1996-06-18 Grading & Land Altermatin permit
.
e
13736 Johnson Street N.E. · Ham Lake, MN 55304 · 757-4052
RE: Gradim!. early buildine: permits and Surety for Parks ide 3rd Addition
Dear Mr. Hale:
This letter serves to confirm Kencos's intent to grade the entire parcel including all
incidental areas necessary to serve the approved plat such as wetland mitigation areas,
utility corridors, ditch cleaning, and tree removal. We desire to have our existing letter
of credit for Parkside which is scheduled for release to be the bridging financial tool to
ensure our compliance with terms in the development contract scheduled for approval at
the next meeting in July. The total cost of our contract with Busse to complete the
revegetation is $19,500. We believe that a LOC. for $21,450 (110%) is more than
reasonable surety.
Model Home Buildine: Permits
An important business goal is to be able to construct up to three model homes in a cluster
on lots 1. & 2 of Block 8, and lot 2 of Block 1. These early starts allow us to market
finished houses during the fall parade of homes which starts September 7. It is possible
to show these homes without running water and toilets as we await appropriate utility line
testing and street paving. To wait until curb and gutter is in place prior to being able to
start a building is to penalize us the fall selling season. We hope to be able to capture the
likely low interest rates through the fall presidential elections in order to build some
momentum for Kenco and our selected builders in the western half of the project.
These model home lots are currently accessed via the existing farmhouse gravel road and
have overhead power to them as they are in the vicinity of the Barn. (being demolished).
This gravel road is in excellent condition and provides more than adequate fire and
emergency vehicle access to the building sites.
.
.
From a fire protection point of view, this cluster would be responded to no different than
the existing farmstead for Becker or the parcel to the south. That is, we believe that a fire
response would include a reservoir pumper truck until such time as we had new water
lines into the subdivision several months from now. (approximately September 30). We
propose the following in order to obtain these early building permits.
1) Provide both a survey and grade verification prior to building permit and after the
foundation is completed; These will be stamped by a licensed surveyor.
2) We will plan for a 5% minimum driveway grade from the proposed curb heights,
creating more than adequate fall from the garage to the street, even if the curb height
increased by a full. 12" during field construction. The typical 18" above curb would create
a standard 3% driveway. 12" above curb would be a 2% driveway.
Project Surety
City code describes financial surety to guarantee developer performance. There is no
requirement that the surety be a letter of credit. Kenco has the ability to provide the City
with both letters of credit which are written for one year increments and expire and
Subdivision Bonds which do not expire via automatic renewal provisions. We desire to
use bonds for a majority of the project, just as your bid contractors do to install major
public works. Business operations for Kenco or any developer are streamlined by being
able to use our working capital more efficiently. Letters of credit unnecessarily tie up
operating capital. A reasonable comparison is that a letter of credit is like a home equity
loan and a Subdivision Bond is like a credit card.
The City attorney believes that a letter of credit is simpler for the City to access, which is
true if a default occurs. A Subdivision Bond will take correspondence with the bonding
company in order to collect money, is no different than auto insurance, and does not
expire. As a means of protecting the City's potential out of pocket expenses in pursuing a
Bond collection, we are willing to provide a letter of credit for the following:
1) All necessary erosion control, site re-seeding and mulching plus;
2) $20,000 for administrative and legal fees to pursue Collection of Bond proceeds.
.
.
We believe that bonding for the balance of project infrastructure (streets and utilities)
provides the City the same level of protection from a performance point of view, and that
a reserve amount of money ina letter of credit provides protection financially in case a
rapid default occurred. (This we believe to be impossible) Bonding provides. Kenco the
greatest access to our capital reserves for product development, new asset purchases,
structure and equipment inventory, staff and contingency measures.
Please contact us with any questions you may have. We will be at your meeting on
Monday to discuss these.items. Thank. you in advance for your consideration.
Sincerely,
f1~~~
Donald Jensen
Land Development Director
Cc: Kent Roessler, President
Attachments:
bond data, model site locations
i
..".'
JUN-26-96 WED 16:55 MEYER-ROHLIN. INC.
.
612 682 9492 P.B2
pr~!ii!!~ary
17604-~
S 8S ~9'Jr E
IJJ
a
('oj
l"-
f>
o
z
PARK
r N 88 ~'48;;-WI
'0 139.00 I
1~3 2 ~I
'0 0
0> 0> I
L N 88 "02'48- W
----_...J
w
a
N
0...... 0
" tn
.
N
~.~
*?
It)8
z
o
z
::5
I
-.
