Agenda - Council Work Session - 12/08/2009

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.CITY COUNCIL WORK SESSION Topic Report: Consider amendments to Brookfield First, Second and Third Additions development agreements and amendments to the related Water and Sanitary Sewer Cost Contribution/ Reimbursement Agreement By: William K. Goodrich, City Attorney Tim Himmer, City Engineer 3 ---- Background: Brookfield First, Second and Third Additions are residential subdivisions originally platted by John Peterson and Oakwood Land Development, Inc. ("Oakwood"). Each of the plats have developed and undeveloped residential lots. Due to the economic times and the significant slow down in residential development, Oakwood has or is about to assign its interest in each of the plats to its lender, 21 st Century Bank ("21 sf). Oakwood has been unable to complete several of the land development requirements pursuant to City Code and each of the plat's respective development agreements. This has brought into play certain of the Letters of Credits and escrows for the Second and Third Additions. In addition to the completion of the Brookfield developments, the City also has a contractual relationship with Oakwood by virtue of a Water Main and Sanitary Sewer Cost ContributionlReimbursement Agreement dated March 22, 2006 (the "WSCA"). In very overly simplified terms, in 2006 Oakwood wanted to develop the now Brookfield platted land in addition to other properties in the City's Northwest and Northeast Service Areas. In order to so develop, the City required municipal sewer and water service, but was unwilling to undertake a City Improvement Project with associated special assessments. Oakwood and the City then negotiated the WSCA whereby Oakwood provided $6,000,000.00 to the Project for assistance in paying for construction of the m.unicipal utilities to serve the Brookfield plats and other land in the City's Northwest and Northeast Service Areas. The City provided some $3,500,000.00 to the Project. The WSCA provides a mechanism for Oakwood to have an opportunity to be reimbursed its $6,000,000.00 based on sewer and water hook-ups over a 15 year period and credits for lots developed in the Brookfield Additions plus other areas. The WSCA provides that at the expiration of the 15 year term, Oakwood will receive no more reimbursement, even though its entire $6,000,000.00 may not by then be reimbursed to it. As stated above, Oakwood has now assigned its interest in the Brookfield plats and the WSCA to 21 st Century Bank. Because of the economic residential housing downturn 21 st now seeks to extend the time for its opportunity for reimbursement of the $6,000,000.00 by five years, such that the expiration date would be December 31, 2026. In addition, 21st and the City need to arrive at completion of the Brookfield developments' infrastructure by use of the security referenced above.