6.0. SR 04-21-1994
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ITEM 6.
MEMORANDUM
TO:
MAYOR & CITY COUNCIL
FROM:
PAT KLAERS, CITY ADMINISTRATOR
DATE:
APRIL 21, 1994
SUBJECT: ELK PARK CENTER DEVELOPER'S
AGREEMENT
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Attached for your review is the draft Developer's Agreement as prepared by
our City Attorney Peter Beck. Peter will be in attendance at this meeting to
address any issues or concerns from the City Council. This draft Agreement
has been forwarded to the developers for their review. A number of meetings
were held with the developers prior to this Agreement being put together
and, as a City, we do not anticipate many requests for changes in this
Agreement from the developers. The Developer's Agreement covers issues
that need to be addressed before a proposal can move forward. These issues
include the necessary improvements for the project as outlined in the
Feasibility Study, the financing for these improvements, and the security to
ensure that the improvements are paid off. Agenda Item #7, the PUD
Agreement, along with the plat and site plan reviews, cover other essential
elements in the development project.
From a City financial point of view, there are two items that should be
brought to the City Council's attention where there is a deviation between
the Developer's Agreement and the Feasibility Study. First, on Page 8 of the
Developer's Agreement, the percentage of the improvements that is to be paid
by the developer is outlined. Item G and H were originally estimated at 50%
and are now recommended to the City Council to be at 25% for the developer.
As the Council is aware, G and H relate to improvements at the School Street
and Jackson Avenue intersection which was previously planned by the City.
Based on our cost estimates, the changes in G and H result in the developer
paying approximately $1.378 million for off site street improvements versus
the original proposal of $1.478 million.
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The second item relates to the request for the developer to finance a portion
of the northeast area water tower. The basis of this original request was
founded on the fact that this is the only redevelopment commercial area in
the vicinity that requires the water pressure and volume of a larger water
tower. The other reason for this request was the need for funds to finance the
water tower. Since there is other commercial property in this water district
P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
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on the east side of Highway 169 that may need the same size of water tower,
and since the water connection fees have increased, there is less justification
to request this contribution to the water tower from the developers.
Therefore, this requested $100,000 contribution is no longer in the proposed
Developer's Agreement. This information has been passed on to the Utilities
Superintendent and some of the Commission members, and they concur with
this situation.
Other than the above noted items, everything in the Developer's Agreement
is consistent with the Feasibility Study. Some off site street improvements in
and around the Jackson Avenue and School Street intersection are the City's
financial responsibility. These expenses were outlined in the Feasibility
Study. The City money for these improvements will come from state
turnback funds.
The security from the developer for these public improvements are outlined
in the Developer's Agreement and are based on our understanding of how
these type of projects are handled in similar communities.
RECOMMENDATION
Staff recommends approval of the Developer's Agreement as presented by the
City Attorney.
FROM LRRKIN HOFFMRN DRLV LINDGREN 612-8963265
04.18.1994 15: 21
P. 2
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MEMQRANDUM
TO:
FROM:
DATE:
LARKIN, HOFFMAN, DALY" LINDGREN, LTD.
Auome)'s at Law
1500 Norwest Pinanclal Center
7900 Xerxes Avenuo South
Bloomington, Minnesota 55431
Te1epnone: (612) 835-3800
PAX: (612) 896-3333
Mayor Henry A. Duitsman and Council Members
Peter K. Beck, City Attorney
April 18, 1994
Elk Park Center: Executive Summary of Developers
Agreement and Planned Unit Development Agreement
RE:
This memorandum is an executive summary of the draft Elk Park
Center Developers and PUD Agreements, to assist you in your
review of these documents. Negotiations with Kraus Anderson on
these documents are continuing and there will be some changes
before Thursday. I will update the Council on those changes at
the City Council meeting. I will be at the Council Meeting on
Thursday to answer any questions, but would be happy to answer
your questions during the week also, either at the office
(896-3220) or at home (929-8877).
Developers Agreement
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Requires the Developer to install and pay directly for all
Improvements located on the lots within the PUD, including
grading, stormwater drainage, sanitary sewer and water
lines, driveways, parking areas and landscaping. The
Developer will also rough grade the public streets within
the PUD.
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Requires that the Developer Installed Improvements be done
before certificates of occupancy will be issued, unless they
cannot be fully completed due to weather conditions (for
instance, landscape p1antings). In this case, the City
Engineer can approve the issuance of a certificate of
occupancy provided the conditions listed on page 4 are met.
Requires the City to install all public streets within the
PUD and all stormwater drainage, sanitary sewer, and water
lines to be located within public rights-of-way. The City
will also install the storm drainage line to be constructed
across School Board property from the pond to School Street.
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FROM LRRKIN HOFFMRN DRLY LINDGREN 612-8963265
04.18.1994 15: 21
P. 3
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Provides that the City will also install necessary street
improvements outside of the PUD ("Off-Site Improvements"),
including the extension of Freeport Avenue through the
School Board property and the improvements to Highway 169,
School Street and Jackson Avenue.
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Requires the Developer to pay:
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For all Improvements within the PUD
For Off-Site Street Improvements as shown on page 8
For trunk facilities and lateral benefit at normal City
rates
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The City's costs to be repaid by the Developer will be
assessed to the lots within the PUD on a square footage
basis and paid back:
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Over a ten year period for the shopping center itself
Over a five year period for the other lots in the PUD
Assessments on the Target property will be paid upfront
Requires the Developer to provide security for paYment of
the City's costs as follows:
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During the construction period Developer will post a
letter of credit in the amount of $2,600,000, which is
the current estimate of the amounts to be assessed to
Developer. This letter of credit will be released when
certificates of occupancy are issued for sot of the
shopping center and Developer has provided a guarantee
for paYment of the assessments.
A second element of security is the guarantee to be
provided by the Developer's parent company, Kraus
Anderson Incorporated. This guarantee will remain in
effect until all assessments are paid, but may be
reduced from time to time to the amount of the then
outstanding assessments.
Developer is required to combine the lot which contains the
pond with the lot on which its sign will be located, to
ensure that the pond does not go tax forfeit.
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Developer is required to install street lights as directed
by Elk River Municipal Utilities.
All other conditions of the City Council's resolution
approving a Conditional Use Permit for the PUD are
incorporated into the Developers Agreement.
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FROM LRRKIN HOFFMRN DRLY LINDGREN 612-8963265
04.18.1994 15: 22
P. 4
Planned Unit Development Agreement
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Requires the Developer to develop the PUD in accordance with
the plans approved by the City Council.
Identifies the permitted and conditional uses within the
PUD.
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Requires site plan review and approval for each building to
be constructed within the PUD, and anytime a building is
expanded or remodeled on the exterior, or a site plan is
revised.
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Requires that common areas be maintained and subject to
reciprocal parking and access easements.
Incorporates the conditions set forth in the City Council'S
resolution approving the Conditional Use Permit for the PUD.
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The intent of these documents is to put into contractual language
the conditions which the Council established for the development
of this PUD in its resolution approving the Conditional Use
Permit for the PUD. If these contracts are approved by the City
Council, they will be finalized, executed and recorded before
construction proceeds on the shopping center.
~ Please feel free to call me if you do have any questions.
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