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ITEM 3.11 Kwik Trip CUPOtsTY.F o MINNESOTA V DEPARTMENT INFORMATION Request for City Council Action ORIGINATING DEPARTMENT: REQUESTOR: MEETING DATE: Planning I Citv Planner Licht 1 22 June 2015 PRESENTER(s): Consent Agenda AGENDA ITEM DETAILS REVIEWED BY: City Administrator Johnson City Attorney MacArthur ITEM #: 3.11 Kwik Trip CUP RECOMMENDATION: City staff recommends approval of the development agreement for Kwik Trip, Inc. to develop Lot 1, Block 1, Riverbend South. ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED? Yes. No. BACKGROUND/JUSTIFICATION: The City Council, at their meeting on 8 June 2015, approved a conditional use permit for Kwik Trip, Inc. to develop a convenience store with motor fuel sales, commercial car wash and truck stop facilities. The approval was subject to conditions outlined in the Findings of Fact and Decision and included the requirement that the developer enter into a development agreement with the City accordance with Section 20-4-7 of the Zoning Ordinance, subject to review by the City Attorney and approval of the City Council. The City Attorney drafted the development agreement and forwarded it to the applicant for review and comment. The applicant has provided comments to the City Attorney that are minor in nature and have been incorporated as part of the document attached hereto. SUPPORTING DOCUMENTS: n ATTACHED ❑ NONE A. Resolution 2015-34 POSSIBLE MOTION Please word motion as you would like it to appear in the minutes. Motion to adopt Resolution 2015-34 adopting a development agreement with Kwik Trip, Inc. regarding development of Lot 1, Block 1 Riverbend South. RllnrrFT INFORMATION FUNDING: BUDGETED: ❑ YES ❑ NO NA ACTION TAKEN ❑ APPROVED AS REQUESTED ❑ DENIED ❑ TABLED ❑ OTHER (List changes) COMMENTS: CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO. 2015-34 RESOLUTION APPROVING DEVELOPERS AGREEMENT LOT 1, BLOCK 1, RIVERBEND SOUTH- KWIK TRIP WHEREAS, Kwik Trip, Inc. has an approved Conditional Use Permit (CUP) for LOT 1, BLOCK 1 RIVERBEND SOUTH, and WHEREAS, the approved CUP requires construction of some public t improvements on LOT 1, BLOCK 1 and OUTLOT A and payment of City costs and fees as well as placing certain restrictions on the development; and WHEREAS, those obligations are contained and memorialized in the attached Developers Agreement; and WHEREAS, the Developers Agreement also sets forth the security required to assure satisfactory construction of public improvements and establishes the various remedies available to the City in the event that Developer breaches the terms and conditions of the Agreement. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Otsego, Wright County, Minnesota as follows; 1. The attached Developers Agreement between the City of Otsego and Kwik Trip, Inc. is hereby approved, subject to Staff approved changes. 2. The Mayor and City Clerk are hereby authorized to execute the Developers Agreement on behalf of the City of Otsego. ADOPTED this 22nd day of June, 2015 by the City Council of Otsego. MOTION TO ADOPT the Resolution by Council Member and seconded by Council Member IN FAVOR: OPPOSED: CITY OF OTSEGO Jessica Stockamp, Mayor Tami Loff, City Clerk 2 DEVELOPMENT AGREEMENT LOT 1, BLOCK 1, RIVERBEND SOUTH THIS AGREEMENT, entered into this day of June, 2015 by and between the CITY OF OTSEGO, a Minnesota municipal corporation ("CITY") and KWIK TRIP, INC., a corporation under the laws of the State of ("DEVELOPER") RECITALS WHEREAS, DEVELOPER has proposed construction of a convenience store with motor fuel sales, truck stop and commercial car wash to be constructed on the following described property; LOT 1, BLOCK 1, RIVERBEND SOUTH according to Plat on file and of record at the Office of the County Recorder, Wright County, Minnesota; and WHEREAS, DEVELOPER is the fee owner the parcel of land described as LOT 1, BLOCK 1, RIVERBEND SOUTH which lot measures approximately 5.88 acres; and WHEREAS, the Final Plat of RIVERBEND SOUTH and the lot are ` subject to a Conditional Use Permit ("CUP") adopted by the City Council on June 8, 2015; and WHEREAS, the building and improvements on LOT 1, BLOCK 1 and OUTLOT A shall be constructed, maintained and operated in accordance with the approved CUP; and NOW THEREFORE, in consideration of the promises and mutual promises hereinafter contained, it is agreed between the parties as follows: 1. Development Plans. The convenience store with motor fuel sales, truck stop, commercial car wash and improvements shall be developed on LOT 1, BLOCK 1 and OUTLOT A in accordance with the plans the cover sheet of which is attached to this Agreement as Exhibit A dated , 2015 and signed by the City Engineer on file and of record at CITY and herein fully incorporated herein by reference and the conditions stated below (hereinafter the "Building Development Plans"). If the Building Development Plans vary from the written terms of this Agreement, the Building Development Plans shall control. 