Loading...
05. Rolling Acres 61 Development Agreement Staff Report Date of Meeting: December 6, 2023 For: Honorable Mayor and Council From: Kyle Morell, City Administrator Subject: Rolling Acers 61 Development Agreement Background: Council approved Resolution 09-19-23-07, Final Plat for Rolling Acres 61, at their September 19, 2023 meeting. After final plat approval, the only item left was to draft the Development Agreement. City Attorney Larson has worked on the Agreement with the review by the property owner’s attorney. The attached Agreement is the Final version and requires Council approval. Options: 1) Approve the Development Agreement for Rolling Acres 61 2) Table for further review and discussion Recommendation: Option 1 Attachments: Rolling Acres 61 Development Agreement 1 Received from / Return To: City of Scandia 14727 209th St. N. Scandia, MN 55073 CITY OF SCANDIA WASHINGTON COUNTY, MINNESOTA DEVELOPMENT AGREEMENT Rolling Acres 61 THIS DEVELOPMENT AGREEMENT (“Agreement”) is made this ____ day of , 2023 by and between the CITY OF SCANDIA, a municipal corporation and political subdivision organized under the laws of the State of Minnesota (“City”), and LKRJ Properties LLC, a Minnesota Limited Liability Company (“Developer”). The City and Developer are also collectively referred to as the “the “Parties”). RECITALS WHEREAS, Developer owns the approximately 61.03 acres of real estate located at Parcel ID 30.032.20.22.0004 and platted as Rolling Acres 61 and described on Exhibit A attached hereto (the “Property”). WHEREAS, on behalf of the Property Owners, the Developer has applied for both a rezoning of the Property as well as preliminary and final plat for a major subdivision of the Property for a redevelopment of the Property to be known as “Rolling Acres 61.” WHEREAS, on January 17, 2023, the City Council passed Resolution No. 2023-06, Approving Findings of Fact for Rezoning for the Property Located at Parcel ID 30.032.20.22.0004. The existing site is a 61.03 acre parcel, zoned as of January 17, 2023 as Agricultural Core (AG-C) and guided by Agricultural Core by the Scandia 2040 Comprehensive Plan. The southeast portion of the site is currently used for agricultural purposes, while the remainder of the site is undeveloped with grassland and some intermittent trees within the northern portion of the site. The northern portions of 2 the property are within the Shoreland Management Overlay District (SM-O) due to its proximity to Lake Keewahtin to the south. WHEREAS, on January 17, 2023, the Resolution No. 2023-05, Approving Preliminary Plat for a Major Subdivision for “Rolling Acres 61” Located at Parcel ID 30.032.20.22.0004. Per the preliminary and final plat, the single-family lots vary in size between 1.51 and 3.55 acres. WHEREAS, on January 17, 2023, the City Council adopted Ordinance 2023-02 rezoning the affected parcels from Agriculture Core (AG-C) to Open Space Planned Unit Development (OS- PUD). The subdivision is proposed as an open space development permitted through the OS-PUD standards as described in Scandia Code Chapter 153.200.50, requiring a rezoning to either AG-C or RR-G in order to proceed. In exchange for the preservation of open space, a density bonus of up to 75% is permitted. With a 75% increase, a maximum of seven lots is allowed for the development on this Property. In addition to the density increase, the OS-PUD allows smaller lots that typically permitted in the base zoning districts. The Development shall meet all OS-PUD requirements imposed by Scandia UDC, including but not limited to dimensional standards. WHEREAS, one of the conditions of the preliminary plat approval was that a development agreement shall be executed between the City and the Developer with the Final Plat detailing the terms that will govern the development of the Property. WHEREAS, on September 19, 2023, the Scandia City Council approved the final plat known as Rolling Acres 61, with certain required conditions as memorialized by Resolution 09-19-23-07. WHEREAS, one condition of final plat approval imposed by the City requires the Developer to enter into this Development Agreement detailing the terms that will govern the development of the Property. WHEREAS, the Developer thereafter acquired the Property from the former Property Owner and as a result, as defined above, is now both the Property Owner and the Developer. WHEREAS, it is the policy of the City (1) to enter into development contracts as described in Minnesota Statutes Section 462.358, Subdivision 2(a) and, (2) for a developer to meet the requirements set forth in Scandia UCD section 153.500.90, Subd. 4, entitled “Development Agreement.” WHEREAS, the Parties desire to set forth the respective rights and obligations of the parties with this Agreement. NOW, THEREFORE, in consideration of the terms and conditions described in the Recitals that are incorporated in full herein and of the mutual promises and conditions contained herein, it is agreed by the parties hereto as follows: 3 ARTICLE I DEFINITIONS 1.1 Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Agreement" means this Development Agreement by and between the City, the Developer, and the Property Owner as the same may from time to time be mutually modified, amended, or supplemented by a signed written agreement. "City" means the City of Scandia, Minnesota. “City Counsel” mean the governing body for the City. "Construction Plans" means the plans, specifications, drawings and related documents describing all construction work and improvements to be performed, installed or constructed by Developer on the Property pursuant to this Agreement. "Developer" means LKRJ Properties LLC, a Minnesota Limited Liability Company, or its successors or assigns. "Improvements" means all improvements installed and constructed as part of the Project, including, but not limited to, access, utility, and site-related improvements, on the Property in conformity with the Construction Plans. “Indemnified Parties” means the City governing bodies’ members, officers, agents, consultants, legal counsel, employees, and civil servants. “Plat” means the final plat of Rolling Acres 61, approved by the Scandia City Council as memorialized by Resolution 09-19-23-07. "Property" means the real estate described on the attached Exhibit A. “Property Owner” means LKRJ Properties, LLC, its successors or assigns. "Project" means the development and construction on the Property by Developer of the Improvements pursuant to the terms of this Agreement. “Public Improvements” means all Improvements constructed as part of the Project on public right-of-way or within public easements to be dedicated to the City upon completion. “Private