The URL can be used to link to this page

Home My WebLink About5.C.2. Cash Deposit Agreement for the Extension of Hansen Avenue s'c.L . CITY OF SHAKOPEE Memorandum CONSENT TO: Mayor & City Council Mark McNeill, City Administrator FROM: Bruce Loney, Public Works Director SUBJECT: Authorize the Appropriate Officials to execute a Cash Deposit Agreement for the Extension of Hansen A venue from Crossings Boulevard to County Road 18 DATE: September 1, 2009 INTRODUCTION: Attached is a Cash Deposit Agreement between Shakopee Crossings Limited Partnership and the City of Shakopee for the construction of Hansen A venue from Crossings Boulevard to County Road 18, as prepared by the City Attorney. This agreement is for City Council consideration in moving forward with the extension of the roadway and improving access to the adjacent properties. BACKGROUND: The Developer submitted a request to complete the construction of Hansen A venue west of its existing location to County Road 18 in order to improve access to their property and facilitate future development. The Developer and the City entered into a Reimbursement Agreement (dated April 21, 2009) and agreed the Developer will construct the project utilizing their contractor and their financing. Pursuant to the recently approved Developer's Agreement (dated August 5, 2009), the Developer and the City are to enter into a Cash Deposit Agreement in lieu of the Developer providing a letter of credit to satisfy the City's financial security requirements for the construction of the project improvements. ALTERNATIVES: 1. Authorize the appropriate officials to execute a Cash Deposit Agreement for the extension of Hansen Avenue from Crossings Boulevard to County Road 18. 2. Do not authorize the appropriate officials to execute a Cash Deposit Agreement for the extension of Hansen A venue from Crossings Boulevard to County Road 18. 3. Table for additional information. RECOMMENDATION: Staff recommends Alternative No.1, as the Developer has agreed to construct the Hansen Avenue improvements as a private development project and a Developer's Agreement has been approved. This roadway will improve access and facilitate future development of th~. adj acent properties. ACTION REOUESTED: 1. Authorize the appropriate officials to execute a Cash Deposit Agreement for the extension of Hansen Avenue from Crossings Boulevard to County Road 18. ~~ Public Works Director BLlpmp ENGR/2009 ENGINEERING PROlECTS/Hansen AvenueIWORD CASH DEPOSIT AGREEMENT THIS AGREEMENT, made and entered into on this _ day of August, 2009, by and between the City of Shakopee, a municipal corporation organized under the laws of the State of Minnesota ("City") and Shakopee Crossings Limited Partnership, a Wisconsin limited partnership ("Developer"). RECITALS (1) The Developer has submitted and the City has approved a request to complete the construction of Hansen A venue west of its existing location to a limited access point along CSAH 21 ("Project"); and (2) The City and the Developer have entered into a Developer's Agreement, dated ,2009 concerning the Project ("Developer's Agreement"); and (3) The Developer has agreed to construct and install the improvements defined in the Developer's Agreement as "Project Improvements" at its cost; and (4) In lieu of a letter of credit, the Developer has requested and the City has agreed to allow the Developer to make a cash deposit with the City to satisfy the City's financial security requirements that will ensure that the Project Improvements are satisfactorily completed, any defective work is corrected or repaired and the Project contractors and materials suppliers are paid. NOW, THEREFORE, in consideration of the mutual covenants, promises and conditions contained in this Agreement, the City and the Developer agree as follows: 1. Cash Deposit. Simultaneously with submitting an executed copy of the Developer's Agreement with the City, the Developer shall deposit with the City the sum of $436,550.63 which is 125 percent of the total estimated Project costs as approved by the City Engineer ("Cash Deposit"). The City shall hold the Cash Deposit funds in its escrow fund. The Cash Deposit will bear annual interest for each year at a rate equal to one percent below the average interest rate (rounded to the nearest quarter) on the investments held by the City on December 31 st of the respective year. The interest on the Cash Deposit will accrue until there are no longer any of the Cash Deposit funds left in the escrow fund or the remaining Cash Deposit funds are released to the Developer by the City. 2. Use of the Cash Deposit. The Cash Deposit plus any accrued interest is to be used by the City for making payments to Developer's contractors for labor and materials as