CITY OF CLEAR LAKE, MINNESOTA
DEVELOPMENT AGREEMENT
This Development Agreement (“Agreement”), dated , 2005, is by and between the City of Clear Lake, a Minnesota municipal corporation, (“City”), and AR Financial, LLC (the “Developer”).
1.Request for Plat Approval. The Developer has asked the City to grant final approval of a plat for a residential subdivision called Parkside, which is referred to in this Agreement as "the Plat”. The Plat is planned for single family dwelling and townhome use, and is zoned PUD-R-2 Residential under the City Zoning Ordinance in conformance with the preliminary plat, plans, terms, and conditions recommended by the City staff and approved by the Clear Lake City Council. The legal description for the land proposed for the Plat is attached hereto and incorporated herein as "Exhibit A". This Agreement applies to all the property in the Plat.
2.Conditions of Plat Approval. The City hereby grants final approval of the Plat subject to the conditions that the Developer enter into this Agreement, furnish a letter of credit security in a form acceptable to the City, and record the Plat with the Sherburne County Recorder within 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, remove trees, construct sewer lines, water lines, streets, utilities, public or private improvements, or any buildings, until all the following conditions have been satisfied: 1) this Agreement 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 final Plat and this Agreement have been approved by the City and recorded with the Sherburne County Recorder’s Office; and 4) the City has issued a letter to the Developer that all conditions have been satisfied and that the Developer may proceed.
4.Changes in OfficialLand Use Controls. For two (2) years from the date of this Agreement, no amendments to the City’s Comprehensive Plan or official land use controls shall affect the use, development density, lot size, lot layout, or dedications of the final Plat unless required by state or federal law or agreed to in writing by the City and the Developer. Thereafter, notwithstanding anything in this Agreement to the contrary, to the full extent permitted by state and federal law, the City may require compliance with any amendments to the City’s Comprehensive Plan, official controls, and platting or dedication requirements enacted after the date of this Agreement.
5.Development Plans. The Plat shall be developed in accordance with Development plans attached to this Agreement and the conditions stated below. If the plans vary from the written terms of this Agreement, the written terms shall control. The development plans are attached and incorporated herein as follows:
Exhibit A:Preliminary Plat.
Exhibit B:Site Plan.
Exhibit C:Landscape Plan.
Exhibit D:Grading, Drainage, and Erosion Control Plan.
Exhibit E:Utility Plan.
Exhibit F:Final Plat.
6.Improvements. The Developer shall install and pay for the following services and improvements for the Plat “Improvements”:
A. Sanitary Sewer System
B.Water System
C.Storm Sewer System
D.Streets
E.Concrete Curb and Gutter
F.Street Lights
G.Site Grading, Water Retention Ponds, and Erosion Control
H.Underground Utilities
I.Setting of Iron Monuments
J.Surveying and Staking
K.Outlet Green Areas
L.Accesses to Outlots
M.Preparation of preliminary and final plats.
The City represents that it has sufficient sanitary sewer and water capacity to provide such services to the final Plat, but provides no assurances that sanitary sewer and water capacity will be available for any approved preliminary plats or future final plats that may be sought by the Developer.
7.Installation of Improvements. The above Improvements shall be installed in accordance with the City zoning and subdivision ordinances; City standard specifications for utilities and street construction; and any other applicable ordinances and regulations. The Developer shall submit plans and specifications which have been prepared by a competent registered professional civil engineer to the City for final approval by the City Engineer. The Developer shall obtain all necessary permits from the City, SherburneCounty, State of Minnesota, and all other agencies having jurisdiction, before proceeding with construction. The Developer shall instruct its engineer to provide adequate field 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 his engineer shall schedule a pre-construction meeting at a mutually agreeable time at the City Council chambers 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 “as constructed” plans, an electronic file of the “as constructed” plans in a hard copy and a computer disk format and two complete sets of blue line “as constructed” plans, all prepared in accordance with City standards.
8.Placement of Monuments. In accordance with Minnesota Statutes Sec. 505.02, the final placement of iron monuments for all lot corners of the Plat 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.
