HomeMy WebLinkAbout13.F.1. Consider Easement Encroachment Agreement-8051 Horizon Drive
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CITY OF SHAKOPEE
Memorandum
TO: Mayor and City Council
FROM: Mark McNeill, City Administrator
SUBJECT: Easement Encroachment Agreement
DATE: October 6, 2009
Comment:
Introduction:
The City Council is asked to approve an encroachment agreement for a location adjacent
to 8051 Horizon Drive.
Background:
This issue has been before the City Council a couple of times, most recently on Sept. 1st.
At that time, Council discussed the issue, and sent it back for revision.
Term of the Agreement: As a part of the discussion, the Council had indicated 7 to 10
years' duration would be acceptable. Staff proposed eight in the resulting draft
document, the applicant responded with ten years. The proposed language states that if
the City develops the encroached-upon area during that time, the City will rebate to the
applicants the proportionate amount of the original payment, to be determined by the
remainder ofthe 10 year term.
Insurance: The Council should be aware that the City will not be covered by home
owner liability insurance for incidents caused by the encroachment on public property.
According to the City's insurance broker, their agency has never been able to add an
"additional insured" (such as the city, in this case) toa homeowner's policy. Our broker
indicates that it would be possible to add additional insured on commercial general
liability policies, but that has not been provided by the applicant.
If the homeowners themselves are injured on the encroached property, they will also be 1
without coverage (and would be precluded from suing the City by virtue of the "hold
harmless' provision). In our broker's opinion, personal liability coverage under a
homeowner's policy is third party coverage, and does not extend to the policy holder.
Therefore, if the City Council wishes to approve this agreement, it is with the
understanding that the homeowner's insurance policy will not provide coverage. A Hold
Harmless and Indemnity provision is included in the language.
Maintenance Standards: At the September 1 st meeting, the Council has also directed
minimum standards for maintenance be established. Staff proposed to the applicants that
the encroachments be required to have "a neat and orderly appearance, and be free of
weed and algae at all times". The applicants' attorney countered that the language should
be such that the encroachment area be kept "in a reasonable condition, not inconsistent
with the current natural state ofthe Park Property," and is what is included in the
document. The owners will agree to maintain the pond and waterfall in good working
order so that the water circulates.
The PRAB' s recommendation was to allow the waterfall to remain in place, but that the
remainder of the encroachment be removed. The proposed language allows related
landscaping to remain.
Budget Impact:
A usage fee of$2.50 per square foot, plus a $550 administrative fee is proposed. As an
example cited previously, an 1100 square foot encroachment (exact size of this
encroachment is to be determined) would mean that $2750 would be paid to the City,
plus a $550 administrative fee, for a total of$3300. Given that this is the first
encroachment agreement to be negotiated, the $550 is going to be insufficient to fully
cover the City's costs (the City's legal fees on this encroachment issue are already in
excess of $1 000). However, if approved this agreement would be setting a precedent,
future agreements may help to recoup the initial "set up" expenditure by the City,
depending on how complex they may be.
Fees paid would go into the Park Reserve Fund, unless otherwise directed by the Council.
Recommendation:
If the Council wishes to allow the encroachment remain, it should authorize execution of
the attached agreement.
Relationship to Visioning:
This does not relate to any ofthe City's Visioning goals.
Action Required:
If the Council wishes to authorize the encroachment to remain in place, it should, by
motion, authorize executing of an agreement for an encroachment adjacent to 8051
Horizon Drive, by and between the City of Shakopee, Linda Green, and Richard Wett.
LW1A~
Mark McNeill
City Administrator
MM:cn
ENCROACHMENT AGREEMENT
This Encroachment Agreement ("Agreement") is made as of this _ day of ,
2009, by and between the City of Shakopee, a Minnesota municipal corporation ("City") and
Linda L. Green and Richard J. Wett, wife and husband ("Owners").
RECITALS
A. The Owners own the property located at: 8051 Horizon Drive, City of Shakopee,
County of Scott, State of Minnesota, legally described as follows:
Lot 1, Block 1, Horizon Heights, 3rd Addition
("Owners' Property"); and
B. The City owns undeveloped park property which is adjacent to the Owners'
Property. The legal description of the Park Property is:
Park 1, Horizon Heights
("Park Property"); and
C. The Owners have installed a pond that includes a waterfall and surrounding
landscaping ("Encroachments") that encroach into a portion ("the Encroachment Area") of the
Park Property. A schematic drawing of the Encroachment Area is attached as Exhibit A to this
Agreement; and
D. The City is willing to allow the Encroachments to remain on the Park Property
subject to the terms and conditions contained in this agreement.
