RES 2022-28 Approving a Site Improvement Performance Agreement for Lot 1, Block 1, Gateway North 4th AddnCITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2022-28
APPROVING A SITE IMPROVEMENT PERFORMANCE AGREEMENT
FOR LOT 1, BLOCK 1, GATEWAY NORTH 41H ADDITION
WHEREAS, Duke Realty Limited Partnership (the "developer") is proposing expansion ofthe principal building
upon Lot 1, Block 1, Gateway North 4th Addition; and
WHEREAS, the proposed expansion requires relocation of existing City trunk utility pipes within the property;
and
WHEREAS, relocation of the City trunk utilities was approved on 14 March 2022 by the City Council; and
WHEREAS, Section 11-9-7 of the Zoning Ordinance requires the developer to enter into a Site
Improvement Performance Agreement to provide the City construction and warranty securities for the
public and private improvements and to provide the City various remedies in the event that the developer
breaches the terms and conditions of said agreement; and
WHEREAS, those obligations are outlined and memorialized in the attached Site Improvement Performance
Agreement.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA THAT:
1. The Site Improvement Performance Agreement attached hereto between the City of Otsego and
Duke Realty Limited Partnership is hereby approved inform subject to modification offees, charges,
and securities as approved by City staff.
2. The Mayor and City Clerk are hereby authorized to execute the Site Improvement Performance
Agreement on behalf of the City of Otsego.
ADOPTED by the Otsego City Council this 14th day of March, 2022.
MOTION BY: Dahl
SECONDED BY: Goede
INFAVOR:Stockamp, Dahl, Darkenwald, and Goede
OPPOSED: none
CITY OF OTSEGO
�-
Jessica L. Stockamp, Mayor
ATTEST:
Audra E`tzel, City Clerk
(reserved fwrecording inforrnation)
SITE IMPROVEMENT PERFORMANCE
AGREEMENT
THIS SITE IMPROVEMENT PERFORMANCE AGREEMENT ("Agreement") dated
, 2022, by and between the CITY OF OTSEGO, a Minnesota municipal corporation
and DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership (the "Developer").
1. BACKGROUND.
A. The Developer has submitted to the City a site plan and conditional use permit
application for property in the City of Otsego, Minnesota located at 6651 Queens Avenue NE, legally
described as Lot 1, Block 1, Gateway North 4t" Addition, Wright County, Minnesota according to the
recorded plat thereof (hereinafter referred to as the "Subject Property").
B. The development of the above described property includes the 221,100 square foot
expansion of an existing 478,900 square foot warehouse and distribution facility, relocation of existing City
trunk sewer forcemain and trunk watermain, and installation of new public and private utilities.
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C. The removal of the existing trunk sewer forcemain and watermain shall only be
completed after the new trunk lines are installed and all testing has passed. Shutting off of the existing trunk
lines shall be done so as to minimize the down time Cl"d in cooperation with the City utility department. The
City will not issue any building permits until the site improvement plans are approved and signed by the City
Engineer.
D. The Developer shall install and complete the Improvements by December 31, 2022.
For purposes of this agreement, the Improvements are the site improvements required by the Agreement,
specifically the erosion control, grading, trunk sewer forcemain, trunk watermain, lateral watermain, private
storm sewer, and private driveway/parking areas, landscaping and similar improvements within the Plat;
provided, however, that the Developer and the City acknowledge the construction of a 221,100 square foot
building, is expressly excluded from the definition of Improvements under this Agreement.
E. The Developer may start construction of the building prior to the relocation of the
existing trunk forcemain and watermain only outside of the existing and new utility easements. Once the
relocated trunk facilities are fully functioning and have been approved for use by the City Engineer, the
existing easements) within the building footprint Mn be vacated and construction of that portion of the
building expansion can proceed.
2. CONDITIONS OF APPROVAL. This Agreement is a condition of City site plan approval and
will be recorded against the Subject Property.
