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HomeMy WebLinkAbout7.F.7. Amendment to Developer's Agreement for Ryan Companies 7,F7 fr{i5eoZ City of Shakopee Memorandum CONSENT TO: Mayor and City Council Mark McNeill, City Administrator FROM: Kris Wilson, Assistant City Administrator SUBJECT: Amendment toDeveloper's Agreement for Dean Lakes DATE: August 9, 2006 Introduction The City Council is asked to authorize staff to execute an amended Developer's Agreement with Ryan Companies for the Dean Lakes Business Park so that Ryan Companies' letter of credit for assessments can be reduced at the time a certificate of occupancy is issued. Background Ryan Companies has approached the City with a request to amend the Developer's . Agreement for the Dean Lakes Business Park. The current language of the agreement requires Ryan to provide a letter of credit valued at 75% of the amount of the assessments for Plan B Improvements to. the property. Currently, this letter of credit can only be reduced when assessments are paid, so that the letter of credit equals the actual amount of assessments due... Ryan has asked that when acertific~te of occupan~y has been issued for an improved commercial property that we allow the1rletter of credit to be reduced by the amount of the remaining assessment against that property. Ryan's position is that the improvements on an individual parcel back any outstanding assessments on that parcel, therefore allowing for a reduction in their letter of credit by a corresponding amount. Should the assessments on such a parcel go unpaid, the City could seek to collect as it would for unpaid taxes. The City Council discussed Ryan's requestat their July 18 meeting and directed staff to draft the language necessary to accommodate Ryan's request and bring it back to the Council for fonnal action. The. following is the amended language for the Developer's Agreement, as drafted by st~ff and reviewed by the City Attorney: 2) Payment Method Two (2): Seventy-five (75) Percent Letter of Credit. The Developer shall submit to the City a certified letter of credit approved by the City Attorney made payable to the City of Shakopee upon which the City may draw, in the amount of 75% of the City Engineer's estimated total assessment for all such Plan B I Improvements, said letter of credit to be submitted upon execution of this agreement. If the Developer fails to pay any assessments, interest or penalty as the same come due, the City may draw on said letter of credit for any such amounts not paid. Those assessments as levied shan be paid by the Developer of a future lot, piece or parcel owner to the City as special assessments levied against the benefited land. The letter of credit shall be renewed annually. If not renewed, the City shall draw on all ofthe money in the existing letter of credit before it expires. The letter of credit shan be terminated upon payment of an assessments due on Developer owned lots and may be reduced to equal the actual amount of assessments due when 25% or more of the assessments have been paid. Such reductions are limited to one per year. The letter of credit may also be reduced in an amount equal to the outstanding balance of the special assessments apportioned to a parcel-ofland that is zoned "Business Park" when a certificate of occupancy hasbeen issued for?: building onihat parcel if the building is valued by the City's buildin-g official in an amount greater than the outstanding balance of the special assessments apportioned to that parcel. Requested Action: The Council is asked to offer a motion authorizing the appropriate staff to execute an . amended Developer's Agreement with Ryan Companies for the Dean Lakes Business Park, to include the amended language printed above. '- F.^I, City of Shakopee CONSENT Memorandum TO: Mayor and City Council Mark McNeill, City Administrator FROM: Kris Wilson, Assistant City Administrator SUBJECT: Amendment to Developer's Agreement for Dean Lakes DATE: August 9,2006 Introd uction The City Council is asked to authorize staff to execute an amended Developer's Agreement with Ryan Companies for the Dean Lakes Business Park so that Ryan Companies' letter of credit for assessments can be reduced at the time a certificate of occupancy is issued. Background Ryan Companies has approached the City with a request to amend the Developer's Agreement for the Dean Lakes Business Park. The current language ofthe agreement requires Ryan to provide a letter of credit valued at 75% of the amount of the assessments for Plan B Improvements to the property. Currently, this letter of credit can only be reduced when assessments are paid, so that the letter of credit equals the actual amount of assessments due. Ryan has asked that when a certificate of occupancy has been issued for an improved commercial property that we allow their letter of credit to be reduced by the amount of the remaining assessment against that property. . Ryan's position is that the improvements on an individual parcel back any outstanding assessments on that parcel, therefore allowing for a reduction in their letter of credit by a corresponding amount. Should the assessments on such a parcel go unpaid, the City could seek to collect as it would for unpaid taxes. The City Council discussed Ryan's request at their July 18 meeting and directed staff to draft the language necessary to accommodate Ryan's request and bring it back to the Council for formal action. The following is the amended language for the Developer's Agreement, as drafted by staff and reviewed by the City Attorney: 2) Payment Method Two (2): Seventy-five (75) Percent Letter of Credit. The Developer shall submit to the City a certified letter of credit approved by the City Attorney made payable to the City of Shakopee upon which the City may draw, in the amount of75% ofthe City Engineer's estimated total assessment for all such Plan B I Improvements, said letter of credit to be submitted upon execution of this agreement. If the Developer fails to pay any assessments, interest or penalty as the same corne due, the City may draw on said letter of credit for any such amounts not paid. Those assessments as levied shall be paid by the Developer of a future lot, piece or parcel owner to the City as special assessments levied against the benefited land. The letter of credit shall be renewed annually. If not renewed, the City shall draw on all of the money in the existing letter of credit before it expires. The letter of credit shall be terminated upon payment of all assessments due on Developer owned lots and may be reduced to equal the actual amount of assessments due when 25% or more of the assessments have been paid. The letter of credit may also be reduced in an amount equal to the outstanding balance of the special assessments apportioned to a parcel of land that is zoned "Business Park" when a certi:!1cate of occupancy has been issued for a building on that parcel if the building is valued by the City's building official in an amount greater than the outstanding balance ofthe special assessments apportioned to that parcel. Reductions are Iimitedto one per year. Requested Action: The Council is asked to offer a motion authorizing the appropriate staff to execute an amended Developer's Agreement with Ryan Companies for the Dean Lakes Business Park, to include the amended language printed above.