AGREEMENT
NOW, THEREFORE, on the basis of the premises and the mutual covenants and
agreements set forth in this Agreement, the parties agree as follows:
1. The City grants the Owners the right to encroach into the Encroachment Area for
the sole purpose of using, operating, maintaining, repairing and replacing the
Encroachments. The permission granted by the City by this Agreement is limited
exclusively to such purposes.
2. The Owners agree to pay the City a fee of $ for the use of the
Encroachment Area along with the City's administrative costs of $550.00 which
were incurred by the City in processing and recording this Agreement. The
Owners shall pay the City these fees upon execution of this Agreement by both
parties.
3. The Owners agree to maintain the Encroachments so that they have a neat and
orderly appearance and in a reasonable condition not inconsistent with the current
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natural state of the Park Property. The Owners also agree to maintain the pond
and waterfall in good working order so that the water circulates.
4. This Agreement shall not prevent or impair the City from using the Encroachment
Area for any use that it is entitled by law to use the Encroachment Area.
5. The City does not warrant that the Encroachment Area is suitable for the purposes
for which it is permitted to be used under this Agreement. The Owners assume all
risk with respect to their activities within and use of the Encroachment Area. The
City shall have no responsibility with regard to any failure of or damage to the
Encroachments.
6. This Agreement shall run with the land and shall inure to the benefit of and be
binding upon the parties to this Agreement and their respective successors and
aSSIgns. This Agreement shall be for an indefinite term and continue until
terminated by one of the parties. Either party may terminate this Agreement at
any time for any reason, by providing prior written notice to the other at least 30
days in advance of the effective date of termination. If such service cannot be
made, service may be posted on the Encroachment Area. An affidavit of
termination signed by the City Administrator shall constitute prima facie evidence
of termination of this Agreement by the City. Notwithstanding the foregoing, the
City shall not be permitted to terminate this Agreement for a period of ten (10)
years after the date of this Agreement, unless the City elects to develop the Park
Property into a Park. In the event that the City elects to develop the Park Property
into a Park and terminates this Agreement within such ten (10) year period, the
City sh.all refund to the Owners the remaining amount of usage fee and
administrative costs that were paid by the Owners. The amount of the refund
shall be calculated by taking the total amount of the usage fee and administrative
costs paid by the Owners and dividing it by 3650 (the number of days in the ten
(10) year period) and multiplying that number by the number of days that remain
in the ten (10) year period as of the effective date of termination.
7. Before the effective date of termination, the Owners shall remove the
Encroachments from the Encroachment Area at their sole cost and expense, and
shall return the Encroachment Area to its preexisting condition or better, unless
otherwise directed by the City.
8. If the Owners fail to remove the Encroachments or to return the Encroachment
Area to its preexisting condition upon termination of this Agreement either by
them or by the City, the City may enter the Encroachment Area and the Owners'
Property and remove the Encroachments. The Owners hereby grant the City a
temporary easement for purposes of entering their Property in order to remove the
Encroachments. The Owners agree that all reasonable costs incurred by the City,
including administrative and reasonable legal costs, III removing the
Encroachments can be assessed against the Property up to a maximum amount of
$10,000 (the "Assessment Amount"). The Owners understand that the exact
amount of the assessments cannot be determined at the present time, and
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understand that the final assessment will be determined in accordance with the
City's adopted assessment policy. The Owners waive notice of hearing and
hearing with regard to the Assessment Amount. The Owners waive all right to
appeal or otherwise contest or challenge the levy of the Assessment Amount. The
Owners further agree that any requirements of Minnesota Statutes, Chapter 429
relating to the Assessment Amount are waived to the extent that such
requirements are not met.
If the actual cost of removing the Encroachments is greater than the Assessment
Amount, the City reserves the right to levy an assessment in a greater amount or
to levy supplemental assessments pursuant to Minnesota Statutes, Section
429.071, but the Owners have not consented or agreed to such greater amount or
supplemental assessments, nor have they waived any of their rights to challenge
such greater assessment anlount or supplement assessment pursuant to Minnesota
Statutes Chapter 429.