3. PLANS. The Subject Property shall be developed in accordance with the following plans
which are on file with the City. The plans shall not be attached to this Agreement. If the plans vary from the
written terms of this Agreement, the written terms shall control. The plans are:
Plan A —Site Plan
Plan B —Grading and Drainage and Erosion Control Plan
Plan C —Utility Plan
Plan D —Landscape Plan
Plan E. —New Building Floor Plan
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Plan F — New Building Elevations Plan
Plan G —Lighting Photometric Plan
Plan H —Traffic Control Plan
No work can occur outside of the areas indicated on the plans without modifying this
Agreement or obtaining a separate grading permit.
4. EROSION CONTROL. The Developer is responsible for obtaining an MPCA Construction
Permit for the site as well as developing a SWPPP for the site prior to issuance of a building permit. The
permit requires that all erosion and sediment BMPs be clearly outlined in a SWPPP. Changes made
throughout construction must be documented in the SWPPP. All basin slopes and slopes adjacent to
wetlands must have erosion control blanket installed.
Additional erosion control measures may be required during construction as deemed necessary by
City staff. Any additional measures required shall be installed and maintained by the Developer.
5. LICENSE. Developer hereby grants the City, its agents, employees, officers and contractors
a license to enter the Subject Property to perform all work and inspections deemed appropriate by the City
in conjunction with site development.
6. CONSTRUCTION ACCESS. Construction traffic access and egress for grading, public utility
construction, and public street construction is restricted to access the Subject Property as approved by the
City Engineer.
7. FORCEMAIN. The Developer shall at their sole cost relocate existing trunk sewer forcemain
to locations shown on the site plan improvements. The utility design is subject to review and approval of the
City Engineer. The Developer shall post a $445,815.00 security for the utility service relocation and
reconnection to the public utilities with this agreement.
8. WATERMAIN. The Developer shall at their sole cost install new trunk watermain and
lateral watermain with the site plan improvements. The utility design is subject to review and approval
of the City Engineer, The Developer shall post a $301,700.00 security for the utility service connection
to the public utilities with this agreement.
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9. STORM SEWER. The Developer at their sole cost shall construct private storm sewer
to convey the stormwater runoff from the proposed improvements to the stormwater management
basin.
Final locations and sizes of all storm sewer facilities will be reviewed by City staff with the
building permit plans.
10. CITY ENGINEERING ADMINISTRATION AND CONSTRUCTION OBSERVATION. The
Developer shall pay for construction observation performed by the City Engineer. Construction observation
shall include part or full time inspection of proposed public utilities as determined necessary by the City
Engineer and will be billed on hourly rates estimated to be eight percent (8%) of the estimated construction
cost or a $10,000.00 minimum.
11. SEWER CONNECTION CHARGE AND WATER CONNECTION CHARGE, The Developer
shall pay to the City required sewer connection charges. The Sewer Connection Charge shall be collected
per Section 8-1-&C of City Code for all uses and must be paid prior to the issuance of a building permit
based on the fee schedule in effect at the time of application for the building permit.
12. DRAINAGE AND GRADING. All grading, drainage, erosion control, and wetland impacts
are subject to review and approval of the City Engineer, which shall not be unreasonably denied, withheld,
or delayed. The plat shall be graded in accordance with the approved grading development and erosion
control plan, Plan "B". The plan shall conform to City of Otsego specifications. Within thirty (30) days after
completion of the grading and final establishment of ground cover or temporary stabilization reasonably
approved by the City, which shall not be unreasonably denied, withheld, or delayed, the Developer shall
provide the City with an "as constructed" grading plan certified by a registered land surveyor or engineer
that all storm water treatment/infiltration basins and swales, have been constructed on public easements
or land owned by the City. The "as constructed" plan shall include field verified elevations of the following:
a) cross sections of storm water treatment/infiltration basins; b) location and elevations along all swales,
wetlands, wetland mitigation areas if any, locations and dimensions of borrow areas/stockpiles, and
installed "conservation area" posts; and c) lot corner elevations and building pads. The City will withhold
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issuance of a Certificate of Occupancy until the approved certified grading plan is on file with the City and
A erosion control measures are in place as reasonably determined by the City Engineer. The soils
observation and testing report, including referenced development phases and lot descriptions, shall be
submitted to the Building Official for review prior to the issuance of the Certificate of Occupancy.