9.Time of Performance. The Developer shall install all required public improvements for the Plat prior to the issuance of building permits by the City, with the exception of the final wear course of asphalt on streets. The final wear course on streets shall be installed between August 15th and October 15th the first summer after the base layer of asphalt has been in place one freeze thaw cycle. The Developer may, however, request an extension of time from the City. If an extension is granted, it shall be conditioned upon updating the security posted by the Developer to reflect cost increases and the extended completion date. Final wear course placement outside of this time frame must have the written approval of the City Engineer.
10.Right of Entry. The Developer herby grants to the City, its agents, employees, officers, and contractors an irrevocable right of entry to enter the Plat to perform any and all work and inspections necessary or deemed appropriate by the City during the installation of improvements by the Developer or the City, or to make any necessary corrective actions necessary by the City. Except the emergency situations, as defined by the City, the City shall give the Developer five (5) business days notice stating the deficiencies and necessary corrections prior to making any corrective action. Said right of entry shall continue until the City finally accepts the improvements and any applicable warranty period has expired.
11.Erosion Control. The City has adopted an Erosion Control Policy. All site grading shall comply with the Erosion Control Policy, subject to review and approval of City Staff. After the site is rough graded, but before any utility construction is commenced or further building permits are issued, the Erosion Control Plan (attached as Exhibit C), shall be implemented by the Developer and inspected and approved by the City. If the City Engineer determines that it would be unreasonable to require full implementation of the Erosion Control Plan prior to utility construction or issuance of certain building permits, the Engineer shall state in writing what construction can take place and what particular building permits can be issued prior to full implementation. The City may impose additional erosion control requirements if, in the opinion of the City Engineer, they would be beneficial. All areas disturbed by the excavation and backfilling operations shall be reseeded forthwith after the completion of the work in that area. If the Developer does not comply with the Erosion Control Plan and schedule or any supplementary instructions, the City may, with reasonable notice, take action as it deems appropriate. Any necessary boulevard sodding shall be at least three (3) feet in width installed behind the curb within two (2) weeks of curb completion.
12.Clean Up. The Developer shall promptly clean up any and all dirt and debris deposited on public streets or public property as a result of construction activity on the Plat. If Developer fails to clean up such dirt and debris within twenty-four (24) ours of notification by the City, the City shall clean up said dirt and debris and Developer agrees to pay the City’s costs of such cleanup within thirty (30) days of billing.
13.Ownership of Improvements; Homeowner’s Association.
A.Upon final acceptable by the City Council of the work and construction required by this Agreement, utility improvements lying within public easements shall become City property without further notice or action.
B.The Developer will cause a homeowner’s association to be established for the control and maintenance of any non-City-owned or controlled, non-built, and common private areas of the Plat, excluding streets and walkways located within the Plat. The by-laws of the homeowner’s association shall be subject to the approval of the City.
14.City Administration and Construction Monitoring. The Developer shall pay a reasonable fee for in-house administration of the Plat. City administration will include monitoring of construction observation, consultation with Developer and his engineer on the status of or problems regarding the project, coordination for final inspection and acceptance, project monitoring during the warranty period, and processing of requests for reduction in security. The Developer shall pay for construction monitoring performed by the City’s consulting professionals at their customary hourly rates. Construction monitoring shall include part or full-time inspection of proposed public utilities and street construction by the City Engineer.
15.Security.
A. Developer will provide the City with an irrevocable letter of credit (or other surety as approved by the City Attorney) as security that the obligations of the Developer under this contract shall be performed. Said letter of credit or surety shall be in the amount of $______representing the sum of one hundred twenty-five percent (125%) of the estimated cost of the Improvements to be constructed by the Developer. Said letter of credit or surety must meet the approval of the City Attorney as to form and issuing bank. An approved form is attached hereto as Exhibit “G”
B. The City may draw on said letter of credit or surety to complete work not performed by Developer, to pay liens on property to be dedicated to the City, to reimburse itself for costs incurred in the drafting, execution, administration, and or enforcement of this Agreement, to repair or correct deficiencies or other problems which occur to the municipal Improvements during the warranty period, or to otherwise fulfill the obligations of Developer under this agreement.
C. In the event that any cash, irrevocable letter of credit, or other surety referred to herein is ever utilized and found to be deficient in amount to pay or reimburse the City in total as required herein, the Developer agrees to upon being billed by the deficient amount. If there should be an overage in the amount of utilized security, the City will, upon making said determination, refund to the Developer any monies which the City has in its possession which are in excess of the actual costs of the project as paid by the City.
