HomeMy WebLinkAbout2010-06-16 PACKET 08.D.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM #
DATE 6116/10
Finance
50 a 119 :4 ILYA I R M19N
ORIGINATING DEPARTMENT
COUNCIL ACTION REQUEST
Consider request to rebate special assessment penalties paid by Pulte Homes as purchaser of
the 39 remaining lots in the Preserve subdivision.
STAFF RECOMMENDATION
Approve request to rebate penalties.
BUDGET IMPLICATION
BUDGETED AMOUNT ACTUAL AMOUNT
ADVISORY COMMISSION ACTION
SUPPORTING DOCUMENTS
® MEMO /LETTER: Roland memo 6/10/10; Pulte letter 5/25/10
❑ RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
❑ OTHER:
ADMINISTRATORS COMMENTS
hc
City Administrator Date
COUNCIL ACTION TAKEN: APPROVED ❑ DENIED ❑ OTHER
&S , c)w
CADocuments and Settings\rrolandWy Documents \City Council Action Form.doc
DATE REVIEWED APPROVED
DENIED
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PLANNING ❑ ❑
❑
❑
PUBLIC SAFETY ❑ ❑
❑
❑
PUBLIC WORKS ❑ ❑
❑
❑
PARKS AND RECREATION ❑ ❑
❑
❑
HUMAN SERVICES /RIGHTS ❑ ❑
❑
❑
ECONOMIC DEV. AUTHORITY ❑ ❑
❑
❑
❑ ❑
❑
SUPPORTING DOCUMENTS
® MEMO /LETTER: Roland memo 6/10/10; Pulte letter 5/25/10
❑ RESOLUTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
❑ OTHER:
ADMINISTRATORS COMMENTS
hc
City Administrator Date
COUNCIL ACTION TAKEN: APPROVED ❑ DENIED ❑ OTHER
&S , c)w
CADocuments and Settings\rrolandWy Documents \City Council Action Form.doc
City of
• .• G
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To: Mayor and Council members
Ryan Schroeder, City Administrator
From: Robin Roland, Finance Director '
Date: June 10, 2010
Subject: Request to rebate special assessment penalties
Introduction
Pulte Homes has a purchase agreement for the 39 remaining lots in the Preserve at Cottage
Grove subdivision and plans to close on these properties in July. The properties currently
have a significant amount of delinquent special assessments (with penalties accrued) which
Pulte will pay at the time of closing. Pulte is requesting that the City Council consider rebating
the special assessment penalties after all the lots are brought to current status. The request
letter is attached to this item.
Discussion
The Preserve at Cottage Grove has levied assessments totaling $1,375,889 or $34,397.22 for
each lot. Principal and interest on these assessments through the first half of 2010 totals
$533,351. Staff estimates the penalty amount on these assessments will total in excess of
$55,000 (or roughly 10% of the outstanding assessment amount) at the time of closing.
The current property owner is in default on the property assessments which have incurred the
penalties in the first place. Pulte Homes will be assuming payment of the balance of the levied
assessments on these properties for the remaining 3' /z years.
By statute, penalties collected on delinquent special assessments are required to be
distributed to the taxing jurisdiction which levied the assessment. Therefore, the City will
receive the entire amount of penalties which are paid when the assessments are brought
current.
In light of the difficult development environment, granting Pulte's request could be seen as an
additional incentive to getting the Preserve development back on track and encouraging
economic development in Cottage Grove.
Action Requested
Staff recommends adoption of the attached resolution granting Pulte's request that penalties
paid on the delinquent special assessments be rebated to them.
f f
N l�
May 25, 2010
City of Cottage Grove
Robin Roland
7516 80` Street South
Cottage Grove, TNA 55016
Re: The Preserve at Cottage Grove
Dear Ms. Roland
Pulte Homes has entered into a purchase agreement for all 39 remaining lots located within the
Preserve at Cottage Grove subdivision. It is anticipated that the closing on the lots will occur in
mid July of this year. Upon closing on the lots, Pulte Homes will be assuming all of the
assessments that have been levied against the lots.
It is our understanding that the assessments that were due in 2009 and the first half of 2010 have
riot been paid by the current owner and therefore additional penalties have accrued. It is Pulte
I lome's intention to get all of the assessment payments caught up when we close on the lots in
July.
We would request that the City Council consider abating the penalties that have accrued to date
once the assessments have been paid for 2009 and the first half of 2010. Pulte Homes and the
City of Cottage Grove have a long history of working well together and we would appreciate the
City Council's consideration of this matter.
If you have any questions or need additional information, please do not hesitate to contact me at
952- 912 -5465 or Ja son wedel�cr�ultegroup.com
Sincerely,
Pulte Homes of Minnesota
� ason C. Wedel, P.E. '� Director of Land
Pulte Homes, Inc. 1 12701 Whitewater Drive Suite 300 1 Minnetonka, Minnesota 55343 1 952.936.7833 1 952.936.7839 (Fax)
•_ ,$•
RESOLUTION REBATING PENALTIES ON SPECIAL ASSESSMENTS
WHEREAS, the Preserve at Cottage Grove project currently has delinquent
special assessments outstanding with penalties incurred; and
WHEREAS, Pulte Homes will acquire the 39 remaining lots in the project and the
special assessment levied against them under a purchase agreement in July 2010; and
WHEREAS, Pulte Homes will pay the delinquent amount of special assessments
with penalties at the time of closing on the properties; and
WHEREAS, it is the discretion of the City Council to do so.
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of
Cottage Grove as follows:
That penalties paid by Pulte Homes on the delinquent special assessments on
the 39 lots known as the Preserve at Cottage Grove be rebated to Pulte Homes after
receipt of the proceeds from the payment of the special assessments by the City from
Washington County.
Adopted by the City Council of the City of Cottage Grove this _ day of
, 2010.
Myron Bailey, Mayor
Attest:
Caron M. Stransky, City Clerk