HomeMy WebLinkAbout# 12 - CC Eastern Village Trunk Sewer DA Amendments 8-4-14
MAYOR & COUNCIL COMMUNICATION
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DATE: 8/4/15
REGULAR
ITEM # 12 MOTION
AGENDA ITEM: Eastern Village Trunk Sewer and Watermain Developer’s Agreement
SUBMITTED BY: Kyle Klatt, Community Development Director
THROUGH: Clark Schroeder, Interim City Administrator
REVIEWED BY: Jack Griffin, City Engineer Dave Synder, City Attorney
SUGGESTED ORDER OF BUSINESS:
- Introduction of Item .....................................Community Development Director
- Report/Presentation………………………...Community Development Director
- Questions from Council to Staff ............................................. Mayor Facilitates
- Call for Motion ............................................................... Mayor & City Council
- Discussion ....................................................................... Mayor & City Council
- Action on Motion .................................................................... Mayor Facilitates
POLICY RECCOMENDER: Staff is recommending that the City Council approve revisions
to the Eastern Village Trunk Sewer and Watermain development contract that will change the name of the developer associated with the project and make other revisions as negotiated by Staff and the developer.
FISCAL IMPACT: Direct Payments to Developer – None (no change from approved
agreement). SUMMARY AND ACTION REQUESTED: The City Council is being asked to consider
amendments to the approved developer’s agreement for a project to install trunk sewer and
watermain facilities from the 30th Street lift station to the southern edge of the railroad right-of-
way line within the southern portion of the Village Planning Area. This trunk infrastructure will connect to the line previously constructed by the City within the 39th Street right-of-way and that was extended to the railroad right-of-way in the northern part of the Village. The revisions will
change the developer of the project from Chase Development, Inc. to two separate parties:
Robert Engstrom Companies and GWSA Land Development, LLC (Gonyea). In addition to the
City Council Meeting [Regular Agenda Item 12]
August 4, 2015
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developer change, the two new parties to the agreement have asked for revisions to the document
to extend the completion date from September 15th to November 1st.
The recommended motion to take action on the request is as follows:
“Move to amend the developer’s agreement for the Eastern Village Trunk Sewer and Watermain as drafted and documented in the attached amended Development Agreement”
LEGISLATIVE HISTORY/STAFF REPORT: The City Council approved a developers’ agreement for trunk sewer and watermain project on June 9th of this year after separating out this
specific project from the overall work planned within the Easton Village subdivision. In the time
since the Council’s approval of an agreement, the private parties that will be building this project
have failed to come to an agreement that would allow work to commence on the project as
initially proposed. At this time, two of the parties that will directly benefit from the installation of the trunk infrastructure, Robert Engstrom Companies and Gonyea Development, have asked
that the City name them as the developer for the project so that they can assume responsibility to
build the line and move forward with their respective development projects that are ultimately
connecting to this line.
In addition to changing the name of the developer, the parties involved with this project have asked for some additional changes to the agreement, the most significant of which is the moving
back of the original project completion date from September 15th to November 1, 2015. The
November 1st date was selected because it is the latest date that the sewer connection could be
made and still allow the City to assess properties along 39th Street that will be connecting to this line. Staff has been in discussions all parties associated with the trunk sewer line, and is recommending approval of the request with the following considerations:
• That Section 9 of the agreement concerning the time of performance be revised to include additional language that will require the developer to track progress towards completion of the project.
• That the project include a penalty for failure to complete the sewer work by November
1st. The suggested $15,000 penalty represents the City’s carrying costs for bond interest payments if the 39th Street sewer work cannot be assessed to benefitting property owners.
• That this section include additional clarification concerning the circumstances under
which an extension may be considered by the City.
• That in consideration of the later completion date, some of the previous provisions concerning notification requirements for default be removed.
The developer has also asked that the project construction cost estimates be updated to reflect the
most recent information available from their contractor. These updated estimates have slightly lowered the amounts from the agreement as originally drafted.
All proposed changes from the approved agreement are tracked in the attached document.
City Council Meeting [Regular Agenda Item 12]
August 4, 2015
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BACKGROUND INFORMATION (SWOT):
Strengths: The revisions will allow the responsibility for the project to transfer to
developers that will be able to mobilize and begin construction on the trunk infrastructure.
The agreement includes additional language that offers additional protection to the City if
the sewer line is not installed prior to November 1st. There is no such protection in the
current agreement.
The revised agreement is a key part of all parties being able to move forward with their developments and to execute the private agreements necessary to build the trunk sewer
line.
The three affected parties have provided their signed agreement for review by the City to
document their intent to move forward with construction.
Weaknesses: Work must commence soon in order to ensure the November 1st deadline can be met.
Opportunities: The proposed revisions will further the City’s interests in completing a
major piece of trunk sewer infrastructure that is funded by private developers.