Improvements” means all Improvements to be installed and constructed on the Property in conformity with the Construction Plans that are not dedicated to the City. "Unavoidable Delays" means delays, outside the control of the party claiming an occurrence, which are the direct or indirect result of strikes, other labor troubles, unusually severe 4 or prolonged bad weather, acts of God, fire or other casualty to the Improvements, litigation, or other administrative procedures commenced by third parties which, by injunction or other similar judicial action, directly result in delays, or acts or requirements of any federal, state or local governmental unit (other than the City acting in its contractual capacity under this Agreement) which directly results in delays. ARTICLE II IMPROVEMENTS 2.1 Right to Proceed. The Parties acknowledge and agree that the Property is properly zoned and classified for Developer’s and Property Owner’s desired use. Developer may not construct any Improvements until all the following conditions precedent have been satisfied: City approval of the Construction Plans; issuance of all permits; and deposit of the Security for Public Improvements pursuant to Section 3.7 of this Agreement. 2.2 Development. The Property shall be developed in accordance with the approved Plat, Construction Plans and all City codes and regulations and any additional and further requirements as may be established. If the Construction Plans vary from the written terms of this Agreement, the written terms shall control unless such variation from this Agreement is specifically acknowledged in the Construction Plans. The construction, installation, materials and equipment shall be in accordance with the plans and specifications approved by the City. All the work shall be under and subject to the inspection and approval of the City, the City Engineer, and, where appropriate, any other governmental agency having jurisdiction. In addition, the Developer shall meet the following requirements: 2.2.1. Conservation Easement. 40.2 acres will be preserved as natural open space and agricultural farmland. A wetland delineation has been submitted; multiple wetlands exist on the north and east side, all of which are located within Outlot A. Outlot A will be subject to the Conservation Easement granted to BWSR, which must be reviewed and approved as to form by the Scandia City Attorney. 2.2.2. Subdivision, Lots, Keystone Avenue North Access, Septic and Well. The proposed subdivision would create seven lots for development and three outlots. Access to the subdivision would be via Keystone Avenue North on a new road proposed as 198th Street North. Developer must obtain approval from Washington County for access onto Keystone Avenue North, which is also County Road 50 (C.R. 50). The subdivision would be developed as an open space conservation development. Each of the seven lots will be developed with single-family homes. Each lot will be served by a septic system and well. 2.2.3. Outlot A. Prior to the issuance of any building permit, Property Owner will provide the City with a conservation easement for Outlot A between the Property Owner and the Minnesota Board of Soil and Water Resources. The City Attorney must review and approve the easement before it can be recorded. 5 2.2.4. Outlot B. Prior to the issuance of any building permits, Property Owner will record a permanent easement for the benefit of the City that Outlot B is restricted for preservation purposes to agricultural use (haying and grazing is considered an agricultural use), and that the easement will furthermore provide that (1) the Easement will be construed, interpreted, and applied in harmony with adjacent conservation easement(s) and (2) will include a provision that when and if additional future construction or development within the Property occurs, then Outlot B will accommodate on, over, below, and above access to and thru Outlot B as well as any stormwater facility and management requirements that the City may then impose in its sole discretion. 2.2.5 Outlot C. After completion of the stormwater facilities and City review and approval, Property Owner will deed Outlot C to the City. Outlot C will contain the stormwater facilities for the site. A drainage and utility easement must be granted by Developer to the City for the benefit of Outlot C where it adjoins street right-of-way (along the west and north lot lines). 2.2.6. Streets, Access, and Parking. The subdivision will include a new road constructed by Developer, shown as 198th Street North on the final plat. Parking will provided on and for each lot; parking is required to be provided at a rate of 2 spaces per single family dwelling. The new road shall adhere to city requirements imposed by Scandia City Engineer. The constructed road, with just the base course, needs to go through a minimum of one free thaw cycle before wear course is allowed. A minimum of five or more of the seven residences allowed must be constructed to completion prior to placement of the final wear course. 2.2.7. Landscaping. Developer’s landscaping plan shows 11 deciduous trees and 20 evergreen or coniferous trees, for a total of 31 trees. Trees shall be no closer than 75 feet from the edge of the asphalt of the new road. After final restoration and turf establishment reaches at least 70% coverage, Developer shall request final inspection from the City. 2.2.8. Comfort Lake Forest Lake Watershed District (CLFLWD) and Stormwater Management. Developer shall comply with all requirements imposed by the Comfort Lake Forest Lake Watershed District (CLFLWD) including securing the proper CLFLWD permit and compliance with the CLFLWD permit. All stormwater management facilities shall be owned by the City after final project completion by Developer and acceptance by the City, and prior completion and acceptance by the City, if required by the City, Developer shall enter into a maintenance agreement for stormwater management and buffer requirements needed for stormwater management. 2.2.9. Construction/Building Plans/Pre-Construction Meeting. All structures, signs, buildings, and the like must comply with applicable City codes and regulations and state, county, watershed district, and local laws and regulations. A preconstruction meeting is required to be held prior to any construction activity starting on site. Developer shall invite representatives from the City, Watershed, and applicable private utility owners to attend with adequate advance notice of the time, place, and date of the meeting. 2.2.9. Parkland Dedication. Per Scandia UDC section 153.500.090, Subd. 5, Developer has paid to the City a Parkland Dedication fee in the amount of $3,000 for each residential unit, which for this Project means a Parkland Dedication fee payment in the total amount of $21,000.00. 