Prior to the release of the grading and erosion control security, the "as constructed" plan for the lot
must be submitted to verify that the final as -built grades and elevations of the specific lot are consistent with
the approved grading plan for the development, and amendments thereto as reasonably approved by the
City Engineer, which shall not be unreasonably denied, withheld, or delayed, and that all required property
monuments are in place. If the final grading, erosion control and "as constructed" grading plan is not timely
completed, after fifteen (15) days' written notice to Developer, the City may enter the lot, perform the work,
and draw on the letter of credit or the cash escrow, as the case may be. Upon satisfactory completion of the
grading, erosion control and "as constructed" grading plan, the security, less any draw made by the City,
shall be released.
A certified as -built building pad survey must be submitted and approved for commercial, industrial
or institutional developments prior to issuance of a building permit.
Retaining walls over four feet in height shall be constructed in accordance with plans and
specifications prepared by a structural or geotechnical engineer licensed by the State of Minnesota.
Following construction, a certification signed by the design engineer shall be filed with the Building Official
evidencing that the retaining wall was constructed in accordance with the approved plans and
specifications. All retaining walls identified on the development plans and by special conditions referred to
in this Agreement shall be constructed before any other building permit is issued for a lot on which a
retaining wall is required to be built. All retaining walls must comply with the City's engineering manual and
the City's zoning ordinance.
13. STREETS. The Developer agrees to maintain the streets within the Plat until the base course
bituminous surfacing has been reasonably accepted by the City, which shall not be unreasonably denied,
withheld, or delayed. Should the City be required to grade the street prior to paving, the cost of such grading
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shall be paid by the Developer and may be drawn from the Developer's letter of credit or cash escrow. Should
snowplowing be necessary prior to street paving, the City may plow the street prior to acceptance, and the
Developer will hold harmless and indemnify the City from any and all liability claims related to such work and
pay all costs associated with that work. Any plowing undertaken by the City will constitute no acceptance or
evidence of acceptance of the streets) in question. Upon final completion of streets and acceptance by the
City as a City street rather than a private drive, the Developer shall guarantee to the City for a period of one
year the streets have been constructed to City standards. The warranty period shall not commence until such
time as street construction is completed and the streets are accepted as City streets by the City. The one
year warranty period set forth above commences upon the date on which the City accepts the streets by
resolution. The warranty period for underground utilities is one year and shall commence following
completion and acceptance by City Council by resolution. A minimum of 10% of the total security required
under this Contract shall be retained as warranty security as specified in the section of this Contract.
14. CLEAN UP. The Developer shall clean dirt and debris from streets that has resulted from
construction work by the Developer, subcontractors, their agents or assigns. Prior to any construction on
the Subject Property, the Developer shall identify in writing a responsible party and schedule for erosion
control, street cleaning, and street sweeping.
15. LANDSCAPING. Landscaping shall be installed in accordance with the approved landscape
plan. The Developer shall post a $93,100.00 landscaping security upon issuance of a building permit to
ensure that the landscaping is installed in accordance with the approved plan. All plants required as part of
an approved landscaping plan shall be maintained and kept alive and in good condition. Dead plants or
plants in poor health or condition shall be treated or replaced in accordance with the approved landscape
plan as determined by the zoning administrator. Any species substitutions for replacement trees or shrubs
shall be subject to approval by the Zoning Administrator and must be demarcated on the final approved
landscape plan submitted to the City.
