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08-16-06 Special CITY OF RICHFIELD, MINNESOTA WEDNESDAY, AUGUST 16, 2006 SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 8:00 A.M. Call to order Roll call 1. Consideration of resolution approving third amendment to Contract for Private Development with Ryan Companies US, Inc. Notes: Staff Report No. 54 Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. AGENDA ITEM # 1 REpORT # 54 ~ STAFF REpORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING AUGUST 16, 2006 REpORT PREPARED By: PAT SMITH, COMMUNITY DEVELOPMENT MANAGER NAME, TITLE REpORT PRESENTER: PAT SMITH, COMMUNITY DEVELOPMENT MANAGER REVIEWED BY EXECUTIVE DIRECTOR: ~- NAME, TITLE ~\a' 'nEPA~ENT DIRECTOR REVIEw: ITEM FOR HRA CONSIDERATION: Consideration of Third Amendment to the Contract for Private Development with Ryan Companies US, Inc. 1. RECOMMENDED ACTION: By Motion: Adopt the attached Resolution approving the Third Amendment to the Contract for Private Development with Ryan Companies US, Inc. I II. BACKGROUND I On July 27,2005 the Housing and Redevelopment Authority (HRA) entered into a Contract for Private Development (Contract) with Ryan Companies US, Inc. (Ryan). On June 20, 2006 the HRA approved the First Amendment to the Contract, and on July 21,2006 the HRA approved the Second Amendment to the Contract. Ryan is now proposing a Third Amendment to the Contact (see attached Amendment). Under Section 16 of the First Amendment, if the City or HRA fails to satisfy any of the conditions in the Escrow Agreement, Ryan has the right to cease any work relating to the relocation of the utilities in association with the Public Improvement and Special Assessment Agreement, and the HRA will reimburse Ryan for its work to date. 081606 special HRA mtg - ryan contract 3rd amend Furthermore, the wording of Section 16 provides that the reimbursement will be "based on Developer's time and material, including internal time for design and engineering at its typical rates charged on other projects, plus 8% profit". It has been determined that at least a portion of the utility relocation work, for which Ryan will pay, will be done by CenterPointe Energy under a contract with Ryan; and as such might not be eligible for reimbursement under a literal reading of the Section. The Third Amendment clarifies that the utility relocation work includes work that Ryan subcontracts out to other companies. CenterPointe Energy, not Ryan, will be relocating the natural gas pipeline. Thus, the relocation of the pipeline is proposed to be added to Section 16. I III. BASIS OF RECOMMENDATION I I A. POLICY I . On July 27,2005 the HRA entered into a Contact for Private Development with Ryan Companies US, Inc. . The HRA has consistently taken actions to support Cedar Point Commons. I B. CRITICAL ISSUES I . At the time Section 16 was being negotiated, it was clearly the intention of the parties that Ryan would be entitled to reimbursement for costs incurred by it for utility relocations whether or not the work was preformed by Ryan or under contract between Ryan and a third party. . Ryan is requesting the HRA to approve the proposed Third Amendment to the Contract to keep the development moving forward. . HRA legal counsel will inform the HRA of any possible future defaults by the City or HRA that would require the HRA to reimburse Ryan for utility relocation expenses. I C. FINANCIAL . N/A I D. LEGAL I . HRA legal staff drafted the Amendment. . A meeting notice was posted for the August 16 Special HRA Meeting on August 11, 2006. I IV. ALTERNATIVE RECOMMENDATION(S) . Approve the amendment with changes. . Do not approve the Amendment. I V. ATTACHMENTS I . Resolution approving the Third Amendment to the Contract . Third Amendment to the Contract . Redlined version of Section 16 I VI. PRINCIPAL PARTIES EXPECTED AT MEETING . HRA legal counsel I-I HRA RESOLUTION NO. RESOLUTION APPROVING THIRD AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT WHEREAS, the Housing and Redevelopment Authority ("the HRA") and Ryan Companies US, Inc. ("Ryan") did on or about July 27, 2005 enter into an agreement entitled, Contract for Private Development, (the "Contract"), calling for the redevelopment of an area of land (the "Property") lying within the City of Richfield; and WHEREAS, the HRA approved the First Amendment to the Contract on or about June 30, 2006; and WHEREAS, the HRA approved the Second Amendment to the Contract on or about July 21,2006. WHEREAS, events subsequent to the First Amendment have occurred that require the amendments to the Contract for the project to move forward; and WHEREAS, the parties desire to address such matters through certain amendments to the Contract; and WHEREAS, the HRA has reviewed and is familiar with the proposed amendment to the Contract entitled: Third Amendment to Contract For Private Redevelopment ("Third Amendment"), and is satisfied that the terms thereof carry out the intentions of the parties, and are necessary and appropriate for the Development. NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The proposed Third Amendment is hereby in all respects approved. 2. Upon completion of such modifications, the Executive Director and Board Chair are directed to take all steps and do all things necessary to effectuate the provisions of the Third Amendment. