02-22-96 WSMayor Norman F. Freske
Otsego City Hall
8899 Nashua Avenue NE
Otsego, MN 55330
February 15, 1996
Dear Mayor Freske and Otsego City Council Members:
Due to my schedule, I will be unable to attend the Workshop meeting scheduled
for February 22, 1996. I totally understand the importance of this meeting concerning the
future of our proposed development. However, I will be out of town on February 22 and
February 23.
Knowing the strategic importance of this meeting, I would like to submit a list of
issues that I feel must be resolved within the next two weeks. I recognize this is a short
time span, but I believe most of these issues have been apparent for several weeks. We
need to continue on a time schedule, that mandates we close on the purchase of 335 acres
of land by December of 1996. To do so, we must request immediate response to certain
matters. They are as follows:
1. We must have a written agreement from the City that we will be granted a
franchise to own, design, construct, maintain and operate a package treatment sewage
plant. The plant should include sewer and water to provide full utilities to the proposed
development. It is my understanding and agreement that this package be entirely
subsidized by ourselves. We, or others, would be responsible for the operation and
maintenance of this facility. The system would be subject to MPCA approval.
It is my understanding that the package plant and utilities will be designed to
accommodate our project. If Riverwood Conference Center chooses to use our system, it
would then be constructed to accommodate them and they would pay us a proportionate
share of the cost. The system could be designed so that Island View homes could "hook-
up" later if need be. This would entail increasing the plant capacity and they would pay a
proportionate share to the owners, or us.
I know this will have to be massaged by attorneys. I am hopeful that the City, at
this time, can grant us, in writing, the franchise to build and operate the plant. We will
find it improbable to continue the pursuit of this project, without getting this resolved in
the next 10-20 days. We are presently running 45 days behind our projected schedule.
Neal A. Perlich Realty incorporated
12450 Wayzata Blvd., Suite 207 Minnetonka, MN 55305
(612) 933-8300 Fax (612) 545-1184
Mayor Norman Freske
Page 2 of 4
February 15, 1996
Please do not take this as a "threat", but rather as fact. This issue is the most important
element of our progress. We must have this agreement secured in the next 10-20 days. It
is relatively simple, if we pay to build and own the plant -- we want a franchise to operate
it.
We would not intend to simply turn the system over to the City. After having
designed, financed, constructed and managed the plant, there would have to be some
compensation. This option would exist for the City.
Again, we recognize that the granting of the facility as a franchise, does not assure
us of anything until we receive final or preliminary plat approval. To repeat in plain,
simple English — unless granted the franchise, the project is dead. Since we are paying the
full cost, I do not feel this is unfair. Since we are solving a problem for Riverwood and
future problems for Island View, I would consider it a no lose situation for the City.
2. We must have a commitment from the City as to the fees for Park and Trail
assessments.
a. Will we be granted the present assessment of $875.00 (including
Park and Trail) per residential lot?
b. What would the assessment fee or allocation be for the 190 acre
golf course? Need specifics. (How much per acre or what?)
Please spell out the specifics.
3. It has been mentioned several times in meetings that the City will "help"
but "not in a monetary way". What specifically does this mean?
a. Does it mean in real estate taxes?
b. Does it mean in Park Dedication Fees?
C. Road Improvement Charges (Kadler, etc.)?
d. Waiving any legal, engineering or development fees? Please be
specific, if there is any participation from the City — what is it going
to be?
e. Or other answers?
Mayor Norman Freske
Page 3 of 4
February 15, 1996
4. I would request a safe figure, or percentage of actual construction fees,
that would be charged by the City for engineering/supervision fees. This is not
unreasonable. We worked this out in our most recent development in Wyoming,
Minnesota with a fully sewered and watered residential development. We have to get a
"ball park" figure on what the City charges may be for this project. Because this involves
a sewer and water plant along with a lot development, we must be able to relate to
percentage cost. EXAMPLE 1: If our "plant costs" are $500,000, what could their
charges be — knowing the MPCA will control this. More and more cities are providing
this up -front. EXAMPLE 2: If there are 200 lots, with three miles of roads and total
development costs are $13,000 per lot, what are their fees? I recognize that this is
nebulous, but we have to know what the City Engineer charges may be on this project.
