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Home My WebLink About2012-011 Council Resolution• • • Council MembeP ' Donnellintroduced the following resolution and moved its adoption: CITY OF LINO LAKES RESOLUTION NO. 12 -11 AUTHORIZING EXECUTION OF AMENDMENT TO DEVELOPMENT CONTRACTS, PINE GLEN & PINE GLEN 2ND ADDITION WHEREAS, the City Council approved the execution of a development contract for Pine Glen — Phase I on May 22, 2006, and WHEREAS, the City Council approved the execution of a development contract for Pine Glen Second Addition on March 12, 2007; NOW, THEREFORE, BE IT RESOLVED that the Lino Lakes City Council approves the Amendment to Development Contract with 23, LLC, for Pine Glen - Phase I and Pine Glen Second Addition and authorizes the Mayor and City Clerk to execute such agreement on behalf of the City. Jul Bartell, ty C1rk Jeff Rein - rt , f'ayor Adopted by the City Council of Lino Lakes, Minnesota this 13th day of February, 2012. The motion for the adoption of the foregoing resolution was duly seconded by Council MemberRoeser and upon vote being taken thereon, the following voted in favor thereof: I he tollowinj votedsagdinstasamety, SToesz, Reinert none Whereupon said resolution was declared duly passed and adopted. • • • CITY COUNCIL AGENDA ITEM 6B STAFF ORIGINATOR: Jason C. Wedel, City Engineer MEETING DATE: February 13, 2012 TOPIC: Consider Resolution No. 12 -11 Authorize Execution of Amendment to the Development Contracts for Pine Glen and Pine Glen 2nd Addition VOTE REQUIRED: 3/5 INTRODUCTION On May 22, 2006 and March 12, 2007, the City Council approved the Development Contracts for the Pine Glen and Pine Glen 2nd Additions respectively. Included in the Development Contracts was a provision that the developer establish a cash escrow with the City for the payment of costs incurred by the City related to plat review, administration, engineering review, legal costs, etc. In addition, the developer was also required to provide letters of credit to ensure the improvements that are installed by the developer are in compliance with City requirements. This includes such items as sanitary sewer, watermain, storm sewer and street improvements. BACKGROUND The majority of the developer installed improvements have been complete for several years. The only work remaining is to pave the final lift of bituminous on the streets, which is scheduled to take place this spring. The developer's current of letter of credit is therefore still in place and needs to be renewed for another year. The developer is requested that the City utilize the existing cash escrow as security for the developer installed improvement rather than require the letter of credit be renewed. Renewing the letter of credit cost the developer money and with the housing market continuing to be challenging he would rather not incur the additional cost. The current cash escrow on deposit with the City for both phases of Pine Glen is $85,117.03. A portion of that cash deposit will be needed for City staff time associated with finalizing the project and inspecting the paving of the final lift of bituminous on the streets. Staff is therefore comfortable allowing $65,117.03 to be used as security for the developer installed improvements. The estimated cost to complete the paving is $118,000. The City is therefore requiring the developer to submit an additional $56,500 in cash so that the total cash deposit will be $121,617.03 which is slightly more than the estimate cost to complete the streets. The developer has agreed to provide the additional cash deposit as described above. The only item that still needs to be resolved is amending the existing Development Contracts to allow the cash • • that was originally deposited for administrative costs to be used as security for the developer installed improvements in lieu of a letter of credit. An amendment to the Development Contracts for Pine Glen and Pine Glen 2nd Addition has been prepared by the City Attorney and is attached for your consideration. RECOMMENDATION Approve Resolution 12 -11, Authorizing Execution of Amendment to the Development Contract for the Pine Glen and Pine Glen 2nd Additions. ATTACHMENTS Resolution Number 12 -11 • • AMENDMENT TO DEVELOPMENT CONTRACT — PINE GLEN PHASE I AND DEVELOPMENT CONTRACT — PINE GLEN SECOND ADDITION This Amendment is made this day of February, 2012, by and between the City of Lino Lakes, 600 Town Center Parkway, Lino Lakes, Minnesota 55014, a municipal corporation ( "the City ") and 23, LLC, 1875 Station Parkway N.W., Andover, Minnesota 55304 ( "the Developer "). Whereas, the City and the Developer ( "the Parties ") entered into a Development Contract for Pine Glen — Phase I on May 22, 2006 ( "2006 Contract "); and Whereas, the Parties entered into a Development Contract for Pine Glen Second Addition on March 12, 2007 ( "2007 Contract "); and Whereas, Section II.A.10 of the 2006 Contract and Section II.A.15 of the 2007 Contract