2016-07-05 CC Agenda Packet1lber-tviiie SM041rown W"" oft Cky woy \ Mayor and Council Request for Action
June 30, 2016
SUBJECT: LEGAL - SECOND AMENDMENT TO TOWNE LAKES 6TH ADDITION DEVELOPER'S
AGREEMENT
RECOMMENDATION: It is respectfully requested that the Mayor and Council consider the
following:
MOTION TO: Approve the Second Amendment to Towne Lakes Planned Unit Development
Agreement, Towne Lakes 6th Addition.
BACKGROUND: In 2005, the City and Contractor Property Developers Company ("CPDC")
entered into a development agreement for the development of Towne Lakes 6th Addition. CPDC
installed some of the infrastructure before the housing bust hit and all work was stopped. The
bank eventually foreclosed on the property and sold the property to the Kilbur Development
Group in 2010. The City and Kilbur entered into an amendment to the Developer's Agreement
which required Kilbur to complete some of the more immediate infrastructure improvements and
allowed others to be delayed until residential units are constructed or until 2020. Kilbur has
completed all obligations that are required to be completed at this time, and remains in
compliance with the Development Agreement.
When Kilbur purchased the property it made it clear that it was merely an investment group
which intended on holding the property for a period of time until the market recovered and the
property could be sold to a developer that would finish the development and construct the homes.
Kilbur now proposes to sell the property to a buyer that will complete the development.
At this point City Staff is recommending that the City enter into the attached Second
Amendment to the Development Agreement which would essentially transfer Kilbur's
development obligations to the new buyer. In addition, upon purchasing the land, the new buyer
would dedicate the necessary right of way needed for the construction of Large Avenue and
agree to py half of the costs of constructing Large Avenue at such time as either the Towne
P
Lakes 7tplat is approved or Hunters Pass Addition is approved.
KEY ISSUES:
Other than the changes relating to the dedication of Large Avenue and its future
construction, the proposed action merely substitutes a new owner for the Kilbur
Development group under the existing developer's agreement and its subsequent
amendments.
The existing letter of credit will either be maintained or replaced in the same amount by
the buyer.
The buyer intends on commencing construction on the Towne Lakes 6th Addition plat as
soon as possible.
M:1Public DatalCity Council\Council Packet Information12016107051612016-07-05 Towne Lakes 6th RCA.docx
Meeting Date: July 5, 2016
ends Page 70
Mayor and Council Request for Action — July 5, 2016
Second Amendment To Towne Lakes 6th Addition Developer's Agreement Page 2 of 2
POLICYTRACTICES CONSIDERATIONS: The City has previously allowed owners of
unfinished developments to transfer their obligations under developer's agreements to buyers of
the property, provided the City's security (an acceptable letter of credit) remains in place.
FINANCIAL CONSIDERATIONS: The change in ownership will not have any financial
impact upon the City.
LEGAL CONSIDERATIONS: Except for the dedication of Large Avenue and the agreement
to pay half its costs, the transfer of ownership and this Second Amendment will not alter the
existing terms of the Developer's Agreement as amended by the Kiibur amendment.
