORMATION
Purpose: The Real Property Transfer Declaration provides essential information to the county assessor to help ensure fair and uniform
assessments for all property for property tax purposes. Refer to 39-14-102(4), Colorado Revised Statutes (C.R.S.).
Requirements: All conveyance documents (deeds) subject to the documentary fee submitted to the county clerk and recorder for recordation
must be accompanied by a Real Property Transfer Declaration. This declaration must be completed and signed by the grantor (seller) or grantee
(buyer). Refer to 39-14201(])(a), C.R.S.
Penalty for Noncompliance: Whenever a Real Property Transfer Declaration does not accompany the deed, the clerk and recorder notifies the
county assessor who will send a notice to the buyer requesting that the declaration be returned within thirty days after the notice is mailed.
If the completed Real Property Transfer Declaration is not returned to the county assessor within the 30 days of notice, the assessor may impose
a penalty of S25.00 or .025% (.00025) of the sale price, whichever is greater. This penalty may be imposed for any subsequent year that the
buyer fails to submit the declaration until the property is sold. Refer to 39-14-102(1)(b), C.R.S.
Confidentiality: The assessor is required to make the Real Property Transfer Declaration available for inspection to the buyer. However, it is
only available to the seller if the seller filed the declaration. Information derived from the Real Property Transfer Declaration is available to
any taxpayer or any agent of such taxpayer subject to confidentiality requirements as provided by law. Refer to 39-5-121.5, C.R.S. and 39-13-
102(5)(c), C.R.S.
1. Address and/or legal description of the real property sold: Please do not use P.O. Box numbers.
Lot 2 Second Amendment to the Sunroad Subdivision, according to Plat recorded June 14, 1993, in Book 611
at Page 287 under Reception No. 507365 County of Eaele. State of Colorado (15 Sun Road. Avon, Colorado)
2. Type of property purchased: _ Single Family Residential _Townhome _ Condominium —Multi -Unit Res
X Commercial Industrial _ Agricultural _ Mixed Use _ Vacant Land _ Other
3. Date of closing:
January 17, 2018
Month Day Year
Date of contract if different from date of closing:
September 28, 2017
Month Day Year
4. Total Sale Price: Including all real and personal property.
$ 8,190,340.00
5. Was any personal property included in the transaction? Personal property would include, but is not limited
to, carpeting, draperies, free standing appliances, equipment, inventory, furniture. If the personal property is not
listed, the entire purchase price will be assumed to be for the real property as per 39-13-201, C.R.S.
X Yes _ No If yes, approximate value $ see attached Addendum Describe see attached Addendum
6. Did the total sale price include a trade or exchange of additional real or personal property? If yes, give
the approximate'value of the goods or services as of the date of closing.
Yes X No If yes, value $
Does this transaction involve a trade under IRS Code Section 1031? X Yes _ No
7. Was 100% interest in the real property purchased? Mark "no" if only a partial interest is being purchased.
X Yes _ No If no, interest purchased
8. Is this a transaction among related parties? Indicate whether the buyer or seller are related. Related parties
include persons within the same family, business affiliates, or affiliated corporations.
Yes X 'No
9. Check any of the following that apply to the condition of the improvements at the time of purchase.
New Excellent Good X Average Fair Poor Salvage
If the property is financed, please complete the following.
10. Total amount financed. $ 3,228,584.08
11. Type of financing: (Check all that apply)
New
X Assumed
Seller
Third Party
12. Terms:
_ Variable; Starting interest rate _%
X Fixed; Interest rate 4.25 %
Length of time approx. 15 years remaining on loan
Balloon payment — Yes X No. If yes, amount $ Due date 2/01/2033
13. Please explain any special terms, seller concessions, or financing and any other information that would
help the assessor understand the terms of sale.
See attached Addendum.
For properties other than residential (Residential is defined as: single family detached, townhomes, apartments and
condominiums), please complete questions 14-16 if applicable. Otherwise, skip to #17 to complete.
14. Did the purchase price include a franchise or license fee?
If yes, franchise or license fee value $
15. Did the purchase price involve an installment land contract?
If yes, date of contract
Yes X No
Yes X No
16. If this was a vacant land sale, was an on-site inspection of the property conducted by the buyer prior to
the closing? Yes _ No N/A
Remarks: Please include any additional information concerning the sale you may feel is important.
See attached Addendum.
17. Signed this 15th day of January , 2018.
Enter the day, month, and year, have at least one of the parties to the transaction sign the document, and include
an address and a daytime phone number. GranteeBuyer is signing below as follows:
15 SUN ROAD, LLC, a Colorado limited liability company
Signature of Grantee/Buyer Steven;;. Schroeder, Manager
18. All future correspondence (tax bills, property valuations, etc.) regarding this property should be mailed to:
One Aspen Drive Unit 85 970-222-075_8
Address (mailing) Daytime Phone
Loveland CO 80538
City, State and ZIP Code
ADDENDUM ATTACHED TO AND MADE A PART OF THE REAL PROPERTY TRANSFER
DECLARATION EXECUTED BY 15 SUN ROAD, LLC:
The Total Sale Price of $8,190,340.00 set forth in paragraph 4
includes both -the "Real Property Value" and the "Existing Lease
Value" explained below.
The Real Property Value was agreed to be $4,059,850.00',
consisting of (i) $1,859,850.00 for Seller's represented hard
construction costs for the existing building (approximately $118.80
per square foot times 15, 655 square feet) , and (ii) the agreed upon
land value of $2,200,000.00,
The Existing Lease Value was agreed to be $4,130,490.00 based
on the .current income from an existing "triple net" Lease with a
nationally recognized tenant (Walgreen Co.).
Avon
February 14, 2018
15 Sun Road LLC
One Aspen Drive, Suite 85
Loveland, CO 80538
Sent VIA E -Mail: Sbaker n,sbakerpc.com
Dear Ms. Baker,
We have received your application for Exemption from Real Property Transfer Tax on
January 19, 2018 ("RETT Exemption Application"). We find the RETT Exemption
Application includes adequate information to complete our review under Avon Municipal Code
("AMC") Section 3.12.070(c) for the purposes of our review.
The stated sales price for the transaction is $8,1 -90;340:00 -for the conveyance by Warranty
Deed dated January 17, 2018 as stated in the Real Property Transfer Declaration. The RETT
Exemption Application requests an exemption for a portion of the sales price based on the
asserted value of $4,130,490 for transfer of the existing lease.
AMC Section 3.12.020 defines Consideration in part to mean, "... the actual cash paid
and/or value of the property delivered ... in return for the transfer of ownership or title to ...
real property ..." The RETT Exemption Application indicates that the actual cash paid for
transfer of title to the property was $8,190,340. AMC Section 3.12.050 states that the
computation of tax shall be two percent (2%) of the consideration paid.
AMC Section 3.12.060. sets forth a list of exemptions from the real estate transfer tax.
Consideration paid for assignment of a lease as a component of total consideration paid for the
transfer of property is not one of the exemption from the real estate transfer tax under AMC
Section 3.12.060. The RETT Exemption Application does not cite an exemption under AMC
Section 3.12.060. We understand that the RETT Exemption Application is based on the
proposition that a portion of the consideration paid for transfer of title to the property is based on
the value of assigning the lease rather than the value of the land and building.
