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Home My WebLink About2013-03-06 PACKET 04.J.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # � DATE 3/6/13 • PREPARED BY Community Development Jennifer Levitt ORIGINATING DEPARTMENT STAFF AUTHOR ************��**�*******��************�***��** COUNCIL ACTION REQUEST Consider accepting the letter from Jerry Perron of Leonard, Street and Deinard documenting US Homes Corporation's compliance with City Resolution No. 2012-048 and allow stafF to resume issuing building permits for Pinecliff 5th Addition. STAFF RECOMMENDATION Accept the letter documenting US Homes Corporation's compliance with City Res. No. 2012- 048 and allow staff to resume issuing building permits for Pinecliff 5th Addition. ADVISORY COMMISSION ACTION i_ REVIEWED ❑ ❑ ❑ ❑ ❑ ❑ ❑ APPROVED ❑ ❑ ❑ ❑ ❑ ❑ ❑ DENIED ❑ ❑ ❑ ❑ ❑ ❑ ❑ ❑ PLANNING ❑ PUBLIC SAFETY ❑ PUBLIC WORKS ❑ PARKS AND RECREATION ❑ HUMAN SERVICES/RIGHTS ❑ ECONOMIC DEV. AUTHORITY ❑ SUPPORTING DOCUMENTS � MEMO/LETTER:Memo from Jennifer Levitt dated 3/1/13 Letter from Jerry Perron, Leonard Street and Deinard dated 2/28/13 ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: � OTHER: Recorded Declaration of Covenants, Conditions and Restrictions for Pinecliff Background information ADMINISTRATOR'S COMMENTS �,� �� ,,,� '� , � � � � ; ��:::.: � �i � f i $ � � ( City Administrator Date *�***************�***********�***********�**�*** COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER Cottage ./ Grove � Pride ana PCOSPerity Meet TO: Mayor and Members of the City Council Ryan Schroeder, City Administrator FROM: Jennifer Levitt, Community Development Director/City Engineer DATE: March 1, 2013 RE: Pinecliff 5th Addition Homeowners Association Background The City Council has reviewed the Pinecliff 5th Addition Home Owners Association (HOA) concerns expressed by Tom and Cheri Shannon and Donald and Bonnie Bialucha on December 19, 2012, January 16, 2013, and February 6, 2013. Since February 6, 2013, following Council direction to require US Homes Corporation to file an amended Declara- tion of Covenants, no building permits have been issued for the Pinecliff 5th Addition. On February 8, 2013, US Homes Corporation filed a Supplementary Declaration of Cove- nants, Conditions and Restrictions for Pinecliff, Annexing Lots 3 and 5, Block 3, Pinecliff 5th Addition (please see the enclosed document). Since the filing of the Supplementary Declaration, the City had requested that the US Homes attorney provide a letter docu- menting their clients compliance with Resolution No. 2012-048. Enclosed is a copy of the letter from Jerry Perron of Leonard, Street and Deinard outlining their understanding of compliance with Resolution No. 2012-048. Recommendation � Accept the letter from Jerry Perron of Leonard, Street and Deinard documenting US Homes Corporation's compliance with City Resolution No. 2012-048 and allow staff to resume issuing building permits for Pinecliff 5th Addition. LEON.ARD STREET .AND DEINARD February 28, 2013 VIA FAX AND U.S. MA.TL Corrine A. Heine Kennedy & Graven, Chartered 470 U.S. �ank Plaza 200 South Sixth Street Minneapolis, MN 55402 Re: Pin�ecliff Development Dear Corrine: 150 SOIJTH FLFTFI STREET SUITE 2300 NfINNEAPOLIS� zrizNrrESOTn 55402 61 � - 335-z5oo mt�sN 6i2-335-x6S7 x�.x JERR'Y D. PERRON 612-335-1984 D�RECT JERRY.PERRON@LBONARD. COM Thank you for the phone conversation earlier this week regarding U.S. Home's Pznecliff cornmunity in Cottage Grove. As I mentioned, US Home is waiting for the City to issue building permits for one or more homesites in the Development. You asked that I prepare a letter confirming US Horne's position on its substantial compliance with the City resolution approving the final plat. That resolution xequired that the Association foz the most current phase of fhe deveIopment be part of the Association for the entire Pinecliff neighborhood and responsible for maintenance of all vegetation and landscaping within the stormwater