Responsible Person/Department: Mike Couri, City Attorney
Submitted Through: Adam Nafstad, City Administrator-PWD
Attachments: Second amendment to Towne Lakes 6th Addition Developer's Agreement
M:1Public DatalCity Council\Council Packet Information12016107051612016-07-05 Towne Lakes 6th RCA.docx
Meeting Date: July 5, 2016
ends Page 71
CITY OF ALBERTVILLE
SECOND AMENDMENT To PLANNED iNIT
DEVELOPMENT AGREEMENT
TONNE LAKES 6TH ADDITION
WHEREAS, the City of Albertville ("City"), a Minnesota municipal corporation, and
Contractor Property Developers Company ("Developer"), entered into an Agreement titled
"Planned Unit Development Agreement Towne Lakes 6fh Addition" ("Developer's Agreement")
dated September 7, 2005 and recorded as document number 1003634 at the Wright County
Recorder's office, Wright County, Minnesota; and
WHEREAS, Kilber Section 36, LLC ("Kilber"), a North Dakota limited liability
company, purchased the property subject to the Developer's Agreement; and
WHEREAS, Kilber and the City executed an Amendment to Planned Unit Development
Agreement, Town Lakes 6fh Addition ("First Amendment"); and
WHEREAS, Kilber has since sold the property that this the subject to the Developer's
Agreement and the First Amendment to ; and
WHEREAS, acknowledges that it is bound by the Developer's
Agreement and the First Amendment by virtue of its ownership of the property subject to the
Developer's Agreement and all references hereafter in this Amendment, the First Amendment
and in the Developer's Agreement to "Developer" shall mean ;
NOW, THEREFORE, IT IS HEREBY AND HEREIN MUTUALLY ALLY AGREED, in
consideration of each party's promises and considerations herein set forth, as follows:
1. Paragraph 3 A of the Developer's Agreement is modified to read as follows:
A. on or before September 30, 2016, the Developer shall construct those Municipal
Improvements located on Said Plat as detailed in the Plans and Specifications for
Towne Lakes Sixth Addition, as prepared by Westwood Professional Services dated
February 8, 2005 and revised September 22, 2005 and on file with the City Clerk,
including completion of all items listed on the attached Exhibit A, except that
completion of the following items may be delayed as follows:
i. Sidewalks shall be installed consistent with the timeline set out in
this subparagraph:
a. On the south Side of 68th Street, between Linwood Drive and
Wright County State Aid Highway No. 19 (the Shoppes at
Towne Lakes 2 plat), the sidewalk shall be installed by
Developer when a building is constructed on the lot adjacent to
68th street where there is no sidewalk currently.
1
Agenda Page 72
b . on the north Side of 68th Street, between Linwood Drive and
Wright County State Aid Highway No. 19 (Outlot A to Said
Plat), the sidewalk shall be installed by Developer when a
building is constructed on the lot adjacent to 68th street, and such
sidewalk shall extend from the western edge of said lot east to the
intersection of 68th Street and Linwood Drive.
c. on the west side of Linwood Drive north of 68th Street, the
sidewalk shall be installed by Developer when a building is
constructed on a lot adjacent to Linwood Drive, and such
sidewalk shall extend from 7 & Street to 6 8th Street.
d. on the east side of Linwood Drive, north of 68th Street, the
sidewalk shall be installed by Developer adjacent to the
townhomes abutting Linwood Drive prior to the issuance of an
occupancy permit for such townhomes, and such sidewalk shall
extend south to the intersection of Linwood Drive and 6 8th Street.
e. on the west side of Lancaster way, north of 68th Street, the
sidewalk shall be installed by Developer adjacent to the
townhomes abutting Lancaster way prior to the issuance of an
occupancy permit for such townhomes, and such sidewalk shall
extend south to the intersection of Lancaster way and 6 8th Street.
f. Notwithstanding the foregoing, all sidewalks shall be installed no
later than the earlier of 1) the time of issuance of the final
occupancy permit for the last residence to be constructed on Said
Plat or 2) four years from the date of this Agreement.
ii. Final finish grading of lots shall be performed prior to issuance of an
occupancy permit, but Developer shall ensure that the Subject
Property drains in a manner consistent with the grading and drainage
plan attached to the Developer's Agreement and shall immediately
correct any areas of the Subject Property that do not drain properly.
All such improvements shall be constructed at Developer's expense according to the
standards adopted by the City, along with all items required by the City Engineer.
The City Engineer will promptly inspect the Municipal Improvements upon their
completion and, when satisfactorily completed, recommend acceptance of such
improvements by the City Council. The City Council shall not unreasonably
withhold acceptance of such completed Municipal Improvements.
2. Paragraphs 6A and 6B of the Developer's Agreement is hereby modified to read as
follows:
A. Developer will provide the City with an irrevocable letter of credit as security that
the obligations of the Developer under this contract shall be performed. Said letter
of credit or surety shall be in the amount of $ . Said letter of
2
Agenda Page 73
credit or surety must meet the approval of the City attorney as to form and issuing
bank.
B. The City may draw on said letter of credit or surety to complete work not performed
by Developer (including but not limited to on- and off -site improvements, Municipal
Improvements described above, landscaping, erosion control, and other such
measures), to pay liens on property to be dedicated to the City, to reimburse itself for
costs incurred in the drafting, execution, administration or enforcement of this
Agreement, to repair or correct deficiencies or other problems which occur to the
Municipal Improvements during the warranty period, or to otherwise fulfill the
obligations of Developer under this agreement.
