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HomeMy WebLinkAboutResidential Development Partners, LLC-6/25/2012Please return this copy to: City Clerk & Finance Department 715 Mulberry Street Waterloo, IA 50703 Preparer Information: Christopher S. Wendland, PO Box 596, Waterloo, Iowa 50704 (319) 234.5701 Name Address City Phone SPACE ABOVE THIS UNE FOR RECORDER DEVELOPMENT AGREEMENT This Development Agreement (the "Agreement") is entered into as of U1'vc ;, / 2 by and between Residential Development Partners, . LLC (the "Company") and the City of Waterloo, Iowa (the "City"). Jim D. Ellis and John R. Rooff, III are principals of Company and execute the personal guaranty at the end of this Agreement for the purposes stated therein. RECITALS A City considers economic development within the City a benefit to the community and is willing for the overall good and welfare of the community to provide financial incentives so as to encourage that goal. B. Company is willing and able to finance and construct single-family homes and related improvements on property located throughout the territory of the City on lands formerly owned by the school district, and legally described on Exhibit "A" attached hereto (the "Properties"). AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows: 1. Sale of Properties; Title. Subject to the terms hereof, and as except as set forth in Section 6, City shall convey the Properties to Company for the sum of $1.00 (the "Purchase Price"). Conveyance shall be by quit claim deed, free and clear of all encumbrances arising by or through City except: (a) easements, conditions and restrictions of record which do not, in Company's opinion, interfere with Company's proposed use; (b) current and future real estate real property taxes and assessments subject to the agreements made herein; (c) general utility and right-of-way easements serving the Properties; and (d) restrictions imposed by the City zoning ordinances and other applicable law. No less than fourteen (14) days prior to the anticipated date of DEVELOPMENT AGREEMENT Page 2 conveyance, City shall, at its own expense, deliver to Company an updated abstract of title, or in lieu thereof Company may, at its own expense, obtain whatever form of title evidence it desires. If title is unmarketable or subject to matters not acceptable to Company, and if City does not remedy or remove such objectionable matters in timely fashion following written notice of such objections from Company, Company may terminate this Agreement. 2. improvements by Company. Company shall plat the Properties for development and construction of single-family homes, having an anticipated appraised value upon completion in the range of $150,000 to $200,000 each. Each separate lot upon which a home will be constructed shall be completed to a finished state, including installation of driveways and sidewalks, removal of all construction debris, proper leveling or shaping of groundscape, and grassing and/or landscaping (home construction and finishing as so described are referred to as the "Housing Improvements"). The Housing Improvements and the Infrastructure Improvements (defined below) shall be constructed in accordance with all applicable City, state, and federal building codes and shall comply with all applicable City ordinances and other applicable law. The Properties, the Housing Improvements, the Infrastructure Improvements and all site preparation and development -related work to make the Properties usable for Company's purposes as contemplated by this Agreement are collectively referred to as the "Project". The Project shall be divided into the phases described as Baltimore, Burton, Lafayette and Williston, and the Burton and Lafayette phases may be further divided as described in Section 6. 3. Timeliness of Construction; Possibility of Reverter. The parties agree that Company's commitment to undertake the Project and to construct the Improvements in a timely manner constitutes a material inducement for the City to convey the Properties to Company and that without said commitment City would not do so. Company must undertake the actions described on Exhibit "B" attached hereto (the "Infrastructure Improvements"), within the time stated on said Exhibit "B" with respect to each separate phase. The timely commencement of Infrastructure Improvements (including completed platting) for a given phase, or for a portion thereof, is referred to the "Release Event" for such phase or phase portion. If Company has not, in good faith, begun the construction of any phase of the Infrastructure Improvements on the schedule stated in Exhibit "B" attached hereto, then title to the platted lots lying within such phase shall, as to any such lots on which construction of Home Improvements has not begun, revert to the City, except as provided in this Agreement; provided, however, that if construction has not begun at the end of any phase commencement period but the development of such phase of the Project is still imminent, the City Council may, but shall not be required to, consent to an extension of time for the construction of the Infrastructure Improvements, and if an extension is granted but construction of the Infrastructure Improvements has not begun within such extended period, then the title to the Properties lying within such phase shall revert to the City after the end of said extended period. Company representatives shall appear at a meeting of members of the Waterloo city council on or about July 1 of each year during the period that Company is subject to this Agreement, to report on the DEVELOPMENT AGREEMENT Page 3 progress and status of Project activities. If Company determines at any time that a