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11-9Resolution No. 11-9 RESOLUTION AUTHORIZING EXECUTION OF AN AGREEMENT WITH NESLER & LAKE -LOTS, LLC REGARDING CERTAIN PUBLIC IMPROVEMENTS IN WEST POINT GARDENS SUBDIVISION (PHASE 1) BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Ed Schock, Mayor, and Diane Robertson, City Clerk, be and are hereby authorized and directed to execute an Agreement with Nesler & Lake -Lots, LLC on behalf of the City of Elgin regarding certain public improvements in West Point Gardens Subdivision (Phase I), a copy of which is attached hereto and made a part hereof by reference. s/ Ed Schock Ed Schock, Mayor Presented: January 12, 2011 Adopted: January 12, 2011 Omnibus Vote: Yeas: 7 Nays: 0 Attest: s/ Diane Robertson Diane Robertson, City Clerk AGREEMENT REGARDING CERTAIN PUBLIC IMPROVEMENTS IN WEST POINT GARDENS SUBDIVISION (PHASE I) THIS AGREEMENT made this 12th day of January, 2011 , Q6i4 (this "Agreement"), by and between Nesler & Lake - Lots LLC, an Illinois limited liability company ("Developer"), and City of Elgin, an Illinois municipal corporation (the "City"). WHEREAS, Developer is the owner of the West Point Gardens Subdivision in the City of Elgin, Illinois ("Subject Property"); and WHEREAS, Developer has commenced certain development activities in relation to the Subject Property; and WHEREAS, Phase I of the subdivision of the Subject Property is depicted on Exhibit A attached hereto (hereinafter referred to as "Phase I of the Subject Property"); and WHEREAS, Developer intends to substantially complete the public improvements within Phase I of the Subject Property and has requested that the City accept certain public improvements within Phase I of the Subject Property; and WHEREAS, Developer may not be the builder of dwelling units in the Subject Property, but typically sells, transfers and assigns the right to build homes, and the concurrent obligations related to home building, to another entity; and WHEREAS, the parties have identified other matters in issue between them in regard to the Subject Property; and WHEREAS, the City has certain concerns about accepting the streets in an area where so few dwelling units have actually been constructed, and where the Developer or the future home builder will have the obligation of constructing sidewalk and of planting parkway trees; and WHEREAS, the parties have discussed the concerns of the City, and the matters in issue between them, and have come to certain understandings regarding same, and desire to reduce said understandings to writing to memorialize their agreement regarding them. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS CONTAINED HEREIN, AND OTHER GOOD AND VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS: I. Subject to the terms of this Agreement, within sixty (60) days of (i) Developer having completed installation of the final surface course on the streets within Phase I of the Subject Property as identified on Exhibit A hereto to the satisfaction of the City's Engineer, (ii) Developer having completed and corrected all outstanding punch list items for such Phase I Public Improvements (hereinafter defined) to the satisfaction of the City's Engineer, and (iii) Developer having posted the bonds with the City referred to in Section 4 hereof (or agree to the modification of the existing bonds with the City referred to in Section 4 hereof), the City shall by appropriate Resolution of the City Council accept the public streets, street lighting, street signage, storm sewers, water -main, sanitary sewers, and related appurtenances in Phase I of the Subject Property (hereinafter collectively referred to as the "Phase I Public Improvements"). Notwithstanding the foregoing or anything else to the contrary in this Agreement, the City's acceptance of such Phase I Public Improvements shall not include acceptance of sidewalks or required parkway improvements, including trees, mulch, black dirt and sod. For the purposes of clarification, it is also understood and agreed that the detention facilities and any bike paths within the Subject Property are private improvements and shall not be accepted by the City. For the purposes of further clarification, it is also understood and agreed that the punchlist items for such Phase I Public Improvements shall include, but not be limited to, the removal of the current sales office on Tulip Court by the Developer at its cost and the completion of Tulip Court by the Developer at its cost. 2. Upon said acceptance of the Phase I Public Improvements but subject to the provisions of Section 4 below, the City shall release the securities previously posted by Nester Road Limited Partnership to secure satisfactory completion of such Phase I Public Improvements on the Subject Property. The security to be released identified by the improvements secured, the document number and the amount are as follows: for Phase I — Site Improvements, Letter of Credit # 428-1 (original amount of $7,057,606.92 and current amount of $2,325,348.80), and for Phase I - Mass Grading, Letter of Credit# 428-0 (original amount of $1,205,369 and current amount of $215,000.00). 