RES 2023-42 Approving a Development Contract for IOS OtsegoCITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2023-42
IOS OTSEGO
WHEREAS, Minnesota Otsego Industrial Properties LLC (the "developer") is proposing platting of the IOS
Otsego final plat; and
WHEREAS, a final plat was approved by the City Council on 12 June 2023; and
WHEREAS, Section 10-10-4.A of the Subdivision Ordinance and Section 11-9-7 of the Zoning Ordinance
requires the developer to enter into a development contract 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 contract; and
WHEREAS, those obligations are outlined and memorialized in the attached Development Contract.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA THAT:
1. The Development Contract attached hereto between the City of Otsego and Minnesota Otsego
Industrial Properties LLC is hereby approved in form subject to modification of fees, charges, and
securities as approved by City staff.
2. The Mayor and City Clerl< are hereby authorized to execute the Development Contract on behalf of
the City of Otsego.
ADOPTED by the City Council of the City of Otsego this 12th day of June, 2023.
MOTION BY: Moores
SECONDED BY: Dahl
IN FAVOR: Stockamp,
OPPOSEDnone
Dahl, Dunlap, Goede, and Moores
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CITY OF OTSEGO
Jessica L. Stocl<amp, Ma
ATTEST:
Audra Etzel, City Clerk
(reserved for recording irafornaatiwa)
DEVELOPMENT CONTRACT
(Developer Installed Improvements)
IOS OTSEGO
CONTRACT dated
2023, by and between the CITY OF OTSEGO, a
Minnesota municipal corporation ("City"), and MINNESOTA OTSEGO INDUSTRIAL PROPERTIES,
LLC, a Minnesota limited liability company (the "Developer").
1. REQUEST FOR PLAT APPROVAL. The Developer has asked the City to approve a plat
for IOS OTSEGO (referred to in this Contract as the "plat"). The land is situated in the County of Wright,
State of Minnesota, and is legally described on Exhibit "A" attached hereto and made a part hereof:
2. CONDITIONS OF PLAT APPROVAL. The City hereby approves the plat on condition that
the Developer enter into this Contract, furnish the security required by it, and record the plat with the
County Recorder or Registrar of Titles within one hundred (100) days after the City Council approves the
final plat.
3. RIGHT TO PROCEED. Within the plat or land to be platted, the Developer may not grade
or otherwise disturb the earth or remove trees, unless a grading permit has been approved by the City
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Engineer following approval of a preliminary plat by the City Council, construct sewer lines, water lines,
streets, utilities, public or private improvements, or any buildings until all the following conditions have been
satisfied: 1) this contract has been fully executed by both parties and filed with the City Clerk, 2) the
necessary security has been received by the City, 3) the necessary insurance for the Developer and its
construction contractors has been received by the City, and 4) the plat has been filed with the Wright
County Recorder or Registrar of Titles' office.
4. PHASED DEVELOPMENT. If the plat is a phase of amulti-phased preliminary plat, the
City may refuse to approve final plats of subsequent phases if the Developer has breached this Contract
and the breach has not been remedied. Development of subsequent phases may not proceed until
Development Contracts for such phases are approved by the City. Park dedication charges referred to in
this Contract are not being imposed on outlots, if any, in the plat that are designated in an approved
preliminary plat for future subdivision into lots and blocks. Such charges will be calculated and imposed
when the outlots are final platted into lots and blocks.
5. PRELIMINARY PLAT STATUS. If the plat is a phase of amulti-phased preliminary plat,
the preliminary plat approval for all phases not final platted shall lapse and be void unless final platted into
lots and blocks and outlots, within two (2) years after preliminary plat approval.
6. CHANGES IN OFFICIAL CONTROLS. For five (5) years from the date of this Contract, no
amendments to the City's Comprehensive Plan or official controls shall apply to or affect the use,
development density, lot size, lot layout or dedications of the approved plat unless required by state or
federal law or agreed to in writing by the City and the Developer. Thereafter, notwithstanding anything in
this Contract to the contrary, to the full extent permitted by state law, the City may require compliance with
any amendments to the City's Comprehensive Plan, official controls, platting or dedication requirements
enacted after the date of this Contract.