phase of the Project is not economically feasible, then after giving thirty (30) days' advance written notice to City, Company may convey the Properties lying within such phase to City by special warranty deed, and thereupon neither party shall have any further obligation under this Agreement with respect to such phase except as expressly provided herein. If development has commenced within the required period or any extended period and is stopped and/or delayed as a result of an act of God, war, civil disturbance, court order, labor dispute, fire, or other cause beyond the reasonable control of Company, the requirement that construction of any phase or of the entire Project shall be tolled for a period of time equal to the period of such stoppage or delay, and thereafter if construction is not completed within the allowed period of extension then title to the Properties or, as applicable, to a given phase of the Properties or to a portion of a phase of the Properties as described in Section 6, shall revert to the City. 4. Reverter of Title; Buyout Option. Title shall not revert to City as to any Project phase, or portion thereof as described in Section 6, for which the Release Event has occurred. In the event of any reverter of title, Company agrees that it shall, at its own expense, promptly execute all documents, including but not limited to a special warranty deed, or take such other actions as the City may reasonably request to effectuate said reverter and to deliver to City title to the Properties that is free and clear of any lien, claim, or encumbrance arising by or through Company. Concurrently with the deed, Company shall deliver to City the abstracts of title for Properties conveyed. Company shall pay in full, so as to discharge or satisfy, all liens, claims, charges, and encumbrances on or against the Properties. If Company fails to deliver such documents, including but not limited to a special warranty deed and related abstracts of title, to City within thirty (30) days of written demand by City, then City shall be authorized to execute, on Company's behalf and as its attorney-in-fact, the special warranty deed required by this Section, and for such limited purpose Company does hereby constitute and appoint City as its attomey-in-fact. In lieu of any reverter of title, Company shall have an option to purchase the Properties subject to reverter for a sum equal to the value of such Properties determined by appraisal, minus documented expenses actually incurred by Company with respect to such Properties (the "Reversion Buyout Price"). Said option shall be exercised by delivering written notice to City no later than the last day for commence- ment of Infrastructure Improvements pursuant to Section 3. Company shall deliver the Reversion Buyout Price to City within thirty (30) days of the date that notice of option exercise is delivered to the City. After receipt of the Reversion Buyout Price, the City shall execute and deliver to Company a written instrument evidencing release and termination of the City's reversion rights. 5. Indemnity. Company further agrees that it shall indemnify City and hold it harmless with respect to any demand, claim, cause of action, damage, or injury made, suffered, or incurred as a result of or in connection with the Project, Company's failure to carry on or complete same, or any lien, claim, charge, or encumbrance on or against the Properties of any type or nature whatsoever that attaches to the Properties by virtue of Company's ownership of same. If City files suit to enforce the terms of this DEVELOPMENT AGREEMENT Page 4 Agreement and prevails in such suit, then Company shall be liable for all legal expenses, including but not limited to reasonable attorneys' fees. Company's duties of indemnity pursuant to this Section shall survive the expiration, termination or cancellation of this Agreement for any reason. 6. City Activities in Aid of Development. A. Demolition. The parties acknowledge that the Lafayette phase property consists of lots in Blocks 18 and 19, in Linden Place subdivision, separated by Indiana Street, and that the lots in Block 19 are clear of structures but a former school building remains on the lots in Block 18. Within four (4) years from the date this Agreement is approved by city council, City shall demolish and clear the Block 18 site and thereafter convey same to Company. At Company's request, City shall convey the Block 19 lots to Company at any time after this Agreement is approved by city council. B. Assembly of Burton phase area. The parties acknowledge that the Burton phase property consists of- -imately-4.38 acres under ownership by the Waterloo Board of Park Commissioners. City shall exercise reasonable diligence and good faith efforts to acquire ownership of the parkland, or cause the parkland to be conveyed to Company. At Company's request, City shall convey the smaller, City -owned parcel to Company at any time after this Agreement is approved by city council. C. Property maintenance. Until the city council approves final platting for a phase area or portion thereof, City shall be responsible, at its own expense, for necessary mowing, snow removal and maintenance of existing sidewalks. As to any Properties under Company ownership, Company agrees to permit City employees or agents reasonable access for these purposes. 7. No Encumbrances; Limited Exception. Until the Release Event for a phase of Infrastructure Improvements has occurred, Company agrees that it shall not create, incur, or suffer to exist any lien, encumbrance, mortgage, security interest, or charge on the Properties lying within any such phase, other than such mortgage or mortgages as may be reasonably necessary to finance Company's undertaking of the Infrastructure Improvements and of which Company notifies City in advance of Company's execution of any such mortgage. Company may not mortgage the Properties or any part thereof for any purpose except in connection with financing of the Infrastructure Improvements. 