6 2.2.10. Review and Approval; Agreements; Declarations, Restrictions, and Agreements Running with the Land. Developer shall review and approve and execute all documents necessary to meet the term and conditions of this Agreement. To the extent reasonably required by the City, Developer shall execute declarations, restrictions, easements, or agreements that run with the land and bind successors-in-interest to ensure compliance with the terms and conditions of this Agreement. 2.3 Construction and Installation by Developer. Developer shall complete the construction of the Improvements at Developer's sole cost and expense, pursuant to the following terms and conditions: 2.3.1 All site grading, common greenway and open spaces, storm water storage ponds, surface drainage ways and all private driveways, shall be in accordance with a grading, drainage and site plan approved by the City Engineer. Any changes to the grading plan during construction shall be submitted to the City for approval. An as-built grading plan must be submitted to the City Engineer for review. Each building site must conform to the grading plan approved by the City prior to a building permit being issued. 2.3.2 Developer shall control soil erosion ensuring: A. All development shall conform to the natural limitations presented by the topography and soil of the subdivision in order to create the best potential for preventing soil erosion. Developer shall submit an erosion control plan, detailing all erosion control measures to be implemented during construction, to the City for approval prior to the commencement of site grading or construction. B. Erosion and siltation control measures shall be coordinated with the different stages of development. Appropriate control measures as required by the City Engineer shall be installed prior to development and as may be necessary to control erosion. C. Land shall be developed in increments of workable size such that adequate erosion and siltation controls can be provided as construction progresses. The smallest practical area of land shall be exposed at any one period of time. D. Where the topsoil is removed, sufficient arable soil shall be set aside for re-spreading over the developed area. The topsoil shall be restored to a depth of at least four (4) inches and shall be of a quality at least equal to the soil quality prior to development. E. Developer shall not locate its equipment within any public right-of- way without the express written consent of the City Engineer. 2.3.3 Developer shall place iron monuments at all lot and block corners and at all other angle points on boundary lines. Iron monuments shall be replaced after all street and lawn grading has been completed in order to preserve the lot markers. 7 2.3.4 Developer shall be responsible for street maintenance, including curbs, boulevards, sod, street sweeping, and snow removal until the City has inspected the road with the final wear course, the establishment of vegetation in the Right of Way, and the stormwater control installation and accepted them all, and a minimum of five or more of the seven residences have been constructed and a certificate of occupancy issued. All streets shall be maintained free of debris and soil until the subdivision is completed. Warning signs shall be placed when hazards develop in streets to prevent the public from traveling on same and directing attention to detours. The repair of any damage done to the streets or public utilities by Developer or any of its contractors or subcontractors, shall remain the financial responsibility of the Developer. 2.3.5 Developer shall comply with all applicable requirements and regulations promulgated from the Minnesota Office of Pipeline Safety. The Developer shall hold harmless and indemnify the City from any and all loss or damage resulting from its failure to comply with these requirements including but not limited to expenses the City incurs in correcting errors in information provided by Developer its agents or contractors or remediating problems resulting there from in the right of way. Upon failure to provide full documentation as required, the City shall notify Developer and Developer shall have 30 days to secure full compliance. Failure to comply will result in the work being assigned by the City to an outside professional for completion of the necessary work. Any costs incurred in resolving these requirements shall be assessed to the property or offset from security required under this agreement. The City shall document the time and materials required to review, confirm and accept the installation documentation and shall invoice Developer for the costs based on the actual work involved or on a fee schedule adopted by the City Council. 2.3.6 All utilities necessary to service each residential lot shall be installed from the new road to the lot line of each respective lot at Developer’s expense, including but not limited to electric, gas, phone, cable, etc. Electrical distribution lines located or to be located upon the site shall be installed and maintained underground. 2.3.7 Developer shall complete construction, materials testing during the construction, such as gradations, compaction tests, and bituminous testing meeting City standards and MnDOT Standards of Specifications for Construction. 2.4 Costs and Fees. Developer agrees to pay the actual and reasonable fees and costs equal to the technical, planning, and administrative review and process costs of the City and its consultants, and the publication costs that are associated with performing necessary reviews and approval services relating to the Plat, Construction Plans and this Agreement. Developer will be responsible for development fees/permits as required by the City, Washington County, and Watershed District. Developer has caused One Thousand and Seven Hundred and 00/100 Dollars ($1,700.00) to be deposited in escrow with the City, receipt of which is hereby acknowledged, for estimated City costs and fees. (a) Legal Fees. Developer agrees to pay all of the City’s reasonable legal fees and costs incurred in relation to the development of the Property, whether performed by the City 8 Attorney or its designee, including, but not limited to, the review of all documents, plans, and plats submitted by Developer, the negotiation and drafting of this Agreement, all legal research, the drafting of any related documents, including resolutions, as well as any time incurred in the various and miscellaneous legal involvements which have been or are required during the development