7. DEVELOPMENT PLANS. The plat shall be developed in accordance with the following
plans. The plans shall not be attached to this Contract. The plans may be prepared, subject to the City
Engineer's approval, after entering the Contract, but before commencement of any work in the plat. The
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City Engineer may approve minor amendments to Plans without City Council approval
from the written terms of this Contract, the written terms shall control. The plans are:
Plan A -Plat
Plan B -Final Grading, Drainage, and Erosion Control Plan
Plan C -Plans and Specifications for Public Improvements
Plan D -Street Lighting Plan
Plan E -Landscape Plan
8. IMPROVEMENTS. The Developer shall install and pay for the following:
A. Sanitary Sewer System
B. Water System
C. Storm Sewer System
D. Streets
E. Concrete Curb and Gutter
F. Street Lights
If the plans vary
G. Site Grading, Stormwater Treatment/Infiltration Basins, and Erosion Control
H. Underground Utilities
I. Setting of Iron Monuments
J. Surveying and Staking
K. Sidewalks and Trails
L. Retaining Walls
M. Landscaping
The improvements shall be installed in accordance with the City subdivision ordinance; City
standarI specifications for utility and street construction; and any other ordinances including Chapter 6 of
the City Code concerning erosion and sediment control. The Developer shall submit plans and
specifications which have been prepared by a competent Minnesota registered professional engineer to the
City for approval by the City Engineer, The Developer shall instruct its engineer to provide adequate field
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inspection personnel to assure an acceptable level of quality control to the extent that the Developer's
engineer will be able to certify that the construction work meets the approved City standards as a condition
of City acceptance. In addition, the City may, at the City's discretion and at the Developer's expense, have
one or more City inspectors and a soil engineer inspect the work on a full or part-time basis. The
Developer, its contractors and subcontractors, shall follow all instructions received from the City's
inspectors. The Developer's engineer shall provide for on -site project management. The Developer's
engineer is responsible for design changes and contract administration between the Developer and the
Developer's contractor. The Developer or its engineer shall schedule apre-construction meeting at a
mutually agreeable time at the City with all parties concerned, including the City staff, to review the
program for the construction work. Within thirty (30) days after the completion of the improvements and
before the security is released, the Developer shall supply the City with a complete set of reproducible
constructed" plans and an electronic file of the "as -constructed" plans in an AutoCAD .DWG file or a .DXF
file, all prepared in accordance with City standards.
In accordance with Minnesota Statutes 505.021, the final placement of iron monuments for all lot
corners must be completed before the applicable security is released. The Developer's surveyor shall also
submit a written notice to the City certifying that the monuments have been installed following site grading,
utility and street construction.
9. CONTRACTORS/SUBCONTRACTORS. City Council members, City employees, and
City Planning Commission members, and corporations, partnerships, and other entities in which such
individuals have greater than a 25% ownership interest or in which they are an officer or director may not
act as contractors or subcontractors for the public improvements identified in Paragraph 8 above.
10. PERMITS. The Developer shall obtain or require its contractors and subcontractors to
obtain all necessary permits, which may include:
A. Wright County for County Road Access and Work in County Rights -of -Way
B. MnDot for State Highway Access
C. MnDot for Work in Right -of -Way
D. Minnesota Department of Health for Watermains
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E. MPCA NPDES Permit for Construction Activity
F. MPCA for Sanitary Sewer and Hazardous Material Removal and Disposal
G. DNR for Dewatering
H. City of Otsego for Building Permits, Retaining Walls, Irrigation
I. MDH for water permits
J. MPCA for sewer extension
11. DEWATERING. Due to the variable nature of groundwater levels and stormwater flows, it
will be the Developer's and the Developer's contractors and subcontractors responsibility to satisfy
themselves with regard to the elevation of groundwater in the area and the level of effort needed to
perform dewatering and storm flow routing operations. All dewatering shall be in accordance with all
applicable county, state, and federal rules and regulations. DNR regulations regarding appropriations
permits shall also be strictly followed.
12. TIME OF PERFORMANCE. The Developer shall complete construction of Kadler Avenue
up to and including curb and placement of the first lift of asphalt by October 31, 2023.
The Developer shall install all other required public improvements related to Kadler Avenue by June
30, 2024.
13. STREETS. The Developer agrees to maintain the streets within the Plat until the base
course bituminous surfacing has been accepted by the City. Should the City be required to grade the street
prior to paving, the cost of such grading shall be paid by the Developer and draw from the Developer's letter
of credit. Should the City determine that snowplowing is necessary prior to street paving, the City will plow
the street(s) prior to acceptance of the streets. The Developer shall hold harmless and indemnify the City
from any and all liability related to this snow plowing and shall pay all costs associated with this snow
plowing. Any plowing undertaken by the City shall constitute no acceptance or evidence of acceptance of
the street(s) in question. The final wear course shall not be constructed until at least one (1) construction
season after the base construction is completed. 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 two
(2) years the streets have been constructed to City standards. The warranty period shall not commence until
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such time as street construction is completed and the streets are accepted as City streets by the City. The
two (2) year warranty period set forth above commences upon the date on which the City accepts the
streets by resolution.
14. KADLER AVENUE IMPROVEMENTS. The Developer shall construct Kadler Avenue and
install concrete curb and gutter from the north line of the Interstate Otsego plat extending to 801h Street. The
Developer shall taper Kadler Avenue back to the existing rural section of Kadler Avenue at the 801h Street
intersection.
