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HomeMy WebLinkAbout9A - Standardized Development MEETING DATE: AGENDA #: PREPARED BY: REVIEWED BY: AGENDA ITEM: DISCUSSION: CITY COUNCIL AGENDA REPORT FEBRUARY 4, 2002 9A JANE KANSIER, PLANNING COORDINATOR DON RYE, PLANNING DIRECTOR CONSIDER APPROVAL OF A NEW STANDARDIZED DEVELOPMENT CONTRACT History: Several years ago, the City adopted a standardized development contract to be used for new developments. The purpose of the standardized contract is to (1) assure that all appropriate requirements are addressed in each development contract; (2) maintain a minimum standard of consistency between developments; and (3) minimize the staff and Council time required for reviewing and modifying agreements on a development-by-development basis. Since the original standardized contract was adopted, both State statutes and City ordinances have been revised. The staff and the City Attorney have been working to modify the development contract so it is consistent with new requirements. Current Circumstances: The attached standardized development contract addresses the changes in State law and in the City ordinances. It also attempts to address the concerns identified by the City Council. All City staff and the City Attorney have reviewed this draft of the contract. There are several key changes in the draft development contract. These fall into the following categories: . City Administration fees and City Construction Observation fees, and reimbursement of these fees . Storm water management fees and parkland dedication fees . Clean-up requirements . Issuance of building permits and certificates of occupancy . Compliance with other laws . Third party recourse CITY ADMINISTRATION FEE: This is one of the major changes in this contract. City Administration fees include all costs related to implementing 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245 l:\deptwork\devcontr\revisions\cc rpt.doc AN EQUAL OPPORTUNITY E.MP.LOYER Page 1 ---.----..-----,---""j" T j""- the development contract that are not pass-through costs, including preparation of the development contract, consulting with the developer, project monitoring, and processing requests for reduction in security. The fee has been reduced from 6% to 4% of the estimated construction costs. CONSTRUCTION OBSERVATION FEE: This fee is intended to cover the costs incurred for the inspection of the project while it is under construction and the City attorney fees. This is also a major change from the original contract. The fee has been reduced from 6% to 5% of the estimated construction costs. The 5% fee will also be held in an escrow account. Upon completion of the project, any remaining balance will be returned to the developer. If the costs associated with the project exceed the 5%, the developer will be required to deposit additional funds into the account before the project will be allowed to proceed. REIMBURSEMENT OF FEES: The contract clearly specifies that there will be no reimbursement of the City Administration fee; however, the construction observation fee will be held in escrow. STORM WATER MANAGEMENT FEES AND PARKLAND DEDICATION: These requirements have been revised based on studies completed in 2001. CLEAN-UP REQUIREMENTS: The language in this section has been clarified to include homebuilders, contractors and subcontracts, in addition to the developer, among those responsible for dirt and debris on City streets. The developer must identify a specific person who will be responsible for clean up. ISSUANCE OF BUILDING PERMITS AND CERTIFICATES OF OCCUPANCY: This section clarifies how much work must be completed before the City will issue a building permit for the development. In general, the contract requires that all grading, curbing and one lift of bituminous be installed on the streets providing access to and adjacent to a lot before the City will issue a building permit. A permanent certificate of occupancy will not be issued until water and sanitary sewer improvements have been installed, the streets have been completed, the first lift of bituminous has been placed, and the improvements have been inspected and approved by the City. COMPLIANCE WITH OTHER LAWS: This section makes it clear that the plat must comply with any and all county, metropolitan, state and federal laws before work begins. THIRD PARTY RECOURSE: This section includes a statement requiring a third party to seek any recourse against the developer rather than the City. ISSUES: In September, 2001, the City Council conducted a workshop to review a draft of the revised standardized contract. The Council asked staff to address areas of concern, including (1) how the proposed fees were developed; and l:\deptwork\devcontr\revisions\cc rpt.doc Page 2 CONCLUSION: AL TERNATIVES: (2) the effect of reduced City Administration and Construction Observation fees on the City's budget. The substantive change to the development contract is the reduction of the City Administration and Construction Observation fees. These fees are based on several factors. First, the staff surveyed several other developing communities to establish a range of fees. Second, the staff reviewed the history of fees we have collected, and how those fees compared to our actual costs. Finally, the staff met with two of the major developers in the City to discuss this issue. The staff believes the recommended fees are a fair representation of the City costs for most new development. The largest expense is usually the Construction Observation of a new development. By escrowing this fee, the developer is assured that any balance will be returned; the City is also protected in that the developer will be required to deposit additional funds in the event the project goes over 5 percent. A further protection for both the City and the developer is the new State law requiring that the City track all time and costs related to development. Based on the information we will gather, we will be able to adjust fees as necessary. The Council was also concerned on the effect of the fee reduction on the City budget. The staff is confident these fees will continue to cover the City's costs for new development. It must be noted that although we use the standard contract as a template, there are sometimes minor differences from development to development, which may be a result of special improvements or circumstances. For example, the private storm sewer and streets in Deerfield required some special considerations, as do lift stations, County road turn lanes, different landscaping requirements, or regional trails. When there are unusual or unique circumstances applying to a particular development contract, the staff refers the changes to the City Attorney and notes these in the staff report for the Council's information. We do not make any material changes to the Contract without consulting the City Attorney and the Council. The revised development contract will facilitate the review of new development in the City. The contract includes provisions that protect the City's interest, and fairly assess the associated costs of this development to the developer. The staff would recommend approval of this contract. The City Council has three alternatives: I. Adopt the standard development contract as attached. 