3. Paragraphs 7A and 7B of the Developer's Agreement is hereby modified to read as
follows:
A. Periodically, as portions of the Municipal Improvements and landscaping are
completed, and when it is reasonably prudent, the Developer may request of the City
that the surety be proportionately reduced for that portion of the Municipal
Improvements and landscaping which have been fully completed and payment made
therefor. All such decisions shall be at the discretion of the City Council. The City's
cost for processing reduction request(s) shall be billed to the Developer. Such cost
shall be paid to the City within thirty (30) days of the date of mailing of the billing.
The City may at all times retain the letter of credit in an amount sufficient to
complete the unfinished Municipal Improvements and landscaping required by the
Developer's Agreement.
B . The Developer may request of the City a reduction or release of any surety as
follows:
i. when another acceptable letter of credit or surety is furnished to the City to
replace a prior letter of credit or surety.
ii. when all or a portion of the Municipal Improvements or landscaping have
been installed, the letter of credit or surety may be reduced pursuant to
paragraph 7A above, except that the City shall retain the letter of credit or
surety in the amount of 10% of the estimated construction price of the
Municipal Improvements during the first year of the warranty period and 5%
of the estimated construction price of the Municipal Improvements during
the second year of the warranty period.
iii. As to all requests brought under this paragraph, the City Council shall have
complete discretion whether to reduce or not to reduce said letter of credit or
surety.
3
Agenda Page 74
4. The boulevard trees located on the Landscape Plan attached to the Developer's Agreement
shall be installed consistent with the timelines set out in this paragraph:
a. on the east side of Linwood Drive, upon the issuance of an occupancy permit for
townhomes abutting Linwood Drive, but only from such townhomes south to the
intersection of Linwood Drive and 68th Street.
b . on the west side of Linwood Drive, when the corresponding trees on the east side of
Linwood Drive are required to be planted.
c. on 68th Street west of Linwood Drive, upon the construction of a building abutting
68th Street.
d. on 68th Street between Linwood Drive and Lancaster way, upon the issuance of an
occupancy permit for any of the townhome units abutting 68th Street.
e. on the west side of Lancaster way, upon the issuance of an occupancy permit for
townhomes abutting Lancaster way, but only from such townhomes south to the
intersection of Lancaster way and 68th Street.
f. on the east side of Lancaster way, upon the issuance of an occupancy permit for a
single family home, but only where trees are abutting the lot that contains such
single family home.
g. Notwithstanding the foregoing, all boulevard trees shall be installed no later than the
earlier of 1) the time of issuance of the final occupancy permit for the last residence
to be constructed on Said Plat or 2) four years from the date of this Agreement.
5. City and Developer agree that , as successor to Contractor
Property Developers Company under the Developer's Agreement, shall not be liable for
any of Contractor Property Developers Company's obligations under developer's
agreements pertaining to the Towne Lakes first, second, fourth, or fifth additions, and
that liability under the developer's agreement pertaining to
Towne Lakes Third Addition, recorded in the Wright County Recorder's office as
document number 894487, shall arise only to the extent that is the
successor to Contractor Property Developers Company in the Towne Lakes Sixth Addition
Developer's Agreement. Notwithstanding this paragraph, Developer shall not be released
from any liability arising from a wetland permit covering land in the Towne Lakes Sixth
Addition, regardless of whether that permit also covers prior Towne Lakes additions.
6. Developer shall take all necessary steps to amend the NPDES permit for Said Plat to
make Developer the responsible party under such permit.
7. Developer's Agreement. Except as specifically altered by this Amendment, the terms of
the Developer's Agreement and the First Amendment shall remain in full force and effect
for the properties in Towne Lakes 6fh Addition.
Dated this day of July, 2016.
4
Agenda Page 75
CITY OF ALBERTVILLE,
By
Its Mayor
By
Its Clerk
By
Its:
By
Its
STATE OF MINNESOTA )
ss.
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me this day of July,
2016 by Jillian Hendrickson as Mayor of the City of Albertville, a Minnesota municipal
corporation, on behalf of the city and pursuant to the authority of the City Council.