8. Water and Sewer. Company will be responsible for extending water and sewer service to any location on the Properties and for payment of any associated connection fees. 9. Performance Bond. Before beginning Infrastructure Improvements with respect to a given phase, Company shall furnish to City a bond in an amount equal to one hundred percent (100%) of the contract price for such improvements. Said bond shall be issued by a responsible surety acceptable to the City. The bond shall DEVELOPMENT AGREEMENT Page 5 guarantee the faithful performance of the contract and the terms and conditions therein contained, shall guarantee the prompt payment of all materials and labor and protect and shall save harmless the City from claims and damages of any kind arising out of the performance thereof. 10. Representations and Warranties of City. City hereby represents and warrants as follows: A. City is not prohibited from consummating the transaction contemplated in this Agreement by any law, regulation, agreement, instrument, restriction, order or judgment. B. Each person who executes and delivers this Agreement and all documents to be delivered hereunder is and shall be authorized to do so on behalf of City. 11. Representations and Warranties of Company. Company hereby represents and warrants as follows: A. Company is not prohibited from consummating the transaction contemplated in this Agreement by any law, regulation, agreement, instrument, restriction, order or judgment. B. Company is duly organized, validly existing, and in good standing under the laws of the state of its organization and is duly qualified and in good standing under the laws of the State of Iowa. C. Company has full right, title, and authority to execute and perform this Agreement and to consummate all of the transactions contemplated herein, and each person who executes and delivers this Agreement and all documents to be delivered to City hereunder is and shall be authorized to do so on behalf of Company. 12. No Assignment or Conveyance. Company agrees that it will not sell, convey, assign or otherwise transfer its interest in any phase area of the Properties prior to commencement of the Infrastructure Improvements for such phase area, whether in whole or in part, to any other person or entity without the prior written consent of City. Reasonable grounds for the City to withhold its consent shall include but are not limited to the inability of the proposed transferee to demonstrate to the City's satisfaction that it has the financial ability to observe all of the terms to be performed by Company under this Agreement. 13. Materiality of Company's Promises, Covenants, Representations, and Warranties. Each and every promise, covenant, representation, and warranty set forth in this Agreement on the part of Company to be performed is a material term of this Agreement, and each and every such promise, covenant, representation, and warranty constitutes a material inducement for City to enter this Agreement. Company acknowledges that without such promises, covenants, representations, and warranties, DEVELOPMENT AGREEMENT Page 6 City would not have entered this Agreement. Upon breach of any promise or covenant, or in the event of the incorrectness or falsity of any representation or warranty, City may, at its sole option and in addition to any other right or remedy available to it, terminate this Agreement and declare it null and void. 14. Notices. Any notice under this Agreement shall be in writing and shall be delivered in person, by overnight air courier service, by United States registered or certified mail, postage prepaid, or by facsimile (with an additional copy delivered by one of the foregoing means), and addressed: (a) if to City, at 715 Mulberry Street, Waterloo, Iowa 50703, facsimile number 319-291-4571, Attention: Mayor, with copies to the City Attorney and the Community Planning and Development Director. (b) if to Company, to Residential Development Partners, LLC, 402 E. 4th Street, suite 101, Waterloo, IA, 50703, Attention: Jim D. Ellis. Delivery of notice shall be deemed to occur (i) on the date of delivery when delivered in person, (11) one (1) business day following deposit for overnight delivery to an overnight air courier service which guarantees next day delivery, (iii) three (3) business days following the date of deposit if mailed by United States registered or certified mail, postage prepaid, or (iv) when transmitted by facsimile so long as the sender obtains written electronic confirmation from the sending facsimile machine that such transmission was successful. A party may change the address for giving notice by any method set forth in this section. 15. No Joint Venture. Nothing in this Agreement shall, or shall be deemed or construed to, create or constitute any joint venture, partnership, agency, employment, or any other relationship between the City and Company nor to create any liability for one party with respect to the liabilities or obligations of the other party or any other person. 16. Amendment, Modification, and Waiver. No amendment, modification, or waiver of any condition, provision, or term of this Agreement shall be validor of any effect unless made in writing, signed by the party or parties to be bound or by the duly authorized representative of same, and specifying with particularity the extent and nature of the amendment, modification, or waiver. Any waiver by any party of any default by another party shall not affect or impair any rights arising from any subsequent default. 