2. Municipal Improvements. The Building Development Plans include certain Municipal Improvements as set forth on the attached Exhibit B. 3. Private Improvements. The DEVELOPER agrees that it shall cause to be constructed and installed certain private improvements ("Private Improvements") on LOT 1, BLOCK 1. All Private Improvements are to be installed at DEVELOPER'S sole cost and expense pursuant to this Agreement and the private improvements to LOT 1, BLOCK 1 shall include those improvements shown on the Building Development Plans. DEVELOPER shall construct such Private Improvements in accordance with all applicable building codes, ordinances and CITY standards and the Building Development Plans furnished to the CITY and approved by the City Engineer. The DEVELOPER shall obtain all necessary permits before construction of the Building. CITY shall provide adequate field inspection personnel to assure acceptable quality control, which will allow certification of the construction work. Within thirty (30) days after the completion of Building and before any security is released, the DEVELOPER shall supply the CITY with a complete set of reproducible "as built" plans and two (2) complete sets of blue line "as built" plans prepared in accordance with CITY standards. 2 4. Grading, Landscaping and Drainage. The DEVELOPER shall be responsible for grading, landscaping and storm water management on the Subject Property as more fully set forth in this Agreement and as for LOT 1, BLOCK 1 and OUTLOT A only the Building Development Plans and Landscaping Plan. A. Landscaping. DEVELOPER shall maintain the sod and landscape of boulevard areas adjacent to LOT 1, BLOCK 1 and OUTLOT A as shown in the Building Development Plans through at least one growing season and to the satisfaction of CITY. The long term maintenance of sod and landscaping of boulevard areas shall be the responsibility of DEVELOPER. Further, DEVELOPER shall be responsible for mowing, elimination of weeds and removal of any garbage or debris on LOT 1, BLOCK 1. B. DEVELOPER shall comply with the approved Landscaping Plan and conditions of the approved CUP. C. Erosion Control. The erosion control plan for LOT 1, BLOCK 1 and OUTLOT A within the Building Development Plans has been reviewed and approved by CITY and shall be implemented by DEVELOPER prior to grading of LOT 1, BLOCK 1 and OUTLOT A. All areas disturbed by the excavation and backfilling operations shall be reseeded forthwith after completion of work in that area. If DEVELOPER does not comply with the erosion control plan and schedule or any erosion control requirements, CITY may, with reasonable notice, take action as it deems appropriate in accordance with all applicable laws, ordinances or regulations or according to this Agreement. D. Grading Plan. Grading of LOT 1, BLOCK 1 and OUTLOT A shall be in accordance with the approved Grading Plan as provided in the Building Development Plans. 5. Pre -Construction Activity. DEVELOPER shall schedule a pre - construction meeting with CITY to review the proposed schedule for grading and construction of the building and related improvements as set forth on the Building Development Plans, and to coordinate the schedule with the City Engineer. 6. Ownership of Improvements. Upon completion of the work and construction required by this Agreement, improvements lying within public easements on the Subject Property shall become CITY property 3 without further notice or action, except that those streets, which will be maintained as private drives shall remain under DEVELOPER's ownership subject to any and all necessary easements, including necessary ingress and egress access to future and existing lots. 7. Clean Up. DEVELOPER shall promptly clean any and all dirt and debris from streets resulting from construction work by DEVELOPER, its agents or assigns during the work and construction required by this Agreement. 