1997-02-12 DA Outline/Concept
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February 12, 1997
Mr. Mike Couri, Attorney
Mr. Gary Hale
City Administrator
5975 Main Avenue NE.
Albertville, MN 55301
RE: Develooment Ae:reement Data for Cedar Creek PUD
Gentlemen:
This letter confirms my conversation with Gary over the last several months regarding ability to structure a
development agreemnt which would contain reasonable security provisions to protect both parties. I have
attached an outline with a current concept plan. While the concept plan will evolve, the financial outlines
as they relate to development contracts would not. A major problem of the previous proposal in 1996 was
insinuation that security would need to be posted for the entire golf course. We no of no similar business
ventures which are proposed in Albertville or any other community where liquid security is posted in order
to develop the business. We would expect no diferent treatment than someone else proposing a restaurant,
retail, or other business venture.
The attached sketch represents a phasing system. We would use the financial security system proposed for
Parkside 3rd throughout the pysical development of any given phase. Since Albertville does not control the
water system directly, we would ask that future projects eliminate security for the water line portion. Upon
completion of the infrastructure, we provide bonding with Joint Powers. In addition, we will name the City
as cobenificiary of the contractor performance bond which is standard within our construction specifications
per review by SEH. (copy attached)
The following progress on the developemnt is believed to be a safe enough system which does not allow for
"undue developer gain" prior to delivery of a functioning course. Please take some time to analyze the
proposed concept and add a memo of concurrence or alternatives which will become part of the submittal
package. We would prefer to have the financial portion of the development not debated by the Planning
Commission, only the land use and our security progression. We would prefer to be able to state that the
financial projections and security provisions are believed to be more than adequate to protect and benefit
the City.
Project PUD Approvals over entire site create one master development agreeement.
Target dates and proposed restrictions on progress for phase approvals are:
Phase 1: .:!:.25 lots, Center Oaks prior to golf course grading fall of 1997, typical security of bond & LOC
Phase 2: + 41 lots, Center Oaks, approved for construction, permit to cosign for MWCC sanitary sewer
extensin with held until substantial grading and reseeding of holes 2& 3 of the golf course complete within
subdivision and all trail corridor easements dedicated. Permit released to MWCC for issuance upon
verification of seeding by City Engineer.
Phase 3: + 28-30 lots with golf course frontage. Able to be approved for construction, MWCC sanitary
sewer pipe permit application with held until couse in grow in period with driving range open for business.
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Golf Course operations and surety proposal:
. Grading secured by $50,000Lettor of Credit or amount to reseed area grading with MnDot 500 grass
miX.
Deed for golf course lands held in escrow by title company or City Attorney trust, Deed released back
to Pilot Land for use in lease transaction with City. S
. In lieu of public ownership, City granted perman ant open space easement over golf holes to assure
open area in order to proceed with phase two plat construction. If Driving Range not open 2 years after
projects first preliminary plat approval, deed held in escrow released and land for nine holes becomes
soley City property.
. If golf course not open for business within 3 years of approval, percentage share of Municipal gross
proceeds to increase by 5 %.
. City to receive 10% of gross revenues from golf course operations on an annual basis, defined as
greens and cart fees.
. City to be dedicated golf course land upon full operational status and 50 year lease back provision to
partnership started. City to verify liability premiums differential between current municipal parks and
parks with a golf course. City to net 5% greater dollar amount than would be achieved by private
business paying property taxes on golf holes land. Since a golf course does not demand County or
School District services, loss of potential tax revenue from golf hole property is neglible to County and
Schools. City share made whole by partnership agreemnt.
. Partnership retains sole ownership of Golf Course clubhouse and parking lot land, concession income
and golf incidental income such as lessons, balls, shirts etc. Expansion of business operations to be
regulated by City zoning ordinance no different than other businesses.
. Portions of land to allow for joint use of public trails and golf operations..
No additional bonds or letters of credit shall be necessary other than to reseed because of restrictions on
subdivision phase 2,3,4 construction on subsequent phases, open space easement granted year two, and
operational income stream starting year 4, prior to phases 4 to 7 of plat construction. Pilot would not need
to encumber its development rights over housing in a conventional all housing project, therefore the
restrictions create an incentive to perform and clearly a limit on value. Without the ability to construct the
balance of the two dominant subdivisions, very little developer value or profit will be unfairly generated..
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s followsould the Highway 19 project not be awarded and undertaken due to right of way problems, Kenco
will be granted the ability to add the easement acquisition costs to the trunk sewer project via the use of a
reasonable contingency cost. As such, this will readjust the overall area charges projected.
We believe that the ability to maintain an aggressive schedule for the 60th street trunk sewer are in the best
interests of the City. Since the Barthell's bus service provides transportation to the greater community, we
do not believe that delays to their operations are reasonable. At the back end of the construction season, the
ability to pave becomes the critical timing element, so any delays to the front end of the project become
exaggerated at the final completion stage.
Please confirm in writing your ability to turn over use of the easements to Kenco. We will be able to
provide the funding within 2 days of notice that payment will occur. Thank you for your consideration.
Sincerely,
Donald Jensen
Land Development Director
cc:
Peter Carlson - SEH
Gary Hale -- Administrator
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