basins. It also required that ownership of the two existing hornesites — Bialucha residence and Shannon residence — be included within the overall Pinecliff community. Following the City approvals, US Home annexed the affected properties into the ovezall PineclifF communiiy to satisfy the City requirements. US Home xecorded three Supplementary Declarations with the Washington Couxzty Recorder's office on February 8, 2013 as Document Nos. 3934944, 3930945 and 3930946. The language of each Supplementary Declaration states that the affected properties are "hereby annexed into the [Pinecliff] Con�munity and inade subject to the Declaration" and also confirms "The Annexed Property is hereby subject to the Declaration and is part of the Community." Certain covenants within the Declaration do not apply to the homesites at the present time, such as the Architectural guidelines in Article VI and certain restrictians within Article VII. However, the general covena.nts restricting the homesites to residential use, restricting further subdivision of lots and requiring compliance with all zoning and other City ordin.ances are intact, as well as other covenants in the Declaxation, including creation of eommon easements A Professzonal A.ssociatiom LA.�P�OBFICBS IN IvIINNEAPOLIS • MANKATO • ST. CLOT.TD • BISMARCg • V7ASHINGTON� D.C. W'PIW.L�ONARD.COM . 9563036v1 Corrine A. Heine February 28, 2013 Page 2 � for uti]ities and drainage, public underground utility ease�ents, and easem.ents granting tk�e Association the right to ma�intain, repair and xeplace those items within the Community for which the Association has responsibility. Also, the original Declaration approved by the City contains a covenant at Section 13.1 which states that any existing buildings located on portions of the development are permitted despite language in the Declaration to the contrary until they axe expaz�ded or replaced, at which point the xeplacement or expansion shall comply with the Declaration. Duxing the lifecycle of an.y community there may be neighbor disputes and complaints frorn tin�e to time. Should any ownex within Pinecliff, including the ovtmers of the affected homesites, violate applicable covenants, the Association has the ability under the Declaration to enforce thase provisions. The private covenants with in tha Declaration encourage the anucable resolution of disputes through a variety of negotiation, mediation arxd arbitration provisions, and those provisions should facilitate xesolution of an.y cornmunity problems that may arise, leaving no need for the City to be involved with such issues in the future. As a final poant, it is not uncommon for cornmunity covenants to have certain provisions applicable or not applicable to specific hornesites depending on the circumstances. In such instances, US Home takes measures to ensure that all homeowners have adequate notice of the unique nature of certain homesites. The covenants themselves are private agraements between tha horneowners, and initially with the developer too. However, US Home has no control over the decisian of each individual comrnunity to znaintain or reject the covenants once US Home has tur�ned over control of the Association to a Board of Directors governed by the homeowners. In the case of Pinecliff, the Declaration expressly provides that US Home wzll Iase its 3-to-1 control of the Association on December 31, 2013. US Home anticipates that the homeowners r�vill continue to malce good choices about the fiiture of their neighborhood after control is ttuned ovex. On behalf of US Hom.e, I am xequesting at this time tfiat the City issue any pending building pez for the Pinecliff community without fiuther delay. I appreciate your assistance in this process. Very truly yours, LEONARD, STREET AND DElNARD Jenry D. JDP/ljs 9563036v1 �er� Law Specialist, by t e tl�finnesota S'tate Bar Association t,t � �i �A S � , `� „ THIS INSTRUMENT WAS DRAFTED BY ' tpND WHEN RECORDED MAIL TO: Receipt:# 213581 �� ! DCR $48.00 � ( Return to: i NORTH AMERICAN TITLE CO 5001 AMERICAN BLVD #255 I BLOOMINGTON MN 55437 3930945 Certifled Filed andlor recorded on: 2/81201310:18 AM 3930945 Office ot the County Recorder Washington County, Minnesota JenniferWegeniva, CountyRecoider U.3. Home Corporation Minnesotu Lend Division , 16305 36th Ave. N., Suite 600 PI mouth, MN 55446 . � (Space A6me for Recorder/Regishar Use) � SUPPLEMENTARY DECLARATION O� COVENA►NTS, CONDITIONS AND.. , � RESTRICTIONS FOR PINECLIFF . [Annexiug Lots 3 8c 5, Block 3, Pinecli�5 � THIS SUPPLEMENTARY DECLARATiON OF COVENANTS, � CONDITIONS AND � RESTRICTIONS FOR PINECLIFF .( "Supplementary Declaration") is made by U.S. HOME � CORPORATION, a Delaware corporatian ("Declarant") and ETERNITY HOMES LLC, a Minnesotalimited liabi�ity company ("Eternity Homes") and is dated for identification purposes as of January 23, 2013. ' � PREAMBLE . ' ' � � �� Declarant has executed that certain Declazation of Covenants, Conditions and Resirictions recorded D�ccember 6, 2005, as Document No. �3556269, as amended by that certain First Amendment to Declaration of Covenants, Conditions and Restrictions � reco'rded December 28, 2005, as Docurnent No. 3561117, in the of�'ice of tlie County Recorder for Washington Couniy, Minnesota (collectively, the "Declaration"). • . � � The Declaration encumbers real property in Washington County, Minnesota, comprising the Pinecliff community (the "Community"} as described in the Declaratian. Section 2.1 of the Declaration provides, in part, that Declazant reserves the right to add to the Commwuty some or all ,of .the .property d+escribed on E�iibit B of the Declaration ("Future Developmeut Area"), subject to certain conditions specified in the Declaration, a11 of which have been satisfied. . Etemity Homes owns and wishes to annex into tlae Community cartain Future Development Area land as set forth below and Declazant is willing to consent to such annexation. NOW, THEREI�'ORE, De+clarant and Eternity Homes hereby declare as follows: SUPPLEMENfARY DECLARATION 1, Defmitions. Except as otherwise expressly defined herein, words and phrases in this Supplementary Declaration have the sama meanings as defined in the Declaration. 9497932v2 REGORD � NORTti AMERICAN TITLE COMPANY 5001 American Blvd W 5uite 300 6loomington, MN 55437 ' . �/��5a �'1 / , �z a.f. � ` t 2. Anneaed Proper#y; Land Ctassification. Pursuant to Sectian 2.1 of the Declaration, the Future Development Area described in Eahibit 1 attached hereto ("Anneaed Property") is hereby ann�ed into the Cammunity and made subject to the Declaration, subject to the special provisions of this Supplementary Declaration. The Lots in the Annexed Property are identified on Ezhibit 1 hereto. � 3. Covenants Binding. The Annexed Properiy is hereby subject to the Declazation and is part of the Community. . 3.1. The Annexed Properly sha11 he transferred, held, sold, conveyed and developed always subject to �11 of the easements, covenants, restrictions, conditions and other terms and provisions of the Declararion, to the same extent as though the Annexed . Properiy had been designated as part af the Community in the Declazation as � originally executed, but subject to the special provisions and exemptions contained in tlus Supplementary Declazation. � � . 3.2. This Supplementary Declaration does not revoke or rnodify the covenants, ' conditions, restrictions, reservation of easements, or equitable serviiudes established by the Dectaration and other Supplementary Declarations with respect to the remainder of the Community which is not a part of the Ann�ed Property described in this Supplementary Declazation. 