On the basis of the information submitted, the RETT Exemption Application is hereby
denied. You have the right to submit an appeal to the Avon Town Council under AMC
3.12.070(d), which is attached to this letter for your convenience. An appeal must be filed in
writing with the Avon Town clerk within thirty days after the date of transmittal of this denial
decision (March 16, 2018).
The Town has not previously received a real estate transfer tax exemption application
seeking an exemption for the consideration paid for the assignment of a lease. As a matter of
policy, town staff believes that income from a commercial property, whether through an existing
Post Office Box 975 1 One Lake Street I Avon, CO 816201970-743-4000 1 www.avon.org
Avon
C;_)Li_1;;AF)11j
lease or through potential lease revenues under fair market conditions, is a common component
to coni nercial property appraisal and valuation. Therefore, we believe that the value of an
existing lease or the value of potential commercial revenues is an appropriate component of
consideration paid for the transfer of property. We do not believe there is a policy reason to
suggest to the Avon Town Council a change to the definition of consideration or to expand the
list of exemptions under Chapter 3.12 Real Property Transfer Tax of the AMC to include
consideration paid for assignment of a lease.
Sincerely, + L
JA'�/V ---amu r S C n t w r r l^ 1
Scott Wright
Assistant Town Manager and Finance Director
cc: Sarah Baker: sent VIA E -Mail to sbaker�sbake�c.coin
Virginia Egger, Town Manager
Scott Wright, Assistant Town Manager and Finance Director
Eric Heil, Town Attorney
Post Office Box 975 1 One Lake Street I Avon, CO 81620 970-748-4000 1 www.avon.org
.von
COLORADO
3.12.070 - Application for exemption—appeal.
(a) Application required. No transfer of real property shall be exempt from the imposition of the
real estate transfer tax imposed in Section 3.12.030 unless a complete application for
exemptions is filed with the Town and such application is approved by the Town. An
application may be filed no more than seventy-five (75) days prior to a transfer of real property
or within seventy-five (75) days after the transfer of real property. No application for
exemption from real property transfer tax shall be received and no such application shall be
approved if submitted to the Town more than four (4) months after the date of transfer, unless
the Finance Director finds good cause exists for a later filing. Notwithstanding the foregoing,
an application for exemption for low and moderate income housing projects pursuant to
Section 3.12.060(14) must be submitted and approved prior to the transfer of real property
and no such application for exemption pursuant to Section 3.12.060(14) may be received or
approved after the transfer of real property.
(b) Form of application. The form of application for exemption from real property transfer tax,
the form for an appeal and any other forms related to this Chapter shall be determined by the
Town Manager. The form of application shall require the applicant to provide all information
necessary to determine if such application complies with the definition and intent of the
exemptions set forth in Section 3.12.060 above.
(c) Application review. The Town Manager or designee shall review applications for exemption
from real property transfer tax within thirty (30) days of receipt of a complete application. The
failure of the Town Manager or designee to review an application for exemption from real
property transfer tax within thirty (30) days shall not be deemed to constitute an approval of
an application for exemption from real property transfer tax; however, the applicant may elect
to appeal the application directly to the Town Council according to the procedures set forth in
subsection (d) below. If the Town Manager or designee determines that the application does
not include adequate information to determine whether the application complies with an
exemption stated in Section 3.12.060 above, the Town shall send a communication to the
applicant stating that the application shall be denied unless the applicant provides additional
information, shall state the required information and shall provide a maximum of thirty (30)
days for the applicant to provide additional information. The Town Manager or designee shall
review additional information which is timely submitted within thirty (30) days of receipt.
The Town Manager or designee shall approve, partially approve or deny the application in
writing based upon compliance with the exemptions, or the intent of the exemptions, set forth
in Section 3.12.060. Inadequate or inaccurate information which does not demonstrate
compliance with the exemptions set forth in Section 3.12.060 shall be grounds for denial of
an application.
(d) Appeal to Council. Any person whose application for exemption from real property transfer
tax is not acted upon within the timeframe set forth in subsection (c) above or whose
application is denied or partially approved may appeal such decision to the Town Council in
accordance with the procedures and requirements of this Section. The applicant shall file a
written appeal in writing with the Town Clerk within thirty (30) days after the date of
transmittal of the decision of the Town Manager or designee to deny such application. The
Post Office Box 975 1 One Lake Street I Avon, CO 81620 970-748-4000 1 www.avon.org
A A,
Avon
C O L O R A D O
failure to file a written appeal within thirty (30) days after the date of transmittal of the
decision to deny the application shall bar any further consideration of the application, shall
bar any appeal to the Town Council and shall bar any judicial review by a Colorado court.
The written appeal shall state the reasons for the appeal. An appeal which is filed timely shall
be considered and acted upon by the Town Council within forty-five (45) days after the date
of receipt. The Town shall provide at least three (3) days' prior notice to the applicant stating
the date, time and location where the Town Council will consider the appeal. The decision of
the Town Council shall be in writing. The Town Council shall detennine whether to approve,
partially approve or deny the application based on compliance with the exemptions, or the
intent of the exemptions, set forth in Section 3.12.060. Inadequate or inaccurate information
which does not demonstrate compliance with the exemptions set forth in Section 3.12.060
shall be grounds for denial of an application. The failure by the Town Council to hear and
decide an appeal within forty-five (45) days after the receipt of the appeal shall result in the
approval of the application.
(e) False or inaccurate information. Any approval of an application for exemption from real
property transfer tax which is based upon false or inaccurate information provided by the
applicant shall be void ab initio, and such transfer shall be subject to all real property transfer
tax imposed, along with penalties and interest calculated from the date of such transfer.
(f) Duration of approval. An approval for exemption from real property transfer tax which is
granted prior to a transfer shall be valid for seventy-five (75) days and shall then expire if the
transfer has not occurred.
(g) Fees. The Town Council may adopt a resolution setting fees for the processing and reviewing
of applications and appeals as is determined reasonably necessary to recover the costs incurred
by the Town.
(Ord. 15-02 §6; Ord. 10-10 §2)
Post Office Box 975 1 One Lake Street I Avon, CO 81620 970-748-4000 1 www.avon.org
March 15, 2018
By email to vejeQer(a)avon.or�
Town of Avon, Colorado
Post Office Box 975
One Lake Street
Avon, Colorado 81620
Attn: Town Manager
APPEAL OF DENIAL OF
APPLICATION FOR EXEMPTION
FROM REAL PROEPRTY TRANSFER TAX
Dear Manager:
1 submit this appeal on behalf of Trinity-Sunroad, LLC ("Applicant"), the former owner
of the real property at 15 Sun Road, Avon, Colorado. On January 17, 2018, Applicant concluded
a transaction ("Transaction") by which it (i) conveyed the property located at 15 Sun Road, Avon,
Colorado ("Property") and (ii) assigned all of its right, title and interest in and to that certain Lease
dated July 28, 2011 ("Lease") between Applicant and Walgreen Co., an Illinois corporation to 15
Sun Road, LLC. The Property was conveyed by Warranty Deed recorded at Reception No.
201800971 (the "Warranty Deed'),' and the Lease was assigned pursuant to a separate
Assignment and Assumption of Lease dated January 17, 2018 ("Lease Assignment").2
THE TRANSACTION AND EXEMPTION APPLICATION
On January 19, 2018, Applicant fled a Transfer Tax Exemption Application ("Exemption
Application")3 with the Town of Avon ("Avon") asserting payment under protest, and exemption
from payment, of the Town of Avon Real Property Transfer Tax ("RETT") for the value of the
portion of the Transaction agreed upon by the parties as the existing lease value. As set forth in
the Exemption Application, the total value of the Transaction was $8,190,340.00, which the parties
agreed included two elements:
(1) $4,059,850 as value for the real property conveyed by the Warranty Deed, and
(2) $4,130,490 for the existing lease value conveyed by the Lease Assignment.
