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3.8 Due North Car Wash Special Assessment Request for City Council Action DEPARTMENT INFORMATION ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE: Planning City Planner Licht 24 October 2022 PRESENTER(s) REVIEWED BY: ITEM #: Consent Assistant City Administrator Hille City Engineer Wagner City Attorney Kendall 3.8 – Due North Car Wash STRATEGIC VISION MEETS: THE CITY OF OTSEGO: Is a strong organization that is committed to leading the community through innovative communication. X Has proactively expanded infrastructure to responsibly provide core services. Is committed to delivery of quality emergency service responsive to community needs and expectations in a cost-effective manner. X Is a social community with diverse housing, service options, and employment opportunities. Is a distinctive, connected community known for its beauty and natural surroundings. AGENDA ITEM DETAILS RECOMMENDATION: City staff recommends adoption of a resolution approving assessment of certain development and building related fees for Due North Car Wash ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED? Yes No BACKGROUND/JUSTIFICATION: CP Otsego Properties, LLC received approval at the City Council meeting on 10 October 2022 of a preliminary/final plat for Great River Centre of Otsego Seventh Addition and PUD Development Stage Plan for development of a car wash use to be known as Due North Car Wash upon Lot 1, Block 1. The developer is also required to enter into a Development Contract with the City upon approval of the final plat and PUD Development Stage Plan. The Development Contract requires that the Developer pay to the City certain fees related to platting including Sewer Availability Charges, Water Availability Charges, and fees for installation and operation of street lights abutting the property. At the time a building permit is issued for the car wash on Lot 1, Block 1, the developer is also required to pay Sewer Connection Charges and Water Connection. The developer is requesting that the fees for Water Availability Charge, Sewer Availability Charge, Water Connection Charge, Sewer Connection Charges, and street lights be assessed. The breakdown of the fees is as follows: Water Access Charge: $14,802.90 Sewer Access Charge: $21,204.75 Water Connection Charge: $50,724.60 Sewer Connection Charge: $217,984.83 Street lights $21,200.00 Total $325,917.08 he City Attorney has drafted an assessment agreement to assess the total fees of $325,917.08 for seven years at 4.0% interest with payments starting in 2023. The developer has executed the assessment agreement as drafted by the City Attorney. SUPPORTING DOCUMENTS ATTACHED: ▪ Assessment Agreement ▪ Resolution 2022-83 POSSIBLE MOTION PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES: Motion to adopt Resolution 2022-83 approving and adopting special assessments for Lot 1, Block 1, Great River Centre of Otsego Seventh Addition. BUDGET INFORMATION FUNDING: BUDGETED: NA 1 223808v4 PUBLIC IMPROVEMENT AND SPECIAL ASSESSMENT AGREEMENT AGREEMENT made this ___ day of _______________, 2022, by and between the CITY OF OTSEGO, a Minnesota municipal corporation (“City”) and CN OTSEGO PROPERTIES LLC, a Minnesota limited liability company, (“Property Owner”). RECITALS A. Property Owner is the owner of real property located in the City of Otsego, Wright County, Minnesota, as legally described on Exhibit A attached hereto and incorporated herein (the “Subject Property”). B. The Property Owner entered into a Development Contract with the City for improvement of the Subject Property which will be recorded in conjunction with this Public Improvement and Special Assessment Agreement. C. The Development Contract requires the Property Owner to pay Water Availability Charges (“WAC”) in the total amount of $14,802.90. D. The Property Owner requests that the City assess the Water Availability Charges (“WAC”) in the total amount of $14,802.90 against the Subject Property. E. The Development Contract requires the Property Owner to pay Sewer Availability Charges (“SAC”) in the total amount of $21,204.75. F. The Property Owner requests that the City assess the Sewer Availability Charges (“SAC”) in the total amount of $21,204.75 against the Subject Property. G. The Development Contract requires the Property Owner to pay Street Light Operation Costs in the total amount of $21,200.00. H. The Property Owner requests that the City assess the Street Light Operation Costs in the total amount of $21,200.00 against the Subject Property. I. The Development Contract and Otsego City Code Section 8-1-6-C state that the Developer shall pay to the City the required sewer connection charges and water connection charges, which are separate and distinct from Sewer Availability Charges (SAC) and Water Availability Charges (WAC). J. The sewer connection charges with respect to development of the Subject Property are $217,984.83 calculated in accordance with the City Code and the Property Owner requests that the full amount of sewer connection charges be assessed against the Subject Property. 