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HomeMy WebLinkAbout2011-10-19 PACKET 04.D.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # DATE 10/19/11 PREPARED BY Community Development Robin Roland ORIGINATING DEPARTMENT DEPARTMENT HEAD COUNCIL ACTION REQUEST Consider approval of the Second Amendment to the Frattalone's Southpointe Ridge Development Agreement STAFF RECOMMENDATION Approve the Development Agreement - Second Amendment: Frattalone's Southpointe Ridge - 2011 BUDGET IMPLICATION BUDGETED AMOUNT ACTUAL AMOUNT ADVISORY COMMISSION ACTION ❑ PLANNING ❑ PUBLIC SAFETY ❑ PUBLIC WORKS ❑ PARKS AND RECREATION ❑ HUMAN SERVICES /RIGHTS ❑ ECONOMIC DEV. AUTHORITY SUPPORTING DOCUMENTS REVIEWED APPROVED DENIED ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ FT. ® MEMO /LETTER: Roland ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: ® OTHER: Development Agreement -Second Amendment ADMINISTRATORS COMMENTS COUNCIL ACTION TAKEN /C ity A mi strator Date ■ -..�■ � H: \Council items \City Council Action Form.doc City of Cottage Grove Community Development Department TO: Honorable Mayor and City Council Ryan Schroeder, City Administrator FROM: Robin Roland, Finance Director John Burbank, Senior Planner DATE: October 14, 2011 SUBJECT: Development Agreement Second Amendment — Frattalone's Southpointe Ridge Introduction Due to additional costs related to soil contamination at the Gateway Pond site, a Second Amendment to the Development Agreement — Frattalone's Southpointe Ridge is proposed. Discussion The initial 2007 agreement with Frattalone's Southpointe Ridge project covered the standard development and assessment information along with details of grading and reimbursement for the Gateway regional pond. The first amendment to that development agreement was adopted in October 2009 and signed by the developer and the City in April 2010. That amendment removed and revised the original section 5.16 from the development agreement. The first amendment called for the developer to construct an enlarged regional pond in exchange for the credits toward his required ponding and stormwater fees ($418,104). Assumptions made during the course of negotiations of the first amendment were subsequently found to be in error: soils which had originally been thought to have been re- usable were in fact not acceptable to the marketplace. The developer and the City looked at many alternatives, involving further increased costs on both sides, and delaying construction of the pond past the date required by the agreement. This second amendment to the developer agreement is a revision to the financial terms of that first amendment of section 5.16. Effectively, the second amendment: • increases the amount of reimbursement to the developer by $80,000 • identifies an extension for the completion date to June 30, 2012 • identifies the maximum amount of additional soils to be left on the Gateway Pond site • acknowledges the City's contribution of 4,000 cubic yards of clay to the developer as a liner for the pond Honorable Mayor, City Council, and Ryan Schroeder Page 2 of 2 This amendment is the result of many months of negotiations between the developer and City staff in an effort to resolve the issues to the best interest of both parties. Requested Action Approve the Second Amendment to the Development Agreement, Frattalone's Southpointe Ridge. [Reserved for recording data] DEVELOPMENT AGREEMENT- SECOND AMENDMENT FOR FRATTALONE'S SOUTHPOINT RIDGE 2011 This Agreement is made and entered into on the day of , 2011 by and between Southpoint Ridge, LLC., a Minnesota limited liability corporation, referred to as the 'DEVELOPER," and the City of Cottage Grove, a municipal corporation, situated in the County of Washington, State of Minnesota, hereinafter referred to as the "CITY." WHEREAS, SOUTHPOINT RIDGE, LLC is the Developer of a commercial subdivision known as Frattalone's South Point Ridge consisting of five (5) lots and three (3) outlots which is situated in the City of Cottage Grove, County of Washington, State of Minnesota, of which has been platted and is of record with Washington County, hereinafter referred to as the "SUBDIVISION'; and WHEREAS, an original fully executed subdivision agreement between the CITY and DEVELOPER for the SUBDIVISION hereinafter referred to as "THE AGREEMENT" was signed in August of 2007, and recorded with the Washington County Recorder; and WHEREAS, Section 5.16 of THE AGREEMENT required the DEVELOPER to provide ponding for the SUBDIVISION or pay off -site ponding fees, in addition to the standard acre based storm water area charge; and WHEREAS, during the commencement of the construction of the Gateway regional pond hereinafter referred to as "GATEWAY POND" which is detailed in Section 5.16 of THE AGREEMENT, soil contamination was discovered on the CITY owned GATEWAY POND site just northwest of the southbound 80th Street exit ramp on Highway 61, and WHEREAS, the discovery of the soil