4. Assessments and Membership. Each Lot in the Annexed Property is exempt from Association assessments until such time as the Annexed Properiy Lot Owner records an . Assessrnent .Amendment pursuant to Section 6.4 below subjecting the Owner's Annexed, Property Lot to all Declaration provisions, incIuding Association assessments. Until the Owner records an Assessment .Amendment the Owner sha11 not be a Member of the Association or entitled to any rights of Membership, including the right to exercise any Association vote or the right to use any of tlie Community Common Elements, and the provisions of the Declaration pertaining to Membership, voting and Common Elements use shall be inapplicable ta such Owner and the Owner's Annexed Property Lot. Upon recording an Assessment Arnendment for an Annexed Property Lot, the Lot and the Owner thereof shall be subject to all of the rights, privileges and obligations af al2 other Lots and Ovcmers in the Communiiy under the Declaration and the Association voting rights, expenses and assessments for tha# Lot sha11 then be detemvned pursuant to 5ecrions 3.1, 3.2 and 4.6 of the Declaration. 5. Future Development Area. This Supplementary Declaration does not affect Declarant's � right to annex any other Future Development Area, which right continues unchanged. Until Future Devetopment Area is annexed and added to the Community, it is not subject to the Declaration. 6. itevocation; Amendment 6.1. For so long as Declarant owns a Lot in the Community or retains the right to annex Future Development Area, this Supplementary Declaration rnay be revoked or ternunated only by an instrument executed by Declarant and, the record Owner(s) of the Annexed Properiy. ' 6.2. Except for Assessment Amendments pursuant to Section 6.4 below, for so long as Declarant owns a Lot in the Community or retains the right to annex Future 9497932v2 'ra . t • � �.�/ � � Development Area, any amendment of this Supplementary Declararion must be signed by Declarant and satisfy the requirements for amending the Declazation. 6.3. Except for Assessment Amendments pu�suant to Secfion 6.4 below, after Declarant no longer owns a Lot in the Community or retains the right to annex Future Development Area, any amendment of this Supplementary Declaration must saYisfy the requirements for amending the Declaration , . 6.4. The Owner of a Lot in the Annexed Property, at the Owner's sole discretion, may execute and record against the titte to the Owner's Lot an amendment to this Supplementary Declazation whereby the Owner declares that the Lot is subject to Association assessments {"Assessment Amendment"). Upon recording an Assessment Amendrnent, Associadon Assessments shall commence on the Lot as of the first of the month following the month of recording, and thereafter the Lot and �• the Owner thereof shall be subject to the same rights, privileges and obligations under the Declazation as all other Lots and Owners in the Cornmunity. Once � recorded, an Assessment Amendment cannot be revoked or amended, except in accordance with the requirements for am+ending the Declaration. . 7. Declaration Continues. Except as specifically supplemented and modified herein solely with respect to the Annexed Properly, the Declaration continues unmodified, in full force and effect. IN WITNE5S WHEREOF, Etemity Hornes and Declarant have executed this Supplementary Declaration to be effec6ve as of the date and dme recorded in the o�'ice of tlie Recorder, Washington County, Minnesota. � DECLARANT: ETERN OMES LLC, U. S. HOME CORPORATION, " a Minn limited liability compaity a Dela�ware co Lennar. B BY� . � J A. ut� Its: '� I resident � Minnesota Land Division LIST OF EXHIBITS Exhibit 1 Annexed Property Added to the Community 3 9497932v2 :.t�'. . ,. STATE OF l��l!NNESOTA COUNTY OF �[ENNEPIN ) )ss. ) n_* This instrument was aclmowledged before rne on the �_ day of �8 ��,�+4 • 2013, by Jonathan A. Aune, as Vice President - Minnesota Land Division of U.S. Home Corporation, a Delaware corporation, on behalf of the corporation. STEVEN B ACH ��"t� � �"°�_ ' 4 Notary Public NQtary Public State df Minnesota M •Carxoissi�n JaAUd 31 014 � . JULIE ANN VANDEROSTYNE N0�'AA" Pl;9u� • M;N!�ES�TA = V,�' COMMlSSIJN D�!AES Ott3'/11 � 's i trument was acknowledg before me on the �0_ day of 2013, by � ; as � �,,Lp .