2 223808v4 K. The water connection charges with respect to development of the Subject Property are $50,724.60 calculated in accordance with the City Code and the Property Owner requests that the full amount of water connection charges be assessed against the Subject Property. L. The Property Owner has requested that fees in the total amount of $383,496.98 be assessed against the Subject Property, comprised of the following elements: Availability – Water (WAC) $14,802.90 Availability – Sewer (SAC) $21,204.75 Street Lights $21,200.00 Connection – Water $50,724.60 Connection – Sewer $217,984.83 Total $325,917.08 M. The Property Owner requests that the City assess this amount against the Subject Property. NOW, THEREFORE, IN CONSIDERATION OF THEIR MUTUAL COVENANTS THE PARTIES AGREE AS FOLLOWS: 1. SPECIAL ASSESSMENT. The City will assess the amount of Three Hundred Twenty Five Thousand Nine Hundred Seventeen Dollars and Eight Cents ($325,917.08) against the Subject Property. The special assessment shall be deemed adopted on the date this Agreement has been signed by all parties. The assessment shall be spread without deferment over a seven (7) year period in equal annual installments, together with interest of four and zero tenths percent (4.0%) per year on the unpaid balance. The first installment shall be payable with taxes paid in 2023. 2. WAIVER. Property Owner, its successors and assigns, waives any and all procedural and substantive objections to the Public Improvements and special assessment, including but not limited to hearing requirements and any claim that the assessment exceeds the benefit to the Subject Property. Property Owner waives any appeal rights otherwise available pursuant to Minn. Stat. § 429.081. 3. RELEASE. Property Owner, its successors and assigns, hereby unconditionally releases and forever discharges the City, its elected officials, employees, agents and insurers from any and all claims and causes of action of whatever kind or nature that is in any way connected with or related to the Public Improvements and the City’s sewer and water systems, including mapping errors. 4. BINDING EFFECT; RECORDING. This Agreement shall be binding upon Property Owner and its successors and assigns. This Agreement shall run with the land and may be recorded against the title to the Subject Property. [Remainder of page is intentionally left blank. Signature pages follow.] 3 223808v4 CITY OF OTSEGO BY: ___________________________ Jessica L. Stockamp, Mayor AND: ____________________________ Audra Etzel, City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this ________ day of __________________, 2022, by Jessica L. Stockamp and 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 4 223808v4 OWNER: CN OTSEGO PROPERTIES LLC BY: ______________________________ Its STATE OF MINNESOTA ) )ss. COUNTY OF ___________ ) The foregoing instrument was acknowledged before me this ________ day of _________________, 2022, by _____________________________, the ____________________ of CN Otsego Properties LLC, a Minnesota limited liability company, on behalf of said entity. _________________________________ NOTARY PUBLIC THIS INSTRUMENT WAS DRAFTED BY: Campbell Knutson, Professional Association Grand Oak Office Center I 860 Blue Gentian Road, Suite 290 Eagan, Minnesota 55121 DSK/smt 5 223808v4 EXHIBIT A Lot 1, Block 2, Great River Centre of Otsego Second Addition, Wright County, Minnesota, according to the recorded plat thereof. 1 223877v2 CITY OF OTSEGO WRIGHT COUNTY STATE OF MINNESOTA RESOLUTION NO. 2022-83 APPROVING AND ADOPTING SPECIAL ASSESSMENTS CN OTSEGO PROPERTIES LLC, a Minnesota limited liability company, (“Owner”) has requested that the Otsego City Council specially assess certain public improvement costs that affect Owners’ property legally described in Exhibit A attached hereto (“Subject Property”); WHEREAS, the City has received the following signed Public Improvement and Special Assessment Agreement (Exhibit B) waiving all applicable assessment procedural requirements and requesting to be assessed for the public improvement costs in the amount itemized therein for the Subject Property; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA THAT: 1. The signed Public Improvement and Special Assessment Agreement is hereby accepted and approved. 2. The public improvement costs amounting to $325,917.08 are hereby adopted and shall constitute a special assessment against the Subject Property and hereby made part of this Resolution by reference and that the tract of land therein included is hereby found to be benefited by the proposed improvement in the amount of the assessment levied against it. 3. Such assessment shall be payable in equal annual installments without deferment extending over a period of seven (7) years, the first of the installments to be payable with taxes paid in 2023 and shall bear the interest rate of 4.0% per annum from the date of adoption of this assessment Resolution. To the first installment shall be added interest on the entire assessment from the date of this Resolution until December 31, 2023. 4. The Owners, at any time prior to certification of the assessment to the County Auditor, may pay the whole of the assessment on such property, with interest accrued to the date of payment, to the City, except that no interest shall be charged if the entire assessment is paid within thirty (30) days from the adoption of this Resolution; and such owner may at any time thereafter, pay the City the entire amount of the assessment remaining unpaid, with interest accrued to December 31 of the year in which such payment is made. Such payment must be made before November 15 or interest will be charged through December 31 of the next succeeding year. The Owners may also at any time prior to November 15, of any year, pay the remaining unpaid principal balance with interest accrued to December 31 of the year in which such prepayment is made. 5. The City Clerk shall forthwith transmit a certified duplicate of this assessment to the County Auditor to be extended on the property tax lists of the County. 2 223877v2 ADOPTED by the City Council of the City of Otsego this 24th day of October, 2022. MOTION BY: SECONDED BY: IN FAVOR: OPPOSED: CITY OF OTSEGO __________________________________ Jessica L. Stockamp, Mayor ATTEST: __________________________________ Audra Etzel, City Clerk 3 223877v2 EXHIBIT A TO RESOLUTION Lot 1, Block 2, Great River Centre of Otsego Second Addition, Wright County, Minnesota, according to the recorded plat thereof. 