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16. SPECIAL PROVISIONS. The following special provisions shall apply to this Agreement:
A. The site plans and building construction shall be developed in accordance with plans
approved by the City subject to stipulations of approval as outlined herein in
accordance with Section 11-9-4 of the Zoning Ordinance.
B. A building permit is required prior to commencing construction. The construction shall
be completed in accordance with the approval of the Building Official and Fire
Marshal.
C. All utility plans are subject to review and approval of the City Engineer.
D. The Developer shall submit as -built record drawings following the completion of
this project.
E. The removal and relocation of the existing trunk sewer forcemain and trunk
watermain shall be completed in the order described in Section 1.0 of this
Agreement.
17. SECURITY. To ensure compliance with the terms of this Agreement, and construction of all
public improvements, and satisfaction of all other obligations, the Developer shall furnish the City with a cash
escrow or Irrevocable Standby Letter of Credit with automatic renewal provisions in the amount as required
under this Agreement. The issuer and form of the security (other than cash escrow) shall be subject to City
approval in its reasonable discretion. The security shall be issued by a banking institution in good standing
as determined by the City and approved by the City Administrator. The City shall have the ability to draw on
the security at a bank or branch bank located within fifty (50) miles of the City Hall. The security shall contain
an automatic renewal provision and shall not expire until all the Development is complete and fully and finally
accepted by the City, and all terms of this Agreement are satisfied.
The City may draw down the security, on five (5) business days written notice to the Developer, for
any violation of the terms of this Agreement or without notice if the security is allowed to lapse prior to the
end of the required term. If the required public improvements are not completed at least thirty (30) days prior
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to the expiration of the security, the City may also draw it down without notice. If the security is drawn down,
the proceeds shall be used to cure the default.
Upon receipt of proof satisfactory to the City that work has been completed and financial obligations
to the City have been satisfied, with City approval not to be unreasonably withheld or delayed, the security
shall be reduced from time to time in proportion to the work completed, but not below ten (10) percent which
is the amount of the warranty security and issue a letter to the Developer stating that all the required work and
obligations have been completed in accordance with this agreement. For purposes of this Section, the
warranty period shall be a twelve (12) month period after the applicable work has been completed, except
with respect to streets, for which the warranty period shall be two years as addressed elsewhere in this
Agreement.
This security amount shall be submitted to the City prior to execution of the Agreement. All
administrative and legal fees related to plan review, drafting of this Agreement and any other necessary items
shall be paid to the City prior to execution of the Agreement, which are in the aggregate amount of
$1,160,910.60. Upon completion of the work contemplated hereunder and expiration of the warranty period,
the remaining security shall be promptly released to Developer.
18. SUMMARY OF SECURITY REQUIREMENTS. The amount of the security described above
is calculated as follows:
CONSTRUCTION COSTS:
A. Sewer Trunk Force -main
B. Watermain -Lateral and Trunk
C. Streets
TOTAL SUBTOTAL.
OTHER COSTS:
A. Site Grading, Erosion &Sediment Control
And Wetland Protection
B. Engineering &Surveying Construction Services
C. Landscaping
OTHER COSTS SUB -TOTAL
$445,815.00
301,700.00
5,000.00
$752,515.00
$34,200.00
48, 913.48
93,100.00
$176,213.48
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TOTAL — SUBTOTAL
TOTAL IRREVOCABLE LETTER OF CREDIT
FOR SECURITY (126% OF SUBTOTAL
ESCROW
A. City Legal Expenses (Est. 1.0% of $752,515.00 )
B. City Construction Observation (Est. 8.0% of $752,515.00)
C. GIS Data Entry Fee
ESCROW TOTAL
DEVELOPMENT WARRANTY LETTER OF CREDIT
A. Force -main
B. Watermain
C. Streets
B. Erosion & Sedimentation Control
TOTAL WARRANTY LETTER OF CREDIT
This breakdown is not a restriction on the use of the security.