processes. (b) Engineering. Developer agrees to pay all of the City engineering fees and costs incurred in relation to the approval of this Project, whether provided by the City Engineer, a staff engineer or technician or designated employee or by a consultant, including, but not limited to, the review of all documents, plans, and plats submitted by Developer, and oversight of the Project. (c) Planning. Developer agrees to pay all of the City’s planning fees and costs incurred in relation to the approval of this Project, whether provided by staff, technicians, designated employees, or by a consultant, including, but not limited to, the review of all documents, plans, and plats submitted by Developer, and oversight of the Project. (d) Inspection Fees and Costs. Developer agrees to reimburse the City for the costs of inspection and related services provided by the City or by a consultant on the basis of all such services rendered. The inspector of the Improvements on behalf of the City shall be chosen by the City. In the event that the inspector chosen by the City for site inspection during the improvement construction phase is someone other than an employee of the City, the City Engineer may require involvement by his firm in oversight of those inspection processes from time to time as deemed necessary. 2.5 Private Water and Sewer. All sanitary sewer and water for the Property shall be privately owned and maintained. Developer shall cause all purchasers of lots within the project to be responsible for the installation, pursuant to plans approved by the appropriate governmental entity for private sanitary sewer and treatment facilities. ARTICLE III CONSTRUCTION OF AND SECURITY FOR PUBLIC IMPROVMENTS 3.1 Public Improvements. The construction of the Project shall also be expressly conditioned upon construction of certain Public Improvements and conditions regarding the Public Improvements. The Public Improvements, and the conditions regarding the Public Improvements are as follows: (a) Developer shall permit the City Engineer to supervise the details relating to the construction of the Public Improvements and grant the City Engineer the authority to coordinate the work to be done with any work that is done or contracted by the community in the vicinity. The project manager shall be granted authority on behalf of the Developer to make decisions related to the construction of the required Public Improvements as they may arise during the course of the construction. 9 (b) Construction Plans for the Public Improvements shall be prepared at Developer’s sole cost and expense using appropriate state certified or licensed professionals. Said plans, together with the quantities of construction items, and an estimate of total costs, shall be submitted to City Engineer for approval. (c) Developer shall obtain written authorization from the City prior to the commencement of work. During the course of construction, the City shall make such inspections as the City deems necessary to ensure compliance with the Constructions Plans. 3.2 Storm Drainage System. Storm drainage shall be provided by means of storm sewers, culverts, ditches, Storm Water Best Management Practices (BMP’s), and appurtenances in the public right-of-way and/or in drainage easements where required and/or within natural areas (where applicable and permitted), all in accordance with storm drainage plans prepared by Developer and approved by the City and entirely at the Developer sole expense. All storm drainage shall be in conformance with the approved Construction Plans. 3.3 Insurance Policy Endorsements. Prior to construction of the Public Improvements, Developer shall provide evidence of insurance to the City naming the City as additional insured on a primary and noncontributory basis with respect to comprehensive general liability coverage for the Public Improvements work performed by the Developer. The comprehensive general liability coverage will carry limits of not less than $1M per occurrence and $2M in the aggregate. The coverage shall be issued on an occurrence basis for this project. In addition, the Developer shall carry or cause its contractors and such contractors to carry liability coverage for all vehicles and hired and non-owned vehicles with limits acceptable to the City. The Developer and its contractors shall carry Workers Compensation to the extent required by law at the statutory limits. The policies shall be written by an insurance company licensed to do business in Minnesota. Developer shall provide not less than 30 days’ written notice to the City prior to change, modification or termination of said policy. Such notice provisions shall be in the unconditional affirmative, phrases such as “shall endeavor to notify” are unacceptable and shall be rejected. 3.4 Warranty and Warranty Bond. Developer warrants all work required to be performed by it against poor material and faulty workmanship for a period of two years after its completion and acceptance by the City of all Public Improvement per this Agreement. With respect to base course street placement, Developer warrants the road base/base court for one year after final wear course placement and the final punch list work is completed or the two years set forth below, whichever is greater. The Developer shall provide the City a warranty bond in an amount equal to the value of the Public Improvements in a form acceptable to the City or its staff. The warranty bond provided by Developer shall be effective beginning on the date of City accepts the Public Improvements and shall remain in effect until it terminates on the same date two years after the City’s acceptance of the public improvements. All contracts entered into by Developer for construction of the Public Improvements shall provide for a guarantee of the workmanship and materials for a period of two years following the completion and final acceptance of all Public Improvements by the City Council. All such contracts shall also conform to the ordinances and specifications of the City in the construction of all public improvements and the directives of the City Engineer. Any and all warranties obtained by Developer for Public Improvements via this Agreement 10 are deemed assigned by Developer to the City upon acceptance of the Public Improvements by the City. 3.5 Dedication. Subject to all other provisions of this Agreement, upon completion and City acceptance of the work and construction required by this Agreement, Developer shall, without charge to the City, unconditionally give, grant, convey title and fully dedicate the Public Improvements lying within public rights-of-way and easements to the City, in fee simple, free and clear