2. Adopt the standard development contract with modifications. 3. Defer this item and provide staff with specific direction. l:\deptwork\devcontr\revisions\cc rpt.doc Page 3 RECOMMENDED MOTION: REVIEWED BY: l:\deptwork\devcontr\revisions\cc rpt.doc The staff recommends attached standardized ernative # 1. A motion and second to approve the elopment contract is required. Page 4 DRAFT DEVELOPMENT CONTRACT PLAT NAME PROJECT #02- This DEVELOPMENT CONTRACT is entered into this day of ,20_, by and between the CITY OF PRIOR LAKE, a Minnesota municipal corporation ("City"), and , a Minnesota (the "Developer"). Based on the mutual promises and covenants set forth herein, the sufficiency of which is not disputed, the City and the Developer (collectively "Parties") agree as follows: 1. REOUEST FOR PLAT APPROVAL. The Developer has asked the City to approve a Plat for (referred to in this Development Contract as the "Plat"). The land is legally described as: [OR] shown on attached Exhibit A which is incorporated herein as if fully set forth. 2. CONDITIONS OF PLAT APPROVAL. The City hereby approves the Plat on condition that the Developer enter into this Development Contract, furnish the Security required by it, and record the Plat and Development Contract with the County Recorder or Registrar of Titles within 90 days after the City Council approves the fmal Plat. I :\deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 1 T DRAFT 3. RIGHT TO PROCEED. Within the Plat or land to be platted, the Developer may not construct sewer lines, water lines, streets, utilities, public or private improvements, or any buildings until all the following conditions have been satisfied: 1) this Development Contract has been fully executed by both parties, 2) the necessary security, development fees and insurance have been received by the City, and 3) the City Engineer or Designee has issued a letter that all conditions have been satisfied and that the Developer may proceed. The foregoing restriction on the Developer's "Right To Proceed" does not apply to grading or other approvals set forth in Resolution No. _, dated , approving the Preliminary Plat for 4. PHASED DEVELOPMENT. If the Plat is a phase of a multiphased preliminary Plat, the City may refuse to approve Final Plats of subsequent phases if the Developer has breached this Development Contract or any terms or conditions set out in the Resolution approving the Pinal Plat and the breach has not been remedied. Development of subsequent phases may not proceed until the City approves Development Contracts for such phases. Pees and charges collected by the City in connection with infrastructure, public improvements and parkland dedication requirements are not being imposed on outlots, if any, in the Plat that are designated in an approved Preliminary Plat for future subdivision into lots and blocks. Such charges will be calculated and imposed when the outlots are subdivided into lots and blocks. 5. PRELIMINARY PLAT STATUS. If the Plat is a phase ofa multiphased preliminary Plat, the Developer shall submit a Staging Plan for City Council approval which may allow the Developer more than one (1) year to subdivide the property into lots and blocks. 6. DEVELOPMENT PLANS. The Plat shall be developed in accordance with the Plans identified below. The plans shall not be attached to this Development Contract, but are incorporated by reference and made a part of this Development Contract as if fully set forth herein. If the plans vary from I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 2 DRAFT the written terms of this Development Contract, the more specific or stringent controls shall apply. The Plans are: Plan A -- Final Plat Dated (Prepared by ) Plan B -- Final Grading, Development, and Erosion Control Planes) Dated (prepared by ) Plan C -- Tree Preservation and Replacement Plans Dated by ) (Prepared Plan D -- Landscaping Plan Dated (prepared by ) Plan E-- One set of Plans and Specifications for Developer Installed Improvements Dated (prepared by ) Plan F -- Street Lighting Plan Dated (prepared by ) (Prepared by ) Plan G -- Dated (Prepared by ) Plan H -- Dated (Prepared by ) Plan I -- Dated All plans set forth above are incorporated herein and made part ofthis Development Contract. 7. DEVELOPER INSTALLED IMPROVEMENTS. The Developer shall install and pay for the following: A. Sanitary Sewer System B. Water System C. Storm Sewer D. Streets E. Concrete Curb and Gutter F. Street Lights G. Site Grading and Ponding H. Underground Utilities 1. Traffic Control Signs J. Street Signs I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 3 DRAFT K. Setting of Iron Monuments L. Sidewalks and Trails M. Landscaping N. Other The Developer Installed Improvements shall be installed in accordance with the City's Subdivision Ordinance, City standard specifications for utilities and street construction, the City's Public Works Design Manual, and any other applicable City ordinances, all of which are incorporated herein by reference. The Developer shall submit plans and specifications, which have been prepared by a Minnesota registered professional civil engineer to the City for approval by the City Engineer. The Developer shall obtain all necessary permits and approvals from any other agencies having jurisdiction before proceeding with that aspect of the construction as it relates to that permit. The Developer, its contractors and subcontractors, shall follow all instructions received from the City's authorized personnel. The Developer or the Developer's engineer shall schedule a preconstruction meeting with all parties concerned, including the City staff, to review the program for the construction work. Before the Security for the completion of utilities is released, iron monuments must be installed in accordance with Minn. Stat. 9505.02. The Developer's surveyor shall submit a written notice to the City certifying that the monuments have been installed. 8. CONSTRUCTION OBSERVATION The City's authorized personnel shall provide construction observation during the installation of the Developer Installed Improvements in accordance with the Public Works Design Manual. These services by the City shall include: A. Construction observation during installation of required Developer Installed Improvements, which include grading, sanitary sewer, watermain, storm sewer/ponding and street system. B. Documentation of construction work and all testing of Developer Installed Improvements. I :\deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 4 ,- C. DRAFT As-built location dimensions for sanitary sewer, watermain and storm sewer facilities. 