ITEM 3.5 Igloo Utility Fees'01
OtCI�egoF
MINNESOTA CDP
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Planning
City Planner Licht
9 February 2015
PRESENTER(s):
REVIEWED BY:
ITEM #:
Consent
City Administrator Johnson
3.5 — Igloo Utility Fees
City Attorney MacArthur
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff recommends approval of an agreement regarding utility charges applicable to the Igloo Bar
and Restaurant to be located at 15850 87th Street NE.
ARE YOU SEEKING APPROVAL OF A CONTRACT? I IS A PUBLIC HEARING REQUIRED?
Yes. I No.
BACKGROUND/JUSTIFICATION:
The Igloo Restaurant and Bar is under construction with a planned restaurant, bar and indoor ice rink
facility at 15850 87th Street NE within the Great River Centre. Sanitary sewer and water utility charges
are due for the build out of the space in accordance with the Chapter 6, Section 1 of the City Code. City
staff calculated the following utility charges based on the submitted building plans:
Utility Charges
REC Calculation
Proposed
RECS
Utility
Fees
Availability/
Due
Connection
Charges
Restaurant
1 REC/ 10 seats
166 seats
16.6
$11,930/REC
$249,377
Ice
4 REC / Ice Resurfacer
Ice resurfacer
4.0
(2014)
1 REC / 17 fixture
5 fixtures
0.3
units
The business owner also wants to have the ability to clear the tables for live music events. Utility
charges for such a facility would be substantially higher and based on the building code occupancy limit
of 749 persons. To this end, the City Attorney has drafted an agreement that would allow the business
up to 10 events per calendar year where the restaurant would be cleared of tables to increase capacity
up to 749 persons. The business owner is required to provide advance notice to City staff of each
event.
The business owner is also requesting that the utility fees be assessed. The agreement drafted by the
City Attorney would assess the utility fees for 7 years at 4.5% interest, which is 1.5 percent above the
largest bond the City has issued for the sewer and water utility systems consistent with City assessment
policy. The assessment will be against the property to insure payment and the property owner will be
required to consent to the assessment as a signatory to the agreement drafted by the City Attorney.
SUPPORTING DOCUMENTS: ❑ ATTACHED ❑ NONE
A. Draft agreement
POSSIBLE MOTION
Please word motion as you would like it to appear in the minutes.
Motion to approve an agreement between the City of Otsego and the Igloo LLC D/B/A Igloo Bar and
Restaurant regarding utility fees for facilities at 15850 87th Street NE, Otsego.
BUDGET INFORMATION
FUNDING: I BUDGETED: ❑ YES
NA
ACTION TAKEN
❑ NO
❑ APPROVED AS REQUESTED ❑ DENIED ❑ TABLED ❑ OTHER (List changes)
COMMENTS:
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
AGREEMENT BETWEEN THE CITY OF OTSEGO AND THE IGLOO
LLC D/B/A IGLOO BAR AND RESTAURANT REGARDING UTILITY
FEES FOR FACILITIES AT 15850 87" STREET NE, OTSEGO
AGREEMENT entered into this day of February, 2015 between the City of
Otsego (CITY), a Minnesota municipal corporation and The Igloo LLC, a
Minnesota Limited Liability Company, DB/A, IGLOO Bar and Restaurant
(IGLOO).
WHEREAS, IGLOO, on behalf of property owner OTSEGO GRC, LLC, has
applied for a building permit to construct facilities for restaurant use at 15850 87th
Street NE within CITY; and
WHEREAS, said construction as indicated on the plans dated September 17,
2014includes 5,412 square feet of floor area to be used as a restaurant and bar and
8,375 square feet to be used as a recreational activity (hockey) area; and
WHEREAS, CITY currently has in place Utility Fees which include Water
Availability Charges, Water Connection Fees, Sewer Availability Charges and
Sewer Connection Fees which are charged to users based upon Residential
Equivalent Connections (RECS) as determined by CITY as provided for by
Chapter 6, Section 3 of the Otsego City Code; and
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WHEREAS, CITY has calculated total utility fees at current rates for the building
expansion at 20.9 RECs, for a total amount of $249,000.00; and
WHEREAS, IGLOO has indicated that at this time they are going to provide 166
restaurant seats, which would result in 16.6 RECs as well as 4.0 RECs for an ice
resurfacer and 0.3 RECs for 5 fixture units for a total of 20.9 RECs at $11,930.00
per REC for total utility cost of $ 249,000.00 which includes both Availability
Charges and Connection Charges.