Threats: Failure to execute an agreement that is acceptable to all parties could lead to
delays in connecting individuals to the trunk sewer line, the inability of the City to assess the sewer portion of the 39th Street project, and three developments that will be unable to
move forward with building permits.
RECOMMENDATION: Based on the above Staff report, Staff is recommending that the City
Council approve the proposed amendments to the Eastern Village Trunk Sewer and Watermain
Developers Agreement as documented in the attached agreement. The suggested motion to adopt the Staff recommendation is as follows:
“Move to amend the developer’s agreement for the Eastern Village Trunk Sewer and
Watermain as drafted and documented in the attached amended Development Agreement”
ATTACHMENTS:
1. Amended Eastern Village Trunk Sewer and Watermain Developers Agreement
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(reserved for recording information)
DEVELOPMENT CONTRACT
(Trunk Sewer)
Eastern Village Trunk Sewer and Watermain Line
AGREEMENT dated , 2015, by and between the CITY OF LAKE
ELMO a Minnesota municipal corporation (“City”), and Chase Development, Inc GWSA Land
Development, LLC, and Robert Engstrom Companies, (each sometimes individually referred to as a
“Party” and collectively referred to as the “Developer”).
1. REQUEST FOR PUBLIC IMPROVEMENT PROJECT APPROVAL. The Developer
has asked the City to approve the final plans for the Eastern Village Trunk Sewer and Watermain Line
(referred to in this Contract as the "project"). The land is on which the project is situated in the County of
Washington, State of Minnesota, and is legally described in the attached Exhibit “A”:
2. CONDITIONS OF PROJECT APPROVAL. The City hereby approves the project on
condition that the Developer enter into this Contract and furnishes the security required by it.
3. RIGHT TO PROCEED. Unless separate written approval has been given by the City
the Developer may not grade or otherwise disturb the earth, remove trees, and construct utilities, until
all the following conditions have been satisfied: 1) this agreement has been fully executed by both
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parties and filed with the City Clerk, 2) the necessary security has been received by the City, 3) all required
easements have been recorded with the Washington County Recorder's Office, and 4) the City’s
Community Development Director has issued a letter that all conditions have been satisfied, a preconstruction
conference has been held, and that the Developer may proceed.
4. DEVELOPMENT PLANS. The project shall be constructed in accordance with the
following plans and at the Developer’s sole expense. The plans shall not be attached to this Contract. If
the plans vary from the written terms of this Contract, the written terms shall control. The plans are:
Plan A – Eastern Village Trunk Sewer and Watermain Line
5. IMPROVEMENTS. The Developer shall install and pay for the following:
A. Sanitary Sewer - Eastern Village Trunk Sewer and Watermain Line.
B. Watermain - Eastern Village Trunk Sewer and Watermain Line.
The improvements shall be installed in accordance with the City subdivision ordinance and the City’s
Engineering Design and Construction Standards Manual and pursuant to the direction of the City Engineer.
The Developer shall submit plans and specifications which have been prepared by a competent registered
professional engineer to the City for approval by the City Engineer. The Developer shall instruct its
engineer to provide adequate field inspection personnel to assure an acceptable level of quality control to
the extent that the Developer's engineer will be able to certify that the construction work meets the
approved City standards as a condition of City acceptance. In addition, the City may, at the City's discretion
and at the Developer's expense, have one or more City inspectors and a soil engineer inspect the work on
a full or part-time basis. The Developer's engineer shall provide for on-site project management. The
Developer's engineer is responsible for design changes and contract administration between the Developer
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and the Developer's contractor. The Developer or his engineer shall schedule a pre-construction meeting at
a mutually agreeable time at the Lake Elmo Public Works Facility with all parties concerned, including the City
staff, to review the program for the construction work.
All labor and work shall be done and performed in the best and most workmanlike manner and in
strict conformance with the approved plans and specifications. No deviations from the approved plans and
specifications will be permitted unless approved in writing by the City Engineer. The Developer agrees to
furnish to the City a list of contractors being considered for retention by the Developer for the performance
of the work required by the Contract. The Developer shall not do any work or furnish any materials not
covered by the plans and specifications and special conditions of this Contract, for which reimbursement is
expected from the City, unless such work is first ordered in writing by the City Engineer as provided in the
specifications.
6. CITY ENGINEERING ADMINISTRATION AND CONSTRUCTION
OBSERVATION. Prior to the commencement of any construction activity authorized under this agreement,
the Developer shall submit an escrow for City Engineering Administration and Construction Observation
in an amount provided under paragraph 29, Summary of Cash Requirements (City Engineering
Administration Escrow). The escrow account will be used to reimburse the City for all engineering
administration and construction observation performed during the construction of the improvements until
the escrow has been reduced to half of its original amount. Thereafter, the Developer shall reimburse the
City each month, within 30 days of receiving an invoice, for all engineering administration and construction
observation performed during the construction of the improvements (at normal City rates for such services)
and will maintain the account at half of the original balance. If Developer fails to pay the invoiced amount
within such 30-day period, and such failure continues for an additional five (5) business days after written
notice from the City of such failure, the City may draw upon the escrow and stop the work on site until said
escrow has been replenished in accordance with this Section. City engineering administration will include
monitoring of construction progress and construction observation, consultation with Developer and his
engineer on status or problems regarding the project, coordination for testing, final inspection and
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acceptance, project monitoring during the warranty period, and processing of requests for reduction in
security. Construction observation may be performed by the City's in-house staff or consulting engineer.