9. DEVELOPER PROVIDED CONSTRUCTION SERVICES. The Developer shall be responsible for providing all other construction services including, but not limited to: A. Construction surveying B. As-built drawings of grading plans. C. As-built drawings showing location, dimensions and elevations of all utility improvements, including but not limited to top nut of hydrants, manhole rims, manhole inverts. (Tie dimensions to sewer and water services from City staff or City consultants.) D. Project Testing: The Developer is responsible, at the Developer's sole cost, to provide testing to certify that Developer Installed Improvements were completed in compliance with the approved final plans and specifications. The personnel performing the testing shall be certified by the Minnesota Department of Transportation. The City Engineer has the sole discretion to determine if additional testing is necessary. The cost of additional testing is to be paid by the Developer. E. Lot corners and monuments. 10. BOULEVARD AND AREA RESTORATION The Developer shall seed or lay cultured sod in all boulevards within thirty (30) days, or within a timeline established by the City Engineer, of the completion of street related improvements and restore all other areas disturbed by the development grading operation. Boulevard and Area Restoration shall be in accordance with the approved erosion control plan. Upon request of the City Engineer, the Developer shall remove the silt fences after turf establishment. 11. SUBDIVISION MONUMENTS. The Developer shall install all subdivision monumentation within one (1) year from the date of recording the plat, or the monumentation shall be installed on a per lot basis at the time the building permit for the subject lot is issued, whichever occurs I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 5 DRAFT first. At the end of the one (1) year period from recording of the Plat, the Developer shall submit to the City Engineer written verification by a registered land surveyor that the required monuments have been installed throughout the plat. 12. TIME OF PERFORMANCE. The Developer shall install all required public improvements by , 20_, with the exception of the final wear course of asphalt on streets. The final wear course on streets shall be installed the first summer after the base layer of asphalt has been in place for one freeze thaw cycle. The Developer and the City shall consult about an extension of time. If an extension is granted, it shall be in writing and conditioned upon updating the Security posted by the Developer to reflect cost increases and the extended completion date. 13. LICENSE. The Developer hereby grants the City, its agents, employees, officers and contractors a non-revocable license to enter the Plat to perform all work and inspections deemed appropriate by the City in conjunction with the development of the Plat. 14. EROSION CONTROL. Prior to initiating site grading, the erosion control plan, Plan B, shall be implemented by the Developer and inspected and approved by the City. The City may impose, at no cost to the City, additional erosion control requirements if they are necessary to meet erosion control objectives. All areas disturbed by the excavation and backfilling operations shall be reseeded immediately after the completion of the work in that area. All seeded areas shall be mulched, and disc anchored as necessary for seed retention. The parties recognize that time is of the essence in controlling erosion. If the Developer does not comply with the erosion control plan and schedule or supplementary conditions imposed by the City, the City may take such action as it deems appropriate to control erosion. The City will endeavor to notify the Developer in advance of any proposed action, but failure of the City to do so will not affect the Developer's and City's rights or obligations hereunder. The Developer shall be solely responsible for any costs incurred by the City for erosion control measures. The I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 6 DRAFT Developer shall fully reimburse the City for any cost incurred within ten (10) days of the date of the City's invoice. If the Developer does not reimburse the City for any cost the City incurred for such work within ten (10) days, the City may, without further notice to the Developer, draw down the Irrevocable Letter of Credit to pay any costs. No development, utility or street construction will be allowed unless the Plat is in full compliance with the erosion control requirements. The notice provisions set out in Paragraph 39 shall not apply to notifications to the Developer under this paragraph. 15. CLEAN UP. The Developer shall clean dirt and debris from streets that has resulted from any and all construction work by the Developer, homebuilders, contractors and subcontractors, their agents or assigns. Prior to any construction in the Plat, the Developer shall identify, in writing, a responsible party and schedule for erosion control, street cleaning, and street sweeping. If the Developer fails to perform the required clean-up within 24 hours of receiving instructions and notice from the City, the City, without further notice, will perform the work and charge the associated cost to the Developer. If the Developer does not reimburse the City for any cost the City incurred for such work within ten (10) days of receipt of the invoice, the City may draw down, without further notice, the Irrevocable Letter of Credit to pay any costs. The notice provisions set out in Paragraph 39 shall not apply to notifications to the Developer under this paragraph. 16. GRADING PLAN. A. The Plat shall be graded in accordance with the approved grading, development and erosion control planes), (plan B). The plans and work shall conform to City of Prior Lake Public Works Design Manual. B. As-builts. Before the City releases the Grading Security, the Developer shall provide the City with an as built grading plan and a certification by a registered land surveyor or engineer that all ponds, swales, and ditches have been constructed on public easements or land owned by the City. I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 7 DRAFT The as built plan shall include field verified elevations of the following: a) cross sections of ponds, b) location and elevations along all swales and ditches, and c) lot corners and house pads. The City may withhold issuance of building permits until the approved certified grading plan is on file with the City and all erosion control measures are in place as determined by the City Engineer. 17. OWNERSHIP OF DEVELOPER INSTALLED IMPROVEMENTS. Upon completion of the Developer Installed Improvements required by this Development Contract and final written acceptance by the City Engineer, the improvements lying within public right-of-way and easements shall become City property without further notice or action. 