We need a figure given a 15% margin of error; recognizing the development of lots over
three to four years. I know they hesitate to do this, however I do know that based on the
givens:
a. 200 residential lots;
b. Golf course; and
C. Privately owned sewer and water approved by MPCA (they would
be the governing factor).
A "not to exceed" figure could be given to us. Perhaps this is an area where the City
could "help". We are looking for a firm figure -- "not to exceed". On a development of
this magnitude, it can be done -- "as a guarantee" or "subject to", etc. We need this for
projections.
6. I need to know the City's timing. If we provide you a preliminary plat on a
given date, knowing it will carry restrictions from an EAW survey or MPCA approvals,
how long will the process take to get approval from the City? Subject to RAW, MPCA or
other necessary approvals, how long would it take to get the project through the usual
process?
a. Three months?
b. Four months?
C. Five months?
This means preliminary plat approval. We must know this to be accommodating our
Purchase Agreements on the land.
S0 ' d -ti101
Mayor Norman Freske
Page 4 of 4
February 15, 1996
I am sure this leaves out many details that must be answered in the future.
However, we must have answers to these questions — NOW! I do feel that these matters
can be addressed and resolved by the Council. We are requesting a reply by March 5,
1996. Please understand, we want very much to do this project. We presently have
approximately $30,000 invested, which is infinitesimal in relation to the future. We are
prepared to go forward. I am anxiously awaiting the City's answers and direction.
Thank you Mr. Mayor and all members of the City Council. Please give this
matter your most serious and immediate attention.
Sincerely,
Neal Perlich
NP/epw
02-21-1996 04:38PM FROM Radzwill & CouriLaw Offic TO 4418823 P.01
.c
Ylam S. Raizwiu RADZMLL & CO IRI
Andrew J. McArthur Attorney: at Law
Michael C. C uri 705 Central Avenue East
PO Bax 369
St. Michael, MN 55376
(6.12) 497=1930
(612) 497-2599 (FAX)
Post -It" brand fax transmittal Memo 7 1 +torp
TbFw
Febr ary 20, .1996
ICOL f�n,,-7 co.
City (Council Members r-_ `re miy voila
City of. Otsego
c/o TgJaine Beatty, City Clerk
8899 Nashua!Avenue NE
Elk iver, MN'55330
RE: roposed Wastewater Treatment P,Iant Neal Pe�rlichi
DearICouncil Members:
..Upon. review . of that, letter submitted. by. N.ea1•::P.er.li-�h :relative to
the council Workshop I believe the following issues need to be
addr ssed by the Council
1: D es the•Council.wish to consider a. franchised operation within.
the-. ity? As the= Council i$.: we.l-1 aware,...�other franchise agreements; i.::.
for ,nstartce cable, involve: rather complex agreements. In
' most.:.
case diose Agreexaents-'are• formula :agreements, in this. instance a
rgth' r
unique. agreement would have .-to be drafted including, but not • -
limi ed to the following items:
A. "Specific conditions as to how the: franchise wouldbe:
oilern ted such as responsibility for repair to the system and
rest ratioof City streets when work is done.
IB. A clear delineation of liability .between the parties.
Fran ise holder will clearly have to indemnify and defend the City
from any and all claims.
C: The cost of the franchise.
D. Terms and conditions under which the City would buy out or
ass e ' eohtra'l of the facilities.
E.
:Bond' or securityi provisionsi.to ensure.,oper;ation of the
�tia?n and mean up of any environmental or 'other .hazar• 3s . resulting -
i
i
02-21-1996 04:39PM FROM Radzwill & CouriLaw Offic TO
4418823 P.02
Letter to Otsego City Council
FebrIary 21, 1996
Page 2
from acts or failures to act of the franchisee.