See Warranty Deed, Exhibit 1.
'- See Lease Assignment, Exhibit 2.
3 See Exemption Application, Exhibit 3.
Sarali J. Baker P.C.
P.O. Box 455 1 • 1099 Cal)itol Street, #204 • Eagle, CO 81631
t: (970) 331-0799 f. (866) 597-4823 e: sbaker@sbakerpc.coin
Town of Avon, Colorado
March 15, 2018
Page 2
These numbers are reflected on the Real Property Transfer Declaration (Form TD -1000) executed
by the buyer and submitted to the Eagle County Clerk and Recorder contemporaneous with the
recording of the Warranty Deed.4
In its Exemption Application, Applicant explained that in order to avoid the possibility of
imposition of a lien by Avon, at the closing of the transaction, it remitted the RETT to Avon based
on the value of the entire Transaction. That payment to the Town was in the amount of
$164,236.80. However, as noted above, the total value of the Transaction included two elements,
one of which is separately taxed under, and is consideration for other than an interest in real
property as defined by, the Town of Avon Real Property Transfer Tax Ordinance, memorialized
in Chapter 3.12 of the Avon Municipal Code ("RETT Ordinance").
The Exemption Application claimed payment under protest, and exemption from payment
of the RETT for, the existing lease value. Applicant claims the proper payment due, and
overpayment of tax, under the RETT Ordinance as follows:
(A) Payment under partial protest to the Town: $164,236.80
(B) Transfer tax on consideration for real property interest: $81,197.00
(C) Overpayment: $83,039.80
APPEAL OF AVON'S DENIAL OF THE EXEMPTION APPLICATION
On February 14, 2018, by email from Martha Anderson, Avon advised Applicant of its
denial of Applicant's Exemption Application (the "Denial"). Pursuant to Avon Municipal Code
"AMC") § 3.12.070(b), Applicant hereby appeals Avon's Denial.
TIMELINESS OF APPEAL
Pursuant to AMC § 3.12.070(b), any person whose application for exemption from the
RETT is denied may appeal such decision to the Town Council. The appeal shall be filed in writing
with the Town Clerk within thirty (30) days after the date of transmittal of the decision of the Town
Manager or designee. This appeal is timely, as it is fled on or before March 16, 2018.
BASIS FOR APPEAL
The Denial should be overturned for two primary reasons. First, because the Lease is a
long-term and/or non -market lease, Avon's Denial errs in combining the value of the leased fee
and leasehold estate, resulting in double taxation of the value of the leasehold estate. Second, the
transfer of the Applicant/landlord's contractual rights under the Lease is not a transfer of an interest
or possessory right in and to real estate, and is therefore outside what Avon can legally impose its
RETT on under AMC § 3.12.030. This appeal addresses each, in turn.
4 See Real Property Transfer Declaration, Exhibit 4.
Town of Avon, Colorado
March 15, 2018
Page 3
1. The Lease must be treated as a separate component of value under the RETT
Ordinance.
Avon's Denial takes the position that lease revenues are generally a "common component
to commercial property appraisal and valuation" and that therefore, the Lease value is a component
of consideration paid for the Transaction. On this basis, Avon maintains that the consideration
paid for the real estate includes the value the parties agreed is for the existing Lease value.
While Avon's position may be an appropriate one in a short-term, market lease
circumstance, it is not the case in a long-term, non -market lease situation, as the Real Property
Valuation Manuals ("Manual") published by the State of Colorado Department of Local Affairs
– Division of Property Taxation ("Division") makes clear. A long-term, non -market lease occurs
when:
1. A property is occupied by a single tenant;
2. Rental income per unit of comparison (usually $/sf) is outside the range that is
typical of similar properties; -
3. The lease is of long enough duration to have a significant impact on value.
See Manual, Vol. 3, §7.13. The Manual goes on to provide that:
Consideration of the following criteria will be helpful in determining the applicability of
long-term, non -market lease valuation procedures:
• Long-term lease refers to a lease with a remaining term of ten years or more. Lease
options are not relevant in this determination, unless there is strong evidence that the
option(s) will be exercised. (Examples of this type of evidence may include: a letter of
intent to renew, a lease renewal agreement, or a solid history of exercising renewal
options.)
• Lease terms are not renegotiable upon sale of the property.
• Lease terms are not renegotiable upon exercise of a renewal option.
• The tenant's interest (leasehold estate) must be transferable for there to be any
leasehold value.
Id. As applied to the facts of this Transaction, (1) the property is occupied by a single tenant, (2)
the Lease is long-term, in that it continues until 2087-69 more years;6 (3) the terms of the Lease
5 https://drive.google.com/file/d/iimZZAAD9-KvrV3wgoXG2ghgagRusNIb8/view
G See Lease, Article 1. It is our understanding that Avon is in possession of a copy of the Lease. However, if this is
not the case, please advise and a copy will be provided subject to a non -disclosure agreement, given the commercial
sensitivity of the business terms of the Lease, the vast majority of of which are not relevant to the issues presented in
this appeal.
Town of Avon, Colorado
March 15, 2018
Page 4
are not renegotiable upon sale of the property; (4) the Lease does not include renewal options; and
(5) the leasehold estate is transferable.7
As a long-term and/or non -market lease, valuation of the leased fee interest$ and the
leasehold interest9 should be—and are—treated distinctly under both the guidance of the Manual,
as well as under Avon's RETT Ordinance:
As a general rule, § 39-1-106, C.R.S., requires that the fee simple interest in
property be valued for property tax purposes. The valuation process should reflect
a market value, using market assumptions, including market rent, market expenses,
and market occupancy. There are a few specific exceptions to this requirement.
The valuation of property subject to a long-term, non -market lease is one of
those exceptions.
Manual, Vol. 3, §7.13 (emphasis added).
Avon's RETT Ordinance as drafted—but not as it is being applied under the Denial—
honors the Division's recognition that "[t]he sale of a property subject to a long-term, non -
market lease cannot reflect the value of both the leased fee and leasehold estates; therefore,
each component of value should be considered separately by this method." Id. Avon
acknowledged this in its RETT Ordinance by separately imposing a transfer tax on leases where
the initial possessory term is for twenty-five years or more. See AMC § 3.12.060(10). In other
words, the proper way to impose the RETT on the value of a long-term lease is to separately
consider the leased fee interest and the leasehold interest. By imposing its RETT on both the value
of the transfer of the leased fee estate—as well as on the leasehold estate's capitalization or annual
rentals'—Avon properly captures taxation of the two distinct interests without double -counting.
However, as Avon seeks to apply its RETT under the interpretation of the Denial, Avon is
actually and impermissibly applying its RETT twice to the value leasehold estate: first in its
collection of a tax on the lease capitalization or annual rental, and second in its inclusion of the
existing lease value as a component of the value of the real estate. This result is precisely that
which is prohibited under the unit assessment rule, which prohibits multiple assessments on
multiple taxpayers holding disparate interests in a single piece of property. See City and County
' "At any time and from time to time, without Landlord's consent, Tenant may assign this Lease or Tenant may sublet
the Leased Premises or Building to any person, firm, corporation or other entity, other than a corporation or other
entity described in Article 13(b) above, for any lawful purpose." See Lease, Article 13(c).