� ;_� . � � of Ete 'ty. ��Homes � LLC, a Minneso limited liability cvmpany, an behalf of the limited liability company. STATE OF MINNESOTA ) � � ' )ss. COUNTY O1�N �h,r.o��-} �7Rl�I�?1�� . � � < <. �.�' ' - . 4 9497932v2 A • ` �� ✓ ♦�� , Egitibit 1 Auneaed Property Added to the Community The following real property located in the City of Cottage Grove, Washington Caunty, Minnesota, is added to the Pinecliff Community as follows: Lots 3 and 5, Block 3, PINECLIFF 5� ADDITION, according to the recorded Plat thereof. � � 9497932v2 a ��sb�t i Corrine A. Heine 470 U.S. BankPlaza 200 South Si�h Street Minneapolis MN 55402 � � '�` ' (612) 337-9217 telephone � y � (612) 337-9310 fax � � .��' . http://www.lcennedy-gra�en.com cheine@kennedy-graven. com CHARTERED MEMORANDUM TO: Ryan Schroeder, Jennifer Levitt, John McCool FROM: Corrine A. Heine, City Attorney DATE: January 11, 2013 RE: Pinecliff 5�` Addition Plat Requirement At the January 2, 2013 city council nc�eeting, Tom and Cheri Shannon and Donald and Bonnie Bialucha requested that the city council amend Resolution No. 2012-048, approving the final plat for Pinecliff S Addition, by removing condition no. 14. That condition required that the existing xesidential parcels at 6120 and 6240 Ideal Avenue be made part of the homeowners' association for the entire Pinecliff neighborhood. The city council asked me to review the relevant documents and provide legai advice. Back�round Facts Tha chronology of events is impoi-tant. The relevant dates and events are listed below. 12/1/200�4 City Council approves final plat for Pinecroft (Pinecliff l Addition), which includes only the land in Pinecliff that is east of Hinton; no Shannon or Bialucha land is included in this application 1//2005 Application for preliminary plat approval for Pinecliff 2" Addition is filed; Shannons and Bialuchas co-sign application; preliminary plat includes the land between Hinton and Ideal Avenues and and 65�' Streets, except for 500 � 450 exception piece in the southeast quarter 4/20/2005 City council approves preliminary plat for the entire Pinecliff area, including Shannon and Bialucha properties; preliminary plat contemplates development in phases and includes various requirements to be imposed on a homeowners' association; Resolution OS-065 10/24/2005 US Homes files plat for Pinecliff l Addition, Document 3547192 10/21/2005 US Homes files declaration of covenants for Pinecliff development; decla� ation establishes a common interest community (CIC) that 417427v2 CAH CT155-25 includes only Pinecliff 1 S Addition but identifies all of land in preliminary plat for Pinecliff 2�` Addition, including Shannon and Bialncha pxoperties, as property that may be added to CXC; assessments for properties owned by Sh�on and Bialucha as of 10/05, the date of commencenlent of assessments depends on whether ShannonlBialucha own and occupy the lots at the tune of annexation into the development; for those lo ow�aad an.d occupied at time of annexatian, assessments don't start until conveyed to third party; for those not owned and occu�ied at time of annexation, assessments start on date of annexation into development; c�eclaration is signed by US Homes and nat Shannons or Bialuchas; declaration is recorded 12/6/OS as Document No. 3556269 12/28/OS US Ho�nn.es records amendment to declaration for Pinecliff; this amendment does not alter provisions related to Shannon/Bialucha pxope�rties; Document No. 3561117 6/27/2006 US Homes records plat for Pinecliff 2" Addition; this plat does not include Shannon/Biaaucha properties; Document No. 3592809 Presumably, US Homes xecords supplemental declaration that annexes Pinecliff 2" Addition into Pinecliff CIC (This document has not been reviewed.) 3/2/20011 US Homes racords plat for Pinecliff 3 Addition; this plat does not include the ShannonBialucha propertias; Document No. 3833555 Presumably, US Homes records supplemental declaration that annexes Pinecliff 3 Addition into the Pinecliff CIC (This document has not been reviewed.) 