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HomeMy WebLinkAbout#05 - Crossroads East Development Agreement 4th Amendment STAFF REPORT DATE: October 18, 2022 CONSENT AGENDA ITEM: Crossroads East 1st Addition – Fourth Amendment to Development Agreement SUBMITTED BY: Molly Just, Planning Director BACKGROUND: On November 3, 2021 the Lake Elmo City Council adopted Resolution 2021-115 approving the Final Plat and PUD Plans for Crossroads East 1st Addition. On December 7, 2021, the Lake Elmo City Council adopted Resolution 2021-134 approving the Development Agreement for Crossroads East 1st Addition. On April 5, 2022, the Lake Elmo City Council adopted Resolution 2022-034 approving the First Amendment to the Development Agreement for Crossroads East 1st Addition. The developer requested this amendment in order to allow it to proceed with vertical construction of the buildings on the platted property prior to completion of the public improvements. On June 22, 2022, the Lake Elmo Building Official posted Stop Work Orders for Crossroads East 1st Addition for failure to have public site utilities completed by June 21, per the First Amendment to the Development Agreement. Mayor Cadenhead subsequently reversed the Stop Work Orders. On July 21, 2022, the Developer submitted application for a Second Amendment to the Development Agreement in order to extend the time allowed to complete the public infrastructure improvements. On August 3, 2022, the Lake Elmo City Council adopted Resolution 2022-076 approving the Second Amendment to the Development Agreement for Crossroads East 1st Addition. This would be an interim agreement while staff revised the agreement to remove the restrictions on tenant improvements. On August 16, 2022, the Lake Elmo City Council adopted Resolution 2022-078 approving the Third Amendment to the Development Agreement for Crossroads East 1st Addition extending the deadline for public infrastructure improvements to September 30, 2022 and allowing issuance of tenant building permits. On September 30, 2022 the Developer had not completed the required public infrastructure improvements and so the Lake Elmo Building Official issued a Stop Work Order on the construction of the private improvements. Construction of the public infrastructure improvements could continue. 2 On October 3, 2022 the Developer and staff reached an agreement on an extension of time to construct a shortened list of public infrastructure improvements in exchange for staff proposed public benefits. ISSUE BEFORE THE CITY COUNCIL: Should the Council adopt Resolution 2022 – 091 approving the Fourth Amendment to the Development Agreement for Crossroads East 1st Addition? PROPOSAL City staff and the Developer have come to terms on the proposed Fourth Amendment which extends the deadline for completion of a shortened list of public improvements to December 21, 2022. The Developer signed agreement is attached. The list is shortened to include what is absolutely necessary and does not compromise public safety. In exchange for extending the deadline the Developer has agreed to construct a 6-foot tall opaque privacy fence on the top of the berm along the northern property line that is shared by a residential neighborhood. The privacy fence will be in addition to the required screening for that area and the recently planted trees will for the most part be relocated to the residential side of the new fence. The fence must be constructed by December 31, 2022. In addition, the Developer agreed that the security (letter of credit) cannot be reduced until all of the listed public improvements are deemed complete. Staff recommends that the City Council adopt the Fourth Amendment as it is a very thoughtful compromise between the City and Developer. If the City Council elects to deny the amendment then the approved Third Amendment would be the governing agreement and the Developer would have to stop work. OPTIONS: 1) Adopt Resolution 2022-091 approving the Fourth Amendment to the Development Agreement for Crossroads East 1st Addition; 2) Amend and then approve the Fourth Amendment to the Development Agreement for Crossroads East 1st Addition; or 3) Direct Staff to prepare a resolution for denial of the Fourth Amendment to the Development Agreement for Crossroads East 1st Addition. FISCAL IMPACT: There is no fiscal impact to the City in approving this amendment. RECOMMENDATION: If removed from the consent agenda: “Motion to adopt Resolution 2022-091 approving the Fourth Amendment to the Development Agreement for Crossroads East 1s Addition.” ATTACHMENTS: • Fourth Amendment to the Development Agreement • Resolution 2022 - 091 LA515-93-827501.v2 FOURTH AMENDMENT TO DEVELOPMENT AGREEMENT This Fourth Amendment to Development Agreement (“Fourth Amendment”) is made and entered into this _____ day of October, 2022, by and between the City of Lake Elmo, a