they become due, to pay for the installation of any uncompleted Project Improvements and the correction or repair of any defective work. The Project Improvements contemplated by this Agreement and the Developer's Agreement, upon completion and acceptance by the City, will become municipal improvements to be held, managed and maintained by the City, Therefore, it is essential that the materials used and the construction be completed 355557v2 SJS SH155-224 I in accordance with the Developer's Agreement and the approved construction plans and specifications thereof on a timely basis. Upon failure of Developer to faithfully comply with the terms of the Developer's Agreement, or in the City's opinion that Developer is not making a good faith effort to timely complete the Project Improvements, the City, may, in addition to any other remedy it may have, enter upon the site and perform, or cause to have performed, any obligation of Developer under said Developer's Agreement, which shall be paid out of the Cash Deposit. 3. The Developer shall submit invoices for labor and materials for the Project Improvements to the City to be paid by the City from the Cash Deposit on a monthly basis. The City shall pay the invoices submitted by the Developer for a particular month only one time per month. It is fully understood and acknowledged by and between the City and the Developer that payment of invoices by the City does not constitute approval or acceptance by the City of the work that was performed or the materials that were supplied. The Developer understands and agrees that in no event will the City allow the Cash Deposit amount to drop to less than the full amount of any unpaid inspection and administration costs plus 100 percent of the amount that the City Engineer deems necessary to complete all of the remaining Project Improvements. In addition, the City will also withhold 25 percent of the original Cash Deposit amount, unless the City Engineer determines that a lesser percentage will be sufficient to ensure satisfactory completion of the Project Improvements. Therefore, in either of these events, the invoices from contractors and materials suppliers will not be paid by the City from the Cash Deposit. The Developer will be responsible for directly paying the Project contractors and materials suppliers from its own funds. 4. Upon written request by the Developer, the Cash Deposit may be fully released by the City when: 1) the City Engineer determines that all required improvements have been satisfactorily completed in accordance with the approved construction plans and specifications and the approved Storm Water Pollution Prevention Plan; 2) the City Engineer determines that all required improvements have been satisfactorily completed in accordance with the most recent editions of the City Design Criteria and the City General Specifications and Standard Detail Plates for Street and Utility Construction; 3) the Developer submits to the City Engineer a detailed reproducible drawing, including an electronic form outlined in the most recent edition of the City Design Criteria of the improvements showing the details as required by the City Design Criteria; 4) the Developer or its contractor submits a maintenance bond as required by the Developer's Agreement; and 5) the Developer has met all of its requirements and obligations set forth by the Developer's Agreement to the City's satisfaction. Should the Developer or its contractor fail or refuse to submit a maintenance bond, the City may retain some or all of the funds as security for the guarantee as provided in the Developer' Agreement. In that event, the City is authorized to use the Cash Deposit to complete the improvements or to make such repairs or additions as would be provided under the guarantee, when in the judgment of the City, the City determines that the Developer is not going to complete the improvements or make such repairs. 355557v2 SJS SH155-224 2 6. The Developer and the City agree that the Cash Deposit is unconditionally pledged for payment pursuant to the terms of this Agreement and any bankruptcy, insolvency or other financial difficulty of the Developer shall not affect the City's obligation to disburse the funds pursuant to the terms of this Agreement. 7. The Developer may terminate this Agreement if it provides the City with an alternative form of financial security in a form and amount that is satisfactory to the City. IN WITNESS WHEREOF, the City and Developer have caused this Agreement to be duly executed on the day and year first above written. CITY OF SHAKOPEE By: John Schmitt Its: Mayor By: Mark McNeill Its: City Administrator By: Judith Cox Its: City Clerk SHAKOPEE CROSSINGS LIMITED PARTNERSHIP By: Its: 355557v2 SJS SHl55-224 3