18. STREET MAINTENANCE. Developer shall be responsible for all street maintenance until final written acceptance by the City of the Developer Installed Improvements. Warning signs and detour signs, if determined to be necessary by the City Engineer, shall be placed when hazards develop in streets to prevent the public from traveling on same and directing attention to detours. If and when streets become impassable, such streets shall be barricaded and closed. For the purpose of this subparagraph, "street maintenance" does not include snow plowing or normal sweeping. 19. CONSTRUCTION ACCESS. Construction traffic access and egress for grading, public utility construction, and street construction is restricted to . No construction traffic is permitted on the adjacent local streets. 20. IMPROVEMENTS REOUIRED BEFORE ISSUANCE OF BUILDING PERMITS. A. Grading, curbing, and one lift of bituminous shall be installed on all streets providing access and adjacent to a lot prior to issuance of any building permits for that lot. If building permits are issued prior to the acceptance of Developer Installed Improvements, the Developer assumes all liability and costs resulting in delays in completion of the Developer Installed Improvements and damage I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 8 DRAFT to Developer Installed Improvements caused by the City, or its agents or contractors, the Developer, its contractors, subcontractors, material men, employees, agents or third parties. B. A permanent Certificate of Occupancy shall not be issued for any building in the plat until water and sanitary sewer improvements have been installed and the streets have been completed and the first.1ift of bituminous has been placed and said improvements have been inspected and determined by the City to be available for use. 21. CITY ADMINISTRATION. The Developer shall pay a fee for City administration. City administration will include all activities necessary to implement this Developer's Contract. These activities include, but are not limited to, preparation of the Development Contract, consultation with Developer and its engineer on the status of or problems regarding the development of the Plat, project monitoring during the warranty period, and processing of requests for reduction in security. Fees for this service shall be four percent (4%) of the estimated construction cost as detailed in Exhibit E, less oversizing costs outlined in Exhibit D, Section A, assuming normal construction and project scheduling. 22. REIMBURSEMENT OF CITY ADMINISTRATION FEES. Once the City approves the construction costs or estimates for the Developer Installed Improvements there will not be any reimbursement to the City by the Developer or to the Developer by the City for City Administration fees. 23. CITY CONSTRUCTION OBSERVATION. Construction observation shall include, but is not limited to, part or full-time inspection of proposed grading, public utilities and street construction and City legal expenses. The Developer shall deposit an amount equal to five percent (5%) of the estimated construction cost, less oversizing costs outlined in Exhibit D, Section A, for construction observation performed by the City's authorized personnel and incurred pass-through legal expenses. This amount shall be maintained by the City in escrow until final acceptance of all Developer Installed Improvements by the City. Any balance remaining in the escrow account will be returned to the Developer at that time. I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 9 DRAFT Extraordinary costs incurred by the City over and above the five percent (5%) Construction Observation fee shall be billed to the Developer. Extraordinary costs are defined as costs resulting from change orders applied to the proj ect and costs incurred as a result of unknown conditions at the time of design. 24. STORM WATER MANAGEMENT FEE. The Developer shall pay a storm water management fee of $ prior to the City signing the final Plat. The amount was calculated as follows: _ acres at $2,943.00 per acre (R-l, R-2 and R-3) or $4,856.00 per acre (R-4) or $6,092.00 per acre (commercial and industrial). This calculation was determined by the Trunk Storm Sewer Fee Determination Study adopted by City Council Resolution #01-03 on January 8, 2001. 25. SANITARY SEWER AND WATERMAIN TRUNK AREA CHARGES. A Sanitary sewer and watermain trunk area charge of $ shall be paid by the Developer for sanitary sewer and watermain trunk improvements prior to the City signing the final Plat. The amount was calculated as acres at $3500.00 per acre. follows: 26. CITY-WIDE COLLECTOR STREET CONSTRUCTION CHARGE. This Development Contract requires the Developer to pay a City-wide Collector Street Construction Charge of $ for collector street improvements prior to the City signing the final Plat. The amount was calculated as acres at $1500.00 per acre. follows: 27 PARK AND TRAIL DEDICATION. The Developer shall dedicate to the public an amount of cash or land or a combination of both as established by the City. This calculation was determined by the Park Fee Study adopted by City Council Resolution #01-10 on February 5, 2001. The required amount of dedication of land or cash payment shall be determined by the provisions of Section 1004.1000 if the City Subdivision Ordinance, or by the fee scheduled adopted by resolution of the City CounciL The fee shall be paid prior to the City signing the final Plat. The Developer shall provide the City with a warranty deed for any land described as an outlot or a lot rather than park on the final plat. I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 1 0 DRAFT 28. STREET LIGHTS AND OPERATIONAL COSTS. The Developer is responsible for the installation of the street lighting. The Developer shall pay the full capital cost of every light to be installed; this includes poles, fixtures, underground wiring, and all appurtenant work. The Developer shall pay operation and maintenance for the streetlights until the City accepts the Developer Installed Improvements, at which time the billing shall be transferred to the City. The street light plan must be acceptable to the City Engineer and in accordance with the Public Works Design Manual. 