Construction observation shall include, at the discretion of the City, part or full time inspection of proposed
public utilities and street construction. Services will be billed on an hourly basis at normal City rates therefor.
The direction and review provided through the inspection of the improvements should not be
considered a substitute for the Developer required management of the development. Developer will cause
the contractor(s) to furnish the City with a schedule of proposed operations at least five (5) days prior to the
commencement of construction of each type of Improvement. City shall inspect all Developer Installed
Improvements during and after construction for compliance with approved plans and specifications.
Developer will notify the City Engineer at such times during construction as the City Engineer requires for
inspection purposes. Such inspection is pursuant to the City’s governmental authority, and no agency or
joint venture relationship between the City and Developer is thereby created.
7. CONTRACTORS/SUBCONTRACTORS. City Council members, City employees, and
City Planning Commission members, and corporations, partnerships, and other entities in which such
individuals have greater than a 25% ownership interest or in which they are an officer or director may not
act as contractors or subcontractors for the public improvements identified in Paragraph 5 above.
8. PERMITS. The Developer shall obtain or require its contractors and subcontractors to
obtain all necessary permits, including but not limited to:
A. Right-of-Way Excavations and Obstructions:
• City of Lake Elmo, Right-of-Way Utility Installation(s)
• City of Lake Elmo, Right-of-Way Obstruction(s)
• Washington County, Utility Installations(s)
• Washington County, Street or Driveway Access(s)
• Minnesota Department of Transportation, Utility Installation
• Minnesota Department of Transportation, Right-of-Way Permit
B. Watermain Extensions:
• Minnesota Department of Health
C. Sanitary Sewer Extensions:
• Minnesota Pollution Control Agency
• Metropolitan Council Environmental Services
D. Stormwater Management:
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• Valley Branch, Brown’s Creek or South Washington Watershed District Permit
E. Erosion, Sedimentation Control:
• Minnesota Pollution Control Agency, General NPDES Stormwater Permit
• SWPPP (Stormwater Pollution Prevention Plan)
F. Wetland Mitigation:
• Board of Water and Soil Resources, WCA
G. Construction Dewatering:
• Minnesota Department of Natural Resources
9. TIME OF PERFORMANCE. The Developer shall install all public improvements by
September 15, 2015. The Developer may, however, request an extension of time from the City. If an
extension is granted, it shall be conditioned upon updating the security posted by the Developer to
reflect cost increases and amending this agreement to reflect the extended completion date. The
Developer understands that time is of essence for the City to complete the Trunk Sanitary Sewer portion
of these improvements by November 1, 2015 and therefore hereby waives any right to appeal or contest
any remedies, penalties or fines imposed by the City as allowed within this agreement. The Developer
shall complete the installation of the trunk sanitary sewer improvements by November 1, 2015. The
Developer shall complete the trunk watermain improvements by December 1, 2015. The Developer
may, however, request an extension of time from the City. The City has no obligation to grant an
extension and will consider granting an extension only if work progresses diligently, in the sole opinion
of the City, and every effort is made to meet the completion deadline, including, but not limited to, the
mobilization of additional pipe crews. The City inspection staff will maintain daily work logs to track
progress of the work and said work logs will be referenced by the City when determining if an extension
is warranted. If an extension is granted, it shall be conditioned upon updating the security posted by
the Developer to reflect cost increases and amending this agreement to reflect the extended completion
date. If Developer fails to complete the installation of the trunk sanitary sewer improvements prior to
November 1, 2015, Developer shall pay to the City a fee in the amount of Fifteen Thousand Dollars
($15,000.00) regardless of whether the City grants an extension for the improvements or not. This fee
is to provide reimbursement to the City for the interest costs on the bond payments of the sanitary sewer
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portion of the 39th Street: Street and Sanitary Sewer Improvement Project in the event the City is unable
to assess the sewer because the connection is incomplete. If the sewer line is completed prior to
November 1, 2015, or the City is able to assess for the sewer portion of the 39th Street Project,
Developer shall pay no fee.
10. LICENSE. The Developer hereby grants the City, its agents, employees, officers and
contractors a license to enter the project area to perform all work and inspections deemed appropriate by the
City in conjunction with project construction.
11. CONSTRUCTION ACCESS. Construction traffic access and egress for public utility
construction is restricted to access the subdivision via the planned construction access off of Lisbon
Avenue. No construction traffic is permitted on other adjacent local streets.