3. Despite said acceptance of the Phase I Public Improvements by the City, and as an express condition thereof, Developer shall have the following obligations: a. Developer shall be responsible to repair any damage caused to the Phase I Public Improvements in the Subject Property, caused by any and all persons involved in, or resulting from, construction of dwelling units on any of the lots in Phase I of the Subject Property (hereinafter "Construction Damage") up to and including such time as not less than 75% of the dwellings (i.e., 198 dwellings) within Phase I have been issued temporary or permanent occupancy permits. The repair of any Construction Damage shall be limited to the areas reasonably requiring such repair as determined by the City's Engineer and shall be performed in a manner consistent with, and so as to blend into the original, non -damaged Phase I Public Improvements as determined by the City's Engineer. Notwithstanding the foregoing, damage to the Phase I Public Improvements in the Subject Property caused by City vehicles or employees or individuals not involved with the construction of dwelling units within the Phase I Public Improvements shall not be considered to be Construction Damage and shall not be the responsibility of Developer to repair. There shall exist a rebuttable presumption that any damage to the Public Improvements shall be considered to be Construction Damage and shall be the responsibility of Developer to repair at its cost. In the event Developer wishes to contend that certain damage to the Phase I Public Improvements is not Construction Damage and not the responsibility of Developer to repair, Developer shall submit documentation of same to the City Engineer for the City Engineer's consideration. The determination of whether any damage to the Phase I Public Improvements constitutes Construction Damage shall be made by the City Engineer, which determination shall be binding. At such time 75% of the dwellings (i.e., 198 dwellings) to be constructed within Phase I have been issued temporary or permanent occupancy permits, Developer shall provide the City's Engineer written notice thereof. The City shall then cause the Phase I Public Improvements within Phase I to be inspected, and the City shall create a punch list of Construction Damage to the Public Improvements to be repaired by Developer at its cost. Developer shall repair any Construction Damage identified in such punch list by the City as soon as is reasonably practical. b. If Developer fails to make such repairs to the Phase I Public Improvements suffering Construction Damage to the satisfaction of the City's Engineer and to pay the repair costs associated therewith, following thirty (30) days prior written notice from the City to the Developer, then the City shall have the right to perform such repairs and to recover the cost thereof from Developer. Additionally, if Developer fails to make such repairs to the Phase I Public Improvements suffering Construction Damage to the satisfaction of the City's Engineer and to pay the costs associated therewith, the City shall have the right to withhold further permits or other approvals for the Subject Property including, but not limited to, building permits and/or occupancy permits until such time as Developer makes the repairs to the Phase I Public Improvements or Developer reimburses the City for the cost of the repairs made by the City. Such remedies shall be in addition to any and all remedies the City may have with respect to enforcing and/or collecting on the Bonds referenced in Section 4 hereof. C. Developer shall also be responsible for the installation of the planting and live growth of parkway trees, together with appropriate mulch, black dirt and sod (collectively the "Parkway Improvements") in Phase I of the Subject Property as required by the terms and provisions of the City Code and/or the Annexation Agreement pertaining to the West Point Gardens Subdivision as originally enacted and thereafter amended, or shall cause the installation of the Parkway Improvements to be completed by others. The installation of the Parkway Improvements shall also be in conformance with the approved final engineering plans for the Subject Property. The installation of Parkway Improvements shall be completed in conjunction with the development of the lot adjacent to the specific Parkway Improvements. d. Developer shall also be responsible for the installation of the required sidewalk on each individual lot and in other areas in Phase I of the Subject Property as required by the approved final engineering plans for Phase I of the Subject Property ("Phase I Sidewalks") or shall cause the installation of the Phase I Sidewalks to be completed by others. The installation of the Phase I Sidewalks shall be in conformance with the approved final engineering plans for Phase I of the Subject Property. Notwithstanding the foregoing, or anything else to the contrary in this agreement, upon the occurrence of ninety percent (90%) or more of the dwellings (i.e., 238 dwellings) within Phase I of the Subject Property having been issued temporary or permanent occupancy permits, unless otherwise agreed to by the City, Developer shall complete the installation of all required Phase I Sidewalks. Additionally, and notwithstanding the foregoing, or anything else to the contrary in this Agreement, upon the occurrence of the 10`h anniversary of this Agreement and in the event any required Phase I Sidewalks have not yet been installed in the Phase I of the Subject Property, unless otherwise agreed to by the City, Developer shall complete the installation of all required Phase I Sidewalks. 4. Developer shall, prior to the expiration or release of its current outstanding bonds for the Phase I Public Improvements and prior to the City's acceptance of the Phase I Public Improvements, post with the City bonds to secure the performance of its obligations under this Agreement. In the alternative, the currently outstanding bonds for the Phase I Public Improvements may be modified in their terms and reduced as to amount for such purposes. Such bonds shall be in the amount and timeframe as follows: a. Ten percent (10%) of the original estimate for the Phase I Underground Improvements. The Underground Improvement bond shall remain in place for a warrantee period of one (1) year from the time of Phase I Public Improvements acceptance. Upon expiration of the warrantee period, the City shall release the bond. b. Ten percent (10%) of the original estimate for street pavement, curbs, gutters, street lights and signage improvements. The bond for the Phase I street improvements shall remain in place until (i) not less than seventy-five percent (75%) of the dwellings (198 