8 "A leased fee interest is the lessor's, or landlord's interest. It is an ownership interest held by a landlord with the
rights of use and occupancy conveyed by a lease to others." Manual, Vol. 3, §7.13.
' "A leasehold estate is the lessee's, or tenant's estate. It is the interest held by the lessee (tenant or renter) through a
lease conveying the rights of use and occupancy for a stated term under certain conditions." Id.
10 See AMC § 3.12.020 Definitions — Consideration ("In the event that the transaction or transfer is by lease agreement
not specifically exempted in Section 3.12.060 of this Chapter, the consideration shall be computed based upon the
capitalization or the current annual rental for ten (10) years, plus any additional consideration, paid or to be paid.
When it is not possible to determine the annual rental, the tax shall be based upon the appraised value of the property
covered by the lease, and this decision, that the annual rental cannot be determined, shall be solely at the discretion of
the Town Manager...")
Town of Avon, Colorado
March 15, 2018
Page 5
of Denver v. Bd. of Assessment Appeals of State of Colo., 848 P.2d 355, 358 (Colo. 1993). As the
Colorado Supreme Court recognized:
The responsibility of apportioning the tax on this assessment among the various
interest holders rests on the private parties who own these interests... In the
ordinary case the whole of the property is taxed, and which party bears the taxation
burden is not a matter of public concern; rather it is to be resolved as a matter of
contract between the landlord and tenant.
Id. at 359-60, citing Ti°imble v. Seattle, 231 U.S. 683, 689, 34 S.Ct. 218, 219, 58 L.Ed. 435 (1914).
Avon, under its RETT Ordinance, has the right to tax both the leased fee interest and the
leasehold interest. But it cannot—as its Denial would have the effect of doing—impose the tax on
the value of the leasehold interest twice. The comparison in approach between Avon and Applicant
is summarized as follows:
AVON'S APPROACH TO VALUATION
Leased Fee Interest
$4,059,850 real estate value $8,190,340
$4,130,490 existing lease value
Leasehold Interest
$4,483,66411 $4,483,664
TOTAL VALUE OF ESTATES $12,674,004
APPLICANT'S APPROACH TO VALUATION
Leased Fee Interest
$4,059,850 real estate value $4,059,850
Leasehold Interest
$4,483,664 $4,483,664
TOTAL VALUE OF ESTATES $8,543,514
As demonstrated, the effect of Avon's approach under the Denial is to impermissibly apply
the RETT to the value of the leasehold estate twice, resulting in an inaccurate inflation of the actual
value of the real property. 12 As contemplated by Trimble, it is up to the private parties who own
the interests to allocate the value between themselves for purposes of taxation. They have done
so in this case—as is evidenced by the Real Property Transfer Declaration and Walgreens'
payment of the RETT on the value of the Lease—and are properly paying Avon's RETT on both
elements.
" Calculated based on actual payments to Avon of RETT for the Lease value. The Lease tenant, Walgreens, is paying
Avon the RETT on the Lease. On or about September 22, 2017, Walgreens remitted a payment of $89,673.28 to Avon
for payment of Avon's RETT. See Town of Avon Receipt No. 01000036175, Exhibit 5.
12 For a useful comparison, the Eagle County Assessor assesses the leased fee interest at a value of $2,966,310. See
R040114 - http://property.eaelecounty.us/assessor/taxweb/account.isp?accountNum=RO40114.
Town of Avon, Colorado
March 15, 2018
Page 6
2. Avon's RETT is properly applied only to the value of the transfer of the real estate
interest.
The RETT Ordinance establishes the only legal authority Avon has for imposing a tax on
transfers of interests or possessory rights in and to real estate located in Avon. Avon can collect a
RETT to the extent—but only to the extent—authorized by the RETT Ordinance. AMC § 3.12.030
is the governing section of the RETT Ordinance that imposes the tax. It provides:
Except as provided in Section 3.12.060, there is imposed a tax on all transfers of
interests or possessory rights in and to real estate located in the Town by deed,
lease, assignment of lease, agreement for sale of stock or contract.
The foundation of the RETT Ordinance is that the RETT applies only to "transfers of interests ...
in and to real estate..." or "transfer of possessory rights in and to real estate." Under either
scenario, the transfer has to be in real estate. Applicant does not dispute that Avon's RETT applies
to the value of the portion of the Transaction that conveyed an interest in the real estate, but does
dispute that Avon's RETT applies to the value of the portion of the Transaction that transferred an
interest in the contractual rights memorialized by the Lease.
In its Denial, Avon has ignored the only critical inquiry: Is the transfer of the interest of
Applicant in the Lease a transfer of an interest or possessory right in and to real property?
While the AMC does not define "real estate," it is reasonable to assume that the AMC §
3.12.020 definition of "real property" was intended to apply: "Real property means property other
than personal property as defined by the statutes of the State and does not include trailers or
mobile homes..." The applicable definition of "real property" in the Colorado statues relating to
taxation is: "'Real property' means: (a) All lands or interests in lands to which title or the right of
title has been acquired from the government of the United States... (b) All mines, quarries, and
minerals in and under the land, and all rights and privileges thereunto appertaining; and (c)
Improvements."13 C.R.S. § 39-1-102(14). The definition of "personal property" in the Colorado
statutes relating to taxation is: "everything that is the subject of ownership and that is not included
within the term `real property..."' C.R.S. § 39-1-102(11).
In this case, it is clear that the transfer and assignment of Applicant's interest in the Lease
is not "real estate" under either Avon's definition or the definitions of the State statutes, and is
therefore outside of the class of transactions to which Avon's RETT can be imposed. Under
neither the plain meaning of the term "real estate" nor any of the definitions in the RETT Ordinance
or Colorado statutes can the contractual interest in the Lease be determined to be "real property."
Since it is not "real property", the state statutes make clear that it is "personal property," and the
RETT Ordinance expressly provides that the RETT does not apply to personal property. As such,
Avon cannot legally impose its RETT on the agreed-upon value of the Lease transfer.
13 "Improvements" is defined as "all structures, buildings, fixtures, fences, and water rights erected upon or affixed to
land, whether or not title to such land has been acquired." C.R.S. § 39-1-102(6.3).
Town of Avon, Colorado
March 15, 2018
Page 7
Avon seems to take the position in its Denial that the since aop rtion of the Transaction
included a transfer of an interest in real property, the RETT applies to and is calculated on the total
consideration for the entire Transaction. However, this position is in clear violation of the RETT
Ordinance. First, Avon's legislation that imposes the tax clearly applies it only to real estate. See
AMC § 3.12.030. In defining "real property,"14 Avon expressly excluded personal property.15 If
Avon had wanted its RETT to apply as the Denial interprets it, it would have defined real property
to include personal property that was conveyed within the same transaction as real property. But
Avon did not do so. As such, the RETT cannot legally be applied to the value paid for the Lease
assignment. Moreover, as discussed in Section 1 above, to the extent Avon's RETT is intended to
capture the increase in value to a property as a result of a long-term lease, that value is properly
captured by applying the tax to the lease capitalization or rentals—as Avon's RETT does—rather
than by also consolidating it into the value of the leased fee interest.