12. CONSTRUCTION SEQUENCE AND COMPLIANCE. The City will require the
developer to construct the improvements in a sequence which will allow progress and compliance points
to be measured and evaluated. The Developer and/or their representatives are required to supervise
and coordinate all construction activities for all improvements and must notify the City in writing stating
when the work is ready for the inspection at each of the measurable points defined in the following
paragraphs 13, 14 and 15. For the purpose of this paragraph, Electronic message (email) shall be deemed
an acceptable method of notification provided it is captioned “Notice pursuant to Development Agreement”.
13. EROSION CONTROL. Prior to initiating construction activity, all erosion control measures
shall be implemented by the Developer and inspected and approved by the City. Erosion control practices
must comply with the approved plans and specifications for the project, with all watershed district permits
and with Minnesota Pollution Control Agency’s Best Management Practices. The City may impose
additional erosion control requirements as deemed necessary. The parties recognize that time is of the
essence in controlling erosion. If the Developer does not comply with the erosion control plan and
schedule or supplementary instructions received from the City, the City may take such action as it deems
appropriate to control erosion. The City will endeavor to notify the Developer in advance of any proposed
action, but failure of the City to do so will not affect the Developer's and City's rights or obligations
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hereunder. If the Developer does not reimburse the City for any cost the City incurred for such work within
ten (10) days, the City may draw down the security to pay any costs. No construction activity will be
allowed unless the project is in full compliance with the approved erosion control plan.
14. GRADING PLAN. The project shall be graded in accordance with the approved plans.
The plans shall conform to Engineering Design and Construction Standards Manual. All grading shall be
completed within the project area prior to the acceptance of the public improvements.
15. UTILITY IMPROVEMENTS. All sanitary sewers and watermain shall be installed in
accordance with the approved Plans and Specifications for Public Improvements, Plan "A" and Plan “B”.
The plan shall conform to the City’s Engineering Design and Construction Standards Manual. All restoration
work on the site shall be completed in accordance with the approved plans. Once the work is completed,
the developer or its representative shall submit a written request to the City asking for an inspection of the
improvements. The City will then schedule a walk-through to create a punch list of outstanding items to be
completed. Upon receipt of the written punch list provided by the City, the punch list items must be completed
by the Developer and the City notified to re- inspect the improvements.
16. STREET MAINTENANCE DURING CONSTRUCTION. The developer shall be
responsible for keeping public streets within and adjacent to the project area clean of dirt and debris
that may spill, track, or wash onto the street from Developer’s operation. A copy of this contract shall
be approved by the City before construction activity is started. The contract shall provide that the City
may direct the contractor to clean the streets and the contractor will bill the Developer.
17. OWNERSHIP OF IMPROVEMENTS. Upon completion of the work and construction
required by this Contract, the improvements lying within public easements shall become City property.
Prior to acceptance of the improvements by the City, the Developer must furnish the City with a complete
set of reproducible "record" plans, an electronic file of the "record" plans in accordance with the City’s
Engineering Design and Construction Standards Manual together with the following affidavits:
a. Developer/Developer Engineer’s Certificate
b. Land Surveyor’s Certificate
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certifying that all construction has been completed in accordance with the terms of this Contract. All
necessary forms will be furnished by the City. Upon receipt of “record plans” and affidavits, and upon
review and verification by the City Engineer, the City Engineer will accept the completed public
improvements.
18. WETLAND MITIGATION. The Developer shall complete any required wetland
mitigation/restoration in accordance with the approved Plans and Specifications and in accordance with any
applicable Watershed or agency Permits. If any required mitigation work is found to be incomplete or
restoration is unsuccessful, and if Developer fails to remedy such default within fifteen (15) days after
written notice from the City (provided, however, that in the event of a bona fide emergency, the City shall
only be required to give such notice as is practicable under the circumstances), the City may draw down
the security at any time during the warranty period if the Developer fails to take corrective measures to be
used by the City to perform the work.
19. RESPONSIBILITY FOR COSTS.
A. In the event that the City receives claims from labor, materialmen, or others that
work required by this Contract has been performed, the sums due them have not been paid, and the
laborers, materialmen, or others are seeking payment from the City, and in the further event that such
claims have not been resolved by Developer within thirty (30) days after written notice from
the City, the Developer hereby authorizes the City to commence an Interpleader action pursuant to Rule
22, Minnesota Rules of Civil Procedure for the District Courts, to draw upon the letters of credit in an amount
up to 125 percent of the claim(s) and deposit the funds in compliance with the Rule, and upon such deposit,
the Developer shall release, discharge, and dismiss the City from any further proceedings as it pertains to
the letters of credit deposited with the District Court, except that the Court shall retain jurisdiction to determine
payment of attorneys' fees pursuant to this Contract.