D. Developer hereby agrees to allow the City to specially assess Developer’s property for any and all costs incurred by the City in enforcing any of the terms of this Agreement should Developer’s letter of credit or surety prove insufficient or should Developer fail to maintain said letter of credit or surety in the amount required above within thirty (30) days of mailing of written request by the City. Should the City assess Developer’s property for said costs, Developer agrees not to contest or appeal such assessment and waives all statutory rights of appeal under Minnesota laws, including Minnesota Statute Sec. 429.081, to the extent of the costs identified in this Agreement.
E. That portion of said cash, irrevocable letter of credit, or other surety with respect to the performance of site improvements shall be released upon certification of the City Engineer and approval of the City Council that all such items are satisfactorily completed pursuant to this Agreement.
F. In the event a surety referred to herein is in the form of an irrevocable letter of credit which by its terms may become null and void prior to the time at which all monetary or other obligations of the Developer are paid or satisfied, it is agreed that the Developer shall provide the City with a new letter of credit or other surety, acceptable to the City, at least forty-five (45) days prior to the expiration of the original letter of credit. If a new letter of credit is not received as required above, the City may without notice to Developer declare a default in the terms of this Agreement and thence draw in part or in total, at the City’s discretion, upon the expiring letter of credit to avoid the loss of surety.
16.Security Release.
A. Periodically, as payments are made by the Developer for the completion of portions of the Improvements, and when it is reasonably prudent, the Developer may request the City that the surety be proportionately reduced for the portion of the Municipal Improvements which have been fully completed and payment made. All such decisions shall be at the discretion of the City Council. The City’s cost for processing reduction request(s) shall be billed to the Developer. Such cost shall be paid to the City within thirty (30) days of the date of mailing of the billing.
B. The Developer may request of the City a reduction or release of any surety as follows:
i. When another acceptable letter of credit or surety is furnished to the City to replace a prior letter of credit or surety.
ii. When all or a portion of the Improvements have been installed, the letter of credit or surety may be reduced by the dollar amount attributable to that portion of improvements so installed, except that the City shall retain the letter of credit or surety in the amount of 10% of the estimated construction price of the Improvements during the two-year warranty period.
iii. As to all requests brought under this subparagraph B, the City Council shall have complete discretion whether to reduce or not to reduce said letter of credit or surety.
C.The costs incurred by the City in processing any reduction request shall be billed to the Developer and paid to the City within thirty (30) days of billing.
17. Claims. In the event that the City receives claims for labor, materials, or others that work required by this Agreement has been performed and the sums due them have not been paid, and the laborers, material providers, or others are seeking payment from the City, the Developer hereby authorizes the City to commence a legal action pursuant to Rule 22, Minnesota Rules of Civil Procedure for the District Courts, to draw upon the Developer's letter of credit in an amount up to 125 percent of the claim(s) and deposit the funds in compliance with Court Rule, and upon such deposit, the Developer shall release, discharge, and dismiss the City from any further proceedings as it pertains to the letters of credit deposited with the District Court, except that the Court shall retain jurisdiction to determine attorneys’ fees and costs pursuant to this Agreement.
18.Sanitary Sewer and Water Service Access Charges (SAC & WAC). The Plat is subject to sanitary sewer service access charges ("SAC") totaling FIVE THOUSAND FIVE HUNDRED DOLLARS ($5,500.00) per lot, and water service access charges ("WAC") totaling TWO THOUSAND FOUR HUNDRED DOLLARS ($2,400.00) per lot. The Developer may elect to pay the entire SAC and WAC charges in cash at any time, but Developer agrees that it will pay annually in cash to the City, a minimum of FIFTY-FOUR THOUSAND DOLLARS ($54,000.00) in SAC and WAC charges. Such payments shall be made on or before December 31 of each year, commencing the year following the completion of installation of the development Improvements set forth in paragraph 6 above and each year thereafter until all lots for the Plat have been sold. This amount represents a minimum sale of fifteen (15) lots by Developer each year. The foregoing SAC and WAC charges and guaranteed annual average payment by Developer, is a substantial inducement to the City and the Developer for entering into this Agreement and approval of the Plat, and is not subject to change without the express, written permission of the Developer and the City.