municipal corporation under the laws of Minnesota (the “City”) and Airlake Development, Inc., a Minnesota corporation and Crossroads East, LLC, a Minnesota limited liability company (collectively, the “Developer”). RECITALS: A. The City and the Developer have entered into a Development Agreement dated February 15, 2022 and recorded with Washington County on April 5, 2022 as Document No. 7368700 (the “Development Agreement”); and B. The Development Agreement relates to that subdivision located in Lake Elmo, Minnesota known as Crossroads East 1st Addition and the property is legally described on Exhibit 1 attached hereto (the “Property”); and C. The Parties entered into a First Amendment to Development Agreement on April 5, 2022 and recorded with Washington County on April 29, 2022 as Document No. 4368700 (the “First Amendment”); and D. The Parties entered into a Second Amendment to Development Agreement on August 3, 2022 and recorded with Washington County on August 22, 2022 as Document No. 4382483 (the “Second Amendment”); and E. The Parties entered into a Third Amendment to Development Agreement on August 11, 2022 and recorded with Washington County on August 22, 2022 as Document No. 4382484 (the “Third Amendment”); and F. The Third Amendment extended the deadline for the completion of the public Subdivision Improvements to September 30, 2022; and G. The Developer is in need of additional time to install the Subdivision Improvements and has requested an amendment to the Development Agreement to allow it additional time to complete the Subdivision Improvements; and LA515-93-827501.v2 2 H. The City is willing to grant the requested extension provided that certain public Subdivision Improvements are completed prior to the issuance of any certificate of occupancy and that all other Subdivision Improvements are completed on a revised schedule. NOW, THEREFORE, in consideration of the above recitals, which are expressly incorporated herein, and for other good and valuable consideration, the receipt and sufficiency which is hereby acknowledged, the City and the Developer agree to this Fourth Amendment to the Development Agreement as follows: 1. Paragraph 9 of the Development Agreement is hereby amended as follows: 9. TIME OF PERFORMANCE. Subject to unavoidable delays including adverse weather conditions, the Developer shall install all required Subdivision Improvements by December 31, 2022 with the exception of the storm sewer Cured-in-Place Pipe Lining (“CIPP”) corrections and infiltration basin testing. The Developer agrees that it must implement storm sewer CIPP lining corrections from end to end for each storm sewer segment identified in the Corrected Storm Sewer Plan that is attached to this Agreement as Exhibit D (the “Corrected Storm Sewer Plan”) and Complete the CIPP lining using plans and specifications prepared by a registered professional engineer and approved by the City Engineer. The City and the Developer also agree that the testing of the stormwater BMPs in the public right-of-way and the approval of the stormwater BMPs may occur after December 31, 2022. However, no reductions to the Security will be made by the City pursuant to Paragraph 32 of the Development Agreement until all Subdivision Improvements are Complete, the storm sewer improvements have been installed by the Developer in accordance with the Corrected Storm Sewer Plan and deemed Complete by the City Engineer and the stormwater BMPs in the public right-of-way have been tested and deemed successful by the City and the Valley Branch Watershed District, and that financial obligations to the City have been satisfied. LA515-93-827501.v2 3 2. Paragraph 17 of the Development Agreement is hereby amended by adding a new subparagraph (C) which shall read as follows. (C) The Developer shall install a six foot tall opaque fence on the top of the berm that runs along the north boundary line of the Subdivision. The fence shall be installed by the Developer no later than December 31, 2022. All other language in Paragraph 17 shall remain unchanged. 3. Paragraph 23 of the Development Agreement is hereby amended as follows: 23. BUILDING PERMITS/CERTIFICATES OF OCCUPANCY. A. The City will issue a footing and foundation permit for a building within the Subdivision provided that the final plat has been recorded with Washington County. The City will issue a vertical construction permit for a building within the Subdivision prior to installation of the on-site utilities within the Subdivision. B. The City will not issue a certificate of occupancy for any building, or part thereof, within the Subdivision until the Developer has installed all of the public Subdivision Improvements that are listed on the attached Exhibit E and such public Subdivision Improvements set forth in Exhibit E have been deemed Complete by the City Engineer. For the purposes of this Agreement, the