contamination dictated that the CITY incur costs for the completion of additional environmental evaluation, engineering and planning. The DEVELOPER'S grading contractor also needed to handle the moving, marketing and onsite placement of the graded soils differently. This action raised the costs for both parties and, based on the additional work required to address the soil contamination, the CITY and DEVELOPER negotiated a new value for construction of the off -site ponding at four - hundred thirty -six thousand five- hundred forty dollars and 53 cents ($436,540.53); and WHEREAS, It was also determined and documented that the DEVELOPER had previously paid the required stormwater area charge in the amount of one - hundred twenty -six thousand one - hundred four dollars ($126,104.00) with the first assessment against the project and that based on the assessment payment it was agreed that upon completion of the Gateway pond construction detailed in this agreement, the DEVELOPER would be credited one - hundred twenty -six thousand one - hundred four 2 dollars ($126,104.00) on the final assessment for the SUBDIVISION; and WHEREAS, on October 21, 2009 the original AGREEMENT was amended and signed by the CITY and the DEVELOPER and was recorded with Washington County as document number XXXXXXXXX. The modified AGREEMENT struck the old language in Section 5.16 of the AGREEMENT and replaced it in its entirety; and WHEREAS, as of October 13, 2011, the GATEWAY POND had not been completed as required in THE AGREEMENT and the 2010 Amended Agreement (document number XXXXXXXXX) due to difficulties related to the export of the soils from the GATEWAY POND project site; and WHEREAS, based on this non - completion of the required work, financial credits have not been given by the CITY to the DEVELOPER; and WHEREAS, the amended agreement section 5.16 (10) allowed for re- negotiation of the requirements of the agreement should additional site condition discoveries delay construction; and WHEREAS, The CITY and the DEVELOPER have completed additional negotiations on mutually acceptable terms related to the GATEWAY POND construction and compensation. NOW, THEREFORE, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES THAT SECTION 5.16 OF THE FULLY EXECUTED AGREEMENT BETWEEN THE CITY AND THE DEVELOPER FOR THE SUBDIVISION RECORDED AS DOCUMENT XXXXX IS AMENDED AS FOLLOWS: Section 5.16 Gateway Off -site Ponding 1. To compensate for onsite deficiencies in storm water management ponding within the SUBDIVISION, the DEVELOPER must pay an off -site ponding charge for creation of sufficient ponding downstream from the SUBDIVISION. 3 2. As required by the CITY subdivision ordinance, the DEVELOPER must pay stormwater area charges on the entire acreage of the subdivision that is above the normal water elevation. 3. As an alternative to paying the required offsite pending charge and stormwater area charges, THE DEVELOPER agrees to complete the grading for the CITY planned Gateway ponding project consistent with the CITY specifications of the GATEWAY POND plan sheets and the grading plan dated November 9, 2009 (EXHIBIT C) and any amendments to that document (as provided in writing by the CITY). 4. The City and DEVELOPER agree that the new value for construction of the offsite ponding is o A hundred sixteen thousand five hundred forty dollars and 53 cents ($516,540.53) 5. Upon completion and approval of the GATEWAY POND construction the CITY will waive the off -site pending fee of two hundred ninety -two thousand dollars ($292,000) required for the MIMPAILIM 6. Upon completion and approval of the GATEWAY POND construction, the DEVELOPER will be credited one hundred twenty -six thousand one hundred four dollars ($126,104.00) on the final assessment for the SUBDIVISION in lieu of stormwater area charges. 7. Upon completion and approval of the GATEWAY POND construction the DEVELOPER will be credited nine eight thousand four hundred thirty-six dollars and 53 cents ($98,436.53 on the final assessment for the SUBDIVISION for additional contaminated soil handling tasks. 8. The City and DEVELOPER agree that the maximum credit related to the construction of the off- 4 f$436- . 5 405-3)- is five hundred sixteen thousand five hundred forty dollars and 53 cents ($516,540.53) 9. That the DEVELOPER will be credited a total amount ,k�� a .a.:....,: ' "° °wa °° five hundred sixteen thousand five hundred forty dollars and 53 cents ($516,540.53) upon the written certification of the completion of the required ponding work by the CITY Engineer in lieu of the required off -site pending fee, stormwater area charge and contaminated soil handling tasks. 10. The CITY and the DEVELOPER agree that additional soil contamination or other site condition discoveries may delay construction of the pond, and result in the re- negotiation of the requirements in Section 5.16 of the AGREEMENT. 