The Developer shall grant to the City a permanent easement for right-of-way purposes in a
recordable form approved by the City for the portion of Kadler Avenue abutting the exception parcel
southeast of the plat of IOS Otsego.
Right of way dedication, design and construction plans for Kadler Avenue are subject to review and
approval of the City Engineer.
15. 78T" COURT IMPROVEMENTS. The Developer shall construct 781h Court west of Kadler
Avenue to access Lot 1, Block 1, IOS Otsego and future development of Outlot C.
Right of way dedication, design and construction plans for 781h Court are subject to review and
approval of the City Engineer.
16. INTERIM SEPTIC HOLDING TANK. Approval of the preliminary plat was conditioned on
the City, at its sole discretion, obtaining easements for construction of trunk municipal sewer between
Kadler Avenue and Windsong Third Addition to serve the proposed development. The City will pay for
these easements and the construction of the municipal sewer utility between Kadler Avenue and
Windsong Third Addition as a trunk cost. The City is working with two property owners to acquire the
necessary easements, but has not secured them. To allow the development to move forward, interim
use of a septic holding tank is to be allowed for only Lot 1, Block 1.
The interim septic holding tank shall comply with the requirements of Section 9-5-3.D.3 of the City
Code and the Developer shall configure the building connection for both the interim septic holding tank
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and municipal sewer connection, subject to approval of the City Engineer. The interim septic holding
tank and building connection are to be overlaid by temporary drainage and utility easement approved by
the City Engineer to allow access to the building connection and interim septic holding tank.
The City shall require the connection to municipal sewer at such time as the trunk connection east of
Kadler to Windsong Third Addition is completed providing services to the plat in accordance with Section
8-1-3 of the City Code. The Developer shall provide an escrow in the amount of $25,000.00 for
connection to municipal sewer and removal of the interim septic holding tank. The Developer shall
undertake the connection to municipal sewer within one (1) year of the service being available to the lot.
If the Developer has not completed the connection to municipal sewer and removal of the interim septic
holding tank as required by this Contract the City is authorized to undertake the connection and is
entitled to reimbursement for all costs incurred from escrows held in accordance with this Contract,
The Developer shall submit a maintenance plan for the interim septic holding tank as required by
Section 9-5-4.0 of the City Code and shall enter into and maintain a contract for maintenance of the
septic holding tank for the duration the system is in use and until the connection to municipal sewer is
complete. The Developer shall provide the City a copy of said contract and any amendments or
modifications of the initial agreement or any subsequent agreements entered into for maintenance of the
interim septic holding tank. The septic holding tank maintenance contract shall provide for pumping of
the interim septic holding tank on an as needed basis as determined by the City Engineer.
17. LICENSE. The Developer hereby grants the City, its agents, employees, officers and
contractors a license to enter the plat to perform all work and inspections deemed appropriate by the City in
conjunction with plat development.
18. EROSION CONTROL. Prior to initiating site grading, the erosion control plan, Plan B, shall
be implemented by the Developer and inspected and approved by the City. The City may impose
additional erosion control requirements if they would be beneficial. All areas disturbed by the grading
operations shall be stabilized per the MPCA Stormwater Permit for Construction Activity. Seed shall be in
accordance with the City's current seeding specification which may include temporary seed to provide
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ground cover as rapidly as possible. All seeded areas shall be fertilized, mulched, and disc anchored as
necessary for seed retention. The parties recognize that time is of the essence in controlling erosion. If the
Developer does not comply with the MPCA Stormwater Permit for Construction Activity or with the erosion
control plan and schedule or supplementary instructions received from the City, the City may take such
action as it deems appropriate to control erosion. The City will endeavor to notify the Developer in advance
of any proposed action, but failure of the City to do so will not affect the Developer's and City's rights or
obligations hereunder. If the Developer does not reimburse the City for any cost the City incurred for such
work within ten (10) days, the City may draw down the letter of credit to pay any costs. No development,
utility or street construction will be allowed and no building permits will be issued unless the plat is in full
compliance with the approved erosion control plan.
19. GRADING. 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 before the City approves individual building permits, the
Developer shall provide the City with an it )I 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 house pads, and
all other items listed in City Code, The City will withhold issuance of building permits until the approved
certified grading plan is on file with the City and all erosion control measures are in place as 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 building
permits.
If the final grading, erosion control and as -built survey is not timely completed, the City may enter
the lot, perform the work, and apply the cash escrow toward the cost. Upon satisfactory completion of
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the grading, erosion control and as -built survey, the escrow funds, without interest, less any draw made
by the City, shall be returned to the person who deposited the funds with the City.