29(a). LANDSCAPING (Sinele-Familv Residential). In accordance with the City Subdivision Ordinance, each residential lot in the Plat must have at least two (2) front yard trees. The Developer or lot purchaser shall plant the two (2) front yard trees on every lot in the Plat that does not already meet this requirement at the time of the building permit. The Developer or lot purchaser shall sod the front yard, boulevard, and side yards to the rear of every structure on every lot prior to the issuance of the fmal certificate of occupancy. If this section is to be satisfied by existing trees, a tree protection security ("escrowed funds") may also be required. If the required landscaping is not installed, the City is granted a license to enter upon a lot and install the landscaping using the escrowed funds deposited by the builder at the time the building permit was issued. Upon satisfactory completion of the landscaping, the escrowed funds less any draw made by the City, shall be returned to the person who deposited the funds with the City. 29(b). LANDSCAPING (Soecial Provisions). Landscaping for this Plat shall comply with Plan D. The cost of the landscaping requirements shall be provided by the Developer, subject to approval by the City. Subject to approved Plan D, the Developer shall provide a financial guarantee of $ based on an amount equal to 125% of the estimated cost, as set out in Plan D, to furnish and plant the required landscaping and irrigation system. I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 11 f DRAFT 30. TREE PRESERVATION AND REPLACEMENT. Subject to approved Plan C, and to the provisions of Section 1107.2100 of the City Zoning Ordinance, the Developer shall provide a financial guarantee of $ based on an amount equal to 125% of the estimated cost to furnish and plant the replacement trees. The City shall maintain the Security for at least one (1) year after the date the last replacement tree has been planted. At the end of such year, or such longer period as the City determines to be reasonable, the portion of the Security equal to 125% of the estimated cost of the replacement trees, which are alive and healthy may be released. Any portion of the Security not entitled to be released shall be maintained and shall secure the Developer's obligation to remove and replant replacement trees, which are not alive or are unhealthy, and to plant missing trees. Upon completion of the replanting or planting of these trees, the Security shall be maintained for at least one (1) year after the date of the replanting or planting of these trees. If, at the end of this period, all of the required trees are alive and healthy, the entire Security may be released. 31. SECURITY. To guarantee compliance with the terms of this Development Contract, payment of the costs of all Developer Installed Improvements, and construction of all Developer Installed Improvements, the Developer shall furnish the City with an Irrevocable Letter of Credit in an amount equal to 125% of the estimated Developer Improvement Costs. The Irrevocable Letter of Credit ("Security") shall be in the form attached hereto as Exhibit B, from a bank for $ . The amount of the Security was calculated as follows: DEVELOPER INSTALLED IMPROVEMENTS COSTS: Sanitary Sewer $ Watermain $ Storm Sewer $ Streets/Sidewalks/Trails $ I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 12 DRAFT $ $ $ $ $ $ $ X 1.25 $ Street Signs Traffic Control Signs Landscaping Tree Preservation and Replacement Erosion Control Other ESTIMATED DEVELOPER INSTALLED IMPROVEMENTS SUBTOTAL TOTAL FOR IRREVOCABLE LETTER OF CREDIT AMOUNT This breakdown is for historical reference; it is not a restriction on the use of the Security. The bank Qn which the Irrevocable Letter of Credit is drawn shall be subject to the approval of the City. The bank shall be authorized to do business in the State of Minnesota with a principal branch located within the seven County Twin City Metropolitan area. The Security shall be for a term ending December 31, Individual Security instruments may be for shorter terms provided they are replaced at least forty-five (45) days prior to their expiration. If the required Developer Installed Improvements are not completed lilt least thirty (30) days prior to the expiration of the Security, the City may draw it down. If the Security is drawn down, the proceeds shall be used to cure the default. 32. CITY DEVELOPMENT FEES. The Developer shall also furnish the City with a cash fee of$ for City Development Fees. The amount ofthe cash fee was calculated as follows: CITY DEVELOPMENT FEES: City Administration Fee (4%) $ City Construction Observation (5%) $ I:\deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 13 T - DRAFT Storm Water Management Fee $ Sanitary Sewer and Watermain Trunk Area Charges $ City-Wide Collector Street Construction Charge $ Park and Trail Dedication Fee (if in lieu ofland) $ Other $ TOTAL CITY DEVELOPMENT FEES $ 33. REDUCTION OF SECURITY. Upon receipt of proof satisfactory to the City that the required work has been satisfactorily completed and financial obligations to the City have been satisfied, the Security may be reduced by seventy-five percent (75%) of the fmancial obligations that have been satisfied upon written authorization by the City Engineer. Any requests for reductions in the Security must be made in writing to the City Engineer and must be accompanied by lien waivers from any contractor or subcontractor for the Developer. Twenty-five percent (25%) of the Security shall be retained until all Developer Installed Improvements and other obligations under this Development Contract have been completed, including, but not limited to, all financial obligations to the City, and the receipt of all required as-built street, utility and grading plans by the City. In no event shall the five percent (5%) Security be released until the Developer provides the City Engineer with a certificate from the Developer's registered land surveyor stating that all irons have been set following site grading and utility and street construction. 34. WARRANTY. The Developer warrants all Developer Installed Improvements required to be constructed by it pursuant to this Development Contract against poor material and faulty workmanship. The warranty period for streets is one year. The warranty period for underground utilities is two years. The warranty period on Developer Installed Improvements shall commence on the date the City Engineer issues written acceptance of the improvement. The Developer shall post warranty bonds as security. The I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 14 DRAFT City shall retain twenty-five percent (25%) of the Security posted by the Developer until the City Engineer accepts the Developer Installed Improvements and the warranty bonds are furnished to the City. All punch list items must be completed and "as-built" drawings received prior to the commencement of the warranty period. The retained Security may be used by the City to pay for warranty work. The City standard specifications for utilities and street construction identify the procedures for final acceptance of streets and utilities. These standards are set out in the Public Works Design Manual. 