11. The CITY will grant all temporary construction easements required for access and provide necessary City and MnDOT permits necessary for the completion of the required ponding without cost to the DEVELOPER. 12. The DEVELOPER shall abide by all conditions and requirements outlined in the permits obtained for the project. 13. The DEVELOPER and CITY agree that the CITY will complete the construction surveying and inspections for the GATEWAY POND project without cost to the DEVELOPER. 14. The CITY will be responsible for all testing expenses related to the exporting of soil from the pond construction site. 1.5. The CITY will provide MPCA approval documentation for exportation of the approved soil material. 5 16. The DEVELOPER shall be responsible for the contaminated material being handled in accordance with approvals by DRAP and MPCA. 17. The DEVELOPER agrees to remove the existing bituminous roadway from Belden Boulevard to the pond site, dispose of roadway material off -site, re -grade and re- vegetate the area as a component of the GATEWAY POND construction. 3-8: The DEVELOPER agrees to substantially complete the GATEWAY POND, as determined by the CITY, by-Aa g u44— by June 30, 2012. 19. The DEVELOPER agrees to submit an as -built survey in .dwg format to the CITY Engineer upon completion of the pond construction. 20. The DEVELOPER is responsible to maintain all erosion control documentation and inspection necessary to comply with the NPDES permit. 21. The Developer shall initiate the GATEWAY POND construction in November of 2011. 22. The Developer is permitted to retain no more than 5,000 Yards of additional excess soil on the GATEWAY POND sitein a berming design which meets the approval of the Cit�Engineer. 23. The CITY will provide 4,000 cubic yards of clay material that meets pond lining specifications on the GATEWY POND site at no cost to the DEVELOPER. NOW, THEREFORE, IT IS HEREBY FURTHER AGREED BY AND BETWEEN THE PARTIES THAT; 1. All sections of the original fully executed subdivision agreement between the CITY and the DEVELOPER for Southpoint Ridge referred to as the AGREEMENT other than Section 5.16, "EXHIBIT A" , "EXHIBIT B ", "EXHIBIT C" are not amended or affected by this agreement. 6 2. All sections of the 2010 fully executed subdivision agreement amendment between the CITY and the DEVELOPER for Southpoint Ridge referred to as the 2011 AGREEMENT AMENDMENT (Doe 4XXXXXXX) other than Section 5.16, "EXHIBIT A", "EXHIBIT B ", "EXHIBIT C" are not amended or affected by this agreement. 3. This Agreement will be governed by and construed in accordance with the laws of the State of Minnesota. 4. This Agreement is binding upon and extends to the heirs, representatives, assigns, and successors of the parties. 5. All notices, certificates, or other communications required to be given to the CITY and DEVELOPER hereunder must be sufficiently given and deemed given when delivered, or when deposited in the United States mail, first class, with postage fully prepaid OR BY RECOGNIZED OVERNIGHT MAIL DELIVERY and addressed as follows: If to the CITY: City of Cottage Grove Director of Community Development 7516 - 80th Street South Cottage Grove, MN 55016 If to THE DEVELOPER: Southpoint Ridge, LLC Nicholas D. Frattalone 3205 Spruce Street Little Canada, MN 55117 7 The CITY and THE DEVELOPER, by notice given hereunder, may designate different addresses to which subsequent notice; certificate or other communications will be sent. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year first written above. SOUTHPOINT RIDGE LLC., a Minnesota Limited liability Corporation. CITY OF COTTAGE GROVE Bv: Nicholas D. Frattalone Its: Assistant Chief Manager Bv: Myron Bailey, Mayor STATE OF MINNESOTA ) )ss ACKNOWLEDGMENT BY CITY COUNTY OF WASI3INGTON ) On the day of 2011, before me a notary public within and for said County, personally appeared Myron Bailey and Caron M. Stransky to me personally known, each by me duly sworn, each did say that they are respectively the Mayor and Clerk of the City of Cottage Grove, a municipality named in the foregoing instrument and that the seal affixed to said instrument was signed and sealed on behalf of said municipality by authority of its City Council and said Mayor and Clerk acknowledged said instrument to be the free act and deed of said municipality. Notary Public STATE OF MINNESOTA ) SOUTHPOINT RIDGE LLC., ACKNOWLEDGMENT COUNTY OF ) On this _ day of 2011, before me, a notary public within and for said County, personally appeared Nicholas D. Frattalone, Assistant Chief Manager of Southpoint Ridge, LLC a Minnesota Corporation, on behalf of said corporation, to me personally known, each by me duly sworn, did say that he is respectively the Assistant Chief Manager of Southpoint Ridge, LLC, named herein and he did acknowledge and execute said instrument to be his free act and deed on behalf of said Corporation. Notary Public THIS INSTRUMENT DRAFTED 10 -12 -11 BY: Community Development Department City of Cottage Grove 7516 — 80th Street South Cottage Grove, MN 55016 E