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 16th day of August, 2006. Suzanne M. Sandahl, Chair ATTEST: Donna Drummond, Secretary /-) THIRD AMENDMENT TO CONTRACT FOR PRIVATE DEVELOPMENT This Third Amendment to Contract for Private Development (this "Third Amendment") is entered into as of this day of August, 2006, by and between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic (the "HRA"), and RYAN COMPANIES US, INC., a Minnesota corporation ("Developer"). RECITALS A. The HRA and Developer entered into that certain Contract for Private Development dated July 27, 2005 (the "Original Agreement"), that certain First Amendment to Contract for Private Development dated June 30, 2006 (the "First Am ndment"), and that certain Second Amendment to Contract for Private Development dated July 21,2006 (which second amendment, together with the Original Agreement and the First Amendment, are collectively referred to herein as the "Development Agreement"). B. The HRA and Developer desire to amend the Development Agreement as set forth in this Third Amendment. C. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Development Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree that the Development Agreement is amended as follows: 1. Utilitv Relocation Work. Section 16 of the First Amendment is hereby deleted in its entirety and replaced with the following: 16. Utilitv Relocation. In the event the HRA or the City fails to satisfy any of the conditions set forth in the escrow agreement among Developer, the HRA, the City and Old Republic National Title Insurance Company dated June 30, 2006, as amended (the "Escrow Agreement"), and Developer exercises its right to terminate the Escrow Agreement, then (i) Developer shall have the right to cease any work relating to the relocation of the utilities as provided in the Public Improvement and Special Assessment Agreement between Developer and the City, as amended (the "Utility Relocation Work"), which Utility Relocation Work includes without limitation the relocation and/or rerouting by Developer or a third party of the natural gas pipeline that currently runs within or adjacent to the Cedar Avenue South right-of-way between 63rd Street and 66th. Street (the "Pipeline"), and (ii) the HRA will promptly pay and/or reimburse Developer for any work preformed and costs incurred by Developer to date in connection with the Utility Relocation Work, including without limitation (a) work performed, costs incurred and amounts paid by Developer based on . Developer's time and material, including internal time for design and engineering at its typical rates charged on other projects, plus 8% for profit, 1~3 and (b) amounts paid and/or owed by Developer to any third party that performs any of the Utility Relocation Work, including without limitation the entire $577,214.00 prepayment, and any additional amounts, paid to CenterPoint Energy to relocate and/or reroute the Pipeline. The HRA's payment to Developer shall be within thirty (30) days of receipt of Developer's invoice. 2. Counterparts. This Third Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original and together which shall constitute one and the same Third Amendment. This Third Amendment may be delivered by facsimile transmittal or other electronic communication of signed original counterparts. 3. Amendment. Except as set forth herein, the Development Agreement shall remain unmodified and in full force and effect. IN WITNESS WHEREOF, the parties have executed this Third Amendment effective as of the day and year first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By Its Chairperson By Its Executive Director RYAN COMPANIES US, INC. By Its #4066445\ 1 080406 /-1 16. Utilitv Relocation. In the event the HRA or the City fails to satisfy any of the conditions set forth in the escrow agreement among Developer, the HRA, the City and Old Republic National Title Insurance Company dated June 30, 200e2006. as amended (the "Escrow Agreement"t and Developer exercises its right to terminate the Escrow Agreement, then !il.Developer shall have the right to cease performing any work relating to the relocation of the utilities as provided in the Public Improvement and Special Assessment Agreement between Developer and the City, as amended (the "Utility R location Work") and the HRJ\ '.viiI. which Utilitv Relocation Work includes without limitation the relocation and/or reroutina bv Develooer or a third oartv of the natural aas oioeline that currentlv runs within or adiacent to the Cedar Avenue South riaht-of-wav between 63rd Street and 66th Street (the "PiDeline"). and Oi) the HRA will oromotly pay and/or reimburse Developer for its Utility Relocation \j\Jork to dateanv work oreformed and costs incurred by Develooer to date in connection with the Utilitv Relocation Work. includina without limitation (a) work oerformed. costs incurred and amounts oaid bv Develooer based on Developer's time and material, including internal time for design and engineering at its typical rates charged on other projects, plus 8% for profit. and (bl amounts oaid and/or owed by Develooer to anv third oartv that oerforms anv of the Utilitv Relocation Work, includina without limitation the entire $577.214.00 oreoavment. and anv additional amounts. oaid to CenterPoint Enerav to relocate and/or reroute the Pioeline. The HRA's payment to Developer shall be within thirty (30) days of receipt of Developer's invoice.