STATE OF MINNE S O TA
ss.
COUNTY OF WRIGHT
Notary Public
5
Agenda Page 76
The foregoing instrument was acknowledged before me this day of July,
20161 by Kimberly Olson, as Clerk of the City of Albertville, a Minnesota municipal corporation,
on behalf of the city and pursuant to the authority of the City Council.
Notary Public
STATE OF MINNESOTA )
ss.
COUNTY OF WRIGHT )
The foregoing instrument was acknowledged before me this
20161 by , the
DRAFTED BY,
Court, MacArthur & Ruppe P.L.L.P.
P.O. Box 369
705 Central Avenue East
St. Michael, MN 55376
(763) 497-1930
Notary Public
day of
of
6
Agenda Page 77
EXHIBITS
EXHIBIT A
Municipal Improvement and Landscaping Items to be Completed
EXHIBIT B
Townhome Phasing Plan
EXHIBIT C
Trail Easement
EXHIBIT D
Drainage and Utility Easements as Shown on the Towne Lakes 7th Addition Plat
7
Agenda Page 78
EXHIBIT A
WORK To BE COMPLETED
1. Submit televised logs and video of sanitary sewer system for City review and approval.
2. Submit record drawings for City review and approval.
3. Bituminous street patching and repairs, as required prior to final lifts.
4. Placement of final lifts of bituminous per approved plans.
5. Repair and/or replacement of damaged storm sewer.
6. Adjust castings as required for final lift of pavement.
7. Street striping and signage per approved plans.
8. Grade and restore boulevards and medians within public right-of-way.
9. Finish -grading of lots, ponds and drainage ways per approved plans
10. Remove all silt fence, debris piles, and hay bales from site.
11. Remove inlet protection from all storm sewer structures and clean storm sewer as
required.
12. Construct sidewalks per approved plans.
13. Installation of landscaping and plantings per approved plans.
8
Agenda Page 79
EXHIBIT C
PERMANENT TRAIL EASEMENT
THIS INDENTURE, made this day of , 2010, by and between
Kilb er Section 36, LLC (Grantor); and the City of Albertville, Wright County, Minnesota,
(Grantee).
wITNES SETH :
WHEREAS, Grantor is the owner in fee simple of the real estate hereinafter described.
That for good and valuable consideration, the receipt of which is hereby acknowledged,
Grantor has this day bargained and sold, and by these presents, does bargain, sell and transfer
unto the City of Albertville its successors and assigns the following:
A permanent trail easement, for the purpose of constructing, maintaining, and public use
of a trail, over, under and across that area shown on the attached Trail Easement Exhibit
over that part of Outlot B, Towne Lakes 6fh Addition, according to the recorded plat
thereof, Wright County, Minnesota, described as follows:
Beginning at a point on the southerly line of said outlot B, also known as the northeast
corner of Lot 7, Block 7, TOWNE LAKES 5 TH ADDITION; thence North 71 degrees 04
minutes 10 seconds west, along the northerly line of said Lot 7 and its westerly
extension, a distance of 197.08 feet; thence North 18 degrees 55 minutes 08 seconds East,
a distance of 40.00 feet; thence South 71 degrees 04 minutes 10 seconds East, a distance
of 221.26 feet; thence South 18 degrees 55 minutes 50 seconds west, a distance of 40.00
feet to a point which bears South 71 degrees 04 minutes 10 seconds East from the point
of beginning; thence North 71 degrees 04 minutes 10 seconds west, a distance of 24.17
feet to the point of beginning.
Grantor does hereby covenant with the City of Albertville, that it is lawfully seized and
possessed of the real estate above described.
IN WITNESS WHEREOF, the said parties have caused this instrument to be executed
the day and year first above written.
9
Agenda Page 80
Kilber Section 36, LLC
By:
Its:
STATE OF MINNE S O TA
COUNTY OF WRIGHT
The foregoing instrument was acknowledged before me this
20101 by as
361 LLC, Grantor.
This instrument was drafted b y :
Couri, MacArthur & Ruppe, P.L.L.P.
705 Central Ave. East
P.O. Box 369
St. Michael, MN 55376
day of
of Kilber Section
SIGNATURE OF NOTARY
10
Agenda Page 81
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