B. Except as otherwise specified herein, the Developer shall pay all costs incurred by it
or the City in conjunction with the project, including but not limited to legal, planning, engineering and
inspection expenses incurred in connection with approval and acceptance of the project, the preparation of
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this Contract, review of construction plans and documents, and all costs and expenses incurred by the
City in monitoring and inspecting project, all at normal City rates therefor. All amounts incurred and due at
the time, must be fully paid prior to acceptance of the improvements.
C. The Developer shall hold the City and its officers, employees, and agents harmless
from claims made by itself and third parties for damages sustained or costs incurred resulting from project
approval and development. The Developer shall indemnify the City and its officers, employees, and agents
for all costs, damages, or expenses which the City may pay or incur in consequence of such claims,
including attorneys' fees. Notwithstanding anything to the contrary, Developer’s obligation to indemnify,
hold harmless and defend the City shall not extend to any claim, liability, loss, costs, damages or expenses,
including attorney’s fees, which relate to, result from or are caused by the City’s violation of applicable law,
this Agreement or the negligence of the City and/or its officers, employees, consultants or agents.
D. The Developer shall reimburse the City for costs incurred in the enforcement of this
Contract, including reasonable engineering and attorneys' fees.
E. The Developer shall pay in full all bills submitted to it by the City for obligations
incurred under this Contract within thirty (30) days after receipt. Bills not paid within thirty (30) days shall
be assessed a late fee per the City of Lake Elmo adopted Fee Schedule. Upon request, the City will
provide copies of detailed invoices of the work performed.
20. CITY PAYMENTS. There are no City payments for oversizing.
21. SPECIAL PROVISIONS. The following special provisions shall apply to the project.
A. Implementation of recommendations and plan revisions as directed by the City
Engineer.
22. MISCELLANEOUS.
A. The Developer may not assign this Contract without the written permission of the
City Council. The Developer's obligation hereunder shall continue in full force and effect even if the
Developer subdivides the property.
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B. Developer shall take out and maintain or cause to be taken out and maintained until
six (6) months after the City has accepted the public improvements, public liability and property damage
insurance covering personal injury, including death, and claims for property damage which may arise out of
Developer's work or the work of its subcontractors or by one directly or indirectly employed by any of them.
Limits for bodily injury and death shall be not less than $500,000 for one person and $1,000,000 for each
occurrence; limits for property damage shall be not less than $200,000 for each occurrence; or a
combination single limit policy of $1,000,000 or more. The City shall be named as an additional insured on
the policy, and the Developer shall file with the City a certificate evidencing coverage prior to the
commencement of construction activity. The certificate shall provide that the City must be given thirty (30)
days advance written notice of the cancellation of the insurance.
C. Third parties shall have no recourse against the City under this Contract.
D. If any portion, section, subsection, sentence, clause, paragraph, or phrase of this
Contract is for any reason held invalid, such decision shall not affect the validity of the remaining portion of
this Contract.
E. The action or inaction of the City shall not constitute a waiver or amendment to the
provisions of this Contract. To be binding, amendments or waivers shall be in writing, signed by the parties
and approved by written resolution of the City Council. The City's failure to promptly take legal action to
enforce this Contract shall not be a waiver or release.
F. This Contract shall run with the land and may be recorded against the title to the
property. The Developer covenants with the City, its successors and assigns, that the Developer has fee
title to the project property and/or has obtained consents to this Contract, in the form attached hereto, from
all parties who have an interest in the property; that there are no unrecorded interests in the project property;
and that the Developer will indemnify and hold the City harmless for any breach of the foregoing
covenants.
G. Each right, power or remedy herein conferred upon the City is cumulative and in
addition to every other right, power or remedy, express or implied, now or hereafter arising, available to
City, at law or in equity, or under any other agreement, and each and every right, power and remedy herein
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set forth or otherwise so existing may be exercised from time to time as often and in such order as may be
deemed expedient by the City and shall not be a waiver of the right to exercise at any time thereafter any
other right, power or remedy.
H. The Developer represents to the City that the project complies with all city, county,
metropolitan, state, and federal laws and regulations, including but not limited to: subdivision ordinances,
zoning ordinances, and environmental regulations. If the City determines that the project does not comply,
the City may, at its option, refuse to allow construction or development work in the project area until the
Developer does comply. Upon the City’s demand, the Developer shall cease work until there is compliance.
23. EVENTS OF DEFAULT. The following shall be "Events of Default" under this Agreement
and the term "Event of Default" shall mean, whenever it is used in this Agreement, any one or more of the
following events:
A. Subject to unavoidable delays, failure by Developers to commence and complete
construction of the Public Improvements pursuant to the terms, conditions and limitations of this Agreement
and the continuance of such failure for a period of thirty (30) days after written notice thereof (provided, however,
that in the event of a bona fide emergency, the City shall only be required to give such notice as is practicable
under the circumstances).
