Loading...
HomeMy WebLinkAbout2015-110 Council ResolutionCITY OF LINO LAKES RESOLUTION NO. 15-110 APPROVING FIRST AMENDMENT TO PUBLIC IMPROVEMENT SURETY AGREEMENT NORTHPOINTE 3'm ADDITION WHEREAS, the City Council adopted Resolution No. 15-87, on August 24, 2015, approving the Development Contract and Planned Unit Development Agreement ("PUD Agreement) for NorthPointe 3rd Addition; and WHEREAS, the PUD Agreement requires financial security of $1,075,075 to be escrowed with the Escrow Agent, that amount being 125% of the estimated cost of improvements ($860,060); and WHEREAS, the Developer is to provide the remaining financial security for City Improvements at 35% of the cost ($97,110) to the City in the form of a letter of credit; and NOW, THEREFORE BE IT RESOLVED by The City Council of The City of Lino Lakes hereby approves the First Amendment to Public Improvement Surety Agreement attached hereto. Adopted by the Council of the City of Lino Lakes this 28th day of September, 2015. The motion for the adoption of the foregoing resolution was introduced by Council Member Rafferty and was duly seconded by Council Member Kusterman and upon vote being taken thereon, the following voted in favor thereof: Rafferty, Kusterman, Roeser, Stoesz, Reinert The following voted against same: none ATTEST: t e Bartell, City CITY COUNCIL 1... AGENDA ITEM 1G STAFF ORIGINATOR: Diane Hankee MEETING DATE: September 28, 2015 TOPIC: Consider Resolution No. 15-110, Approving Amendment to Public Improvement Surety Agreement, NorthPointe 3rd Addition VOTE REQUIRED: 3/5 INTRODUCTION Staff is requesting council consideration to approve an amendment to the NorthPointe 3rd Addition surety agreement. BACKGROUND The City Council approved the development contract and planned unit development agreement for NorthPointe 3rd Addition by Resolution No. 15-87 on August 24, 2015. The development contract included a surety agreement to provide financial security for the proposed public improvements. The agreement required a financial security in the amount of $1,075,075 to be deposited with the escrow agent. This amount represented 125% of the estimated cost of improvements ($860,060). The developer will also provide the remaining financial security for City Improvements ($97,110) in the form of a letter of credit. Staff has reviewed the request with the City Attorney who prepared the proposed First Amendment to the Public Improvement Surety Agreement. RECOMMENDATION Staff recommends adoption of Resolution No. 15-110. ATTACHMENTS 1. Resolution No. 15-110 AMENDMENT TO PUBLIC IMPROVEMENT SURETY AGREEMENT NorthPointe 3rd Addition THIS AMENDMENT is entered into on September 15, 2015, by Registered Abstractors, Inc., a Minnesota corporation ("Escrow Agent"), City of Lino Lakes ("City"), Tony Emmerich Construction, Inc., a Minnesota corporation ("Developer"), Parties to the Public Improvement Surety Agreement ("Surety Agreement") which is attached as Exhibit C ("Agreement") to that certain Development Contract & Planned Unit Development Agreement for NorthPointe 3`d Addition dated , 2015 ("PUD Agreement"), and Northeast Bank, a Minnesota corporation ("Bank"). RECITALS WHEREAS, the PUD Agreement requires the payment of financial security of $1,075,075.00, in cash, to be deposited with Escrow Agent and a Letter of Credit posted with the City in the amount of $97,110.00; and WHEREAS, the Bank has required that the Surety Agreement be further amended to provide that the cash which is being deposited with Escrow Agent is a loan from the Bank to the Borrower, and said cash shall be deposited in an account held at the Bank in the name of the Escrow Agent under certain terms and conditions acceptable to the Bank, and said Surety Agreement shall further include restrictions on draws or the release of funds from said escrow account by all Parties including the Bank. NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, it is agreed between the Parties as follows: 1. Paragraph 1 of the Surety Agreement shall be further modified by adding the following sentence: "1. The deposit of funds in the amount of $1,075,075.00 represents the loan fund which the Developer/Borrower has secured from the Bank (hereinafter "Loan Funds"). The Loan Funds shall be deposited in an Escrow Account at the Bank ("Escrow Account") and held in the name of the Escrow Agent. Escrow Agent acknowledges that the Escrow Account shall be utilized only for draws for improvements undertaken and completed pursuant to the Surety Agreement, Development Agreement, and Loan Agreement between Borrower and Developer. In no event shall Escrow Agent be allowed to comingle any Funds or withdraw any Funds from said Escrow Account for any use other than reimbursement for the costs of improvements defined in the PUD Agreement. The Letter of Credit shall be for a one (1) year period and automatically renewed for successive one (1) year periods." 2. Restrictions on Withdrawal of Funds from Escrow Account. Regardless of any provision to the contrary within the Public Improvement Surety Agreement, no Funds shall be released from the Escrow Account to the Escrow Agent for disbursement unless the same is approved by both the City and the Bank. 3. Paragraph 3 of the Surety Agreement shall be revised to provide that all items identified under said paragraph 3 shall be furnished to the City and to the Bank and must be approved by both the City and the Bank prior to any further distribution of any Escrow Funds by Escrow Agent. Paragraph 3 shall be further revised by adding the following: "If requested by Bank or Escrow Agent, Borrower shall also furnish to Bank and Escrow Agent a copy of each contract with each of the Contractors. Borrower shall keep the Escrow Agent and Bank advised at all times of the names of all Contractors, and of the type of work, material or services and of the dollar amount covered by each of their respective contracts with Borrower. It is understood that only Contractors whose names, contract