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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. 1 220724v6 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 220724v6 �a 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. 3 220724v6 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 4 2207246 Room & Board 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 5 220724v6 Room &Board 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. 0 220724v6 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 220724v6 Room &Board 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 0 220724v6 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. E 220724v6 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 to 220724v6 Room &Board 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 11 220724v6 Room &Board 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. 12 220724v6 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 13 220724v6 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 14 220724v6 Room &Board [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 15 220724v6 Room &Board