$928,728.48
$1,160,910.60
$7,525.15
60,201,20
250.00
$67,976.35
$66,872.25
451255000
1,500.00
35,850.00
$149,477.25
19. SUMMARY OF CASH REQUIREMENTS. The following is a summary of the cash
requirements under this Contract which must be furnished to the City prior to the City Council signing the
final plat:
A. City Administrative (Est. 1.0% of $752,515.00) $7,525.15
TOTAL CASH REQUIREMENTS $71525.15
20. ACKNOWLEDGEMENT. The Developer acknowledges that approval of installation of the
Improvements does not constitute a guarantee by the City of any future subdivision approvals and that the
Developer performs the work on the Subject Property at its own risk.
21. RESPONSIBILITY FOR COSTS.
A. The Developer shall pay all costs incurred by it or the City in conjunction with the
development of the Subject Property, including but not limited to legal, planning, engineering and inspection
expenses incurred in connection with approval of the site plan, the preparation of this Agreement, review of
any other plans and documents.
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B. The Developer shall hold the City and its officers, employees, and agents harmless
from claims made by itself and third parties for damages sustained or costs incurred resulting from site
approval and development. The Developer shall indemnify the City and its officers, employees, and agents
for all costs, damages, or expenses which the City may pay or incur in consequence of such claims, including
attorneys' fees. Notwithstanding anything contained within this Section 21(B), Developer shall not be
obligated to indemnify or defend the City from and against claims based on any negligence or willful
misconduct by the City, its employees, agents or contractors, or the failure of the City to act in accordance
with City ordinances and other applicable laws.
C. The Developer shall reimburse the City for costs incurred in the enforcement of this
Agreement, including engineering and attorneys' fees.
D. The Developer shall pay in full all bills submitted to it by the City for obligations incurred
under this Agreement within thirty (30) days after receipt. Bills not paid within thirty (30) days shall accrue
interest at the rate of eight percent (8%) per year.
22. MISCELLANEOUS.
A. Third parties shall have no recourse against the City under this Agreement.
B. If any portion, section, subsection, sentence, clause, paragraph, or phrase of this
Agreement is for any reason held invalid, such decision shall not affect the validity of the remaining portion
of this Agreement.
C. The action or inaction of the City shall not constitute a waiver or amendment to the
provisions of this Agreement. To be binding, amendments or waivers shall be in writing, signed by the parties
and approved by written resolution of the City Council, The City's failure to promptly take legal action to
enforce this Agreement shall not be a waiver or release.
D. This Agreement shall run with the land and may be recorded against the title to the
Subject Property. The Developer covenants with the City, its successors and assigns, that the Developer
has fee title to the Subject Property and/or has obtained consents to this Agreement, in the form attached
hereto, from all parties who have an interest in the Subject Property; that there are no unrecorded interests
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in the Subject Property; and that the Developer will indemnify and hold the City harmless for any breach of
the foregoing covenants.
E. Each right, power or remedy herein conferred upon the City is cumulative and in
addition to every other right, power or remedy, express or implied, now or hereafter arising, available to City,
at law or in equity, or under any other agreement, and each and every right, power and remedy herein set
forth or otherwise so existing may be exercised from time to time as often and in such order as may be
deemed expedient by the City and shall not be a waiver of the right to exercise at any time thereafter any
other right, power or remedy.
F. Breach of the terms of this Agreement by the Developer, including nonpayment of
billings from the City, shall be grounds for denial of building permits and certificates of occupancy, and the
halting of all work on the Subject Property.
G. The Developer represents to the City that the development complies with all City,
county, metropolitan, state, and federal laws and regulations, including but not limited to: subdivision
ordinances, zoning ordinances, and environmental regulations. If the City determines that the development
does not comply, the City may, at its option, refuse to allow construction or development work in the
development until the Developer does comply. Upon the City's demand, the Developer shall cease work
until there is compliance.