term “Complete” means that all required testing has been conducted and approved, City engineering inspections have been scheduled and conducted, punch lists have been developed and fully addressed, and as-built record information has been submitted in accordance with the City as-built format requirements, including manhole invert verification showing inverts installed within construction specification LA515-93-827501.v2 4 tolerances, with all testing, inspections and as-built information demonstrating that all Subdivision Improvements, including the public Subdivision Improvements, have been completed as depicted and described in the approved plans and specifications. C. Breach of the terms of this Agreement by the Developer, including nonpayment of billings from the City, shall be grounds for denial of building permits, certificates of occupancy, and withholding of other permits, inspections, or actions and the halting of all work in the Subdivision. D. If the City issues or has issued building permits before the acceptance of the Subdivision Improvements by the City, the Developer assumes all liability and costs resulting in delays in completion of the Subdivision Improvements and damage to the Subdivision Improvements caused by the City, the Developer, the Developer’s contractors, subcontractors, materialmen, employees, agents, or any third parties. E. No sewer and water connection permits may be issued until the streets needed for access have been paved with a bituminous surface and the utilities are tested and approved by the City Engineer. 4. Paragraph 32 of the Development Agreement is hereby amended as follows: 32. REDUCTION OF SECURITY. Upon written request by the Developer and upon receipt of proof satisfactory to the City Engineer that: 1) all Subdivision Improvements are Complete; 2) all of the storm sewer improvements have been installed by the Developer in accordance with the Corrected Storm Sewer Plan and deemed Complete by the City Engineer and the stormwater BMPs in the public LA515-93-827501.v2 5 right-of-way have been tested and deemed successful by the City and Valley Branch Watershed District; and 3) that all financial obligations to the City have been satisfied, the City Engineer may approve reduction in the Security up to 75 percent of the Security associated with the itemization on Exhibit C. (A) Twenty-five percent of the original Security amount, excluding grading and landscaping improvements shall be retained until the warranty period has expired. (B) Twenty-five percent of the original Security amount associated with Landscaping Improvements shall be retained by the City until (1) all Landscaping Improvements have been fully completed and accepted by the City, including all corrective work and warranty punch list items being completed by the Developer; (2) all financial obligations to the City have been satisfied; and (3) the warranty period has expired. Notwithstanding the above, the City may reduce the Security attributable to accepted Landscaping Improvements by up to 38 percent after the first year of acceptance by the City. The City may also further reduce the Security attributable to accepted Landscaping Improvements by up to an additional 37 percent after the second year of acceptance by the City. The City will retain the remaining 25 percent of the Security attributable to accepted Landscaping Improvements until (1) all Landscaping Improvements have been fully completed and accepted by the City, including all corrective work and warranty punch list items being completed by the Developer; (2) all financial obligations to the City have been satisfied; and (3) the warranty period has expired. 5. The current Exhibit D to the Development Agreement shall be replaced with a new Exhibit D. The new Exhibit D is attached to this Fourth Amendment as Exhibit 2. LA515-93-827501.v2 6 6. A new Exhibit E shall be added to the Development Agreement. The new Exhibit E is attached to this Fourth Amendment as Exhibit 3. 7. All other terms and conditions of the Development Agreement shall remain in full force and effect. LA515-93-827501.v2 7 IN WITNESS WHEREOF, the City and the Developer have executed this Fourth Amendment to the Development Agreement as of the date first written above. CITY OF LAKE ELMO By:________________________________ Charles Cadenhead, Mayor By:________________________________ Julie Johnson, City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON ) The foregoing instrument was acknowledged before me this ______ day of ___________________, 2022, by Charles Cadenhead and Julie Johnson, the Mayor and the City Clerk, respectively of the City of Lake Elmo, a Minnesota municipal corporation, on behalf of the City. __________________________________ Notary Public LA515-93-827501.v2 EXHIBIT 1 to Fourth Amendment Legal Description of the Property All lots and outlots located