dwellings) to be constructed within Phase I have been issued temporary or permanent occupancy permits. C. One hundred ten percent (110%) of the estimate as approved by the City Engineer for the remaining Phase I Sidewalk and Parkway Improvements. Such bond shall remain in effect until such Phase I Sidewalk and Parkway Improvements have been completed and have been accepted by the City. d. An amount of $88,484.00 for Mass Grading & Erosion Control. The Mass Grading and Erosion Control bond shall remain in effect until the Subject Property is fully developed and accepted by the City. Miscellaneous Provisions: a. This Agreement shall not be modified, altered or amended without a further written document signed by each of the parties hereto. b. This Agreement shall inure to the benefit of and be binding upon the ` successors and assigns of each party hereto. C. Venue of any action for enforcement of, or arising out of any breach of, the terms and provisions of this Agreement shall lie in the Circuit Court of Kane County, Illinois. d. Each person signing and delivering this document covenants and warrants that he/she has been duly authorized to do so for and on behalf of the party for whom he/she has taken such action. e. All notices and other communications hereunder shall be in writing and shall be deemed given if personally delivered or mailed by registered or certified mail (return receipt requested) or by courier delivery to the parties at the following addresses (or such other addresses for party as shall be specified by like notice) and shall be deemed received on the date on which so hand -delivered or the second business day following the date on which so mailed or sent by courier: TO THE CITY: City of Elgin 150 Dexter Court Elgin, Illinois 60120 Attention: City Manager WITH A COPY TO: City of Elgin 150 Dexter Court Elgin, Illinois 60120 Attention: Corporation Counsel TO DEVELOPER: Nesler & Lake - Lots, LLC 6262 S. Route 83 Willowbrook, IL 60527 Attn: Mark Connelly WITH A COPY TO: TLS Management, LLC P.O. Box 1446 Plainfield, IL 60544 Attn: Tom Scofield Phone (815) 735-4606 Facsimile (815)254-3313 IN WITNESS WHEREOF, the parties hereto have entered into and executed this Agreement as of the date and year first written above. CITY OF ELGIN NES)LER & LAKE — Ed Schock, Ma r Name/Print: iM"K 14. Co Its Authorized Attest: City Clerk Blegal dept\agreement\west point gardens -public improvemenls-nesler & lake -lots Ile-clean-12-6-I0.doc Limits of l� ` o Publie Phase 1 Improvements � � I 1 / �I�,. 5 l TU 4 \ s'. I FUTURE COMMERCIAL DEVELOPMENT (i 1 NA OF CITI C0UNC1L ELGIN THE CITY IN THE SUBURBS" MEETING DATE: December 15, 2010 INITIATIVE M: Agreement with Nesler & Lake -Lots LLC Regarding the Acceptance of Certain Public Improvements in Phase I of the West Point Gardens Subdivision COMMUNITY GOAL • Quality Housing OBJECTIVE Acceptance of certain public improvements in Phase I of the West Point Gardens Subdivision PURPOSE • Ensuring developers provide high -quality infrastructure improvements in new city developments RECOMMENDATION Approve agreement with Nesler & Lake -Lots LLC BACKGROUND Nesler & Lake -Lots LLC ("Developer") is the current Developer of the West Point Gardens Subdivision. Developer has completed certain public improvements in Phase I of the development. Given the current and anticipated conditions in the housing market, Developer is requesting an agreement with the city whereby the city would accept the public improvements in Phase I despite the typical policy of not accepting public streets for maintenance until such time as 70% of the developable lots in the phase of the subdivision have been developed. The city has recently entered into similar agreements for the Highland Woods Subdivision, the Tall Oaks Subdivision and the Bowes Creek Country Club Subdivision. 4. The Developer shall also continue to be responsible for the installation in Phase I of required sidewalks in each individual lot and in other areas in the subject development, as required by the approved final engineering plan for the development. The installation of sidewalks shall be in conformance with improved engineering plans for the development. Upon the occurrence of 90% or more of the dwelling units to be constructed within Phase I having been issued temporary or permanent occupancy permits, Developer is required to complete the installation of all required sidewalks in Phase I. Additionally, upon the occurrence of the 10th anniversary of the agreement, in the event any required sidewalks have not yet been installed in the development, unless otherwise agreed to by the city, the Developer is required to complete the installation of all required sidewalks in the development. 5. The Developer, prior to the city's acceptance of the public improvements in Phase I and prior to the expiration or release of its currently outstanding bonds for the Phase I public improvements, shall post with the city maintenance bonds, bonds with respect to the parkway improvements and sidewalks and a mass grading and soil erosion control bond in the amounts as specified in Section 4 of the agreement. INTERESTED PERSONS CONTACTED Nesler & Lake -Lots LLC FINANCIAL ANALYSIS Acceptance of the Phase I public improvements will be subject to future city council action following the installation of the final surface course on the streets within Phase I and Developer having completed and corrected all outstanding punch list items for the Phase I public improvements. There will be no direct immediate costs associated with the acceptance of the Phase I public improvements; however, maintenance and operating costs for these public improvements will increase over time. An estimate of these costs will be included as part of the request for the future city council action to accept the Phase I public improvements. BUDGET IMPACT FUND(S) ACCOUNT(S) PROJECT #(S) AMOUNT BUDGETED AMOUNT AVAILABLE N/A N/A N/A N/A N/A LEGAL IMPACT None.