8. Administrative Fee. A fee for CITY administration of the development is one (1%) percent of estimated construction costs or $1,500.00. 9. Park and Trail Dedication. Park and Trail dedication requirements for LOT 1, BLOCK 1 have been satisfied with the approval of RIVERBEND SOUTH. 10. Storm Water Fees, and Storm Water Basin. No Storm Water Fees are applicable to LOT 1, BLOCK 1. Pursuant to MPCA updated requirements for infiltration, DEVELOPER shall construct on adjacent CITY property (OUTLOT A, RIVERBEND SOUTH) an additional storm water basin for purposes of meeting the updated requirements. 11. Sewer Availability Charges. The Sewer Availability Charges for LOT 1, BLOCK 1 are as follows: None. 12. Sewer Connection Fees. Sanitary sewer connection fees are paid at the time of issuance of a building permit. The sewer connection fees shall be determined at the time that building plans are submitted and reviewed by CITY. 13. Water Availability Charges. The Water Availability Charges for LOT 1, BLOCK 1 are as follows: None. 14. Water Connection Fees. Water connection fees are paid at the time of issuance of a building permit. The water connection charges shall be determined at the time that building plans are submitted and reviewed by CITY. 15. Street and Traffic Control Sign Fees. The fee amount for the Subject Property was calculated as follows: 2 signs at $250.00 per sign or $500.00. Using these funds, CITY shall purchase and install the street and traffic control signs. in 16. CITY Engineering, Engineering Administration, Construction Observation, and Legal Fee Escrow and City Fees. DEVELOPER shall pay escrow for the CITY'S engineering, engineering administration and construction observation services of Municipal Improvements as set forth on Exhibit C, following execution of this agreement, in the estimated amount set forth below. City engineering 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 service estimated to be three percent (3%) of the estimated construction cost of the improvements to be inspected, assuming normal construction and project scheduling. 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 the Municipal Improvements and will be billed at hourly rates actually required for said inspection 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, CITY will notify DEVELOPER of anticipated cost overruns for engineering administration and observation services. The Escrow and Fee account shall include estimated escrow for City Engineering, Engineering Administration and Construction Observation limited to the Municipal Improvements expenses and Legal expenses, and fees for City Administrative, Street and Traffic Control Signs, Water and Sewer Availability Charges as follows: ESCROW City Construction Administration and Inspection Escrow $11,950.00 (estimated 8% of $149,350.00, actual billings to be paid) Legal Fees (actual billings to be paid) $1,500.00 FEES City Administration Fees (flat fee) $1,500.00 Street & traffic control sign Fees (2 at $250.00 per sign) $500.00 5 Sewer Availability Charge $0.00 Water Availability Charge $0.00 GIS Data Entry Fee (6.42 Ac x $110/ acre) $642.00 TOTAL $16,092.00 These Escrow and Fee amounts shall be submitted to CITY prior to CITY executing this Agreement. Any Escrow amounts not utilized for legal and engineering charges incurred by the City under this Agreement shall be returned to DEVELOPER when all improvements have been completed, all financial obligations to CITY satisfied, and all required "as -built " plans have been received by CITY. Engineering, planning and legal fees incurred prior to the execution of this Agreement shall be deducted from escrow already submitted with the Plat application or charged against the escrow herein established. All other amounts listed as one-time fees are non-refundable and available immediately for CITY use when posted. 