of all monetary encumbrances, together with, including without limitation, all lands upon which they stand, and all structures, mains, conduits, pipes, lines, machinery, equipment, and appurtenances which may in any way be a part of or pertain to such improvements and together with any and all necessary easements for access thereto. After such dedication and acceptance thereof by the City, said Public Improvements shall thereafter be under the jurisdiction of the City and subject to inspection by the City Engineer or its representatives, and the City shall have the right to connect or integrate other sewer or water facilities as the City decides, with no payment or award to, or consent required of Developer. The dedication of any Public Improvements shall not be considered accepted by the City for public ownership until such time as the Public Improvements within the intended dedication have been completed and accepted by the City Council by adoption of a resolution accepting such dedication. Developer shall be responsible and liable for the maintenance, safety, and operation of all Public Improvements until such time as the Public Improvements are accepted by the City Council by resolution. In the event the City must take measures to maintain, operate, or make safe a Public Improvement currently existing or required as a result of the land division, but which has not yet been accepted by the City, the costs of such measures shall deemed City-incurred costs and reimbursed to the City by Developer. 3.7 Security for Public Improvements. To guarantee compliance with the terms of this Agreement and payment of the costs and construction of the Public Improvements, Developer shall furnish the City a performance bond, a cash deposit, certified check, or Irrevocable Letter of Credit (in a form to be approved by the City Attorney) in the amount of $245,000.00 which is 125% of the Preliminary Opinion of Estimated Probable Construction Costs, dated July 25, 2023, for the Public Improvements attached as Exhibit B. In case a letter of credit is posted, the City shall have the right to apply against the letter of credit any bills incurred by the Developer or the City with regard to the Public Improvements, however, the City shall provide Developer the opportunity to pay for said Public Improvements as bills are incurred, in cash, rather than applying payments against the Letter of Credit, if a letter of credit is used in lieu of a cash escrow by Developer. In such case, Developer shall have 10 business days from the time of submission of the bill by the City to the Developer to pay to the City such amount in cash so that the City can use the payment to pay the amount due in lieu of drawing down on the letter of credit or other escrow on file with the City. The letter of credit shall be automatically renewable until the Public Improvements have been completed to the satisfaction of the City. The letter of credit shall secure compliance with all terms of this Agreement and all obligations of the Developer hereunder. The City may draw down on the letter of credit without notice if the obligations of the Developer have not been completed as required by this Agreement. In the event of a default under this Agreement by the Developer, the City shall 11 furnish the Developer with written notice by certified mail of Developer’s default under the terms of this Agreement. If the Developer does not cure the default within 14 days of the date of such notice, the City may draw on the letter of credit and take such steps as it deems necessary to remedy the default. With City approval, the letter of credit may be reduced from time to time as financial obligations are paid and Public Improvements and other Developer obligations are completed to the City’s requirements. The City Engineer shall control the reduction of the letter of credit based upon the request of the Developer demonstrating satisfactory completion of elements of the Public Improvements. The City Engineer shall not authorize reduction of the letter of credit to an amount lower than 125% of the cost of the remaining work, subject to satisfaction of all of the Developer’s financial obligations to the City. The letter of credit will not be reduced below 10% of the original amount until final acceptance of the Public Improvements by City Council. Developer has submitted a total bid of all work necessary for the completion of the Public Improvements. No change order increasing or decreasing the contract expense shall be authorized by the Developer without first notifying the City Engineer of the change and obtaining approval of same. The letter of credit shall be released in full and returned to the Developer within 30 days of (i) completion of all of the Public Improvements included in the calculation of the letter of credit and final acceptance of the improvements by the City Council; (ii) satisfaction of all financial obligations by the Developer to the City. Prior to releasing any portion of the letter of credit or accepting another letter of credit in replacement, the City shall first be satisfied that all work regarding the Public Improvements has been completed according to the Construction Plans. ARTICLE IV GENERAL PROVISIONS 4.1 Permits. Developer shall secure all necessary approvals and permits from all appropriate federal, state, watershed, regional and local jurisdictions prior to the commencement of site grading or construction. Further, Developer shall provide proof of any and all permits requested by the City prior to the pre-construction conference with the City. 4.2 Final Platting. Developer has complied with the final platting requirements as required in Chapter Three, Section 10 of the City Development Code and hereby agrees to complete the development in accordance with the final plat in compliance with City Code. 4.3 Establishment of Construction Schedules. The City Engineer shall have the right to approve construction schedules for the Improvements as proposed by Developer. 4.4 Incorporation of Reference. All plans, specifications and contracts for the Improvements shall be and hereby are made a part of this Agreement by reference as if fully set out herein. 