10/25/2011 US Homes records plat for Pinecliff 4 Addition; this plat does not include the Shannon/Bialucha pzoperties; Docuxnent No. 3859316 11/22/2011 US Homes records supplemental declaration that anne�es lots in Pinecliff 4 Addition into the Pinecliff CIC; tlus document does not alter provisions related to Shannon/Bialucha properties; reco�ded as Doc�ant 3863334. 4/20/12 US Homes applies for fmal plat approval for Pinecliff 5 Addition, which includes Shannon/Bialucha properties; Shannons and Bialuchas co-sign application 5/l 6/l2 City council approves final plat of Pinecliff S , including condition that properties at 6120 and 6240 Idea1 be included in the CIC; at the time of this resolution, 6120 a.nd 6240 Ideal constituted the entirety of all pxoperties owned by the ShannonsBialuchas, each tract being approximately 474' x 214' feet in size; Resolution No. 2012-048, recorded 6/28/12 as Document No. 3894814 6/7/12 US Homes and Shannons enter into letter agreement under which US Hornes agrees to indemnify and reimburse Shannons for any costs required of the Developex under the Development Agreement; this letter does not reference any attached schedule; (Jettex is dated 6/7/12 but date of execution is noti shown) 6/7/12 US Homes and Bialuchas enter into letter agreement under which US 417427v2 CAH CT155-25 Homes agrees to indemnify and reunburse Bialuchas for any costs required of the Developer under the Development Agreement; Ietter refers to Schedule A, which states that Bialucha lots will not be included in the CIC, even when lots are sold (letter is dated 6/7/12 but date of execution is not shown) 6/20/12 Development agreement between US Homes and City is signad by both parties; agreement paragraph 2 conditioned city approval of the agreement on the condition that the Developer abide by all conditions in Resolution No. 2012-048 and that US Home reimburse the Sharnnons and Bialuchas for all liabilities and costs of developing Pinecliff S Addition; letter agreements with Shannons and Bialuchas are referenced an.d attached as evidence that US Homes has indemnified them, but Schedule A to Bialucha letter is not included; agreement paragraph 8 provides that City may withhold building pet�nits fox any breach by Developer; paragraph 11 pravides that agreement runs with land and is binding on successors; agreement recorded l l/2/12 as Document No. 3914993; Bialuchas and Shaianons szgn exhibits referenced in development agreenr�ent but are not named parties to development agreement 8/9/2012 US Homes executes supplemental declaration that annexes most of Pinecliff 5�' Additian (but not the proparties now owned by Shannons/Bialuchas) into the Pinecliff CIC; an e�iibit identifies the future Bialucha/Shannon lots as land that may be brought into the CIC but may not; nothing in supplemental declaration changes the provisions of the declaration regarding timing of assessments if properties are added to CIC; recorded ll/2/12 as Document No. 3914995 9/6/12 US Hoines, Bialuchas and Shannons sign the plat for Pinecliff S Addition; property owned by Bialuchas appears to be divided into parts of Lots 3 and 4, Block 1, Lots 3 and 4, Bloclt 3, and portions of dedicated streets; property owned by Shannons appears to be divided into parts of Outlots B and C, Lots l, 2, 4 and S, Block 5, and parts of dedicated street; plat is recordedl l/2/12 as Dacument No.. 3814994 9/6/12 Shannons quitclaim all of Pinecliff 5 Addition, e�cept fox Lots 4, 5 and 6, Block 5, to US Homes; deed is recorded I1/2/12 as Document 3914996 9/6/12 US Homes quitclairns Lots 4, 5 and 6, Block 5 of Pinecliff S Addition to the Sbannons; deed is recorded 11/2/12 as Document No. 3914997 9/6I12 Bialuchas quitclainl all of Pinecliff S Addition, except Lots 3, 4 and 5, Block 3, to US Homes; deed is recorded 11/2/12 as Docurnent No. 3914999 9/6/12 US Homes quitclaims Lots 3, 4 and 5, Block 3 to Bialuchas by separate deeds; deeds are recorded 11/2/12 as Document Nos. 3915000, 3915001, and 3915002 417427v2 CAH