17. Security. To ensure compliance with the terms of this Agreement, and construction of all Municipal Improvements, DEVELOPER shall furnish CITY with a cash escrow or Irrevocable Standby Letter of Credit in the amount of $329,322.19, said amount calculated as follows: Site Grading, Erosion Control & Wetland Protection Sanitary Sewer- Lateral Watermain- Lateral Storm Sewer- Infiltration Pond Streets Engineering & Surveying Construction Services Landscaping SUBTOTAL 2 $19,200.00 $21,000.00 $28,350.00 $25,000.00 $75,000.00 $14,907.75 $80,000.00 $263,457.75 TOTAL SECURITY (x 125%) $329,322.19 The issuer and form of the security (other than cash escrow) shall be subject to CITY approval, which approval shall not be unreasonably withheld. The security shall be issued by a banking institution in good standing as determined by CITY and approved by the City Administrator. CITY shall have the ability to draw on the Security by overnight courier delivery to the bank or branch bank issuing the Letter of Credit. The security shall be for a term ending July 1, 2016 and shall contain an automatic renewal provision. CITY may draw down the security for any violation of the terms of this Agreement, or upon receiving notice of the pending expiration of the security. It shall be the responsibility of DEVELOPER to inform CITY at least thirty (30) days prior to expiration of the security of the impending expiration and the status of the Project relative to the security and this Agreement. If, for whatever reason, the security lapses prior to complete compliance with this Agreement (other than during any warranty period), DEVELOPER shall immediately provide CITY with either an extension of the security or an irrevocable letter of credit of the same amount upon notification of the expiration. If the required improvements are not completed at least thirty (30) days prior to the expiration of the security, CITY may also draw down the security. CITY may draw down the security for any violation of the terms of this Agreement (after any reasonable notice to DEVELOPER and cure periods). If the security is drawn down, the proceeds shall be used to cure any default. CITY will, upon making determination of final costs to cure any default, refund to the DEVELOPER any monies which CITY has in its possession which are in excess of the security needed. Upon receipt of proof satisfactory to CITY that work has been completed and financial obligations to CITY have been satisfied, the security will be reduced from time to time down to the amount of warranty security as set forth in paragraph 18 of this Agreement. The security shall not be reduced below ten percent (10%) of the posted security until all improvements have been completed, all financial obligations to CITY satisfied (which includes posting of warranty security), and required "as built" plans have been received by CITY. The intent of this Agreement that CITY shall have access to sufficient 11 security, either security or warranty security, to complete the Project and insure warranty on all public improvements. The security amount shall be submitted to CITY prior to execution of the Agreement. 18. Warranty. DEVELOPER warrants all work required to be performed by it against poor material and faulty worinnanship for a period of one (1) year after its completion and acceptance by CITY. The amount of posted security for public improvements to be posted by DEVELOPER shall be in the amount of $27,112.50. The amount has been determined by the City Engineer and is based upon the costs of the raw materials and labor which would be necessary to correct the most common deficiencies in the public improvements. 19. Restrictions. The following restrictions apply to the Subject Property and all lots thereon shall be held, sold, and conveyed subject to the following conditions and restrictions, which are for the purpose of protecting the value and desirability of the Plat and insuring all conditions imposed by CITY in this Agreement are properly recorded against the Final Plat. Said conditions shall run with the real property and be binding upon all parties having a right, title or interest in the Subject Property or any part thereof, their heirs, executors, representatives, successors and assigns: A. DEVELOPER shall comply with all road improvements required by Wright County on CSAH 37. B. DEVELOPER shall comply with all other terms and conditions of the approved CUP. 20. Responsibility for Costs. A. Except costs for Developer's Internal Improvements, DEVELOPER shall pay all costs incurred by it or CITY in conjunction with the development of the Plat and building, including, but not limited to