4.5 Administrative and Miscellaneous Expenses. Any and all administrative, legal or engineering costs which Developer is required to pay to the City, which costs may be offset against the Developer’s escrow deposited with the City, however Developer shall be given the opportunity to 12 review and comment on such costs prior to the application by the City to the escrow for the payment of the same. Should the Developer dispute the reasonableness of any of the City's charges, Developer shall have the right to submit any such dispute to arbitration at Developer's sole and exclusive expense. Arbitration shall be conducted by the American Arbitration Association and shall be initiated and initially paid for by Developer. The prevailing party shall reimburse the non-prevailing party for arbitration expenses, which does not include attorneys fees. 4.6 Indemnification. To the fullest extent permitted by law, Developer/Property Owner shall indemnify and hold harmless the Indemnified Parties shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against loss or damages to property or death of any person occurring at or about or resulting from any defect in the project, disregard to any safety protocols and workplace ordinances or any other loss, expense, or penalty to the extent caused by any willful misrepresentation or any willful wanton misconduct of the Indemnified Parties. 4.7 Council Imposed Conditions. The City Council has imposed the following conditions as conditions precedent to approval and further permitting of the development: 4.7.1 The City Engineer’s approval of the street, utility, grading, and drainage plans is required. 4.7.2 Upon the City Engineer’s approval of the Construction Plans and specifications, final construction plans reflecting all approved revisions shall be submitted to the City. Developer shall submit three full-size and two reduced sets of the final construction plans. 4.7.3 In the event Developer desires to establish an owner’s association, bylaw, articles of incorporation, or protective covenants for the Project, said instruments must be submitted to the City Attorney for review and approval. 4.8 No Reconveyance. Property Owner shall not reconvey the Property to any third party, without the express consent of the City until the new road with base course and the storm water drainage construction on Outlot C is completed. ARTICLE V EVENTS OF DEFAULT 5.1 Events of Default. The following shall be “Events of Default” under this Agreement and the term “Events of Default” shall mean, whenever it is used in this Agreement, any one or more of the following events: 5.1.1 Failure by Developer or the City to substantially observe or perform any material covenant, condition, obligation, or Agreement on its part to be observed or performed under this Agreement. 5.1.2 Failure by either party to pay any monetary obligation required by this Agreement. 13 5.2 Remedies on Default. 5.2.1 Upon the occurrence of an Event of Default for any reason, the non- defaulting party shall give written notice of the default to the defaulting party. If the Event of Default is not cured or waived, or the period for cure extended, within thirty (30) days of said notice, then the parties shall have all rights available at law including the filing of a lawsuit to compel performance by, or to obtain a money judgment against, the defaulting party. The prevailing party to such an action shall be entitled to an award of its costs, expenses and reasonable attorney’s fees. 5.2.2 If the Event of Default is the failure to pay or reimburse expenses or monies due under the terms of this Agreement, then the amount claimed shall bear interest at a rate of 12% per annum, until paid in full (unless later agreed or adjudicated not to have been due and owing) from the date the period to cure expires. 5.3 No Remedy Exclusive. No remedy in this Agreement conferred upon or reserved to the City or Developer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 5.4 No Additional Waiver Implied by One Waiver. In the event any provision contained in this Agreement is breached by any party and thereafter waived in writing by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. ARTICLE VI REPRESENTATIONS AND WARRANTIES OF CITY 6.1 The City is a public body corporate and politic organized and existing under the constitution and laws of the state of Minnesota and has the power to enter into this Agreement and carry out its obligations hereunder. 6.1 Legal Authority. The City represents and warrants to the Developer and Property Owner that it has the power, authority and legal right to perform all of the covenants and obligations required to be entered into or performed by the City, as the case may be, under this Agreement. 6.2 Validity. The City represents to Developer and Property Owner that it is empowered to execute and deliver this Agreement and any other agreements and documents, if any, required hereunder to be executed and delivered by the City. This Agreement has been and each such document at the time it is executed and delivered will be duly executed and delivered on behalf of the City. When executed and delivered to Developer, all such agreements shall 14 constitute a legal, valid and binding obligation of the City, enforceable in accordance with its terms. 6.3 No Conflict. City represents to the Developer and Property Owner that the execution and delivery of this Agreement, the consummation of the transactions contemplated in this Agreement, and the execution and delivery of the documents required to be executed, delivered or acknowledged by City will not violate any applicable statute, rule, regulation, judgment, order or decree of the State of Minnesota or a court having jurisdiction over City or its properties. 6.4 Development Property. The City makes no representation or warranty, either express or implied, as to the Development Property or its condition, or that the Development Property shall be suitable for the Developer’s purposes or needs. 6.5 Interest. No representative of the City has either a direct or indirect financial interest in this Agreement, nor will any member of the City Council benefit financially from this agreement within the meaning of Minn. Stat.§ 412.311 and 471.87 ARTICLE VII REPRESENTATIONS AND WARRANTIES OF DEVELOPER 7.1 The Developer is a Minnesota limited liability company organized and existing in good standing under the laws of the State of Minnesota, and has power and authority to enter into this Agreement and to perform its obligations hereunder and is not in violation of any provisions of the State. 7.2 Legal Authority. Developer represents and warrants to the City that all proceedings of Developer necessary to authorize the negotiation and execution of this Agreement and the consummation of the transaction contemplated by this Agreement have been taken in accordance with applicable law. 7.3 Validity. Developer represents to the City that to the best of Developer’s knowledge, this Agreement and all other documents required to be executed and delivered by Developer have been duly and validly authorized, executed and delivered by Developer and will be enforceable against Developer in accordance with their terms. 