CT155-25 The chronology above is according to the dates of execution of documents, where documents are involved. In real estate, dates of recording are also significant. The listing below is the order in which key documents were recoxded. Recording Date Doc. No. Description of Document 6/28/12 3894814 Resolution ap roving Pinecliff 5 Plat 11/2/12 3914993 Davalopmant Agreement 11/2/12 3814994 Pinecliff 5 plat 11/2112 3914995 Supplemental Decla�ration for Pinecliff Sth lll2/12 3914996 Quit claim deed — Shannon to US Homes — Pinecliff 5 except 3 lots 11/2/12 3914997 Quit claim deed — US Homes to Shannon --- 31ots 11/2/12 3914999 Quit claim deed — Bialucha to US Homes — Pinecliff 5 except 3 lots 11/2/12 3915000 Quit claim deed — US Homes to Bialucha — Lot 3 11/2/12 3915001 Quit claim deed — US Homas to Bialucha — Lot 4 11/2/12 39915002 Quit claim deed — US Homes to Bialucha — Lot 5 Discussion The Development Agreement allows the City to rafuse to issua building permits if the Developer (LJS Homes) breaches any of the provisions of the Development Agreement. Included in those Development Agreement requirements is compliaa�.ce with the conditions of Resolution No. 2012-048, zncluding condition number 14, which requires that the properties at 6120 and 6240 Ideal be included in the planned davelopznent. The builder, Mr. Anderson, has axgued that condition 14 only applies to the tvvo lots now owned a.nd occupied by the Bialuchas (Lot 4, Bloc1� 3) and Shannons (Lot 5, Block 5) and that it does not apply to the other foux vacant lots owned by the Bialuchas and Shannons. That is not correct. At the time the resolution was approved, the "e�isting residential parcels at 6120 and 6240 Ideal Avenue" wexe the pre-development rnetes-and-bounds parcels approximately 2.5 acres each in size. {See plat applications, which use the same addresses.) In addition, condition ] 3 requires that Pinecliff S "be part of the Homeowner's Association for the entire Pinecliff neighborhood." Mr. Anderson has argued that the City had no authority to require properties to be organized as a planned cozx�nn.unity with a homeowner's association. That argument oversimplifies the issue that is presented and ignores the overall context of this development. Tf a developer filed a nevv developznent application with the City that met all subdivision requirements, and the City required the devalopar to establish a common interest community with a homeowner's association where none was othexwise required, Mr. .Anderson would have a strongex axgu�nn.ent. But that is not what happened here. The development was presented to the City as a cohesive planned community and pxeliminarily approved as such in 2005. The planned community included several outlots, one of which was designated as a comxnon elernent to be owned an.d maintained by the HOA (Outlot C, Pineclif�, and another of which, although owned by the City, must be maintained by the HOA (Outlot A, Pinecliff 3 Where a developer craates lots that are otherwise nonbuildable (outlots are by definition not buildable), and the developer has also 417427v2 CAH CT155-25 q, represented that tha lots wi11 be owned and maintained by a HOA, the City may xeasonably require the developer to provide assurances that HOA is actually created and rnaintained. And in this circumstance, where the developer had consistently presented a cohesive plan for a single developzn.ent to be developad in phases, it is not unreasonable for the City to prohibit the developer from carving out isolated lots, otherwise indistinguishable from the neighborhood, and treating those lots differently. This is not unfair to the Bialuchas and Shannons. They had the option of not including their metes and bounds txacts in the plat. But having included thair properties in the plat, it was not unreasonable for the City to require that their lots be subject to the overall development plan that the developer had proposed. Although the condition could be challenged in litigation, and therefore