F. Identification of who would be the franchisee, under what
Gond tions there could be assignment of rights under the agreement,
and what evidence of financial stabil4.ty need be.presented to the
City
G. What' form of organization is .proposed, to operate the
faci ity and. collect charges for services? If al Homeownerfs
Association is formed, for instance, what provisions will have to
be inserted in the controlling covenants to ensure Ithat the City
canake appropriate corrections and charge such costs back to the
responsible parties in the event of nonperformance?
H. The franchise holder will have to demonstrate adequate
insuance coverage in an amount acceptable to the City, including
Work is Compensation coverage and compliance with all. statutes and
rule that are required ofa business doing City.contract work.
II.. The contract (franchise) will need to clearly separate the
franchise operation from the City :for purposes of the open Meeting
Law, I-munic pal. bidding and other provisions, while allowing the
City adequate; oversight of the facility to insure that it is being
properly operated.
J. There would have to.be a determination as to who would be
designated the responsible supervisory person representing the City
and Who would. assume costs of periodic inspections and review of
any equired reports.
K.. There. would have to be a determination -of who would be
responsible for the costs incurred in drafting a proper Franchise
Agreement and; making necessary adjustments or .additions to City
ordi ances in order to effectuate the franchise.
The City has already established City utilities by ordinance which
prohibit hookup to alternative facilities in the event that City
util ties are available. Granting a franchise would require
amendments to the existing utility ordinances as well as drafting
a comprehensive franchise ordinance and agreements: which would
obviously cost some money. It should be noted that going back to
the rroposal previously made by the Darkenwalds, that there appear
to be no comparable agreements available within. the State of
Minnsota. Thus, the City would have to be very' careful in
patterning any agreement after an outstate franchise drafted under
diff4rent laws.
02-21-1996 04:40PM FROM Radzwill & CouriLaw Offic TO 4418823 P.03
Letter to Otsego City Council
February 21, 1996
Page
If.yo any 'other questions I will be available to attempt to
,IA have,an.
answer them at the scheduled workshop meeting on Februatry 22, 1996.
�Ieryrrely Yours
re F7 r ac r
RADZW is COURI
cc: L rry Koshak, HaXanson Anderson
b-Kirmis, NAC
—P -g --
Post -it" brand fax transmittal memo 767 of
From
-Co..
Co.
Dept.
Phone #
Ix #
Fax #
TOTAL P-03
Eg-08-1996 11:42 NRC 612 595 9937 P.02i06
FA C Northwest Associated Consultants, Inc.
C O M M U N I T Y PLANNING • DESIGN MARKET R E S E A R C H
MEMORANDUM
TO:
Otsego Mayor and City Council
FROM:
Bob Kirmis
DATE:
8 February 1996
RE:
Otsego - Perlich Development (Riverwood Golf Course)
FILE NO:
176.02 - 96.01
Attached please find a resolution applicable to the Perlich development request which
directs an amendment to the City's Comprehensive Plan. Specifically, the amendment
would:
1. Expand the Immediate Urban Service Area boundary to include the subject
property.
2. Change the suggested land use upon the subject property from Agricultural and
Low Density Residential to Low Density Residential.
In consideration of the resolution, please note that the directed land use change refers to
low density residential use rather than low/medlum density residential use as specifically
requested by the applicant. The reference solely to low density residential use reflects the
Planning Commission's recommendation on this matter.
Also note that the amendment is conditioned upon final project approval and finding of no
adverse environmental impact.
This item is scheduled for City Council resolution on 12 February.
PC: Elaine Beatty
Andy MacArthur
Larry Koshak
Neal Perlich
5775 Wayzata Blvd. • Suite 555 • St. Louis Park, MN 55416 • (612) 595-9636. Fax. 595-9837
FEB -9B-1996 11:43 NAC 612 595 9837 P.03i06
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO. 96 -
RESOLUTION APPROVING AN AMENDMENT TO THE OTSEGO COMPREHENSIVE
PLAN TO:
EXPAND THE IMMEDIATE URBAN SERVICE AREA BOUNDARY TO INCLUDE
THE PROPERTY LEGALLY DESCRIBED ON ATTACHED EXHIBIT A; AND
2. CHANGE THE SUGGESTED LAND USE UPON THE PROPERTY LEGALLY
DESCRIBED ON ATTACHED EXHIBIT A FROM AGRICULTURAL AND LOW
DENSITY RESIDENTIAL TO LOW DENSITY RESIDENTIAL.