7.4 No Conflict. Developer represents to the City that the execution and delivery of this Agreement, the consummation of the transactions contemplated in this Agreement, and the execution and delivery of the documents required to be executed, delivered or acknowledged by Developer will not violate any applicable statute, rule, regulation, judgment, order or decree of the State of Minnesota or a court having jurisdiction over Developer or its properties. 15 ARTICLE VIII ASSIGNMENT 8.1 The rights, duties and obligations of the Developer hereunder may not be assigned by Developer to an unaffiliated third party without the express written consent of the City. In the event of a sale, merger or reorganization of Developer, City consent is not needed prior to any assignment of this Agreement. ARTICLE IX MISCELLANEOUS 9.1 Clean-up and Property Maintenance. Developer shall be responsible for cleaning up any debris resulting from construction of Improvements by Developer, its contractors, and subcontractors. Developer, through its employees, contractors or agents, agrees to maintain and keep the Property, landscaping, parking lots and other site improvements in a safe, well-kept manner. Developer shall exercise reasonable care to prevent trash, garbage, litter, or other refuse from accumulating on the Property. 9.2 Compliance with Code of Ordinances. This Agreement and all work and improvements required by this Agreement shall be performed and carried out in strict compliance with and subject to the provision of the City’s Code of Ordinances. 9.3 Restrictions on Use. Developer agrees it shall devote, develop and use the Property in accordance with the uses specified in the property covenants and this Agreement. This restriction shall lapse automatically if at any subsequent time, the recorded property covenants lapse, expire, or are otherwise lawfully terminated. The benefits and burdens of this Agreement shall be deemed covenants which run with the land and shall be binding on the successors and assigns of Developer. 9.4 Conflicting Plans. The site plan shall be developed in accordance with the Construction Plans and the conditions stated in this Agreement. In the event of a conflict between the site plan on file with the City and the written terms of this Agreement, the written terms of this Agreement shall control. 9.5 Conflicts of Interest. No member, official, or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his/her personal interest or the interest of any corporation, partnership or association in which he/she is directly or indirectly interested. Provided, however, that after this Agreement has been signed, a member, official, or employee of the City may have contact and business relations with Developer relating to the development project only if a full disclosure is made to the Common Council, and the business relation does not impair the exercise of said member’s, official’s, or employee’s independent judgment on behalf of the City. No member, official, employee, or consultant of the City shall be personally liable to Developer, or any successor of interest, in the event of any default or breach by the City for any amount which may become due to Developer or successor, or on any obligation under the terms of this Agreement. 16 9.6 Indemnification. With the exception of the gross negligence or willful misconduct of any officer, agent or employee of the City, Developer, and its successors and assigns, shall indemnify, hold harmless and defend the City and its officers, agents and employees from any and all liability, losses, costs, damages and expenses or liabilities, including attorneys’ fees, resulting from third party personal injury or property damage claims, actions or judgments predominately occurring on and related to the Property. 9.7 Notices and Demands. Except as otherwise expressly provided in this Agreement, any notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered when mailed by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, to the addresses below, or at such other addresses with respect to either such party as that party may, from time to time, designate in writing. If to Developer or Property Owner: With a copy to: LKRJ Properties LLC 18712 Fontana St Columbus MN 55092 Martin & Squires, P.A. ATTN: John Paul Martin and Richard J. Savelkoul 332 Minnesota Street, Suite W2750 St. Paul, MN 55101 If to City: City of Scandia Attn: City Administrator 14727 209th St. N Scandia, MN 55073 With copy to: Eckberg Lammers, P.C. Attn: Scandia City Attorney 1809 Northwestern Avenue Stillwater, MN 55082 9.8 Entire Agreement. The entire agreement of the Parties has been set forth in this Agreement and there are no representations, warranties or agreements between the parties except as set forth in this Agreement. Developer and Property Owner agree that the City, its agents and employees, shall not be liable for any representations, warranties or agreements not contained in this Agreement and that if any such representations, warranties or agreements have been made, they are wholly unauthorized and not binding upon the City. Developer and Property Owner expressly waive any claims for damages or for rescission because of any representations, warranties or agreements made by the City, its agents or employees, other than as contained in this Agreement. All prior agreements, written or oral, concerning the subject matter of this Agreement are cancelled and superseded. 17 9.9 Modifications in Writing. Neither this Agreement nor any of the provisions of this Agreement may be changed, waived, discharged or terminated except by an instrument in writing signed by the party against whom such enforcement of the change, waiver, discharge or termination is sought. 9.10 Binding Effect and Assignment. This Agreement shall continue to bind and inure to the benefit of the parties and their respective representatives, heirs, successors and assigns. 9.11 Severability of Provisions. It is intended each provision of this Agreement shall be viewed as separate and divisible, and in the event that any provision shall be held to be invalid, the remaining provisions shall continue to be in full force and effect. 9.12 Governing Law. This Agreement and its construction, interpretation, and enforcement and the rights of the parties shall be determined under, governed by and construed in accordance with the internal laws of the State of Minnesota, without regard to principles of conflict of law. Each of the parties agrees that all actions or proceedings arising in connection with this Agreement shall be tried and litigated, at the sole option of City, in any court in which the City shall initiate legal or equitable proceedings and which has subject matter jurisdiction over the matter in controversy. 