23. DEVELOPER'S DEFAULT. In the event of default by the Developer as to any of the work to
be performed by it hereunder, the City may, at its option, perform the work and the Developer shall promptly
reimburse the City for any expense incurred by the City, provided the Developer, except in an emergency as
determined by the City, is first given notice of the work in default, not less than ten (10) days in advance.
This Agreement is a license for the City to act, and it shall not be necessary for the City to seek a Court order
for permission to enter the Subject Property. When the City does any such work, the City may, in addition
to its other remedies, assess the cost in whole or in part.
24. NOTICES. Required notices to the Developer shall be in writing, and shall be either hand
delivereI to the Developer, its employees or agents, or mailed to the Developer by certified mail at the
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following address: 1301 W. 22nd Street, Suite 800, Oakbrook, IL 60523 Notices to the City shall be in writing
and shall be either hand delivered to the City Administrator, or mailed to the City by certified mail in care of
the City Administrator at the following address: Otsego City Hall, 13400 90th Street NE, Otsego, Minnesota
55330.
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CITY OF OTSEGO
BY:
(SEAL)
AND
STATE OF MINNESOTA )
)Ss.
COUNTY OF WRIGHT )
Jessica L. Stockamp, Mayor
Audra Etzel, City Clerk
The foregoing instrument was acknowledged before me this day of ,
2022) by Jessica L. Stockamp and by Audra Etzel, the Mayor and City Clerk of the City of Otsego, a
Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its
City Council.
NOTARY PUBLIC
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DEVELOPER:
DUKE REALTY LIMITED PARTNERSHIP
an Indiana limited partnership
By:
STATE OF )
)ss.
COUNTY OF )
Its:
The foregoing instrument was acknowledged before me this day of
20221 by the
DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership, on behalf of said entity.
NOTARY PUBLIC
DRAFTED BY:
CAMPBELL, KNUTSON
Professional Association
860 Blue Gentian Road, Suite 290
Eagan, Minnesota 55121
Telephone: 651-452-5000
DSK/smt
of
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[BANK LETTERUMAD]
IRREVOCABLE LETTER OF CREDIT
TO: City of Otsego
City Hall
13400 90th Street NE
Otsego, Minnesota 55330
Dear Sir or Madam:
No. _
Date:
We hereby issue, for the account of (Name of Developer) and in your favor, our Irrevocable
Letter of Credit in the amount of $ available to you by your draft drawn on sight on the undersigned
bank.
The draft must:
a) Bear the clause, "Drawn under Letter of Credit No. ,dated , 2 ,
of (Name of Bank) ";
b) Be signed by the City Administrator or Finance Director of the City of Otsego.
c) Be presented for payment at (Address of Bank) before 400 p.m. on November 30,
2
This Letter of Credit shall automatically renew for successive one-year terms unless, at least forty-five (45)
days prior to the next annual renewal date (which shall be November 30 of each year), the Bank delivers written
notice to the Otsego Finance Director that it intends to modify the terms of, or cancel, this Letter of Credit. Written
notice is effective if sent by certified mail, postage prepaid, and deposited in the U.S. Mail, at least forty-five (45)
days prior to the next annual renewal date addressed as follows: Otsego Finance Director, Otsego City Hall,
13400 90th Street NE, Otsego, MN 55330, and is actually received by the Finance Director at least thirty (30) days
prior to the renewal date.
This Letter of Credit sets forth in full our understanding which shall not in any way be modified, amended,
amplified, or limited by reference to any document, instrument, or agreement, whether or not referred to herein.
This Letter of Credit is not assignable. This is not a Notation Letter of Credit. More than one draw may be
made under this Letter of Credit.
This Letter of Credit shall be governed by the most recent revision of the Uniform Customs and Practice
for Documentary Credits, International Chamber of Commerce Publication No. 600.
We hereby agree that a draft drawn under and in compliance with this Letter of Credit shall be duly honored
upon presentation.
[NAME OF BANK]
BY:
Its
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