WHEREAS, the owners of certain tracts of land (subject property) described on
attached Exhibit A of this resolution, and consisting of approximately 335 acres, desire to
construct low and/or medium density residential dwellings upon the property in conjunction
with an 18 hole golf course; and
WHEREAS, the proposed low and/or medium density residential dwellings are to
be served by a "package' sewage treatment system; and
WHEREAS, the developer has represented to the City that the area can be
reasonably serviced by such "package" sewage treatment system; and
WHEREAS, the subject property currently overlays portions of the Rural Service
Area and Long Range Urban Service Area; and
WHEREAS, the City's Comprehensive Plan (Land Use Plan) currently suggests
agricultural use (south of County Road 39) and low density residential use (north of County
Road 39) of the subject property; and
WHEREAS, the proposed land use has necessitated an amendment to the City's
Immediate Urban Service Area boundary and Land Use Plan, as provided in the City's
Comprehensive Plan; and
WHEREAS, the Planning Commission has Considered the requested
Comprehensive Plan amendment and recommended conditional approval; and
WHEREAS, the proposed `package" sewage treatment plant may at some future
point serve existing development in the area and address existing environmental concems;
and
WHEREAS, upon preliminary review, the lands do not qualify as premature
development In that:
a. The land holds adequate storm water drainage capacity.
b. The land has a safe water supply.
c. Adequate roads serve the property.
d. The site holds the ability to accommodate a safe sewage disposal system.
NOW, THEREFORE, THE CITY OF OTSEGO RESOLVES AS FOLLOWS:
The City Comprehensive Plan be hereby amended to:
A. Expand the Immediate Urban Service boundary to include the subject
property legally described on attached Exhibit A.
B. Change the suggested land use of the subject property legally described in
attached Exhibit A from agricultural and low density residential to
low density residential use
The aforementioned Contprehensive Plan amendment is approved subject to the
following conditions:
A. All approvals as deemed necessary by the State, County and City are
obtained for a development substantially similar to that described in the
Northwest Associated Consultants Inc. report dated 10 January 1996.
A determination is made by the City that the proposed use will have no
adverse environmental impacts (i.e., storm water, water supply, sewage
disposal, etc.).
3. The text of the Comprehensive Plan and all maps showing the subject area are
appropriately adjusted to describefillustrate the Immediate Urban Service Area and
land use changes.
4. The Northwest Associated Consultants, Inc. staff report dated 10 January 1996 is
incorporated herein by reference.
TOTAL P.02
FES -06-1996 11:44 NRC 612 595 9937 P.05i06
PASSED this day of 1996.
CITY OF OTSEGO
By:
Norman F. Freske, Mayor
By:
Elaine Beatty, Deputy Clerk/Zoning Administrator
FEB -08-1996 11:44 NAC 612 595 9837 P.06i06
LEGAL DESCIPTION:
The NW 1/4 of the NWI/4 and the SWIM of the NW 1/4, and the SEIM of the NW 1/4,
and the South Half of the NEI/4 of the NWI/4 of Section 14, Township 121, Range 24
and
The NW 1/4 of the SWIM. and the SWIM of the SWIM. and the West Half of the NEI/4
of the SWIM, and the West Half of the SEIM of the SWIM of the NW 1/4 of Section 14,
Township 121, Range 24,
and
The NW I/4 of the MVI/4, and the NEI/4 of the NW 1/4, and the North Half of the SWIM
of the NW i/4 of Section 23, Township 121, Range 24
all lying within the City of Otsego, County of Wright, Minnesota
EXHIBIT A
TOTAL P.06