9.13 Venue. Any disputes or litigation relating to this Agreement shall be initiated, filed, and venued exclusively in the State of Minnesota, Washington County, District Court and shall not be removed to any other federal or state court. 9.14 Waiver of Jury Trial. THE PARTIES JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES REPRESENTS THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN. 9.15 Additional Representations. Each party acknowledges and agrees it (i) has been given a full and fair opportunity to discuss and negotiate the terms of this Agreement, (ii) understands and fully agrees with the provisions of this Agreement, (iii) has carefully read this Agreement; (iv) a copy of this Agreement was available to them prior to the execution thereof; (v) has been given adequate time in which to execute the Agreement; (vi) knows and understands the provisions of this Agreement; and (vii) has signed this Agreement knowingly and voluntarily. 9.16 Further Acts. Each party to this Agreement agrees to perform any further acts and deliver any documents as may be reasonably necessary to carry out the provisions of this Agreement. 9.17 Recordation. The City may record a copy of this Agreement, or a memorandum thereof, in the office of the Washington County Recorder. 18 9.18 Headings. The headings in this Agreement are included for convenience and reference only and should not be construed a part of this Agreement for any other purpose. 9.19 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and facsimile signatures shall be treated as originals; however, in no event shall the Agreement be deemed fully executed without the signatures of all parties. 9.20 Environmental Compliance. The Developer shall comply with all applicable local, state, and federal environmental laws and regulations, and will obtain, and maintain compliance under, any and all necessary environmental permits, licenses, approvals or reviews. 9.21 Certification of Completion. Separate and independent from the Certificate of Occupancy required for each residence, the Developer shall notify the City when construction of the Project has been substantially completed. The City shall after such notification, inspect the Project in order to determine whether the Project has been constructed in compliance of the approved Construction Plans, City, County, and State Ordnances. The City shall deliver, if inspection did not pass, a written statement to the Developer indicating in adequate detail the specific issues in which the Project has failed inspection, and provide Developer with adequate time needed to correct deficiencies and the City shall reinspect the Property. The Certificate of Completion issued for the Project, pending passing all inspections, shall satisfy and terminate the agreement and covenants of Developer in this Agreement solely with respect to construction of the Project. Issuance of the Certificate of Completion shall not be construed to relieve the Developer of any approval required by any City department in connection with the construction, completion or occupancy of the Project not shall it relieve the Developer of any obligations under this Agreement. [Signature pages follow.] 19 IN WITNESS WHEREOF, the City, Developer, and Property Owner have caused this Agreement to be duly executed on the date and year first above written. CITY Christine Maefsky Mayor Kyle Morell City Administrator STATE OF MINNESOTA ) ) ss. COUNTY OF WASHINGTON ) The foregoing instrument was acknowledged before me this ____ day of __________, 2023, by Christine Maefsky, Mayor, and by Kyle Morell, City Administrator, of the City of Scandia, a Minnesota municipal corporation, on behalf of the City and pursuant to the authority of the City Council. Notary Public Approved as to Form: /s/ Eric Larson 11/29/2023 Eric Larson, Scandia City Attorney 20 DEVELOPER LKRJ Properties LLC By: ____________________________ Its: ____________________________ STATE OF MINNESOTA ) ) ss. COUNTY OF _________________ ) On this _____ day of _______________, 2023, before me a Notary Public, within and for said County personally appeared _____________________, _________________ of LKRJ Properties LLC, Developer above named, to me personally known, by me and duly sworn did say that s/he is the Developer above named and acknowledged said instrument to be executed as his free act and deed. Notary Public 21 EXHIBIT A LEGAL DESCRIPTION That part of the North Half of the Northwest Quarter of Section 30 and that part of the South Half of the Southwest Quarter of Section 19, all in Township 32 North, Range 20 West, Washington County, Minnesota, described as follows: Commencing at the Northwest corner of said North Half of the Northwest Quarter of Section 30; thence on an azimuth from North of 179 degrees 54 minutes 19 seconds, oriented to the Washington County Coordinate System, NAD 83, along the West line of said North Half of the Northwest Quarter of Section 30, a distance of 699.86 feet to the point of beginning of the parcel to be described; thence continuing on an azimuth of 179 degrees 54 minutes 19 seconds, along said West line, a distance of 602.00 feet to the Southwest corner of said North Half of the Northwest Quarter of Section 30; thence on an azimuth of 89 degrees 50 minutes 19 seconds, along the South line of said North Half of the Northwest Quarter of Section 30, a distance of 2032.36 feet to its intersection with the West line of the East 934.00 feet of said North Half of the Northwest Quarter of Section 30; thence on an azimuth of 01 degrees 42 minutes 32 seconds, along the West line of said East 934.00 feet of the North Half of the Northwest Quarter of Section 30, a distance of 934.50 feet to its intersection with the North line of the South 934.00 feet of the North Half of the Northwest Quarter of Section 30; thence on an azimuth of 269 degrees 50 minutes 19 seconds, a distance of 253.37 feet; thence on an azimuth of 02 degrees 00 minutes 39 seconds, a distance of 1087.52 feet to the Southwest corner of Lot 1, Block 1, Pheasant Hills, according to the plat thereof, on file and of record in the Office of the County Recorder, Washington County, Minnesota; thence on an azimuth of 02 degrees 00 minutes 39 seconds, along the West line of said Lot 1, Block 1 of said plat, a distance of 267.24 feet; thence on an azimuth of 224 degrees 23 minutes 02 seconds a distance of 2365.72 feet; thence on an azimuth of 269 degrees 54 minutes 33 seconds a distance of 200.65 feet to the point of beginning. 22 EXHIBIT B PRELIMINARY OPINION OF ESTIMATED PROBABLE CONSTRUCTION COSTS