20. CLEAN UP. The Developer shall clean dirt and debris from streets that has resulted from
construction work by the Developer, home builders, subcontractors, their agents or assigns. Prior to any
construction in the plat, the Developer shall identify in writing a responsible party and schedule for erosion
control, street cleaning, and street sweeping.
21. OWNERSHIP OF IMPROVEMENTS. Upon completion of the work and construction
required by this Contract and final acceptance by the City, the improvements lying within public easements
shall become City property without further notice or action.
22. LATERAL STORM SEWER. The Developer shall post a security for lateral storm sewer
in the amount of $886,806.00 which is due upon final plat approval.
The Developer shall pay a cash fee in the amount of $99,169.05 for the Trunk Storm Water
Management Impact Fee for Otsego Creek due upon final Plat Approval, calculated as follows:
23.55 Gross Acres X $4,211/Gross Acre = $99,169.05
23. LATERAL AND TRUNK SANITARY SEWER. The Developer shall pay to the City the
required water availability charges and sanitary sewer availability charges. The water and sewer
availability charges shall be collected according to Section 8-1-6-B of City Code at 3.5 RECs per gross
acre for commercial, industrial, or institutional uses. The Developer shall post a security in the amount of
$684,575.40 for Lateral and Trunk Sanitary Sewer which is due upon final plat approval.
The Developer shall receive a credit from the City in the amount of $61,015.96 for installation of
extra depth sanitary sewer to a property within the sewer district directly to the east of IOS Otsego.
The Developer shall pay a cash fee in the amount of $190,297.87 for the Sewer Availability Charge
at the time of plat approval which is calculated as follows:
23.55 Gr Ac X 3.5 RECs/Gr Ac X $3,049.00/REC = $251,313.83 — $61,015.96 = $190,297.87
The preliminary plat is conditioned on the City, at its sole discretion, obtaining easements for
construction of trunk sewer between Kadler Avenue and Windsong to serve the proposed development.
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The City shall pay for these easements and the construction of the sewer utility between Kadler
Avenue and Windsong Third Addition as a trunk cost. The City is working to acquire the necessary
easements, but has not secured them yet. To allow the development to move forward, interim use of a
septic tank is authorized subject to the following conditions:
1. The Developer shall pay utility availability charges with the final plat.
2. The Developer shall construct trunk sewer from the sewer connection west of Kadler
Avenue to the plat.
3. The Developer shall configure the building connection for both the septic system and sewer
connection.
4. The Developer shall grant to the City a temporary drainage and utility easement in a
recordable form approved by the City overlaying the septic tank.
5. The Developer shall provide an escrow to the City in the amount of $25,000.00 for the
removal of the septic tank and connection to municipal sewer.
6. The Developer shall pay sewer connection charges with the building permit.
The City shall require the connection to sewer with the connection east of Kadler Avenue and shall
undertake the work if not completed within one year from the time of final plat approval.
24. LATERAL AND TRUNK WATERMAIN. The Developer shall post a security in the
amount of $339,872.00 for the installation of lateral and trunk watermain and connection. The Developer
shall receive a credit as determined by the City Engineer in the amount of $19,650.00 from the WAC cash
fee for the cost of connection to 16 inch watermain on the west side of Kadler Avenue and connection of 10
inch watermain to the east side of Kadler Avenue. The Developer shall pay a cash fee in the amount of
$155,750.40 for the Water Availability Charge ("WAC") at the time of plat approval which is calculated as
follows:
23.55 Gr Ac X 3.5 RECs/Gr Ac X $2,128.00/REC = $175,400,40 - $19,650.00 = $155,750.40
25. SEWER CONNECTION CHARGE AND WATER CONNECTION CHARGE. The
Developer shall pay to the City required water and sewer connection charges. The water and sewer
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connection charges shall be collected per Section 8-1-6-C of City Code for all uses and must be paid
according to the terms of this Development Contract.
26. CONSTRUCTION ACCESS. Construction traffic access and egress for grading, public
utility construction, and public street construction is restricted to access the subdivision as approved by the
City Engineer.
27. WETLAND, STREET, AND TRAFFIC CONTROL SIGNS. The Developer shall pay to the
City $1,000.00 to ensure the installation of wetland, street, and traffic control signs. The fee is calculated
as follows: four (4) signs at $250.00 per sign.
28. STREET LIGHT OPERATION COSTS. The Developer shall be responsible for the cost of
street light installation consistent with a street lighting plan approved by the City. The Developer shall pay
to the City a cash fee in the amount of $3,000.00. The fee is calculated as follows: six (6) street lights at
$500.00 per street light.
29. LANDSCAPING. Landscaping shall be installed in accordance with the approved
landscape plan. The Developer shall post a $122,430.00 landscaping security at the time of final plat
approval to ensure that the landscaping is installed in accordance with the approved plan.