B. Failure by Developers to substantially observe or perform any material covenant,
condition, obligation or agreement on their part to be observed or performed under this Agreement. and the
continuance of such failure for a period of thirty (30) days after written notice thereof (provided, however, that
in the event of a bona fide emergency, the City shall only be required to give such notice as is practicable under
the circumstances).
24. REMEDIES ON DEFAULT. Whenever any Event of Default occurs, the City, subject to any
rights of third parties agreed to by the City pursuant to this Agreement, or otherwise by written, executed
instrument of the City, may take any one or more of the following:
A. The City may suspend its performance under the Agreement until it receives
assurances from Developers, deemed adequate by the City, that Developers will cure their default and
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continue their performance under the Agreement. Suspension of performance includes the right of the City
to withhold permits including, but not limited to, building permits.
B. The City may initiate such action, including legal or administrative action, as is
necessary for the City to secure performance of any provision of this agreement or recover any amounts
due under this Agreement from Developers, or immediately draw on the Letter of Credit, as set forth in this
Agreement.
25. ENFORCEMENT BY CITY; DAMAGES. The Developers acknowledge the right of the
City to enforce the terms of this Agreement against the Developers, by action for specific performance or
damages, or both, or by any other legally authorized means. The Developers also acknowledge that their
failure to perform any or all of their obligations under this Agreement may result in substantial damages to
the City; that in the event of default by the Developers, the City may commence legal action to recover all
damages, losses and expenses sustained by the City; and that such expenses may include, but are not
limited to, the reasonable fees of legal counsel employed with respect to the enforcement of this Agreement.
26. WARRANTY. Upon the City’s approval of the improvements, but prior to
formal acceptance of the improvements by the City Council, tThe Developer warrants all
improvements required to be constructed by it pursuant to this Contract against poor material and faulty
workmanship. The Developer shall submit either a performance bond for one-hundred percent (100%) of the
amount of the original cost of the improvements, subject to the approval and in the sole discretion of the City,
or a cash deposit or letter of credit for twenty-five percent (25%) of the amount of the original cost of the
improvements.
A. The required warranty period for materials and workmanship for the utility contractor
installing public sewer and water mains shall be two (2) years from the date of final written City acceptance
of the work.
27. SUMMARY OF SECURITY REQUIREMENTS. To guarantee compliance with the
terms of this agreement, payment of special assessments, payment of the costs of all public improvements,
and construction of all public improvements, the Developer shall furnish the City with an irrevocable letter of
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credit, in the form attached hereto, from a bank, cash escrow or a combination cash escrow and Letter of
Credit ("security") for the sum of $762,007784,280. The amount of the security was calculated as follows:
CONSTRUCTION COSTS:
Eastern Village Trunk Sewer and Watermain $607,105.60624,924
Developer’s Record Drawings $2,500
Construction Sub-Total $609,605.60627,424
Total Project Securities (at 125% Construction
Costs)
$762,007784,280
This breakdown is for historical reference; it is not a restriction on the use of the security. The bank shall be
subject to the approval of the City Administrator. The City may draw down the security, without notice, for
any violation of the terms of this Contract or if the security is allowed to lapse prior to the end of the
required term. If the required public improvements are not completed at least thirty (30) days prior to the
expiration of the security, the City may also draw it down. If the security is drawn down, the proceeds shall
be used to cure the default.
28. REDUCTION OF SECURITY. Upon written request by the Developer and upon receipt of
proof satisfactory to the City Engineer that work has been completed and financial obligations to the City
have been satisfied, with City Engineer approval the security may be reduced as follows:
A. Up to a 50%, or $381,003.50392,140 of the security provided in accordance with
paragraph 27. above may be released when: (1) all utilities have been installed, all testing has been
successfully completed, and the utilities are considered ready for use by the City Engineer; and (2)
completion of the Improvements is done to the satisfaction of the City and evidence of such is provided by
the City in writing and satisfactory evidence of payment, such as lien waivers are provided.
B. Up to an additional 25%, or $190,501.75196,070 of the security provided in
accordance with paragraph 2 7 . above may be released when: (1) all Improvements under this
Agreement have been completed to the satisfaction of the City Engineer including all restoration and
corrective work for any identified punch list items; and (2) Improvements are accepted by the City in
writing and satisfactory evidence of payment, such as lien waivers, are provided.
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C. Twenty-five p e r c e n t (25%) of the security provided in accordance with paragraph
27. above shall be retained as security until: (1) all improvements have been completed, (2) all financial
obligations to the City satisfied, (3) the required "record" plans have been received and approved by the
City, (4) a warranty security is provided in the form of a letter of credit or warranty bond acceptable to the
City, and (5) the public improvements are accepted by the City.