Avon goes on to base its denial, in part, on the fact that AMC § 3.12.060 does not include
an applicable exemption. However, it would be non-sensical to include an exemption for a
transaction to which the RETT is not properly applied in the first place.
Finally, Avon argues in support of its Denial that the Exemption Application "indicates
that the actual cash paid for transfer of title to the property was $8,190,340." This is an erroneous
and disingenuous characterization that cannot go unaddressed in this appeal. What the Exemption
Application states is that "The total sale price for the transaction was $8,190,340.00, which
included two elements..." (emphasis added). To the extent Avon's Denial is based on this
mischaracterization, it must be disregarded.
PROPER CALCULATION OF VALUE OF
TRANSFER OF INTEREST IN REAL ESTATE
The parties' agreed-upon allocation of the total price of the Transaction is set forth in the
Real Property Transfer Declaration, which provides
4. Total Sale Price: Including all real and personal property. $8,190,340.00.
5. Was any personal property included in the transaction? ... Yes, see attached
addenclnm.
Addendum
The Total Sale Price of $8,190,340.00 set forth in paragraph 4 includes both the
"Real Property Value" and the "Existing Lease Value" explained below.
The Real Property Value was agreed to be $4,059,850.00...
The Existing Lease Value was agreed to be $4,130,490.00...
14 Again, Avon's definition of "Real property" is being substituted for the term "real estate," since Avon's RETT
Ordinance does not define "real estate."
15 "Real property means property other than personal property..." AMC § 3.12.020.
Town of Avon, Colorado
March 15, 2018
Page 8
See Real Property Transfer Declaration, Exhibit 4.
Under the RETT Ordinance, Avon can—and must—apply its tax only to the value of the
transaction that is properly within the RETT. Avon's RETT allows it to tax only the real estate
portion of the transaction, and requires it to determine "consideration" on the basis of the "actual
cash paid and/or value of the property delivered ... for the transfer of ownership or title to ... real
property." As City and County of Denver makes clear, the private parties who own the interests
are responsible for apportioning the value. As such, Avon is required to apply the RETT to the
business deal the parties intended. The parties to this Transaction stated in the Real Property
Transfer Declaration what that actual cash paid or value of the property delivered for the real
property was: "The Real Property Value was agreed to be $4,059,850.00." By allocating the
entirety of the transaction value to the transfer of the real property interest, Avon has fundamentally
changed the business deal between buyer and seller. In doing so, Avon has violated its RETT
Ordinance.
CONCLUSION
As the Manual acknowledges, a property encumbered by a long-term, non -market lease
has two components of value—the value of the leased fee interest, and the value of the leasehold
interest. Avon's RETT, when properly applied, captures both of these values.
However, as applied by the Denial, Avon is exceeding its authority by improperly including
the value of the leasehold interest in the value of the leased fee interest for purposes of calculating
the consideration paid for the real estate. Furthermore, Avon is improperly construing the transfer
of the landlord's contractual rights memorialized by the Lease as a transfer of an interest in real
estate. Avon can appropriately capture the value of the leasehold interest once; but it cannot
improperly capture and tax it twice. For these reasons, Avon's Denial should be reversed, and
Applicant should be refunded its $83,039.80 overpayment.
Yours very truly,
SARAH J. BAKER PC
�jf"Alb-'sl
Sarah J. Ba r, Esq.
SJB:sw
Enclosures
cc: Eric Heil, Town Attorney (by email)
Scott Wright, Assistant Town Manager and Finance Director (by email)
Martha Anderson
Trinity-Sunroad LLC (by email)
EXHIBIT 1
TO
APPEAL OF DENIAL OF
APPLICATION FOR EXEMPTION
FROM REAL PROEPRTY TRANSFER TAX
WARRANTY DEED
Eagle County, CO 201800971
Regina O'Brien 01/18/2018
Pgs: 4 03:31:21 PM
REC: $28.00 DOC: $819.03
THE PROPERTY CONVEYED HEREBY SHALL NOT BE REGARDED AS RESIDENTIAL.
WARRANTY DEED
THIS DEED, dated as of the 17th day of January, 2018, between
TRINITY-SUNROAD, LLC, a Georgia limited liability company, of the County
of Fulton, State of Georgia ("Grantor"), and 15 SUN ROAD, LLC,
a Colorado limited liability company, the mailing address of which, for
purposes of this Deed, is One Aspen Drive, Suite 85, Loveland, Colorado
80538, of the County of Larimer, State of Colorado ("Grantee").
WITNESSETH:
That Grantor, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, to Grantor in hand
paid by Grantee, the receipt of which is hereby confessed and
acknowledged, has granted, bargained, sold, and conveyed, and by these
presents does hereby grant, bargain, sell, convey, and confirm unto
Grantee, its successors and assigns, forever, all the real property,
together with improvements, if any, situate, lying, and being in the
County of Eagle, State of Colorado, which is legally described as
follows:
Lot 2, Second Amendment to the Sunroad Subdivision
according to Plat recorded June 14, 1993, in
Book 611 at Page 287 under Reception No. 507365,
County of Eagle, State of Colorado.
(Street Address: 15 Sun Road, Avon, Colorado)
TOGETHER WITH any water rights or utility taps owned by
Grantor which are appurtenant to the above-described property.
TOGETHER WITH all and singular the hereditaments and appurtenances
thereunto belonging, or in anywise appertaining, the reversion and
reversions, remainder and remainders, rents, issues, and profits
thereof; and all the estate, title, interest, claim, and demand
whatsoever of Grantor, either in law or equity, of, in, and to the
above -bargained premises, with the hereditaments and appurtenances.
TO HAVE AND TO HOLD the said premises above bargained and
described, with the appurtenances unto Grantee, its successors and
assigns, forever. And Grantor, for itself and its successors and
assigns, does covenant, grant, bargain, and agree to and with Grantee,
its successors and assigns, that at the time of the ensealing and
delivery of these presents it is well seized of the premises above
conveyed; has good, sure, perfect, absolute, and indefeasible estate of
inheritance, in law, in fee simple; and has good right, full power, and
lawful authority to grant, bargain, sell, and convey the same in manner
and form as aforesaid; and that the same are free and clear from all
former and other grants, bargains, sales, liens, taxes, assessments,
encumbrances, and restrictions of whatever kind or nature soever, and
Grantor does hereby warrant the title to the same, EXCEPT AND SUBJECT TO
those matters set forth on Exhibit "A"" attached hereto and incorporated
herein by reference.
R&cc ding Requested by: t JDD H I.7 S -r�. F +
(HFfiG 1/12/18) 'R,iP -1i:'C C^_':Crado
Grantor shall and will W?U RANT AND FOREVER DEFEND the
above -bargained premises in the quiet and peaceable possession of
Grantee, its successors and assigns, against all and every person or
persons lawfully claiming the whole or any part thereof.
IN WITNESS WHEREOF, Grantor has executed this Warranty Deed as of
the date set forth above.
STATE OF GEORGIA
ss.
COUNTY OF FULTON
TRINITY-SUNROAD, LLC, a Georgia
limiyen-V-��
ility company
By
Vinc nt A. 'ggio, Manager
S The foregoing instrument was acknowledged before me this
day of January, 2018, by Vincent A. Riggio, as Manager of
TRINITY-SUNROAD, LLC, a Georgia limited liability company.
WITNESS my hand and official seal.