30. PARK DEDICATION.
Park dedication requirements for Lot 1, Block 1 shall be waived in consideration of the Plat providing for
completion of Kadler Avenue improvements and extension of trunk sewer infrastructure occurring beyond
the plat boundaries allowing for development of the plat and potentially other adjacent properties
consistent with the City's economic development goals.
Outlot C shall be subject to park dedication requirements at such time as Outlot C is final platted
into lots and blocks.
31. SPECIAL PROVISIONS. The following special provisions shall apply to plat development:
A. Implementation of the conditions listed in the Findings of Fact approved by the City Council on
June 12, 2023.
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B. Before the City signs the final plat, the Developer shall convey Outlots A and B to the City by
warranty deed, free and clear of any and all encumbrances.
C. The Developer shall grant to the City a temporary drainage and utility easement over the
entiI ety of Outlot C in a recordable form approved by the City.
D. Outlot C shall not be platted until such time as municipal sewer service is available to the
property.
E. The Developer shall grant to the City a temporary access and drainage and utility easement
over a portion of Lot 1, Block 1 for connection of municipal sewer service in a recordable form
approved by the City.
F. The Developer shall connect Lot 1, Block 1 to municipal sanitary sewer and remove the interim
septic system within one year from the date that municipal sewer service is available to Lot 1,
Block 1 as determined by the City Engineer.
G. All utility plans shall be subject to review and approval of the City Engineer.
H. The Developer shall pay Utility Availability Charges for Lot 1, Block 1, in accordance with the
fee schedule in effect at the time of final plat approval.
I. The Developer shall pay Utility Connection Charges for Lot 1, Block 1, in accordance with the
fee schedule in effect at the time a building permit is issued.
J. All grading, drainage, wetland, and erosion control plans shall be subject to review and approval
of the City Engineer.
K. The design and construction of all off-street parking shall be subject to review and approval of
the City Engineer.
L. The Developer shall provide a site plan for the outdoor storage area demonstrating adequate
access for emergency purposes, subject to review and approval of the Zoning Administrator,
M. The proposed aggregate surface of the outdoor storage area shall be subject to review and
approval of the City Engineer.
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N. Proposed fencing shall comply with Section 11-19-4.H of the Zoning Ordinance and requires
approval of a fence permit by the Zoning Administrator prior to construction.
O. The Developer shall submit a plan to the City detailing the type, location, and height of all
proposed exterior lighting in compliance with Section 11-16-6 of the Zoning Ordinance, subject
to review and approval of the Zoning Administrator.
P. All signs shall comply with Chapter 37 of the Zoning Ordinance and require a sign permit
approved by the Zoning Administrator prior to installation.
Q. Any outdoor storage of waste and recycling containers shall comply with Section 11-18-4.0 of
the Zoning Ordinance, subject to review and approval of the Zoning Administrator.
R. All stormwater management plans shall be subject to review and approval of the City Engineer.
S. All drainage and utility easements shall be subject to review and approval of the City Engineer.
T. Prior to City Council approval of the final plat, the Developer shall furnish a boundary survey of
the proposed property to be platted with all property corner monumentation in place and marked
with lath and a flag. Any encroachments on or adjacent to the property shall be noted on the
survey. The Developer's land surveyor certifies that all irons have been set following site
grading and utility and street construction. In addition, the certificate of survey must also
include a certification that all irons for a specific lot have either been found or set prior to the
issuance of a building permit for that lot.
U. The Developer shall pay an escrow for the preparation of record construction drawings, GIS,
and City base map updating. This fee is $250.00 per lot for a total charge of $250.00.
V. The Developer is required to submit the final plat in electronic format. The electronic format
shall be either AutoCAD.DWG file or a .DXF file. All construction record drawings (e.g.,
grading, utilities, streets) shall be in electronic format in accordance with standard City
specifications.
32. CONSTRUCTION ADMINISTRATION AND FEES FOR CITY SERVICES. The Developer
shall pay a fee for consulting engineering administration following approval of the Plat. City engineering
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administration will include consultation with Developer and its engineer on status or problems regarding the
project, monitoring during the warranty period, general administration and processing of requests for
reduction in security. Fees for this service shall be the actual amount billed for those services, which are
estimated to be three percent (3%) of the estimated construction cost of the Improvements to be inspected,
assuming normal construction and project scheduling. The Developer shall pay for construction observation
performed by the City Engineer. Construction observation shall include part or full time observation, as
determined by the City Engineer, of proposed street, sanitary sewer, water and storm drainage construction
and will be billed on hourly rates actually required for said inspection, which are estimated to be five percent
(5%) of the estimated construction cost of the Improvements to be inspected. In the event of prolonged
construction or unusual problems, the City will notify the Developer of anticipated cost overruns for
engineering administration and observation services. Any amounts for engineering administration not
utilized from this escrow fund shall be returned to the Developer when all improvements have been
completed, all financial obligations to the City satisfied, and the required "as constructed" plans have been
received by the City.