35. OVERSIZING. City and Developer agree that the Developer Installed Improvements should be oversized for the benefit of future development. Oversizing is the construction of a Developer Installed Improvement to City specifications that exceeds those that would otherwise be required of the Developer. Oversizing improvements include, but are not limited to, sanitary sewer, water, storm drainage facilities, and road improvements. If the City Engineer determines that oversizing is required, the City shall reimburse the Developer for the costs associated with this work and as approved in this contract. City and Developer agree that the cost of system oversizing to be reimbursed to the Developer is $ based upon a cost estimate by the City Engineer as determined by an engineer's estimate or contractors bid to be provided by the Developer and application of the City's Assessment Policy based on a final engineering design. The calculation for oversizing is attached as Exhibit D. 36. CLAIMS. A. City Authorized to Commence Interpleader Action. In the event that the City receives claims from labor, materialmen, or others that work required by this Development Contract has been performed, the sums due them have not been paid, and the laborers, materialmen, or others are seeking payment from the City, the Developer hereby authorizes the City to commence an Interpleader action pursuant to Rule 22, Minnesota Rules of Civil Procedure for the District Courts, to draw upon the Irrevocable Letter of Credit Security in an amount up to 125% of the claim(s) and deposit the funds in I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 15 T DRAFT compliance with the 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 pursuant to this Development Contract. B. Prompt Payment to Subcontractors Required. The Developer shall pay any subcontractor within ten (10) days of the Developer's receipt of payment by the City for undisputed services provided by the subcontractor. If the Developer fails within that time to pay the subcontractor any undisputed amount for which the Developer has received payment by the City, the Developer shall pay interest to the subcontractor on the unpaid amount at the rate of 112 percent (1.5%) per month or any part of a month. The minimum monthly interest penalty payment for an unpaid balance of $100 or more is $10. For an unpaid balance of less than $100, the Developer shall pay the actual interest penalty due to the subcontractor. A subcontractor who prevails in a civil action to collect interest penalties from the Developer shall be awarded its costs and disbursement, including attorney's fees. incurred in bringing the action. (See Minn. Stat. 9471.425, Subd. 4a.) 37. RESPONSIBILITY FOR COSTS. A. The Developer shall reimburse the City for costs incurred in the enforcement of this Development Contract, including engineering and attorneys' fees. B. Except as provided in Paragraphs 14 and 15 of this Development Contract, the Developer shall pay in full all bills submitted to it by the City for obligations incurred under this Development Contract within thirty (30) days after receipt. If the bills are not paid on time, the City may issue a stop work order until the bills are paid in full. 38. DEVELOPER'S DEFAULT. I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 16 DRAFT A. Definition. In the context of this Development Contract, "Event of Default" shall include, but not be limited to, anyone or more of the following events: (1) failure by the Developer to pay, in a timely manner, all real estate property taxes and assessments with respect to the development property; (2) failure by the Developer to construct the Developer Installed Improvements pursuant to the terms, conditions and limitations of this Development Contract; (3) failure by the Developer to observe or perform any covenant, condition, obligation or agreement on its part to be observed or performed under this Development Contract; (4) transfer of any interest in the Plat; (5) failure to correct any warranty deficiencies; (6) failure by the Developer to reimburse the City for any costs incurred by the City in connection with this Development Contract; (7) failure by the Developer to renew the Irrevocable Letter of Credit at least forty-five (45) days prior to its expiration date; (8) receipt by the City from the Developer's insurer of a notice of pending termination of insurance; (9) a breach of any material provision of this Development Contract. With respect to this paragraph, "material provision" shall be construed broadly to offer the City the fullest protection and recourse possible. B. Event of Default - Remedies. Whenever an Event of Default occurs, the City, after providing the Developer with ten (10) days written notice in accordance with the terms of Paragraph 39 of this Development Contract, may take anyone or more ofthe following actions: 1. The City may suspend its performance under this Development Contract. 2. The City may cancel or suspend this Development Contract. 3. The City may draw upon or bring action upon any or all of the Securities provided to the City pursuant to any of the terms of this Development Contract. 4. The City may take whatever action, including legal or administrative action, which may be necessary or desirable to the City to collect any payments due under this Development I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page I 7 DRAFT Contract or to enforce performance and/or observance of any obligation, agreement or covenant of development under this Development Contract. 5. The City may suspend issuance of building permits and/or certificates of occupancy on any of the lots, including those lots sold to third parties, in this Plat. 6. The City may draw upon the Irrevocable Letter of Credit if the City receives notice that the bank elects not to renew the Irrevocable Letter of Credit. 7. The City may, at its option, install or complete the Developer Installed Improvements. 8. Any fees incurred by the City associated with enforcing any of the provisions set out in sections 1-7 above shall be the sole responsibility of the Developer. C. Election of Remedies. None of the actions set forth in this Section are exclusive or otherwise limit the City in any manner. 39. NOTICES. Whenever any paragraph in this Development Contract, with the exception of paragraphs 14 and 15, requires Notice to be provided to the Developer, the notice shall include the following: (1) the nature of the breach of the term or condition that requires compliance by the Developer, or the Event of Default that has occurred; (2) what the Developer must do to cure the breach or remedy the Event of Default; and (3) the time the developer has to cure the breach or remedy the Event of Default. Required Notices to the Developer shall be in writing, and shall be either hand delivered to the Developer, its employees or agents, or mailed to the Developer by certified mail at the following address: . Notices to the City shall be in writing and shall be either hand delivered to the City Manager, or mailed to the City by certified mail in care of the City Manager at the following address: City of Prior Lake, 16200 Eagle Creek Avenue, Prior Lake, Minnesota 55372-1714. Concurrent with providing Notice to the City, Notice(s) shall be served upon the City Attorney Suesan Lea I :\deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 18 DRAFT Pace, Esq. at Halleland Lewis Nilan Sipkins & Johnson, Pillsbury Center South, 220 South Sixth Street, Suite 600, Minneapolis, Minnesota, 55402-4501. 