the issue is not entirely free of doubt, in my opinion, the City has the stronger argument that the Bialuchas and Shannons ara boun.d by condition nos. 13 and 14. It is important to remember that the Bialuchas and Shannons do not own the sarne land that they once owned. When Resolution No. 2012-048 was recorded in June 2012, the Shannons and Bialuchas awned rnetes and bounds parcels that were rectangular in shape. Aftex the plat was recorded, they conveyed away part of their lands and obtained replacement lots. Part of the lots that they naw own wexe actually owned by US Homes when the Resolution was recorded and when US Homes signed the Development Agreernent. Both the Resolution and the Development Agreement wara recorded before the deeds from US Homes to the Shannons and Bialuchas; therefore, the Shannons and Bialuchas acquired title subject to the Resolution and Development Agreoment, and they are bound by it. Even if the Bialuchas and Shannons did not have actual notice of the Resolution, they had constructive notice of its terms, because it was reeorded before their deeds. The Shannons and Bialuchas had both actual and constructive knowledge of the Development Agreement, which was recorded before their deeds, and the land that they acquired from US Homes was acquired subject to that agreement. From a legal standpoint, the Bialuchas and Shaunons are not excused from complying with the documents that affected their title simply because they chose not to read the documents or to obtain legal advice regarding their effect. The Shannons and Bialuchas have claimed that US Homes had agreed that they would not have to join the HOA, and that the City knew of that agreement when the Development Agreement was signed. The facts don't support that contention. Fust, only ihe Bialucha letter agreement with US Homes contained a provision about not being in the HOA; the Shannon letter agreement did not have any attachment. Second, the attachment to the Bialucha letter was never provided to the City; only the first page, which contained the indemnity language referenced in the Development Agreement, was attached to the Development Agreement. The only document publicly available to the City was the original Declaration, and it indicated, not that the Bialuchas and Shannons would not be part of the planned community, but that their lots would not pay association dues under certain conditions. In rny opinion, the Shannon axad Bialucha properties are baund by the Development Agreement, and the City is legally entitled to refuse to issue building permits unless the properties are in.cluded in the planned community. The Council also aslced if the City might have any liability if it agreed to release the Shannon and Bialucha properties from the DeVelopment Agreement. To better answer that ques�ion, I would 417427v2 CAH CT155-25 $ want to know what the status of ownership is within the Pinecliff planned community. At a" minimum, the City would need to not only amend the resolution, but it would also need to amend the Development Agreement. In any such azx�.endment, the City should require an agreement on the pai-t of US Homes, the Shannons and Bialuchas, to indernnify and hold harmlass the City against any claims that could be brought by the owners of other properties in the Pinecliff subdivision. It appears that the Supplemental Declaration for Pinecliff 5�` was recorded before any lots in Pinecliff 5� were conveyed, so anyone who has acquired a lot zn that subdivision acquired their property with notice of the provisions in E�ibit 2 of that document. That makes it unlil�ely that other property owners couJ.d bring a successful claim against the City for amending the Development Agreement. Nevertheless, subject to review of the status of title, the City might need to obtain consent from other property owners to any amendnient of the Development Agreement. Let me know if there are other quesfions that this memo has not addressed. - end - 417427v2 CAH CT155-25 (