My commissfi90116 d fifes : Fef6wAG�Cln_
P R/
Q
F
.. �rJX t0 Aqy 9�. Q+
•O
(Er&G 1/12/18)
201800871
Notary Public
- 2 -
EXHIBIT "A" ATTACHED TO AND MADE A PART OF THE WARRANTY DEED BETWEEN
TRINITY-SUNROAD, LLC ("GRANTOR") AND 15 SUN ROAD, LLC ("GRANTEE")
TITLE EXCEPTIONS
1. The right of the proprietor of a vein or lode to extract and
remove his ore therefrom should the same be found to penetrate or intersect
the premises hereby granted as provided by law and right of way thereon for
ditches or canals as reserved by the United States Patent as set forth
below:
Recording Date: May 4, 1905
Recording No.: Book 48 at Page 272
2. Each and every right or rights of access granted to the
Department of Highways, State of Colorado recorded October 14, 1969, in
Book 216 at Page 168.
3. Covenants, conditions and restrictions but omitting any
covenants or restrictions, if any, including but not limited to those based
upon race, color, religion, sex, sexual orientation, familial status,
marital status, disability, handicap, national origin, ancestry, source of
income, gender, gender identity, gender expression, medical condition or
genetic information, as set forth in applicable state or federal laws,
except to the extent that said covenant or restriction is permitted by
applicable law, as set forth in the Restatement of and Sixth Amendment to
Declaration of Protective Covenants recorded April 23, 1985, in Book 411
at Page 960, and Amendment to Declaration recorded February 7, 1990, in
Book 522 at Page 721.
4. Easements, notes, terms, conditions, provisions, agreements and
obligations as shown on the following plats:
First Amendment to the Sunroad Subdivision recorded January 28,
1992, in Book 571 at Page 579.
Second Amendment to the Sunroad Subdivision recorded June 14,
1993, in Book 611 at Page 287.
5. Terms, conditions, provisions, agreements and obligations
contained in the Zoning Agreement as set forth below:
Recording Date: August 15, 1991
Recording No.: Book 559 at Page 953
6. Terms, conditions, provisions, agreements and obligations
contained in the Trench, Conduit and Vault Agreement as set forth below:
Recording Date: June 3, 1992
Recording No.: Book 581 at Page 369
7. Terms, conditions, provisions, agreements and obligations
contained in the Declaration of Utility Easement as set forth below:
Recording Date: July 8, 1992
Recording No.: Book 584 at Page 307
8. Terms, conditions, provisions, agreements and obligations
contained in the Stipulated Rule and Order as set forth below:
(EFSG 1/12/18)
201800971
Recording Date: July 25, 1997
Recording No.: Book 732 at Page 963
- 3 -
PAGE 2 TO EXHIBIT "A" ATTACHED TO AND MADE A PART OF THE WARRANTY DEED
BETWEEN TRINITY-SUNROAD, LLC ("GRANTOR") AND 15 SUN ROAD, LLC
("GRANTEE")
TITLE EXCEPTIONS
(continued from Page 1 to Exhibit "A")
9. Subject as hereinafter provided, the Lease between
Trinity- Sunroad, LLC, a Georgia limited liability company, Lessor, and
Walgreen Co., an Illinois corporation, Lessee, as shown by Memorandum of
Lease recorded August 9, 2011, at Reception No. 201114754.
10. Subject as hereinafter provided, the terms, conditions,
provisions, agreements and obligations contained in the Memorandum of
Lease as set forth below:
Recording Date: August 9, 2011
Recording No.: Reception No. 201114754
11. Deed of Trust to secure an indebtedness in the amount shown
below:
Amount: $3,900,000.00
Trustor/Grantor: Trinity-Sunroad, LLC, a Georgia
limited liability company
Trustee: Public Trustee of Eagle County
Beneficiary: State Farm Life Insurance Company
Dated: January 25, 2013
Recording Date: January 25, 2013
Recording No.: Reception No. 201301751
Note: Assignment of Rents and Leases recorded January 25, 2013, at
Reception No. 201301752.
Note: Subordination, Non -Disturbance and Attornment Agreement
recorded January 25, 2013, at Reception No. 201301787.
12. Real property taxes for 2017 and subsequent years, a lien not
yet due and payable.
13. Any rights, interests, or claims which may exist or arise by
reason of the following matters disclosed by survey:
Job No.: 12059
Dated: November 9, 2012
Prepared by: J & K, Inc.
Matters shown: Electronic Messaging sign installed generally
within an area in which the Town has a utility and drainage
easement, no document recorded.
NOTWITHSTANDING EXCEPTIONS 9 AND 10 ABOVE, GRANTOR REPRESENTS AND
WARRANTS TO GRANTEE THAT THE "RIGHT OF FIRST REFUSAL" PROVIDED FOR IN
ARTICLE 25 OF THE SUBJECT LEASE AND IN THE RECORDED MEMORANDUM OF LEASE
WAS NOT EXERCISED WITH RESPECT TO THIS SALE AND CONVEYANCE, AFTER PROPER
NOTICE TO THE TENANT.
(8F&G 1/12/18)
201800971
- 4 -
EXHIBIT 2
TO
APPEAL OF DENIAL OF
APPLICATION FOR EXEMPTION
FROM REAL PROEPRTY TRANSFER TAX
LEASE ASSIGNMENT
Eagle County, CO 201801320
Regina O'Brien 0112412018
Pgs: 5 12:46:03 PM
REC: $33.00 DOC: $0.00
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment and Assumption")
is made effective as of the V7 day of January, 2018 ("Effective Date") by and between
TRINITY-SUNROAD LLC, a Georgia limited liability company ("Assignor") and 15 SUN
ROAD, LLC, a Colorado limited liability company ("Assignee").
RECITALS
A. Assignor and Assignee are parties to that certain Contract to Buy and Sell Real
Estate, dated September 28, 2017, as amended (collectively, the "Purchase Agreement")
concerning the real property legally described as Lot 2, Second Amendment to the Sunroad
Subdivision, County of Eagle, State of Colorado ("Property').
B. Assignor simultaneously herewith has conveyed to Assignee all of Assignor's
right, title and interest in and to the Property and, in connection therewith, Assignor has agreed
to assign to Assignee all of Assignor's right, title and interest in and to that certain Lease dated
July 28, 2011 (the "Lease") between Assignor and Walgreen Co., an Illinois corporation (the
"Tenant"). The Lease is more fully described on Exhibit A attached hereto and incorporated by
reference.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor
and Assignee hereby agree as follows:
1. Assignor hereby assigns unto Assignee all of the right, title and interest of
Assignor in and to the Lease, to have and to hold the same unto Assignee, its successors and
assigns, from and after the Effective Date, subject to the terms, covenants and conditions of the
Lease.
2. Assignee hereby assumes the performance of all of the covenants and obligations
of Assignor as Landlord under the Lease to be performed from and after the Effective Date as to
each and every term, condition, covenant and obligation set forth in the Lease and all
amendments, modifications, and extensions thereof as if Assignee signed, executed, and
delivered the Lease and any amendments, modifications, and extensions thereof in Assignee's
own name and on Assignee's own behalf, except Assignee does not assume any obligations or
liabilities under the Lease accruing prior to the Effective Date, which obligations or liabilities
shall remain the responsibility of Assignor.
3. Assignor shall defend, indemnify and hold harmless the Assignee against and
from any and all obligations or liabilities under the Lease accruing prior to the Effective Date.
