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Home My WebLink About9D - Deerfield Ind. Park 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: CITY COUNCIL AGENDA REPORT SEPTEMBER 19, 2005 9D STEVE ALBRECHT, DIRECTOR OF PUBLIC WORKS CONSIDER APPROVAL OF A RESOLUTION CONSIDERING A REQUEST TO AMEND THE DEERFIELD INDUSTRIAL PARK DEVELOPMENT CONTRACT, CITY PROJECT # 03-40 Introduction As part of their development contract, Eagle Creek Development LLC was to extend Adelmann Street from existing terminus at Cottonwood Lane to the property line of Deerfield Industrial Park. Eagle Creek Development LLC has requested an amendment to the development contract for Deerfield Industrial Park. The developer incurred additional costs during construction of Adelmann Street beyond the amounts the City already paid. History On August 16, 2004 the City Council approved the development contract and final plat for Deerfield Industrial Park. The development contract included reimbursement of $153,406.10 to the developer for construction of Adelmann Street to the developer's property. As part of the Waterfront Passage development Adelmann Street should have been constructed to the Deerfield Industrial Park property. The Developer's Engineer provided costs estimates for the construction which were included as exhibit "E" to the contract. Current Circumstances The developer has requested reimbursement for additional costs incurred during construction of Adelmann Street for the following items: 1 ) Storm Sewer: The developer's engineer did not include salvage and replacement of the existing 24-inch storm sewer in Adelmann Street in the estimate. This work was required for connection to the existing utilities. This amount for this additional storm sewer works was $2,156.80. 2) Trench Rock: Even though the utility work was within 50 feet of an existing storm water pond the developer's engineer did not include additional trench rock or stabilizing aggregate in the bid. During construction wet conditions were encountered and additional materials were required. The amount for these additional materials is $2,390.06. 3) Road Construction: As part of the project review City Staff requested a pavement design from the developer several times. After the development contract had been approved the design was submitted and additional aggregate base was required for the road to meet minimum design requirements. The total for the additional street subgrade construction costs was $4,464.00. 4) Off-site Muck Disposal: The City reimbursed the developer for common and pond excavation associated with the construction of Adelmann Street. The developer feels that their estimated cost did not include the cost of disposal of this material. The additional cost for the off-site muck disposal is $8,100.00. C: ',n""<n,"',v"",,:,"i"J'n-4n ",,,,,.,,,,'(1' f,' \ ,co,' "'" ,\AIU/U1 rituofpriorblro.com ,.J. ,Lit., '~":""/~'::;' /v: :"".~ j"d",,,. :.V as,.,: ~h.J..~ndus~, wI .D",,\} \.1"sfh.raC! !\gnti<<:3"".... ,71....:7V.~~ Phone 952.447.4230 I Fax 952.447.4245 ISSUES: FINANCIAL IMPACT: ALTERNATIVES: The developer is requesting an additional $17,110.86 from the City. City Staff is unaware of any previous reimbursements made to developers for oversizing or construction of City improvements, due to incorrect estimates provided by the developer. We have reimbursed for changes made during construction by the City. The developer should have received written approval from the City prior incurring additional costs if they planned on requesting reimbursement. Amending the contract could set a precedent regarding the City's liability for costs. The following issues should be carefully considered: 1) Other developers who have previously incurred additional costs related to over-sizing may seek additional reimbursement. 2) The developers often do not receive competitive bids for these items and thus the City pays more than we would if the costs were bid competitively. The City reimburses at average project costs based on City projects. 3) The City does not track oversizing quantities on private developments. The Developer's Engineer tracks these and we review their quantities if we have questions. Our inspectors do verify rough field quantities to ensure the City is getting what we have paid for. As part of the new development contract adopted by the City Council in June of 2005 the City has added the following language: "No additiona/oversizing compensation relating to this Development Contract shall be made unless approved in writing by the City Engineer and approved by the City Council. /t is the Deve/oper's responsibility to provide accurate estimates in accordance with the approved construction plans. " If the Council wishes to consider additional reimbursement to the developer staff recommends that only storm sewer, trench rock and street construction be reimbursed. Had the developer provided accurate estimates for these items they would have been reimbursed as part of the original contract. The reimbursement amount for these items is $9,010.86. City staff does not recommend that additional reimbursement for off-site muck disposal be made. The City paid for this item as part of the original contract and is not responsible for where or how the developer disposes of the material. The City Council should be aware that City Staff is currently considering drawing on the letter of credit for this development. The required improvements to Industrial Lane near Paws and Pals have not been completed at this time as required by the contract. The developer has committed in writing to the City that the improvements will be completed this fall, starting no later than October 15, 2005. City Staff will keep the Council apprised of this situation. Any reimbursement will be paid for from the Street Oversize, Trunk Sewer and Water funds. The reimbursement costs are currently available in these funds. However, other developers may contend that this reimbursement sets a precedent requiring the City to make similar payments on other developments that have previously incurred additional costs. The alternatives are as follows: 1. Approve a Resolution approving the Amendment of the Deerfield Industrial Contract Agcr;ds 912C5doc RECOMMENDED MOTION: Park Development Contract authorizing reimbursement of $9,010.86 to Eagle Creek Development LLC. 2. Deny this agenda item, affirming that the Developer did not obtain written City approval f or additional costs a nd that t he errors were based on the Developer's construction estimate. 3. Table this item for a specific reason. Staff recommends alternative #2. Boyles, City Manager Contract Agcrida 91 2C5doo 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 RESOLUTION 05-XX RESOLUTION AMENDING THE DEVELOPMENT CONTRACT FOR DEERFIELD INDUSTRIAL PARK (CITY PROJECT # 03-40) MOTION BY: SECOND BY: WHEREAS, The City Council approved the Development Contract for Deerfield Industrial Park on August 16, 2005; and WHEREAS, The Developer has requested and amendment to that contract for the costs associated with construction of Adelmann Street from Cottonwood Lane to the Deerfield Industrial Park property; and WHEREAS, The additional costs incurred for the City's portion are $9,010.86. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA, that: 1. The recitals set forth above are incorporated herein. 2. The City Council approves reimbursement of $9,010.86 to Deerfield Industrial Park. 3. The reimbursement shall be apportioned as follows: $2,390.06 from the Trunk Sewer Fund and $6,620.80 from the Street Oversize Fund. Passed this 19th day of September 2005. Hauaen Hauaen Flemina Flemina LeMair LeMair Petersen Petersen Zieska Zieska YES NO { Seal } Frank Boyles, City Manager {" \r), '''''c'''n'''r,''^'N'';^<jO ,.",'.A''''ldr''dl sl^I""I\D'~v (."I'tUJUJI.U"'citq()f....~l"'lrn.com ~:J, ,t t'\;":::h.~: .;,:, :,:j,L v\,..,.,/~f ._u.....{;:.' Jlc.~" ~ L., g \1. >,;.:, ),,~ !<,J"acr R8~r1\73'~:Jr~.tn.~ Phone 952.447.4230 / Fax 952.447.4245