~
('oj
~r
~~
NO
qZ
5
-.l
4:
y
N 8a 052' 4810 ~
100.00
-1~5.92 --
N 86 "20'42- E
S"" T* S-r,(q-r tJcr- f\
w
::>
:z
w
~
r 150.01 ..,
I II
I~ ~II
Ig 5 811
1 ....,
L S 88 "52'48" E I
r-, .JI
150.00
10 II
I ~ 4- ~Il
,0 0
LOl s aa "52'48" E 0> I I
C 150.00 211
/~ 3 ~II
1 0> S 86 .52'4-8- E g I I
L____ ...J I
r -150:00' = = -,
10 II
'~2 ~ll
101 0 I
S 88 "52'48" E en I
~---- ~ I
150.00 I
19 QII
w
------
"'" 5.00
N 01 .07'12" E
IJJ
.
ON
<0 .......
of'
~p
l()_
o
z
~' t t ..
BONDS AND INSURANCE "THE CONSTRUCTION INDUSTRY
.
-, - "~"'~~
"",. rl I' 1~~""~ .,----
~.;,- "- ....-.-
5650 SOUTH BRAINARD AVENUE, LA GRANGE, ILLINOIS 60525 708/352-6282 Fax 708/352-6295
May 8, 1996
Mr. Don Jensen
Kenco Construction, Inc.
13736 Johnson st. N.E.
Ham Lake, MN 55304
Dear Don:
As requested, enclosed are the following items for your review:
(1) 1995 Annual Report for Frontier Insurance Company
(2) 5 copies of the A.M. Best Rating information
In addition, the following Minnesota communities have accepted
subdivision bonds from Frontier Insurance Company through our Agency:
- ~, FI'""~~I'$ ti~i'l~k
- Shakopee - Ocoee
- Chanhassen - Blaine
- Burnsville - Woodbury
- Plymouth - Brooklyn Park
- Bloomington - ~cJe...., PV2l.iv\"e... ,rV)..ple beNe
e:>vff",1o - W.:>rte fz,"'I,A=... J / I
Finally, I did check with Frontier Insurance Company about the
potential for a rate reduction for Kenco Construction, Inc. and they
told me that they generally use an equity guideline of'$lO million as
one of their primary factors in extending rates less than 1.5%.
Based upon that guideline they would not offer me a lower rate for
Kenco Construction at this time.
Please le~/me know if you nee<< anythin~ else.
AncerelY,
V1k~
( ~~ Moore
~nd Manager
MEMBER NATIONAL ASSOCIATION OF SURETY BOND PRODUCERS
ASSOCIATE MEMBER ASSOCIATED GENERAL CONTRACTORS OF AMERICA
.0
.
13736 Johnson Street N.E.. Ham Lake, MN 55304 · 757-4052
June 18, 1996
Mr. Mayor & Members ofthe City Council
c/o Mr. Gary Hale
City Administrator
5975 Main Avenue NE.
Albertville, MN 55301
RE: Grading and Land alteration permit for Parkside 3rd Addition
Dear Mr. Hale:
This letter serves to confirm Kencos's intent to grade the entire parcel including all incidental
areas necessary to serve the approved plat such as wetland mitigation areas, utility corridors,
ditch cleaning, and tree removal. Per earlier conversations, we understood approval to be
granted upon the preliminary plat approval, contingent on following approved plans and
receiving permits from other agencies which had varying degrees of authority over the site. To
date we have received permits from:
The Army COE for wetland fill and mitigation;
Wright County Watershed for same;
MPCA for grading and erosion control protection via the NPDES permit program;
Permits which have been applied for include County Highway ROW for utility work; and
City of Albertville permit to alter land.
We understand this permit to be necessary but a formality. We are including the following
information for your review and as requested by Section 1900 of your Code.
Kenco is the overall project General Contractor.
Busse Construction, Inc. is our selected grading contractor and will move approximately
100,300 CY of material, all on site. Work is scheduled to last six weeks. Costs for
reseeding and mulching the site are $19,539. A bond or letter of credit can be furnished
for a percentage of this amount. Please confirm with us.
Additional contracts and contractors will be secured through the bid process for streets and
utility work, including the trunk pipe project referenced by the Development contract.
.
.
All of this work is in the public interest, does not impact the health safety or welfare of the
community, meets the conditions of our permits, and will conform to the plans and specifications
prepared and stamped by our consultant engineers, Meyer-Rohlin. To date, we have complied
with all rules and regulations and schedules, and have not knowingly violated any permit rules or
requirements. Plans were also delivered to SEH attn.: Pete Carlson. According to our
consultants, a grading permit was not required for the previous additions of Parkside. Our
selected contractor will be moving equipment on site beginning the week of June 24 to start the
grading project.
Please contact us with any questions you may have. Thank you in advance for your permit
issuance.
Sincerely,
Land Development Director
Cc: Kent Roessler, President