R ---,cording Requested by:
FN-TG-R!CS Co!oraado
p
(1/10/18) / V 00 14 2—
4. Assignee shall defend, indemnify and hold harmless the Assignor against and
from any and all liability to the Tenant for any default by the Assignee in performing its
obligations under the provisions of the Lease accruing from and after the Effective Date.
5. In the event of any dispute between Assignor and Assignee arising out of the
obligations of Assignor or Assignee under this Assignment and Assumption or concerning the
meaning or interpretation of any provision contained herein, the losing party shall pay the
prevailing party's costs and expenses of such dispute, including, without limitation, reasonable
attorneys' fees and costs. Any such attorneys' fees and other expenses incurred by either party in
enforcing a judgment in its favor under this Assignment and Assumption shall be recoverable
separately from and in addition to any other amount included in such judgment, and such
attorneys' fees obligation is intended to be severable from the other provisions of this
Assignment and Assumption and to survive and not be merged into any such judgment.
6. This Assignment and Assumption shall be governed by, and construed in
accordance with, the laws of the State of Colorado.
7. This Assignment and Assumption shall be binding on and inure to the benefit of
the parties hereto, their heirs, executors, administrators, successors in interest and assigns.
8. This Assignment and Assumption may be executed in separate counterparts,
which, together, shall constitute one and the same fully executed Assignment and Assumption.
[Signature page follows]
(1/10/18) -2-
201801320
2-
201801320
IN WITNESS WHEREOF, this Assignment and Assumption has been duly executed as of the
date first above written.
ASSIGNOR:
TRINITY-SUNROAD, LLC,
a Georgia limit d liability company
By: -
Vincent A."Figgio, Manager
�vlc�r�
STATE OF R )
SS.
COUNTY OF 1
The foregoing instrument was acknowledged before me this /fit day of January, 2018,
by Vincent A. Riggio, as Manager of TRINITY-SUNROAD, LLC, a Georgia limited liability
company.
WITNESS my hand and official seal.
My commission expires: /- /3 - ZOZ Z
SARAH J. BAKER
NOTARY PUBLIC
afa,4 Z' Aa�
STATE OF COLORADO
NOTARY ID 20144001790
Notary Public
y
MY COMMISSION EXPIRES 01113/2072
(1110/18) -3 -
201801320
IN WITNESS WHEREOF, this Assignment and Assumption has been duly executed as of the
date first above written.
ASSIGNEE:
15 SUN ROAD, LLC,
a Colorado limited liability company
By: �.
Steven A. Schroeder, Manager
STATE OF COLORADO )
ss.
COUNTY OF LARIMER )
The foregoing instrument was acknowledged before me this 15.4-k day of January, 2018,
by Steven A. Schroeder, as Manager of 15 SUN ROAD, LLC, a Colorado limited liability
company.
WITNESS my hand and official seal.
My commission expires:
LORI K. HANSON /
NOTARY PUBLIC
ATE OF COLORADO Notary Public
NOTARY ID 19874082022 y
MY COMMISSION EXPIRES NOV. 10. 2018
(1/10/18)
201801320
EXHIBIT A
TO ASSIGNMENT AND ASSUMPTION OF LEASE
Description of Lease
1. Lease dated July 28, 2011, in which Trinity-Sunroad, LLC, a Georgia limited
liability company, is the Landlord and Walgreen Co., an Illinois corporation, is the Tenant.
2. Memorandum of Lease dated July 28, 2011, and recorded August 9, 2011, under
Reception No. 201114754 of the Eagle County, Colorado records.
(1110/18)
201801320
First Amendment to Lease dated August 19, 2013.
EXHIBIT 3
TO
APPEAL OF DENIAL OF
APPLICATION FOR EXEMPTION
FROM REAL PROEPRTY TRANSFER TAX
EXEMPTION APPLICATION
AV O n TOWN OF AVON
APPLICATION FOR EXEMPTION
FROM REAL PROPERTY TRANSFER TAX
Grantee(s) (Buver(s)): 15 Sun Road, LLC
Mailing Address: One Aspen Drive, Suite 85, Loveland CO 80538
Phone Number: See attached
Date of Conveyance/Closing: January 17, 2018
Complex Name: N/A
E -Mail Address: See attached
Purchase Price/Consideration: See attached
Street Address: 15 Sun Road, Avon, CO
Title Company: Fidelity National Title
Building/Unit: N/A
E -Mail Address: teresa.hott@fnf.com
The undersigned hereby applies for exemption of the above real estate transaction from the payment of the Town
of Avon Real Property Transfer Tax. The basis of the application for exemption is as follows:
❑ (1) —Transfer to or from Governmental Entity
❑ (2) — Gift/Charity
❑ (3) — Termination of Joint Tenancy
❑ (4) — Death, Will, or Decree of Distribution
❑ (5) — Capital Investment or Reorganization
of Trusts, Corporations, LLCs, etc
❑ (6) — Bankruptcy
❑ (7) — Correction of Previously Recorded Transfer
❑ (8) — Cemetery Lots
❑ (9) — Condemnation
❑ (10) — Lease < 25 Years
❑ (11) — Mineral or Royalty Interest
❑ (12) — Debt Security
❑ (13) —Foreclosure, Sheriff's, Public Trustee, or
Treasurer's Deeds
❑ (14) — Deed Restricted Housing
❑ (15) — Primary Residence ($26 fee)
❑ Request 90 Day Move In Extension
❑ (16) — Subsequent Primary Residence ($26 fee)
❑ Request 90 Day Move In Extension
❑ (17) — IRS Tax Free or Tax Deferred trade
Explanation (Attach additional information as needed. See instructions.):
See attached Addendum
I hereby c er penalty of perjury that the foregoing statements are true and correct.
T/in road GGC
Avon Real Property Transfer Tax
Exemption Application Approved:
��►a Is
Date Grantee(s)
Town Manager or Designee
Date
***Allow Up to 30 Days for Processing per Chapter 3.12 of the Avon Municipal Code***
Date
Finance Department
Fee Paid (if applicable): Initials:
ADDENDUM ATTACHED TO AND MADE A PART OF THE
TRANSFER TAX EXEMPTION APPLICATION
For the Property at:
15 Sun Road, Avon, Colorado
On January 17, 2018, Trinity-Sunroad, LLC conveyed property located at 15 Sun Road, Avon,
Colorado to 15 Sun Road, LLC. The total sale price for the transaction was _$_8,190,340.00, which
included two elements:
(1) $4,059,850 as value for the real property, and
(2) $4,130,490 for the existing lease value.
These numbers are reflected on the Real Property Transfer Declaration (Form TD -1000) executed
by the Grantee and submitted to the Eagle County Clerk and Recorder contemporaneous with the
recording of the deed of conveyance, a copy of which is enclosed.
In order to avoid any possibility of imposition of a lien by the Town of Avon, at the closing of the
transaction, the Town of Avon Real Property Transfer Tax was remitted based on the total sale
price. The payment to the Town was in the amount of S164,236.80. However, as noted above, the
total sale price includes consideration for other than an interest in real property as defined by the
Town of Avon Real Property Transfer Tax Ordinance, memorialized in Chapter 3.12 of the Avon
Municipal Code.