The escrow and fee account shall also include estimated fees for Legal expenses actually
incurred (with any excess funds, if any, returned to Developer as indicated in this Contract), City
Administrative Fee (a flat fee due upon execution of this Agreement), Trunk Water and Sewer Access Fees
(a flat fee due upon execution of this Agreement), Park and Trail Dedication Fees (a flat fee due upon
execution of this Agreement), and shall be as stated by the Financial Summary.
This escrow amount shall be submitted to the City prior to the City executing this 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 this Agreement. Any amounts for legal and engineering
not utilized from this escrow fund shall be returned to the Developer when all improvements have been
completed, all financial obligations to the City satisfied, and the required "as constructed" plans have been
received by the City.
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All other amounts listed as flat fees are non-refundable and available immediately for City use
when posted.
33. SECURITY. To ensure compliance with the terms of this Contract, 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 Contract. The security amount shall be one hundred twenty five (125) percent of the City
Engineer's estimated cost of all public improvements and/or private improvements required by the
Subdivision Ordinance or Zoning Ordinance. The Developer shall provide an additional security equal to six
and one-half (6.5%) of the estimated cost of the required public and/or private improvements for use by the
City for the purpose of assuming responsibility for design, bidding, and construction administration of the
required improvement in the event of a default by the Developer as provided for by this contract.
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 Contract 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 Contract 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 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. For purposes of this Section, the warranty period shall be a twelve
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(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 Contract.
This security amount shall be submitted to the City prior to execution of the Contract. All
administrative and legal fees related to plan review, drafting of this Contract and any other necessary items
shall be paid to the City prior to execution of the Contract. Upon completion of the work contemplated
hereunder and expiration of the warranty period, the remaining security shall be promptly released to
Developer.
34. SUMMARY OF SECURITY REQUIREMENTS
above is calculated as follows:
CONSTRUCTION COSTS:
A. Sanitary Sewer —Lateral and Trunk
B. Watermain — Lateral and Trunk
C. Storm Sewer -Lateral
D. Streets (Kadler Ave (1/4 Mile) and 781h Court
CONSTRUCTION SUB -TOTAL
OTHER COSTS:
A. Site Grading, Erosion &Sediment Control
and Wetland Protection
The amount of the security described
B. Engineering &Surveying Construction Services (6.5%)
C. Landscaping
OTHER COSTS SUB -TOTAL
TOTAL —SUBTOTAL
TOTAL IRREVOCABLE LETTER OF CREDIT
FOR SECURITY (125% OF SUBTOTAL
ESCROW
A. City Legal Expenses (Est. 1.0% of $2,647,521.40)
B. City Construction Observation (Est. 8.0% of $2,647,521.40)
C.
Sanitary Sewer Connection &Removal of Septic Tank
D. GIS Data Entry Fee
ESCROW TOTAL
$684,575.40
339,872.00
8861806000
736,268.00
$2,6471521.40
$115,200.00
172,088.89
122.430.00
$3,057,240.29
$3,821,550.36
$26,475.21
2111 801.71
25,000.00
250.00
$263,526.92
IL
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This breakdown is not a restriction on the use of the security.
35. 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 $2,647,521.40)
B. Trunk Sewer Availability Charge (SAC)
C. Trunk Water Availability Charge (WAC)
D. Trunk Storm Water Management Impact Fee
E. Park Dedication Fee
F. Wetland, Street &Traffic Control Signs
G. Street Lights
TOTAL CASH REQUIREMENTS
$26,475.21
1297087
1551750040
99,169.05
0.00
1,000.00
3/000000
$4751692.50
36. WARRANTY. The Developer warrants all improvements required to be constructed by it
pursuant to this Contract against poor material and faulty workmanship, other than as set forth hereafter in
this Section 36, for a period of one (1) year. The warranty period for streets is two (2) years as specified in
this Contract. The warranty period for underground utilities is one (1) year and shall commence following
completion and acceptance by City Council. A minimum of 10% of the total security as specified above in
tIne portion of Section 33 of this Contract shall be retained as warranty security calculated as follows.