within the plat of Crossroads East First Addition, according to the recorded plat thereof, County of Washington, State of Minnesota. LA515-93-827501.v2 EXHIBIT 2 to Fourth Amendment EXHIBIT D Corrected Storm Sewer Plan LA515-93-827501.v2 LA515-93-827501.v2 LA515-93-827501.v2 LA515-93-827501.v2 Exhibit 3 to Fourth Amendment Exhibit E Public Subdivision Improvements that must be Complete before the Issuance of any Certificate of Occupancy 1. Public Sanitary Sewer a. Tested b. Televised. c. Inverts verified. d. Completion of all Punch List items identified from final inspection by the City. e. Final record drawings approved by the City. 2. Public Watermain (installed and tested) 3. Hudson Boulevard Storm Sewer, BMPs, Street, Trail and Boulevard a. Hudson Boulevard Storm Sewer i. Installed. ii. Televised. iii. Inverts verified. iv. Completion of all Punch List items identified from final inspection by the City, except for CIPP lining corrections. v. Final record drawings approved by City, except for CIPP lining corrections. b. Hudson Boulevard Stormwater Management BMPs. i. Installed and restoration complete. ii. As-built grading verified. iii. Completion of all Punch List items identified from final inspection by the City, except for infiltration basin testing and VBWD approval. c. Hudson Boulevard Street Improvements i. Install wear course. ii. Install striping and pavement marking. iii. Install permanent traffic signs. iv. Removal of temporary traffic control signage. v. Completion of all Punch List items identified from final inspection by the City. vi. Final record drawings approved by the City. d. Hudson Boulevard Trail Improvements and Boulevard Restoration i. Installed and Restoration Complete. ii. Completion of all Punch List items identified from final inspection by the City iii. Final record drawings approved by the City LA515-93-827501.v2 4. Emergency Vehicle Access Roadway. i. Installed and Restoration Complete. ii. Completion of all Punch List items identified from final inspection by the City iii. Final record drawings approved by the City CITY OF LAKE ELMO WASHINGTON COUNTY STATE OF MINNESOTA RESOLUTION NO. 2022-091 A RESOLUTION APPROVING THE FOURTH AMENDMENT TO THE DEVELOPMENT AGREEMENT FOR DEVELOPMENT OF THE CROSSROADS EAST FIRST ADDITION. WHEREAS, the City of Lake Elmo is a municipal corporation organized and existing under the laws of the State of Minnesota; and WHEREAS, Airlake Development Inc, and Crossroads East, LLC (together the “Developer”) previously submitted an application to the City of Lake Elmo (the “City”) for a final plat for Crossroads East First Addition; and WHEREAS, the Lake Elmo City Council adopted Resolution No. 2021-115 on November 3, 2021 approving the final plat for Crossroads East First Addition; and WHEREAS, the Lake Elmo City Council adopted Resolution No.2021-134 on December 7, 2021, approving the Development Agreement for Crossroads East First Addition; and WHEREAS, the Lake Elmo City Council adopted Resolution No. 2022-034 on April 5, 2022 approving the First Amendment to Development Agreement (the “First Amendment”); and WHEREAS, the First Amendment authorized Developer to proceed with vertical construction of the buildings on the Property prior to completion of the public Subdivision Improvements provided that the public Subdivision Improvements were completed on an agreed-upon schedule; and WHEREAS, The Lake Elmo City Council adopted Resolution 2022-076 on August 3, 2022 approving the Second Amendment to Development Agreement (the “Second Amendment”); and WHEREAS, the Second Amendment authorized Developer an extension of time to complete Public Improvements providing certain restrictions were placed on tenant improvements; and WHEREAS, the Lake Elmo City Council adopted Resolution 2022-078 on August 16, 2022 approving the Third Amendment to Development Agreement (the “Third Amendment”), and WHEREAS, the Third Amendment authorized Developer to obtain building permits for tenants provided that Public Improvements are complete no later than September 30, 2022; and WHEREAS, Developer and City have agreed to further amend the Development Agreement to move the deadline for a shortened list of Public Improvements to December 31, 2022 in exchange for erection of a 6-foot opaque fence on the top of the screening berm running along the northern lot line by the same deadline; and NOW, THEREFORE, based on the information received, the City Council of the City of Lake Elmo does hereby approve the Fourth Amendment to Development Agreement for Crossroads East First Addition and authorizes the Mayor and City Clerk to execute the Fourth Amendment. Passed and duly adopted this ___ day of October 2022 by the City Council of the City of Lake Elmo, Minnesota. _________________________________ Charles Cadenhead, Mayor ATTEST: _______________________________ Julie Johnson, City Clerk