17. Severability. Each provision, section, sentence, clause, phrase, and word of this Agreement is intended to be severable. If any portion of this Agreement shall be deemed invalid or unenforceable, whether in whole or in part, the offending provision or part thereof shall be deemed severed from this Agreement and the remaining provisions of this Agreement shall not be affected thereby and shall continue in full force and effect. If, for any reason, a court finds that any portion of this Agreement is invalid or unenforceable as written, but that by limiting such provision or DEVELOPMENT AGREEMENT Page 7 portion thereof it would become valid and enforceable, then such provision or portion thereof shall be deemed to be written, and shall be construed and enforced, as so limited. 18. Captions. All captions, headings, or titles in the paragraphs or sections of this Agreement are inserted only as a matter of convenience and/or reference, and they shall in no way be construed as limiting, extending, or describing either the scope or intent of this Agreement or of any provisions hereof. 19. Binding Effect. This Agreement shall be binding and shall inure to the benefit of the parties and their respective successors, assigns, and legal representatives. 20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. 21. Entire Agreement. This Agrement, together with the exhibits attached hereto, constitutes the entire agreement of the parties and supersedes all prior or contemporaneous negotiations, discussions, understandings, or agreements, whether oral or written, with respect to the subject matter hereof. 22. Time of Essence. Time is of the essence of this Agreement. IN WITNESS WHEREOF, the parties have executed this Development Agreement by their duly authorized representatives as of the date first set forth above. CITY OF WATERLOO, IOWA RESIDENTIAL DEVELOPMENT PARTNERS, LLC By: By: rnest G. Clark, Mayor Jim D. Ellis, Manager Attest: Suzy Scliares, City Clerk PERSONAL GUARANTY. The undersigned, being either an officer, shareholder, manager, or member of Company, hereby agree for themselves and their heirs, personal representatives, and assigns, to unconditionally guarantee to City, its successors and assigns, the full and prompt performance by Company, its successors DEVELOPMENT AGREEMENT Page 8 and assigns, of all promises and covenants on the part of Company to be performed. pursuant to the foregoing Agreement, including but not limited to the duties of indemnity set forth therein. Liability of guarantors hereunder is joint and several. Jim D. Ellis John R. Rooff, In EXHIBIT "A" Legal Description of Properties Former Van Eaton School Site A replat of the West '-.1 of Cushman Heights, Lot 2, Block 2, all in the City of Waterloo, Black Hawk County, Iowa. Former Lafayette School Site Lots 5 through 11 in Block 18 in Linden Place in Waterloo, Black Hawk County, Iowa; known as the former Lafayette School property, all in the City of Waterloo, Black Hawk County, Iowa. Baltimore Field Lot No. 3 in Auditor Francis' Dry Run Plat in the City of Waterloo, excepting the South 30 feet thereof heretofore conveyed to the City of Waterloo, Iowa, for street purposes, all in the City of Waterloo, Black Hawk County, Iowa. Williston Field Lot No. 5, except the East 156 feet thereof in Auditor Francis' Reitzel Plat, and Orlo C. Miller Addition, all of Lot 1, except the West 30 feet, Lot 2, and, All that part of Byron Avenue in the City of Waterloo, Iowa, lying East of a Northerly extension of the West line of Lot No. 1 in Orlo C. Miller Addition, and West of a line that is 156 feet West of the West line of Baltimore Street. Also, all that part of Denver Street in the City of Waterloo, Iowa, lying South of the South line of Byron Avenue and North of the North line of Eureka Street, all in the City of Waterloo, Black Hawk County, Iowa. EXHIBIT "B" Project Phases and Schedule Within the periods stated below with respect to each separate phase of Improvements, Company will have taken all actions necessary to plat the phase area, including but not limited to recording plat documents, and will have begun construction of infrastructure improvements, including but not limited to sanitary sewer, storm sewer, and water main. All of such actions, including the completion of platting, are referred to as the "Infra- structure Improvements." 1. Baltimore. Within five (5) years from date this Agreement is approved by the Waterloo City Council. 2. Burton. With respect to each part of the phase area, within five (5) years from the date of deed for such part, including property currently titled in the Waterloo Board of Park Commissioners. 3. Lafayette. As to Block 19, within five (5) years from the date this Agreement is approved by the Waterloo City Council, and as to Block 18, within three (3) years from the date that City demolishes existing structures and clears the site. 4. Williston. Within five (5) years from the date that the phase area is released from flood plain designation. On all of the Properties, irrespective of particular phase areas, Company agrees to construct the following number of new homes and complete related Housing Improvements on the schedule stated below: Year 1 — four (4) homes Year 2 — eight (8) homes Year 3 — six (6) homes Year 4 — six (6) homes Year 5 — eight (8) homes The first year shall be the 12 -month period from July 1, 2012 through June 30, 2013, and each successive year shall follow in course. By June 30, 2017, Company shall complete a minimum total of thirty-two (32) homes and related Housing Improvements.