40. INDEMNIFICATION. Developer shall indemnify, defend, and hold the City, its Council, agents, employees, attorneys and representatives harmless against and in respect of any and all claims, demands, actions, suits, proceedings, liens, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including interest, penalties, and attorneys' fees, that the City incurs or suffers, which arise out of, result from or relate to this Development Contract. The responsibility to indemnify and hold the City harmless from claims arising out of or resulting from the actions or inactions of the City, its Council, agents, employees, attorneys and representatives does not extend to any willful or intentional misconduct on the part of any of these individuals. 41. NO THIRD PARTY RECOURSE. Third parties shall have no recourse against the City under this Development Contract. Any party allegedly injured or aggrieved as a result of the City's approval of the Plat shall seek recourse against the Developer or the Developer's agents. In all such matters, including court actions, the indemnification and hold harmless provisions set out in Paragraph 40 shall apply to said actions. 42. INSURANCE REOUIREMENTS. Developer, at its sole cost and expense, shall take out and maintain or cause to be taken out and maintained, until the expiration of the warranty period(s) on the Developer Installed Improvements, public liability and property damage insurance covering personal injury, including death, and claims for property damage which may arise out of Developer's work or the work of its subcontractors or by one directly or indirectly employed by any of them. Limits for bodily injury and death shall be not less than $1,000,000 for one person and $2,000,000 for each occurrence; limits for property damage shall be not less than $500,000 for each occurrence; or a combination single limit policy of $1,000,000 or more. The City shall be named as an additional insured on the policy, and the I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 19 T DRAFT Developer shall file with the City a certificate evidencing coverage prior to the City signing the Plat. The certificate shall provide that the City must be given thirty (30) days advance written notice of the cancellation of the insurance. The Certificate shall be in the form attached hereto as Exhibit C. 43. RECORDING DEVELOPMENT CONTRACT. This Development Contract shall run with the land. The Developer, at it's sole cost and expense, shall record this Development Contract against the title to the property within ninety (90) days of the City Council's approval of the Development Contract. The Developer shall provide the City with a recorded copy of the Development Contract. The Developer covenants with the City, its successors and assigns, that the Developer is well seized in fee title of the property being final platted and/or has obtained consents to this Development Contract, in the form attached hereto, from all parties who have an interest in the property; that there are no unrecorded interests in the property being final platted; and that the Developer indemnifies and holds the City harmless for any breach of the foregoing covenants. 44. SPECIAL PROVISIONS. The following special proVISIons shall apply to Plat development: A. Compliance with all of the conditions listed in the Resolution approving the final Plat. B. The Developer is required to submit the fmal Plat m electronic format. The electronic format shall be compatible with the City's current software. C. The Developer hereby waives any claim against the City for removal of signs placed in the right-of-way in violation of the City Zoning Ordinance and State Statutes. The City shall not be responsible for any damage to, or loss of, signs removed pursuant to this provision. 45. MISCELLANEOUS. I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 20 DRAFT A. Compliance With Other Laws. The Developer represents to the City that the Plat complies with all county, metropolitan, state, and federal laws and regulations, including but not limited to: subdivision ordinances, zoning ordinances, and environmental regulations. If the City determines that the Plat does not comply, the City may, at its option, refuse to allow construction or development work in the Plat until the Developer does comply. Upon the City's demand, the Developer shall cease work until there is compliance. B. Severability. If any portion, section, subsection, sentence, clause, paragraph, or phrase of this Development Contract is for any reason held invalid, such decision shall not affect the validity of the remaining portion of this Development Contract. C. Amendments. There shall be no amendments to this Development Contract unless in writing, signed by the parties and approved by resolution of the City Council. The City's failure to promptly take legal action to enforce this Development Contract shall not be a waiver or release. D. Assignment. The Developer may not assign this Development Contract without the prior written approval of the City Council. The Developer's obligation hereunder shall continue in full force and effect even if the Developer sells one or more lots, the entire Plat, or any part of it. E. Interpretation. This Development Contract shall be interpreted in accordance with and governed by the laws of the State of Minnesota. The words herein and hereof and words of similar import, without reference to any particular section or subdivision, refer to this Development Contract as a whole rather than to any particular section or subdivision hereof. Titles in this Development Contract are inserted for convenience of reference only and shall be disregarded in constructing or interpreting any of its provlSlons. F. Jurisdicition. This Development Contract shall be governed by the laws of the State of Minnesota. I:\deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 21 DRAFT CITY OF PRIOR LAKE (SEAL) By: Jack G. Haugen, Mayor By: Frank Boyles, City Manager DEVELOPER: By: Its: By: Its: STATE OF MINNESOTA ) ( ss. COUNTY OF SCOTT) The foregoing instrument was acknowledged before me this _ day of , 20_, by Jack G. Haugen, Mayor, and by Frank Boyles, City Manager, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. NOTARY PUBLIC STATE OF MINNESOTA ) ( ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of ,20_, by NOTARY PUBLIC 1 :\deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 22 DRAFT DRAFTED BY: City of Prior Lake 16200 Eagle Creek Avenue SE Prior Lake, Minnesota 55372 I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 23 T DRAFT FEE OWNER CONSENT TO DEVELOPMENT CONTRACT , fee owners of all or part of the subject property, the development of which is governed by the foregoing Development Contract, affirm and consent to the provisions thereof and agree to be bound by the provisions as the same may apply to that portion of the subject property owned by them. Dated this _ day of ,20_ STATE OF MINNESOTA ) ( ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 20_, by NOTARY PUBLIC DRAFTED BY: City of Prior Lake 16200 Eagle Creek Avenue SE Prior Lake, Minnesota 55372 I:\deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 24 DRAFT MORTGAGEE CONSENT TO DEVELOPMENT CONTRACT , which holds a mortgage on the subject property, the development of which is governed by the foregoing Development Contract, agrees that the Development Contract shall remain in full force and effect even if it forecloses on its mortgage. Dated this _ day of ,20_ STATE OF MINNESOTA ) ( ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 20_, by NOTARY PUBLIC DRAFfEDBY: City of Prior Lake . 