4 223877v2 EXHIBIT B TO RESOLUTION PUBLIC IMPROVEMENT AND SPECIAL ASSESSMENT AGREEMENT AGREEMENT made this ___ day of _______________, 2022, by and between the CITY OF OTSEGO, a Minnesota municipal corporation (“City”) and CN OTSEGO PROPERTIES LLC, a Minnesota limited liability company, (“Property Owner”). RECITALS A. Property Owner is the owner of real property located in the City of Otsego, Wright County, Minnesota, as legally described on Exhibit A attached hereto and incorporated herein (the “Subject Property”). B. The Property Owner entered into a Development Contract with the City for improvement of the Subject Property which will be recorded in conjunction with this Public Improvement and Special Assessment Agreement. C. The Development Contract requires the Property Owner to pay Water Availability Charges (“WAC”) in the total amount of $14,802.90. D. The Property Owner requests that the City assess the Water Availability Charges (“WAC”) in the total amount of $14,802.90 against the Subject Property. E. The Development Contract requires the Property Owner to pay Sewer Availability Charges (“SAC”) in the total amount of $21,204.75. F. The Property Owner requests that the City assess the Sewer Availability Charges (“SAC”) in the total amount of $21,204.75 against the Subject Property. G. The Development Contract requires the Property Owner to pay Street Light Operation Costs in the total amount of $21,200.00. H. The Property Owner requests that the City assess the Street Light Operation Costs in the total amount of $21,200.00 against the Subject Property. I. The Development Contract and Otsego City Code Section 8-1-6-C state that the Developer shall pay to the City the required sewer connection charges and water connection charges, which are separate and distinct from Sewer Availability Charges (SAC) and Water Availability Charges (WAC). 5 223877v2 J. The sewer connection charges with respect to development of the Subject Property are $217,984.83 calculated in accordance with the City Code and the Property Owner requests that the full amount of sewer connection charges be assessed against the Subject Property. K. The water connection charges with respect to development of the Subject Property are $50,724.60 calculated in accordance with the City Code and the Property Owner requests that the full amount of water connection charges be assessed against the Subject Property. L. The Property Owner has requested that fees in the total amount of $383,496.98 be assessed against the Subject Property, comprised of the following elements: Availability – Water (WAC) $14,802.90 Availability – Sewer (SAC) $21,204.75 Street Lights $21,200.00 Connection – Water $50,724.60 Connection – Sewer $217,984.83 Total $325,917.08 M. The Property Owner requests that the City assess this amount against the Subject Property. NOW, THEREFORE, IN CONSIDERATION OF THEIR MUTUAL COVENANTS THE PARTIES AGREE AS FOLLOWS: 1. SPECIAL ASSESSMENT. The City will assess the amount of Three Hundred Twenty Five Thousand Nine Hundred Seventeen Dollars and Eight Cents ($325,917.08) against the Subject Property. The special assessment shall be deemed adopted on the date this Agreement has been signed by all parties. The assessment shall be spread without deferment over a seven (7) year period in equal annual installments, together with interest of four and zero tenths percent (4.0%) per year on the unpaid balance. The first installment shall be payable with taxes paid in 2023. 2. WAIVER. Property Owner, its successors and assigns, waives any and all procedural and substantive objections to the Public Improvements and special assessment, including but not limited to hearing requirements and any claim that the assessment exceeds the benefit to the Subject Property. Property Owner waives any appeal rights otherwise available pursuant to Minn. Stat. § 429.081. 3. RELEASE. Property Owner, its successors and assigns, hereby unconditionally releases and forever discharges the City, its elected officials, employees, agents and insurers from any and all claims and causes of action of whatever kind or nature that is in any way connected with or related to the Public Improvements and the City’s sewer and water systems, including mapping errors. 4. BINDING EFFECT; RECORDING. This Agreement shall be binding upon Property Owner and its successors and assigns. This Agreement shall run with the land and may be recorded against the title to the Subject Property. [Remainder of page is intentionally left blank. Signature pages follow.] 6 223877v2 CITY OF OTSEGO BY: ___________________________ Jessica L. Stockamp, Mayor AND: ____________________________ Audra Etzel, City Clerk STATE OF MINNESOTA ) ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this ________ day of __________________, 2022, by Jessica L. Stockamp and 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 7 223877v2 OWNER: CN OTSEGO PROPERTIES LLC BY: ______________________________ Its STATE OF MINNESOTA ) )ss. COUNTY OF ___________ ) The foregoing instrument was acknowledged before me this ________ day of _________________, 2022, by _____________________________, the ____________________ of CN Otsego Properties LLC, a Minnesota limited liability company, on behalf of said entity. _________________________________ NOTARY PUBLIC THIS INSTRUMENT WAS DRAFTED BY: Campbell Knutson, Professional Association Grand Oak Office Center I 860 Blue Gentian Road, Suite 290 Eagan, Minnesota 55121 DSK/smt 8 223877v2 EXHIBIT A Lot 1, Block 2, Great River Centre of Otsego Second Addition, Wright County, Minnesota, according to the recorded plat thereof.