29. SUMMARY OF CASH REQUIREMENTS. The following is a summary of the cash
requirements under this Contract which must be furnished to the City at the time of project approval:
City Engineering Administration
Escrow
$20,000 (Based on two months of
administration/observation)
Total Cash Requirements $20,000
30. NOTICES. Required notices to the Developer shall be in writing, and shall be either hand
delivered to the Developer, its employees or agents, or mailed to the Developer by certified mail at the
following address: 10850 Old County Road 15, Suite #200, Plymouth, MN 55441. Notices to the City shall
be in writing and shall be either hand delivered to the City Administrator, or mailed to the City by certified
mail in care of the City Administrator at the following address: Lake Elmo City Hall, 3800 Laverne Avenue
N. Lake Elmo, Minnesota 55042.
31. EVIDENCE OF TITLE. Developer shall furnish the City with evidence of its fee ownership
of the property on which the project will be constructed by way of an attorney’s title opinion or title insurance
policy dated not earlier than thirty (30) days prior to the start of construction.
15
CITY OF LAKE ELMO
(SEAL)
BY: , Mayor
AND
, City Clerk
DEVELOPER:
GWSA, LLC
BY:
Its:
ROBERT ENGSTROM COMPANIES, INC.
BY:
Its:
16
STATE OF MINNESOTA ) ( ss.
COUNTY OF WASHINGTON )
The foregoing instrument was acknowledged before me this day of ,
2 , by and by , the Mayor and City Clerk of the City of Lake Elmo, a Minnesota municipal corporation, on behalf of the
corporation and pursuant to the authority granted by its City Council.
NOTARY PUBLIC
STATE OF MINNESOTA )
( ss. COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 2 , by
the of .
NOTARY PUBLIC
DRAFTED BY: City of Lake Elmo
3800 Laverne Avenue North Lake Elmo, MN 55042 (651) 747-3901
17
FEE OWNER CONSENT
TO
DEVELOPMENT CONTRACT
, fee owners of all or part of
the subject property, the development of which is governed by the foregoing Development Contract, affirm and consent to the provisions thereof and agree to be bound by the provisions as the same may apply to
that portion of the subject property owned by them.
Dated this day of , 2 .
STATE OF MINNESOTA ) ( ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 2 ,
by .
NOTARY PUBLIC
DRAFTED BY: City of Lake Elmo
3800 Laverne Avenue North Lake Elmo, MN 55042 (651) 747-3901
18
MORTGAGE CONSENT
TO
DEVELOPMENT CONTRACT
, which holds a mortgage on
the subject property, the development of which is governed by the foregoing Development Contract, agrees that the Development Contract shall remain in full force and effect even if it forecloses on its mortgage.
Dated this day of , 2 .
STATE OF MINNESOTA )
( ss. COUNTY OF )
The foregoing instrument was acknowledged before me this day of _,
2 , by .
NOTARY PUBLIC
DRAFTED BY:
City of Lake Elmo 3800 Laverne Avenue North Lake Elmo, MN 55042
(651) 747-3901
19
EXHIBIT “A” TO
DEVELOPMENT CONTRACT
Legal Description of Project Property
Easton Village, LLC Property:
All that part of the Northeast Quarter of the Southeast Quarter and the Northwest Quarter of the Southeast
Quarter and the Southeast Quarter of the Northeast Quarter and the Southwest Quarter of the Northeast Quarter all being in Section 13, Township 29 North, Range 21 West, Washington County, Minnesota, lying
south of the southerly right-of-way line of the Union Pacific Railroad, and further described as follows:
Beginning at the East Quarter Comer of said Section 13; thence South 0 degrees 02 minutes 51 seconds East bearings based on the Washington County Coordinate System (NAO 83), along the east line of said
Southeast Quarter of Section 13, a distance of 1321.17 feet to the southeast comer of said Northeast Quarter of the Southeast Quarter; thence South 89 degrees 32 minutes 18 seconds West along the south line of the
North Half of said Southeast Quarter, a distance of 2637.64 feet to the southwest comer of said Northwest Quarter of the Southeast Quarter; thence North 0 degrees 00 minutes 58 seconds East along the North and
South Quarter Section line of said Section 13, a distance of 1397.70 feet to the southerly right-of-way line of the Union Pacific Railroad; thence North 72 degrees 32 minutes 48 seconds East along said southerly right-
of-way line, a distance of 69.19 feet to the point of intersection with a line being 66.00 feet east of, as measured at right angles to, and parallel with said North and South Quarter Section line of said Section 13;
thence South 0 degrees 00 minutes 58 seconds West along said parallel line, a distance of 330.00 feet thence (at right angles) South 89 degrees 59 minutes 02 seconds East, a
distance of 300.00 feet thence (at right angles) North 0 degrees 00 minutes 58 seconds East, 424.41 feet to said southerly right-of-way line of the Union Pacific Railroad; thence North 72 degrees 32 minutes 48 seconds
East, along said southerly right-of-way line of the Union Pacific Railroad, a distance of 2378.80 feet to the east line of said Southeast Quarter of the Northeast Quarter; thence South 0 degrees 02 minutes 53 seconds
East along said east line, a distance of 883.82 feet to the point of beginning.