9. The Owners shall indemnify, hold harmless and defend the City, its officials,
employees, contractors and agents, from and against any and all claims, losses,
proceedings, damages, causes of action, liability, costs or expenses (including
reasonable attorneys' fees), arising from or in connection with or caused by any
act, omission or negligence of the Owners, their contractors, licensees, invitees,
agents, servants or employees in connection with the construction, repair,
maintenance, removal or operation of the Encroachments. In addition, the
Owners shall indemnify, hold harmless and defend the City, its officials,
employees, contractors and agents, from and against any and all claims, losses,
proceedings, damages, causes of action, liability, costs or expenses (including
reasonable attorneys' fees) caused by an injury to a member of the public caused
by the Encroachments.
10. The Owners agree not to suffer or allow any liens, claims and processes to be
placed against the City's rights to or interest in the Encroachment Area as a result
of the use of the Encroachment Area, including, without limitation, any liens for
labor or materials provided for the construction, repair or maintenance of the
Encroachments.
11. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Minnesota.
12. This Agreement shall constitute the entire agreement of the parties and any prior
understanding or representation of any kind preceding the date of this Agreement
shall not be binding upon either party except to the extent incorporated in this
Agreement.
13. Any modification of this Agreement shall be binding only if evidenced in writing
signed by both parties.
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14. Required notices to the parties to this Agreement shall be in writing, and shall
either be hand delivered or mailed to the following addresses:
a) As to the City: City of Shakopee
129 South Holmes Street
Shakopee,~ 55443-4300
Attn: City Administrator
b) As to the Owners: Linda L. Green and Richard J. Wett
8051 Horizon Drive
Shakopee, MN 55443
or at such other address as either party may from time to time notify the other in writing.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
CITY OF SHAKOPEE
By:
John Schmitt
Its: Mayor
By:
Mark McNeill
Its; City Administrator
By:
Judith S. Cox
Its: City Clerk
STATE OF MINNESOTA )
) ss.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this _ day of ,
2009, by John Schmitt, Mark McNeill and Judith S. Cox, the Mayor, City Administrator and City
Clerk respectively, of the City of Shakopee, Minnesota, a municipal corporation, on behalf of the
City.
Notary Public
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Linda L. Green
Richard J. Wett
STATE OF MINNESOTA )
) ss.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this _ day of ,
2009, by Linda L. Green and Richard J. Wett,
Notary Seal
This document was drafted by:
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street, Suite 470
Minneapolis, MN 55402
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EXHIBIT A
Schematic of Encroachment Area
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natural state of the Park Property. The Owners also agree to maintain the pond
and waterfall in good working order so that the water circulates,
4. This Agreement shall not prevent or impair the City from using the Encroachment
Area for any use that it is entitled by law to use the Encroachment Area.
5. The City does not warrant that the Encroachment Area is suitable for the purposes
for which it is permitted to be used under this Agreement. The Owners assume all
risk with respect to their activities within-and use of the Encroachment Area. The
City shall have no responsibility with regard to any failure of or damage to the
Encroachments.
6. This Agreement shall run with the land and shall inure to the benefit of and be
binding upon the parties to this Agreement and their respective successors and
aSSIgns. This Agreement shall be for an indefinite term and continue until
terminated by one of the parties. Either party may terminate this Agreement at
any time for any reason, by providing prior written notice to the other at least 30
days in advance of the effective date of termination. If such service cannot be
made, service may be posted on the Encroachment Area. An affidavit of
termination signed by the City Administrator shall constitute prima facie evidence
oftermination of this Agreement by the City.
In the event of the development of the land in question by the City, the City
shall consider retaining the pond if its existence is consistent with the end
usage of the property.
If notice is given by the City after September 1st of any year ordering the
encroachment to be removed, said encroachments shall be removed by June
1st of the following year, providing that a minimum of sixty days' notice has
been given. Otherwise, the encroachments shall be removed within 60 days;
however, the City shall not unreasonably deny a request for an extension of
the removal period due to unavoidable circumstances.
Notwithstanding the foregoing, the City shall not be permitted to terminate this
Agreement for a period of ten (10) years after the date of this Agreement, unless
the City elects to develop the Park Property into a Park. In the event that the City
elects to develop the Park Property into a Park and terminates this Agreement
within such ten (10) year period, the City shall refund to the Owners the
remaining amount of usage fee and administrative costs that were paid by the
Owners. The amount of the refund shall be calculated by taking the total amount
of the usage fee and administrative costs paid by the Owners and dividing it by
3650 (the number of days in the ten (10) year period) and multiplying that number
by the number of days that remain in the ten (10) year period as of the effective
date of termination.
7. Before the effective date of termination, the Owners shall remove the
Encroachments from the Encroachment Area at their sole cost and expense, and
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