descriptions and, after a request therefor, contracts have been furnished to Bank and Escrow Agent shall be entitled to receive disbursements under this Agreement. Borrower may obtain advances for disbursement to contractors only to the extent of the amount currently due to each Contractor for work satisfactorily completed or materials actually incorporated into the Project by such Contractor, less any retainage permitted to be withheld pursuant to such Contractor's contract, and Borrower agrees that all sums requested hereunder for disbursement to each Contractor shall not exceed that amount. Escrow Agent shall not be required to make the final advance for the payment of the full amount of each Contractor's contract until the Bank and City are satisfied that all of the work covered by such contract has been completed in accordance with the approved Plans, and all requirements set forth in the Loan Agreement and Development Agreement have been fully complied with, including, with respect to the General Contractor, the requirements to evidence Completion of the Improvements. The Escrow Agent shall perform a search of the appropriate records and, within five (5) Business Days after receiving the foregoing items, shall give Bank notice by telephone if any intervening liens are disclosed (other than those expressly listed in the Title Policy or subsequent amendments thereto previously given to Bank). If any such intervening liens or other matters, which in Bank's and City's judgment jeopardize its security interest in the Project, are disclosed, the Escrow Agent shall refrain from making further disbursements until Bank and the City notify the Escrow Agent that such intervening liens or other matters have been waived by Bank and City or satisfied. Upon demand of Bank and/or City, Borrower shall immediately cause any such liens or other matters to be satisfied of record or bonded, or shall make other arrangements with respect to the discharge thereof satisfactory to Bank and City." 4. Paragraph 6 of the Surety Agreement shall be revised to provide that items listed under paragraph 6 shall also be provided to and approved by the Bank prior to any disbursements of funds. 5. Paragraph 7 of the Surety Agreement shall be revised to provide that all notifications shall be delivered to both the City and the Bank in writing and all notifications regarding document approval shall be provided to both the City and the Bank. If Borrower fails to deliver documents or provide any missing documents, the Escrow Agent shall provide notice to both the City and the Bank. Any documents supplied or requested by Escrow Agent shall be provided to both the City and the Bank to the City's and Bank's full satisfaction. 6. Paragraph 9 of the Surety Agreement shall be revised to provide that the City, Bank and Developer have the right to examine the books and records of the Escrow Agent and the Escrow Agent shall notify both the City and the Bank when the fund balance is less than $25,000.00. 7. Paragraph 11 of the Surety Agreement shall be revised to provide that the Escrow Agent, City and Bank do not ensure that the building or construction will be completed or when completed will be pursuant to the Plans and Specifications. 8. Paragraph 14 of the Surety Agreement shall be revised to provide any future amendment to the Surety Agreement shall only be approved by all Parties to this Agreement including, but not limited to, the Bank. 9. Paragraph 16 of the Surety Agreement shall be revised to provide that Escrow Agent shall provide financial statements to both the City and the Bank. 10. Paragraph 21 of the Surety Agreement shall be revised to provide that in the event the City has declared a default under the Development Contract/Planned Unit Development Agreement, this Agreement shall not terminate and all funds held in the Escrow Account shall remain held in said Escrow Account pending agreement between the City and the Bank as to the application of any funds held in Escrow and, in the event the Parties cannot agree to the same to a court of competent jurisdiction in connection with allocation of the funds. 11. Paragraph 23 of the Surety Agreement shall be deleted in its entirety and replaced with the following: "All remaining funds, after completion of all work as provided in this Agreement, shall be returned to Bank and disbursed by the Bank pursuant to the terms and conditions of the Loan Agreement by and between Bank and Borrower dated September , 2015. All remaining funds held pursuant to this Agreement shall be disbursed to the Bank as soon as reasonably possible after review and approval by the City of all terms and conditions of this Agreement." 12. Except as revised herein, all other terms and conditions of the Surety Agreement shall remain unchanged. ESCROW AGENT: Registered Abstractors, Inc., a Minnesota corporation By Its: CITY: City of Lino Lakes By: Jeff Reinert, Mayor ATTEST: By: Julianne Bartell, City Clerk DEVELOPER: Tony Emmerich Construction, Inc., a Minnesota corporation By: Anthony J. Emmerich Its: President BANK: Northeast Bank, a Minnesota corporation By: Larry G. Crane Its: Market President L, ESCR - \-- STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of September, 2015, by , the of Registered Abstractors, Inc., a Minnesota corporation, on behalf of the corporation. Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of September, 2015, by Jeff Reinert, the Mayor of the City of Lino Lakes, on behalf of the city. Notary Public STATE OF MINNESOTA ) ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of September, 2015, by Anthony J. Emmerich, the President of Tony Emmerich Construction, Inc., a Minnesota corporation, on behalf of the corporation. STATE OF MINNESOTA COUNTY OF Notary Public The foregoing instrument was acknowledged before me this day of September, 2015, by Larry G. Crane, the Market President of Northeast Bank, a Minnesota corporation, on behalf of the corporation. 664151-v5 L.► Notary Public