Excepting therefrom that part of the Northwest Quarter of the Southeast Quarter of said Section 13, lying within the following described area: Commencing at the southwest comer of said Northwest Quarter of the
Southeast Quarter; thence North along the west line of said Southeast Quarter of Section 13, a distance of 240.00 feet to the point of beginning; thence continuing North along said west line of the Southeast Quarter, a
distance of 667.80 feet thence East at right angles a distance of 30.00 feet; thence southeasterly by a deflection angle to the right 46 degrees 28 minutes 00 seconds, a distance of 220.70 feet; thence
southeasterly by a deflection angle to the left 20 degrees 35 minutes 00 seconds, a distance of 286.80 feet; thence south by a deflection angle to the right 64 degrees 07 minutes and parallel with said west line of the
Southeast Quarter, a distance of 382.70 feet thence West at right angle, a distance of 440.00 feet to the point of beginning.
And Excepting from the first above described area, all that part lying Easterly of a line 60.00 feet West of,
measured at right angle to and parallel with the center line of County State Aid Highway 15 described as follows: Commencing at the East Quarter comer of said Section 13; thence South 00 degrees 51 minutes 49
seconds East, bearing oriented to the Washington County Coordinate System, South Zone, along the East line of said Section 13 to the southeast comer of said Section 13 and the beginning of the center line to be
described; thence North 00 degrees 45 minutes 51 seconds West a distance of 3571.19 feet thence North 00 degrees 54 minutes 55 seconds West a distance of 1000.00 feet and said center line there terminating,
except the Chicago and Northwestern Railroad right-Of-way, Washington County, Minnesota.
Peter J. Schiltgen Property:
That part of the West half of Section Thirteen (13), Township Twenty-nine (29) North of Range Twenty-one (21), lying within the following boundaries, to-wit: Beginning at the quarter post in the center of the South line
of said Section; thence running North along the Center Line of said Section to a point in the center of the Saint Paul & Stillwater Road; thence Southwesterly along the center of said road to a point forty-four (44)
20
Rods West of the East Line of the Northwest Quarter of said Section; thence South on a line parallel with the West line of said Section to a point in the South line thereof Forty-four (44) Rods West of the center post in
said line; thence East Forty-four (44) Rods to the place of beginning, excepting, however, a strip of land One Hundred (100) Feet in width, being Forty-four (44) feet on the north side and Fifty-six (56) feet on the South
side of center line of St. P.S. & T. F. Ry. track as constructed over and across East Forty-four (44) Rods of West One-half (W 1/2), and also excepting therefrom the East 726 feet of the South 1800 feet of the
Southwest Quarter (SW ¼) of Section 13 Township 29 North, Range 21 West, Washington County, Minnesota, according to the United States Government Survey thereof, subject to the right of way of
Minnesota Trunk Highway No. 5 (also known as Stillwater Boulevard North), and is also subject to a 20 foot road use easement recorded by Document Number 328273 in the Office of the County Recorder, Washington
County, Minnesota, and is also subject to a Northern States Power Easement recorded in Book 136 of Deeds, Page 297, in the Office of the County Recorder, Washington County, Minnesota.
21
IRREVOCABLE LETTER OF CREDIT
No.
Date:
TO: City of Lake Elmo
Dear Sir or Madam:
We hereby issue, for the account of (Name of Developer) and in your favor, our Irrevocable Letter of Credit in the amount of $_ , available to you by your draft drawn on sight on the undersigned bank at its
offices in Minnesota.
The draft must:
a) Bear the clause, "Drawn under Letter of Credit No. , dated , 2 , of (Name of Bank) ";
b) Be signed by the Mayor or City Administrator of the City of Lake Elmo.
c) Be presented for payment at (Address of Bank) , on or before 4:00 p.m. on November 30,
2_ _.
This Letter of Credit shall automatically renew for successive one-year terms unless, at least forty-five (45) days prior to the next annual renewal date (which shall be November 30 of each year), the Bank delivers written
notice to the Lake Elmo City Administrator that it intends to modify the terms of, or cancel, this Letter of Credit. Written notice is effective if sent by certified mail, postage prepaid, and deposited in the U.S. Mail, at least forty-five (45) days
prior to the next annual renewal date addressed as follows: City Administrator, City Hall, 3800 Laverne Ave. N. Lake Elmo Minnesota 55042 and is actually received by the City Administrator at least thirty (30) days prior to the renewal
date.
This Letter of Credit sets forth in full our understanding which shall not in any way be modified, amended, amplified, or limited by reference to any document, instrument, or agreement, whether or not referred to herein.
This Letter of Credit is not assignable. This is not a Notation Letter of Credit. More than one draw may be
made under this Letter of Credit.
This Letter of Credit shall be governed by the most recent revision of the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 500.
We hereby agree that a draft drawn under and in compliance with this Letter of Credit shall be duly honored
upon presentation.
BY:
Its
10078850v2