required the Developer to furnish Irrevocable Letters of Credit to cover the cost of the Developer's Improvements, and the Developer did in fact obtain letters of credit; and Whereas, Section V of both Development Contracts required the Developer to establish an escrow account with the City for the payment of City costs, and Developer did in fact establish an escrow account for each Contract; and Whereas, Developer has not completed all Developer Improvements, as defined in the two Contracts, but is no longer able to obtain letters of credit to guarantee installation of those Improvements; and Whereas, Developer wishes to utilize its cash escrow accounts, as further supplemented by Developer, to guarantee and pay for the installation of the remaining Developer Improvements, and the City is amenable to utilizing the accounts in that manner. Now, Therefore, in consideration of the mutual promises contained herein, it is agreed by the Parties as follows: • • 1. The current balance of the cash escrows are as follows: Pine Glen Phase I Pine Glen 211d Addn. Total Trees $13,309.00 $11,531.00 $24,840.00 Remainder $63,048.60 $22,068.43 $85,117.03 Totals $76,357.60 $33,599.43 $109,957.03 Tree escrows cannot be used for any other purpose and therefore will not be modified by this Amendment. 2. The City shall retain a total of $20,000 in escrow for the two Contracts to cover remaining City costs, leaving $65,117.03 available for use under this Amendment ($85,117.03 — 20,000 = 65,117.03). Of that amount, $48,234.03 shall be made available from the Pine Glen Phase I account, and $16,883.00 shall be made available from the Pine Glen 2nd Addition account. 3. The final Developer Improvements that remain to be completed are, generally, paving the final wear course and related street improvements, the estimated cost of which is $118,000.00. This Amendment does not alter the nature of the Improvements required under the existing Developer Contracts. 4. The Developer shall escrow a total of $121,617.03 to cover the remaining Developer Improvements. In order to satisfy this total obligation, Developer shall deposit an additional $56,500 into its escrow accounts with the City prior to commencement of the final Developer Improvements ($65,117.03 + 56,500 = 121,617.03). The deposit shall be split between the two escrow accounts in proportion to the amount of work remaining to be completed in each development. 5. Notwithstanding Sections II.A.15 and V of the 2006 Contract, and II.A.10 and V of the 2007 Contract, the Developer and the City agree that, with the exception of the $20,000 reserved to the City for City costs, the escrow accounts may be utilized for the payment of direct costs incurred by Developer to complete the remaining Developer Improvements. Direct costs include only those costs invoiced by the contractor(s) retained to complete the Developer Improvements and does not include any administrative or personnel costs incurred by Developer ( "indirect costs "). All indirect costs shall be the sole responsibility of the Developer. 6. The City's continuing right to reimburse itself for costs incurred by the City pursuant to Sections V of the 2006 Contract and 2007 Contract, takes priority over payments for the Developer Improvements. In the event the escrow accounts are not sufficient to cover both the City's costs and the direct costs of the remaining Developer Improvements, the Developer shall deposit additional funds as needed Or • • to cover all such costs. The additional deposit(s) shall be made within 14 days of receiving notice from the City of the shortage. 7. The Developer shall contract with the contractor(s) needed to complete the remaining Developer's Improvements. A copy of the final contract(s), and any change orders thereto, shall be provided by the Developer to the City. Upon completion and City acceptance of the Developer's Improvements, the City shall release escrow funds in the amount of the contractor contract(s). Said funds shall be released to the Developer for payment to the contractor(s). Consistent with Paragraph II.A.15.b of the 2006 Contract and Paragraph II.A.10.b of the 2007 Contract, the Developer shall immediately provide the City a one year maintenance bond, in a form acceptable to the City, to satisfy the Developer's warranty obligations under the Development Contracts. 8. All rights, duties and obligations of the Parties as set forth in the 2006 Contract and 2007 Contract continue in force except as otherwise modified in this Amendment. 9. Upon the Developer's satisfaction of all obligations under the Development Contracts and this Amendment, the City shall release the remaining escrow funds to the Developer pursuant to the terms of the Development Contracts. 10. The undersigned warrant that they have the requisite authority to execute this Amendment and bind the entity on whose behalf they sign. 23, LLC By: Its: City of Lino Lakes Jeff Reinert, Mayor Attest: Juliann Bartell, Clerk