legal, planning, engineering, and inspection expenses in connection with the development and said Building. B. DEVELOPER shall hold CITY and its officers, employees and agents harmless from claims made by itself and third parties for damages sustained or costs incurred resulting from DEVELOPER's acts or failures to act in connection with development of the Subject Property by DEVELOPER. DEVELOPER shall indemnify CITY and its officers, employees and agents for all costs, damages or expenses which CITY may pay or incur in consequence of such claims, including attorney's fees. C. DEVELOPER shall reimburse CITY for costs incurred in the enforcement of this Agreement, including engineering fees, planning fees, attorney's fees, and costs and disbursements. CITY shall reimburse DEVELOPER for costs incurred in the enforcement of this Agreement, including engineering fees, attorney's fees, and costs and disbursements. D. DEVELOPER shall pay in full all bills submitted to it by CITY for obligations incurred under this Agreement and agreed to be paid by DEVELOPER under this Agreement within thirty (30) days after receipt. If the bills are not paid on time, and DEVELOPER does not reasonably dispute the payment of amount of such bill CITY may either reimburse itself from existing Escrow or Security or may halt all Building development work and construction until all bills are paid in full. Bills not paid within thirty (30) days shall accrue interest at the rate of twelve percent (12%) per year. 21. Miscellaneous. A. Third parties shall have no recourse against CITY under this Agreement. B. If any portion, section, subsection, sentence, clause, paragraph or phrase of this Agreement is for any reason held invalid, such decision shall not affect the validity of the remaining portion of this Agreement. C. The action or inaction of CITY or DEVELOPER shall not constitute a waiver or amendment to the provisions of this Agreement. To be binding, amendments or waivers shall be in writing, signed by the parties and approved by written resolution of the City Council. CITY's or DEVELOPER's failure to promptly take legal action to enforce this Agreement shall not be a waiver or release. D. This Agreement shall run with the land, shall be recorded against the title to the Subject Property, and shall be binding on all parties having any right, title or interests in the Subject Property or any part thereof, their heirs, successors and assigns. E r E. Each right, power or remedy herein conferred upon CITY or DEVELOPER is cumulative and in addition to every other right, power or remedy, express or implied, now or hereafter arising, available to CITY or DEVELOPER, 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 and in such order as may be deemed expedient by CITY or DEVELOPER and shall not be a waiver of the right to exercise at anytime thereafter any other right, power or remedy. F. DEVELOPER shall pay for all local costs related to drainage improvements required to complete the construction of the Plat and building according to the Building Development Plans. Local costs are costs related to required internal drainage improvements such as retention ponds. G. Should development of the Plat or building proceed at a pace slower than anticipated, and for that reason, specific terms of this Agreement become onerous or unduly burdensome to DEVELOPER, upon DEVELOPER's application, CITY will enter into negotiations regarding those specific terms and shall not unreasonably withhold consent to appropriate changes in the terms of this Agreement. H. DEVELOPER shall demonstrate and maintain compliance with the 1991 Wetland Conservation Act. DEVELOPER shall be responsible for all on site drainage for the Subject Property, as well as for any affects their actions may have on adjoining properties. 22. Violation of Agreement. If while the escrow or security provided in this Agreement is outstanding, a violation of any of the covenants or agreements herein contained occurs and such violation is not cured within thirty (3 0) days after written notice thereof from CITY to DEVELOPER, CITY may draw upon the DEVELOPER's escrow or security to cure any violation of the Agreement and to reimburse CITY for any costs incurred in curing the violation. 