DEVELOPMENT WARRANTY LETTER OF CREDIT
A. Sanitary Sewer
B. Watermain
C. Storm Sewer
D. Streets
E. Erosion & Sedimentation Control
TOTAL WARRANTY LETTER OF CREDIT
37. RESPONSIBILITY FOR COSTS.
$102,686.31
50,980.80
110,440.20
1181000.00
5 760.00
, $387867.31
A. Except as otherwise specified herein, the Developer shall pay all costs incurred by it or the City
in conjunction with the development of the plat, including but not limited to Soil and Water
Conservation District charges, legal, planning, engineering and construction observation
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inspection expenses incurred in connection with approval and acceptance of the plat, the
preparation of this Contract, review of construction plans and documents, and all costs and
expenses incurred by the City in monitoring and inspecting development of the plat.
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 plat
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.
C. The Developer shall reimburse the City for costs incurred in the enforcement of this Contract,
including engineering and attorneys' fees.
D. The Developer shall pay, or cause to be paid when due, and in any event before any penalty is
attached, all special assessments referred to in this Contract. This is a personal obligation of
the Developer and shall continue in full force and effect even if the Developer sells one or more
lots, the entire plat, or any part of it.
E. The Developer shall pay in full all bills submitted to it by the City for obligations incurred under
this Contract within thirty (30) days after receipt. If the bills are not paid on time, the City may
halt plat development and construction until the bills are paid in full, Bills not paid within thirty
(30) days shall accrue interest at the rate of eighteen percent (18%) per year. Additionally, the
Developer shall pay in full all bills submitted to it by the City prior to any reductions in the
security for the development.
F. In addition to the charges and special assessments referred to herein, other charges and
special assessments may be imposed such as but not limited to sewer availability charges
("SAC"), City water connection charges, City sewer connection charges, and building permit
fees.
38. 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
Inc
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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 forty-eight
(48) hours in advance. This Contract 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 land. When the City does any such work, the City
may, in addition to its other remedies, assess the cost in whole or in part.
39. MISCELLANEOUS.
A. The Developer represents to the City that the plat complies with all city, county, state, and
federal laws and regulations, including but not limited to: subdivision ordinances, zoning
ordinances, and environmental regulations. If the City determines that the plat does not
comply, the City may, at its option, refuse to allow construction or development work in the plat
until the Developer does comply. Upon the City's demand, the Developer shall cease work until
there is compliance.
B. Third parties shall have no recourse against the City under this Contract.
C. Breach of the terms of this Contract by the Developer shall be grounds for denial of building
permits, including lots sold to third parties.
D. If any portion, section, subsection, sentence, clause, paragraph, or phrase of this Contract is for
any reason held invalid, such decision shall not affect the validity of the remaining portion of this
Contract.
E. Grading, curbing, and one lift of asphalt shall be installed on all public and private streets prior
to issuance of any building permits.
F. If building permits are issued prior to the acceptance of public improvements, the Developer
assumes all liability and costs resulting in delays in completion of public improvements and
damage to public improvements caused by the City, Developer, its contractors, subcontractors,
material men, employees, agents, or third parties. No sewer and water connections or
inspections may be conducted and no one may occupy a building for which a building permit is
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issued on either a temporary or permanent basis until the streets needed for access have been
paved with a bituminous surface and the utilities are accepted by the City Enginee, .
G. The action or inaction of the City shall not constitute a waiver or amendment to the provisions of
this Contract. 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 Contract shall not be a waiver or release.
H. This Contract shall run with the land and may be recorded against the title to the property. In
the event this Contract is recorded, upon request by Developer, the City covenants to provide a
recordable Certificate of Completion within a reasonable period of time following the request,
upon the completion of the work and responsibilities required herein, payment of all costs and
fees required and compliance with all terms of the Contract. A release of this Contract may be
provided in the same manner and subject to the same conditions as a Certificate of Completion
provided there are no outstanding or ongoing obligations of Developer under the terms of this
Contract. The Developer covenants with the City, its successors and assigns, that the
Developer is well seized in fee title of the property being final platted and/or has obtained
consents to this Contract, in the form attached hereto, from all parties who have an interest in
tIne property; that there are no unrecorded interests in the property being final platted; and that
the Developer will indemnify and hold the City harmless for any breach of the foregoing
covenants.
I. Insurance. Prior to execution of the final plat, Developer and its general contractor shall
furnish to the City a certificate of insurance showing proof of the required insurance required
under this Paragraph. Developer and its general contractor shall take out and maintain or
cause to be taken out and maintained until six (6) months after the City has finally accepted
the public improvements, such insurance as shall protect Developer and its general contractor
and the City for work covered by the Contract including workers' compensation claims and
property damage, bodily and personal injury which may arise from operations under this
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Contract, whether such operations are by Developer and its general contractor or anyone
directly or indirectly employed by either of them. The minimum amounts of insurance shall be
as follows:
Commercial General Liability (or in combination with an umbrella policy)
$2,000,000 Each Occurrence
$2,000,000 Products/Completed Operations Aggregate
$2,000,000 Annual Aggregate
The following coverages shall be included:
Premises and Operations Bodily Injury and Property Damage
Personal and Advertising Injury
Blanket Contractual Liability
Products and Completed Operations Liability
Automobile Liability
$2,000,000 Combined Single Limit — Bodily Injury & Property Damage
Including Owned, Hired & Non -Owned Automobiles
Workers Compensation
Workers' Compensation insurance in accordance with the statutory requirements of the
State of Minnesota, including Employer's Liability with minimum limits are as follows:
• $500, 000 — Bodily Injury by Disease per employee
• $5001 000 — Bodily Injury by Disease aggregate
• $5001000 — Bodily Injury by Accident
The Developer's and general contractor's insurance must be "Primary and Non -Contributory".