Trinity-Sunroad LLC hereby claims payment under protest, and exemption from payment of the
real estate transfer tax for the non -real property portion of the sale price—that is, the difference
between the total sale price and the sale price paid for the real property interest. Trinity-Sunroad
LLC calculates the proper payment due under, and overpayment of, the Town of Avon Real
Property Transfer Tax Ordinance as follows:
(A) Actual payment to the Town: $164,236.80
(B) Transfer tax on consideration for real property interest: $81,197.00
(C) Overpayment: $83,039.80
Trinity-Sunroad, LLC hereby requests prompt refund from the Town of the same.
For further information, please contact Grantor's counsel:
Sarah J. Baker
Sarah J. Baker PC
1099 Capitol Street #204
Post Office Box 4551
Eagle, CO 81631
Telephone: (970) 331-0799
E -Mail: sbakerasbakerpc.com
EXHIBIT 4
TO
APPEAL OF DENIAL OF
APPLICATION FOR EXEMPTION
FROM REAL PROEPRTY TRANSFER TAX
REAL PROPERTY TRANSFER DECLARATION
REAL PROPERTY TRANSFER DECLARATION
(TD -1000)
GENERAL INFORMATION
Purpose: The Real Property Transfer Declaration provides essential information to the county assessor to help ensure fair and uniform
assessments for all property for property tax purposes. Refer to 39-14-102(4), Colorado Revised Statutes (C.R.S.).
Requirements: All conveyance documents (deeds) subject to the documentary fee submitted to the county clerk and recorder for recordation
must be accompanied by a Real Property Transfer Declaration. This declaration must be completed and signed by the grantor (seller) or grantee
(buyer). Refer to 39-14-201(])(a), C.RS.
Penalty for Noncompliance: Whenever a Real Property Transfer Declaration does not accompany the deed, the clerk and recorder notifies the
county assessor who will send a notice to the buyer requesting that the declaration be returned within thirty days after the notice is mailed.
If the completed Real Property Transfer Declaration is not returned to the county assessor within the 30 days of notice, the assessor may impose
a penalty of $25.00 or .025% (.00025) of the sale price, whichever is greater. This penalty may be imposed for any subsequent year that the
buyer fails to submit the declaration until the property is sold. Refer to 39-14-102(t)(b), C.R.S.
Confidentiality: The assessor is required to make the Real Property Transfer Declaration available for inspection to the buyer. However, it is
only available to the seller if the seller filed the declaration. Information derived from the Real Property Transfer Declaration is available to
any taxpayer or any agent of such taxpayer subject to confidentiality requirements as provided by law. Refer to 39-5-121.5, C.R.S. and 39-13-
102(5xc), C.R.S.
1. Address and/or legal description of the real property sold: Please do not use P.O. Box numbers.
Lot 2. Second Amendment to the Sunroad Subdivision, according to Plat recorded June 14. 1993. in Book 61.1
at Pate 287 under Reception No 507365 Countv of Eagle. State of Colorado (15 Sun Road. Avon. Colorado)
2. Type of property purchased: _ Single Family Residential _Townhome _ Condominium —Multi -Unit Res
X Commercial _ Industrial _ Agricultural _ Mixed Use _ Vacant Land _ Other
3. Date of closing:
January 17 2018
Month Day Year
Date of contract if different from date of closing:
September 28. 2017
Month Day Year
4. Total Sale Price: Including all real and personal property.
S 8.190.340.00
5. Was any personal property included in the transaction? Personal property would include, but is not limited
to, carpeting, draperies, free standing appliances, equipment, inventory, furniture. If the personal property is not
listed, the entire purchase price will be assumed to be for the real property as per 39-13-201, C.R.S.
X Yes _ No If yes, approximate value S see attached Addendum Describe see attached Addendum
6. Did the total sale price include a trade or exchange of additional real or personal property? If yes, give
the approximate 'value of the goods or services as of the date of closing.
_ Yes X No If yes, value S
Does this transaction involve a trade under IRS Code Section 1031? X Yes _ No
7. Was 100% interest in the real property purchased? Mark "no" if only a partial interest is being purchased.
X Yes _ No If no, interest purchased
8. Is this a transaction among related parties? Indicate whether the buyer or seller are related. Related parties
include persons within the same family, business affiliates, or affiliated corporations.
Yes X 'No
9. Check any of the following that apply to the condition of the improvements at the time of purchase.
New Excellent Good X Average Fair Poor Salvage
If the property is financed, please complete the following.
10. Total amount financed. $ 3,228.584.08
11. Type of financing: (Check all that apply)
New
X Assumed
Seller
Third Party
12. Terms:
Variable; Starting interest rate _%
X Fixed; Interest rate 4.25 %
Length of time approx. 15 years remaining on loan
Balloon payment — Yes X No. If yes, amount $ Due date 2/01/2033
13. Please explain any special terms, seller concessions, or financing and any other information that would
help the assessor understand the terms of sale.
See attached Addendum.
For properties other than residential (Residential is defined as: single family detached, townhomes, apartments and
condominiums), please complete questions 14-16 if applicable. Otherwise, skip to #17 to complete.
14. Did the purchase price include a franchise or license fee? Yes X No
If yes, franchise or license fee value S
15. Did the purchase price involve an installment land contract?
If yes, date of contract
Yes X No
16. If this was a vacant land sale, was an on-site inspection of the property conducted by the buyer prior to
the closing? Yes J No N/A
Remarks: Please include any additional information concerning the sale you may feel is important.
See attached Addendum.
17. Signed this 15th day of January , 2018.
Enter the day, month, and year, have at least one of the parties to the transaction sign the document, and include
an address and a daytime phone number. Grantee/Buyer is signing below as follows:
15 SUN ROAD, LLC, a Colorado limited liability company
By
Signature of Grantee/Buyer Steven A. Schroeder, Manager
18. All future correspondence (tax bills, property valuations, etc.) regarding this property should be mailed to:
One Aspen Drive Unit 85 970-222-0758
Address (mailing) Daytime Phone
Loveland. CO 80538
City, State and ZIP Code
ADDENDUM ATTACHED TO AND MADE A PART OF THE REAL PROPERTY TRANSFER
DECLARATION EXECUTED BY 15 SUN ROAD, LLC:
The Total Sale Price of $8, 190, 340. 00 set forth in paragraph 4
includes both the "Real Property Value" and the "Existing Lease
Value" explained below.
The Real Property Value was agreed to be $4,059,850.00,
consisting of (i) $1,859,850.00 for Seller's represented hard
construction costs for the existing building (approximately $118.80
per square foot times 15,655 square feet) , and (ii) the agreed upon
land value of $2,200,000.00,
The Existing Lease Value was agreed to be $4,130,490.00 based
on the current income from an existing "triple net" Lease with a
nationally recognized tenant (Walgreen Co.).
EXHIBIT 5
TO
APPEAL OF DENIAL OF
APPLICATION FOR EXEMPTION
FROM REAL PROEPRTY TRANSFER TAX
TOWN OF AVON RECEIPT NO. 01000036175
Received By: DESIREE SPINKS
Today's Date: 12/08/17
TOWN OF AVON Receipt Number: 01000036175
Payor: WALGREENS
Register Date: 09/27/17 Time: 11:41
Item Customer >IM. -Amount
REAL ESTATE TRANSFER TAX WALGREENS $89,673.28
TOTAL DUE: $89,673.28
OTHER $89,673.28 REF NUM: Wire 9/22
TENDERED CHANGE
$89,673.28 $.00