NOW, THEREFORE IT IS AGREED BETWEEN THE PARTIES as follows;
1. CITY agrees that at the time a building permit is issued for the bar and
restaurant as currently contemplated total utility fees for the proposed
restaurant and facility will be 20.9 RECS, in the total amount of
$249,000.00 which includes Availability Charges and Connection Fees.
2. IGLOO and the property owner OTSEGO GRC, LLC hereby petition the
CITY to assess the above listed Availability Charges and Connection Fees
in the total amount of $249,000.00 against the property at 15850 87th Street
NE (PID No. 118-239-001030 ) for a period of seven (7) years at an interest
rate of 4.5 % per annum commencing with taxes payable in 2016.
IGLOO and the property owner OTSEGO GRC, LLC on behalf of both of
them, their heirs, assignees or successors in title do hereby waive any and
all hearings, irregularities in procedure and any right of appeal of any
nature, including the right to appeal the assessment under Minnesota
Statute 429.081, common law or the Minnesota Constitution. Both IGLOO
and OTSEGO GRC, LLC agree that the property is benefited in at least the
amount of the assessment.
4. In the event of future expansion of the facility utility fees shall be paid at
the time that any additional seats are provided in a pro -rated basis based
upon the number of seats added as determined by CITY. Additional City
utility fees shall be adjusted based upon the City fees in force and effect at
the time the seating is expanded.
5. IGLOO shall be responsible for immediately contacting the CITY to make
additional payment when seats are added. CITY reserves the right to
periodically inspect the premises regarding the number of seats being
provided in the build out area. Additional payments are immediately due to
CITY, which may add interest at the rate of 6% per annum to any amount
Pa
not timely paid (within 30 days) as well as City administrative costs,
Planning fees, Engineering fees or Legal fees.
6. In the event that IGLOO fails to make timely payment of any additional
utility fees owed, IGLOO agrees that, at the direction of the CITY, it will
immediately terminate any service or seating for which it has not paid the
allocated utility fees. In the event that CITY must take legal or other action
to enforce this Agreement, IGLOO shall be liable to CITY for any costs
incurred by the CITY in enforcement including, but not limited to,
Administrative costs, Planning fees, Engineering fees and legal fees and
costs.
7. IGLOO and OTSEGO GRC, LLC do hereby waive any and all claims or
causes of action against the CITY, of whatever nature, related to this
Agreement unless caused by the willful, wanton or intentional misconduct
of the CITY or anyone acting on behalf of the CITY.
8. To the fullest extent permitted by law, IGLOO agrees to defend, indemnify
and hold harmless CITY, and its employees, officials, and agents from and
against all claims, actions, damages, losses and expenses, including
attorney fees, arising out of IGLOO's performance or failure to perform its
obligations under this Agreement. IGLOO agrees this indemnity obligation
shall survive the completion or termination of this Agreement.
9. As additional remedies, and at the sole discretion of CITY, CITY may
assess any amounts not paid to the CITY against the real property or may
lien the property. In the event that CITY determines that an unpaid amount
shall be assessed against the real property, IGLOO and the property owner,
OTSEGO GRC, LLC, agree to any such assessment in the amount
determined by CITY and waive any hearings, any irregularities in
procedure, and any appeal of the assessment including the right to appeal
under Minnesota Statute 429.081.
10. IGLOO shall be allowed to clear tables from the restaurant and utilize the
building to a capacity not to exceed 749 persons up to ten (10) times per
year. IGLOO shall notify the CITY prior to any of these events. In the
event that IGLOO violates this specific paragraph CITY may, at its sole
discretion, impose additional restrictions on the number of such events
allowed per year.
11. This Agreement may not be amended except by written Agreement of all
parties.
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12. In the event that any portion, sentence, paragraph or clause of this
Agreement is held to be invalid by a court of competent jurisdiction the
remainder of the Agreement shall be modified and interpreted to be as close
as possible to the original intent of the Parties.
Dated:
CITY OF OTSEGO
Jessica Stockamp, Mayor
Tami Loff, City Clerk
Dated:
THE IGLOO LLC
By:
Its
CONSENT
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OTSEGO GRC, LLC as owner of the real property identified in this Agreement,
15850 87th Street NE, Otsego, Minnesota, hereby consents to and agrees to be
bound by the terms and conditions of this Agreement.
Dated:
OTSEGO GRC, LLC
By: James R. Anderson
Its: Operating Manager