All insurance policies (or riders) required by this Contract shall be (i) taken out by and
maintained with responsible insurance companies organized under the laws of one of the
states of the United States and qualified to do business in the State of Minnesota, (ii) shall
name the City, its employees and agents as additional insureds (CGL and umbrella only) by
endorsement which shall be filed with the City and (iii) shall identify the name of the plat. A
copy of the endorsement must be submitted with the certificate of insurance.
Developer's and general contractor's policies and Certificate of Insurance shall contain a
provision that coverage afforded under the policies shall not be cancelled without at least
thirty (30) days' advanced written notice to the City, or ten (10) days' notice for non-payment
of premium.
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J
An Umbrella or Excess Liability insurance policy may be used to supplement Developer's
or general contractor's policy limits on a follow -form basis to satisfy the full policy limits
required by this Contract.
Indemnification. To the fullest extent permitted by law, Developer agrees to defend, indemnify
and hold harmless the City, and its employees, officials, and agents from and against all
claims, actions, damages, losses and expenses, including reasonable attorney fees, arising
out of Developer's negligence or its performance or failure to perform its obligations under this
Contract. Developer's indemnification obligation shall apply to Developer's general
contractor, subcontractor(s), or anyone directly or indirectly employed or hired by Developer,
or anyone for whose acts Developer may be liable. Developer agrees this indemnity
obligation shall survive the completion or termination of this Contract.
K. 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
anA 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.
L. The Developer may not assign this Contract without the written permission of the City Council.
The Developer's obligation hereunder shall continue in full force and effect even if the
Developer sells one or more lots, the entire plat, or any part of it, until the City's issuance of a
Certificate of Completion and Release.
M. Retaining walls over four feet in heigh
of
shall be constructed in accordance with plans and
specifications prepared by a structural or geotechnical engineer licensed by the State
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
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and by special conditions referred to in this Contract 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.
N. Should the Developer convey any lot or lots in the Development to a third party, the City and the
owner of that lot or those lots may amend this Development Contract or other city approvals or
agreements for development or use of those lots without the approval or consent of the
Developer or other lot owners in the Development. Private agreements between the owners of
lots within the Development for shared service or access and related matters necessary for the
efficient use of the Development shall be the responsibility of the lot owners and shall not bind
or restrict City authority to approve applications from any lot owner in the Development.
40. NOTICES. Required notices to the Developer shall be in writing, and shall be either hand
delivered to the Developer, its employees or agents, or mailed to the Developer by certified mail at the
following address: C/O Best &Flanagan 60 South Sixth Street, Suite 2700, Minneapolis, MN 55402.
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.
The remainder of this page has been intentionally left blank.
Signature pages follow.]
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(SEAL)
STATE OF MINNESOTA
)ss.
COUNTY OF WRIGHT
CITY OF OTSEGO
BY:
AND
Jessica L. Stockamp, Mayor
Audra Etzel, City Clerk
The foregoing instrument was acknowledged before me this day of ,
2023, 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:
MINNESOTA OTSEGO
INDUSTRIAL PROPERTIES, LLC
BY:
STATE OF MINNESOTA )
)ss.
COUNTY OF )
Its
The foregoing instrument was acknowledged before me this day of ,
20231 by the of
Minnesota Otsego Industrial Properties, LLC, a Minnesota limited liability company, on behalf of said
entity.
NOTARY PUBLIC
DRAFTED BY:
CAMPBELL, KNUTSON
Professional Association
Grand Oak Office Center 1
860 Blue Gentian Road, Suite 290
Eagan, MN 55121
Telephone: 651-452-5000
DSK/smt
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EXHIBIT "A"
TO
DEVELOPMENT CONTRACT
The North Half of the Northeast Quarter of Section 27, Township 121, Range 24, Wright
County, Minnesota, EXCEPTING THEREFROM the East 208.70 feet of the South 208.70
feet of said North Half of the Northeast Quarter.
(Abstract Property)
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[BANK LETTERHEAD]
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 Developers 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) , on or before 4:00 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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