Loading...
HomeMy WebLinkAbout5G Release of Development Agreements Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: MARCH 28, 2016 AGENDA #: 5G PREPARED BY: CASEY MCCABE, COMMUNITY DEVELOPMENT SPECIALIST PRESENTED BY: SARAH SCHWARZHOFF, CITY ATTORNEY AGENDA ITEM: CONSIDER APPROVAL TO RELEASE DEVELOPMENT AGREEMENTS FOR PRIOR LAKE PROPERTIES LLC DISCUSSION: Introduction The purpose of this agenda item is to consider authorizing the Mayor and City Manager to execute the attached Release of Development Agreements. History The City of Prior Lake and Anthony Shanks entered into a Development Agreement in October 1995 related to the establishment of an Economic Development TIF district and the purchase of 1.85 acres of property from the EDA to support the NBC Products, Inc. project at 16873 Fish Point Road SE. The same two parties entered into a second Development Agreement in May 1998 related to the purchase of an additional 1.16 acres of property from the EDA. Current Circumstances The City of Prior Lake has received a request from Prior Lake Properties, LLC, which is the current owner of the 16873 Fish Point Road SE property, to release the two development agreements. The property is being sold and since all obligations of the developer have been fully performed the property owner asks that the City of Prior Lake affirm in a recordable instrument that all obligations of the Developer, and its successor owners, under the Development Agreements, have been fully performed and satisfied, and the Property is released and discharged from all covenants, conditions, restrictions and provisions contained in the Development Agreements. The City of Prior Lake executed a Certificate of Completion and Release of Forfeiture on February 14, 2007. The Certificate of Completion certified that all building construction and other physical improvements have been completed and the covenants and conditions in the Deed and Development Agreements have been performed by the Grantee and the provisions for forfeiture of title and right to re-entry are released absolutely and forever; however, the Certificate of Completion did include the following language, “… said Deed and Development Agreements shall otherwise remain in full force and effect.” The language related to the Development Agreements remaining in full force and effect is concerning to the property purchaser and title company. The property owner is requesting the Release of Development Agreements to clarify that all obligations of the Grantee have been completed and written 2 consent is not required from the City of Prior Lake prior to sale or transfer the property. Conclusion The City Attorney does not generally recommend that the City release development agreements as they include provisions of general effect such as stormwater requirements and code compliance which the City prefers to retain. In such cases the city will often provide a partial release which maintains the provisions of general effect but releases provisions related to construction and payment of fees which are complete. However, although these documents are titled “development agreements” they are not land use development agreements such as the city uses today. Instead they are financing agreements which address the TIF financing. Due to the complexities, the City of Prior Lake reviews requests for release on a case by case basis and presents them to Council for approval. The City Attorney and city staff have confirmed that all work to be performed under the Developments Agreements is complete, that all fees have been paid, and that the TIF district related to the Development Agreements has been decertified; In review of the Development Agreements (there are two agreements but the language is very similar) there are few provisions of general effect. There is language in the developer warranties in which the developer agrees to pay all costs related to an event of default and to cooperate with the City in relation to any issues such as traffic or trash created by construction or operation of the project. In addition, the agreements provide language requiring the developer to pay any attorney fees related to enforcement and to indemnify the City in certain situations. Finally, there are restrictions on the use of the property. If the City releases the development agreements there may be some risk that the City is reducing the enforcement options it may currently have. However, due to the fact that most of the remedies are tied to the agreements themselves, the risk is relatively minor. ISSUES: The City does not have any obligation to release the development agreements, however, based on discussion with staff the City Attorney’s Office has concluded that the risk in releasing the development agreements is limited, due to their age, the completion of all related work, the decertification of the TIF district, and the lack of significant provisions of general effect. FINANCIAL IMPACT: The costs associated with the Prior Lake City Attorney’s legal review are being paid by the applicant. ALTERNATIVES: 1. Motion and a second, as part of the Consent Agenda, authorizing the Mayor and City Manager to execute the Release of Development Agreements. 2. Motion and a second denying the Release of Development Agreements. 3. Motion and a second to table the matter and provide direction to staff. RECOMMENDED MOTION: ATTACHMENT: Alternative #1 1. Release of Development Agreements RELEASE OF DEVELOPMENT AGREEMENTS WHEREAS, the City of Prior Lake, a Minnesota municipal corporation (“City”) and Anthony Shanks entered into that certain Development Agreement, dated October 16, 1995 and recorded in the office of the Scott County Recorder on November 27, 1995 as Document No. 361968 and into that certain Development Agreement, dated May 15, 1998 and recorded in the office of the Scott County Recorder on August 6, 1998 as Document No. 422335 (collectively the “Development Agreements”); WHEREAS, the City has confirmed that all work to be performed under the Developments Agreements is complete, that all fees have been paid, and that the TIF district related to the Development Agreements has been decertified; NOW THEREFORE, the Development Agreements are hereby terminated and all property governed thereby is released. CITY OF PRIOR LAKE ________________________________ ______________________________ Kenneth L. Hedberg, Mayor Frank Boyles, City Manager STATE OF MINNESOTA ) ( ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this 28th day of March, 2016, by Kenneth L. Hedberg, 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 DRAFTED BY: Gregerson, Rosow, Johnson & Nilan, LTD 100 Washington Ave S, Suite 1550 Minneapolis, MN 55401