RES 11-20CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO. 2011- 20
RESOLUTION DECLARING DEFAULT IN TERMS AND CONDITIONS OF
ESCROW AGREEMENT AND UNDERLYING DEVELOPERS AGREEMENT
FOR REQUIRED IMPROVEMENT OF ROADS AND PUBLIC
IMPROVEMENTS AND PAYMENT OF ASSESSMENTS WITHIN GREAT
RIVER CENTRE
WHEREAS, the original Developer's Agreement between the City of Otsego (CITY)
and Appello Group, LLC (APPELLO) required APPELLO to undertake and complete
certain public improvements within the Plat of GREAT RIVER CENTRE, including
construction of Plat streets and other public improvements to the satisfaction of the City
Engineer; and
WHEREAS, certain roads within the Plat were constructed, but no final lift of
bituminous was ever laid to this date, and certain other required public improvements
have not been constructed in the time frame required by the Developer's Agreement; and
WHEREAS, the above mentioned deficiencies in completing public improvements, as
well as others, have been brought to the attention of APPELLO over the course of the last
four years; and
WHEREAS, the CITY entered into an extension Agreement with APPELLO in 2010,
requiring a portion of the improvements to be completed in 2010 and the remainder to be
completed by July 15, 2011 subject to possible extension; and
WHEREAS, APPELLO partially complied with the Agreement by constructing the
designated portion of the public improvements in 2010; and
WHEREAS, pursuant to the Agreement, APPELLO has submitted a letter to the CITY
by April 15, 2011 requesting an extension of the 2010 Agreement; and
WHEREAS, APPELLO has indicated that they have no current sales and thus no funds
to complete the remainder of the public improvements by July 15, 2011; and
WHEREAS, City staff have met with APPELLO in an attempt to arrive at an Agreement
that would allow for an extension of the 2010 Agreement, but would also address CITY
issues involving completion of the remainder of public improvements and payment of
CITY debt service on bonds issues to improve County Road 42 and thus facilitate
construction of the GREAT RIVRE CENTRE; and
WHEREAS, City staff and APPELLO have not yet arrived at a proposed Agreement for
submission to the City Council.
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Otsego,
Wright County, Minnesota as follows:
The CITY hereby declares that APPELLO has anticipatorily breached the
conditions of that Agreement between the CITY and APPELLO (consented to by
21St CENTURY BANK) regarding construction of certain improvements by
APPELLO on or before July 15, 2011, as well as the terms and conditions of the
underlying Developers Agreement..
2. Pursuant to the terms and conditions of that Agreement and the underlying
Developers Agreement, CITY staff are hereby authorized to draw upon the
current Letter of Credit issued by 21St Century Bank in the amount of
$300,000.00, said funds to be used to either complete unfinished public
improvements or to make CITY debt service payments on the bonds issued for the
County 42 project for which the APPELLO property within GREAT RIVER
CENTRE has been assessed.
3. City staff is hereby directed to meet with APPELLO in a good faith attempt to
arrive at a satisfactory extension Agreement by July 15, 2011.
4. In the event that a satisfactory Agreement cannot be reached by July 15, 2011,
CITY staff is hereby directed to deliver this resolution and any other required
documents to 21s' CENTURY BANK and draw upon the Letter of Credit.
5 The Mayor and City Clerk are hereby authorized to execute on behalf of the CITY
any additional documents required to make the draw.
IN FAVOR: MAYOR STOCKAMP: COUNCILMEMBERS: HEIDNER, SCHARBER, SCHROEDER
AND DARKENWALD.
OPPOSED: NONE
2
CITY OF OTSEGO
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Tami Loff, City Clerk