23. Maintain Public Property Damaged or Cluttered During Construction. DEVELOPER agrees to assume full financial responsibility for any damage which may occur to public property 10 including, but not limited to , street, street sub -base, base, bituminous f surface, curb, utility system including, but not limited to, watermain, sanitary sewer or storm sewer when said damage occurs as a result of construction activity which takes place during development of the Subject Property by DEVELOPER or its contractors, except for damage caused by CITY, its employees, agents or contractors. DEVELOPER further agrees to pay all costs required to repair the streets and/or utility systems damaged or cluttered with debris when occurring as a direct or indirect result of the Developer's construction that takes place on the Subject Property. In the event that DEVELOPER is required to maintain or repair such damage and fails to maintain or repair the damaged public property referred to aforesaid within thirty (30) days after written notice from CITY or such longer period as may reasonably necessary or in the event of an emergency as shorter time period as determined by CITY, CITY may, upon notifying DEVELOPER undertake making or causing it to be repaired or maintained. When CITY undertakes such repair, DEVELOPER shall reimburse CITY for all its reasonable expenses within thirty (30) of its billing to DEVELOPER. If DEVELOPER fails to pay said bill within thirty (30) days, the security shall be responsible for reimbursing CITY. 24. Non -Assignment Without Consent. The obligations of DEVELOPER under this Agreement may be assigned by DEVELOPER if the assignment is approved by CITY. However, DEVELOPER shall not be released from its obligations under this Agreement without the express written consent of the City Council through Council resolution. 25. Subordination. This Agreement must be recorded against the Subject Property and all other liens, interests or mortgages shall be subordinate to the terms and conditions this Agreement and said Agreement shall not be subject to foreclosure by any other lien, interest or mortgage. 26. Notices. Required notices to DEVELOPER shall either hand delivered to DEVELOPER, it employees or agents, or mailed to DEVELOPER by registered mail or sent by overnight delivery at the following address: Notice to CITY shall be in writing and shall be either hand delivered to the City Clerk or Deputy City Clerk or mailed by registered mail or sent by overnight delivery at the following address: City of Otsego, City Hall, 13400 90th Street NE, Otsego, MN 55330, Attention: City Clerk. 11 27. Agreement Effect. This Agreement shall be binding and extend to the respective representatives, heirs, successors and assigns of the parties hereto. 28. Amendment. This Agreement shall be amended only by addendum executed by both parties to this Agreement. 12 IN WITNESS WHEREOF, DEVELOPER and CITY have executed this Agreement as of the day and year above first written. CITY OF OTSEGO, A municipal corporation Jessica Stockamp, Mayor Tami Loff, City Clerk KWIK TRIP, INC. A corporation By: Its 13 STATE OF MINNESOTA) ss. COUNTY OF WRIGHT ) On this day of February, 2015 before me personally appeared Jessica Stockamp and Tami Loff to me known as the persons described in the foregoing instrument and who did say they are, respectively, the Mayor and City Clerk of the municipal corporation named therein and that said instrument was signed on behalf of said municipal corporation by authority of its City Council and said Jessica Stockamp and Tami Loff acknowledged said instrument to be the free act and deed of said municipal corporation. NOTARY PUBLIC STATE OF MINNESOTA) ss. COUNTY OF WRIGHT ) On this day of February, 2015, before me personally appeared to me known as the person described in the foregoing instrument and who did say he is the of KWIK TRIP, INC, and that said instrument was signed on behalf of KWIK TRIP, INC. with authority and on behalf of the company and said acknowledged said instrument to be the free act and deed of said entity. NOTARY PUBLIC DRAFTED BY: MACARTHUR LAW OFFICE 3601 Thurston Avenue North Suite 103 Anoka, MN 55303 763-231-5850 14 EXHIBIT A DEVELOPMENT PLANS FOR THE SUBJECT PROPERTY Building Development Plans for LOT 1, BLOCK 1, RIVERBEND SOUTH by Loucks Associates dated , 2015 and approved by CITY , 2015, cover sheet attached. 15 EXHIBIT B- MUNICIPAL IMPROVEMENTS Watermain, Sanitary Sewer, Storm Sewer and Pond. 16