16200 Eagle Creek Avenue SE Prior Lake, Minnesota 55372 I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 25 DRAFT CONTRACT PURCHASER CONSENT TO DEVELOPMENT CONTRACT , which/who has a contract purchaser's interest in all or part of the subject property, the development of which is governed by the foregoing Development Contract, hereby affirms and consents to the provisions thereof and agrees to be bound by the provisions as the same may apply to that portion of the subject property in which there is a contract purchaser's interest. Dated this _ day of ,20_ STATE OF MINNESOTA ) ( ss. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 20____, by NOTARY PUBLIC DRAFTED BY: City of Prior Lake 16200 Eagle Creek Avenue SE Prior Lake, Minnesota 55372 I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 26 DRAFT EXHIBIT" A" TO DEVELOPMENT CONTRACT Legal Description of Property Being Final Platted and Copy of Final Plat, Including Title Sheet: ]: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 27 T DRAFT EXHIBIT "B" SAMPLE IRREVOCABLE LETTER OF CREDIT No. Date: TO: City of Prior Lake. 16200 Eagle Creek Avenue Prior Lake, Minnesota 55372-1715 Dear Sir or Madam: We hereby issue, for the account of (Name of Developer) and in your favor, our Irrevocable Letter of Credit in the amount of $ , available to you by your draft drawn on sight on the undersigned bank. The draft must: a) Bear the clause, "Drawn under Letter of Credit No. (Name of Bank) "; , dated , 20_, of b) Be signed by the Mayor or City Manager of the City of Prior Lake. c) Be presented for payment at (Address of Bank) , on or before 4:00 p.m. on November 30, 20_. This Letter of Credit shall automatically renew for successive one-year terms unless, at least forty-five (45) days prior to the next annual renewal date (which shall be November 30 of each year), the Bank delivers written notice to the Prior Lake City Manager that it intends to modify the terms of, or cancel, this Letter of Credit. Written notice is effective if sent by certified mail, postage prepaid, and deposited in the U.S. Mail, at least forty-five (45) days prior to the next annual renewal date addressed as follows: Prior Lake City Manager, Prior Lake City Hall, 16200 Eagle Creek Avenue, Prior Lake, Minnesota 55372-1714, and is actually received by the City Manager at least forty-five (45) days prior to the renewal date. This Letter of Credit sets forth in full our understanding which shall not in any way be modified, amended, amplified, or limited by reference to any document, instrument, or agreement, whether or not referred to herein. This Letter of Credit is not assignable. This is not a Notation Letter of Credit. More than one draw may be made under this Letter of Credit. This Letter of Credit shall be govemed by the most recent revision of the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 400. We hereby agree that a draft drawn under and in compliance with this Letter of Credit shall be duly honored upon presentation. BY: Its I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 28 DRAFT EXHIBIT "C" SAMPLE CERTIFICATE OF INSURANCE PROJECT: CERTIFICATE HOLDER: City of Prior Lake 16200 Eagle Creek Avenue Prior Lake, Minnesota 55372-1714 INSURED: ADDITIONAL INSURED: City of Prior Lake AGENT: WORKERS' COMPENSATION: Policy No. Expiration Date: Effective Date: Insurance Company: COVERAGE - Workers' Compensation, Statutory. GENERAL LIABILITY: Policy No. Expiration Date: Effective Date: Insurance Company: ( ) Claims Made ( ) Occurrence LIMITS: [Minimum] Bodily Injury and Death: $1,000,000 for one person $2,000,000 for each occurrence Property Damage: $500,000 for each occurrence -OR- Combination Single Limit Policy $1,000,000 or more COVERAGE PROVIDED: I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 29 DRAFT Operations of Contractor: YES Operations of Sub-Contractor (Contingent): YES Does Personal Injury Include Claims Related to Employment? YES Completed Operations/Products: YES Contractual Liability (Broad Form): YES Governmental Immunity is Waived: YES Property Damage Liability Includes: Damage Due to Blasting YES Damage Due to Collapse YES Damage Due to Underground Facilities YES Broad Form Property Damage YES AUTOMOBILE LIABILITY: Policy No. Effective Date: Expiration Date: Insurance Company: (X) Any Auto LIMITS: [Minimum] Bodily Injury: $1,000,000 each person $2,000,000 each occurrence Property Damage: $500,000 each occurrence -OR- Combined Single Limit Policy: $1,000,000 each occurrence ARE ANY DEDUCTIBLES APPLICABLE TO BODILY INJURY OR PROPERTY DAMAGE ON ANY OF THE ABOVE COVERAGES: If so, list: Amount: $ [Not to exceed $1,000.00] SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL MAIL TIllRTY (30) DAYS WRITTEN NOTICE TO THE PARTIES TO WHOM TillS CERTIFICATE IS ISSUED. Dated at On BY: Authorized Insurance Representative I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 30 DRAFT EXHIBIT "D" TO DEVELOPMENT CONTRACT (Oversizing Calculations for Developer Installed Improvements) A. OVERSIZING I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 31 DRAFT EXHIBIT "E" TO DEVELOPMENT CONTRACT ESTIMATED CONSTRUCTION COSTS I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 32 DRAFT <""""- EXHIBIT "F" TO DEVELOPMENT CONTRACT CONDITIONS OF PLAT APPROVAL 1. A current title opinion or commitment of title insurance is submitted acceptable to the City Attorney. 2. Payment of all fees prior to release of the final plat mylars. _ 3. Reductions of the entire final plat be submitted, to the following scales: 1" = 800'; I" = 200'; and one reduction at no scale which fits onto an 81/2" x 11" sheet of paper. 4. Four mylar sets of the final plat with all required signatures are submitted. 5. The developer provides financial security, acceptable to the City Engineer prior to release of the final plat mylars. 6. The final plat and all pertinent documents must be filed with Scott County within 90 days from the date of fmal plat approval. Failure to record the documents by , will render the final plat null and void. I: \deptwork\devcontr\revisions\revised contract.doc 1/29/02 Page 33