HomeMy WebLinkAbout2014-18 Development Agreement for Timber RidgeRESOLUTION NO. 18
SERIES OF 2014
A RESOLUTION APPROVING A DEVELOPMENT AGREEMENT FOR THE TIMBER
RIDGE PROPERTY
WHEREAS, the Town of Vail is planning a redevelopment project for the Timber
Ridge property;
WHEREAS, the purpose of the redevelopment project is to provide employee
housing;
WHEREAS, the Town wishes to facilitate the redevelopment of the Property
consistent with the Housing zone district and those plans approved by the Town of Vail
PEC and DRB;
WHEREAS, to accomplish the redevelopment of the Property, the Town desires
to enter into a Development Agreement with the developer of the property, Lion's Ridge
Apartment Homes, LLC ( "Developer ");
WHEREAS, on April 1, 2014, the Town Council approved a prior versions of the
Development Agreement, but that version was never executed, and since that time,
certain provisions of the Development Agreement have changed; and
WHEREAS, the Town Council wishes to approve the Development Agreement in
substantially the form attached hereto, and to authorize the Town Manager to execute
the Development Agreement at closing.
NOW THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE
TOWN OF VAIL, COLORADO THAT:
Section 1. The Council hereby approves the Agreement and authorizes the
Town Manager to execute the Agreement on behalf of the Town in substantially the
same form as attached hereto, subject to the following contingencies:
a. Approval by the Vail Local Housing Authority of the Ground Lease
and Deed Restriction for the Timber Ridge property;
b. Approval by the Vail Local Housing Authority of Developer's
operating agreement;
C. Approval by the Vail Local Housing Authority of any documents
required by Developer's lender to be signed by the Vail Local Housing Authority
for the Timber Ridge property; and
d. Final approval by the Town Attorney.
1
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INTRODUCED, PASSED AND ADOPTED this 19th day of August, 2014.
A drew P. Daly, or
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DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (the "Agreement ") is made this day of
, 2014 (the "Effective Date "), by and between the Town of Vail, Colorado, a
Colorado home rule municipality (the "Town "), the Vail Local Housing Authority, a Colorado
statutory housing authority (the "VLHA "), and Lion's Ridge Apartment Homes, LLC, a Colorado
limited liability company ( "Developer ") (individually a "Party" and collectively the "Parties ").
WHEREAS, the Town is the owner of certain real property, more particularly described in
Exhibit A attached hereto and incorporated herein by this reference (the "Property ");
WHEREAS, to provide employee housing in the Vail, Colorado, area, the Town will convey
the Property to the VLHA for the purposes described in this Agreement;
WHEREAS, the VLHA has agreed to lease the Property to Developer for development ofthe
Property for employee housing ( "Development ") pursuant to the ground lease between the VLHA
and Developer (the "Ground Lease ");
WHEREAS the Development is subject to a Deed Restriction for the benefit ofthe Town and
the VLHA in the form attached to the Ground Lease as Exhibit B (the "Deed Restriction ");
WHEREAS, the Town and Gorman & Company, Inc. entered into a Pre - Development
Agreement dated November 4, 2013 regarding the Property, which Pre - Development Agreement
shall be deemed superseded by this Agreement; and
WHEREAS, the Parties wish to elaborate on the terms of the Development process and
parameters of the Development, as well as certain ongoing matters related to the ownership and
operation of the Development.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
contained herein, the sufficiency of which is mutually acknowledged, the Parties agree as follows:
1. Obligations of all Parties. The Town, the VLHA and Developer shall grant to each other, for
the benefit of the Property and Lot 1, Timber Ridge Subdivision, A Resubdivision of Lion's Ridge
Subdivision, Block C, A Resubdivision of Lots 1, 2, 3, 4 & 5, Town of Vail, County of Eagle, State
of Colorado, which is adjacent immediately to the west of the Property and owned by the Town (the
"Adjacent Property "), such temporary construction easements across the Property and the Adjacent
Property that are mutually determined to be necessary for the Development. Upon completion ofthe
Development, appropriate permanent easements, including without limitation utility, drainage, and
access easements, will be granted by the Parties for the benefit of the Property and the Adjacent
Property.
2. Obligations of the Town.
a. The Town shall refund 100% of all amounts paid by the Developer for the Town's
construction and building materials use tax applicable to the Property, which refund shall be paid by
the Town to Developer within 5 business days after Developer's payment to the Town.
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b. The Parties acknowledge their intent that the Property is to be exempt from ad
valorem property taxes pursuant to C.R.S. § 29 -4 -227, by virtue of a 0.01% ownership interest in
Developer held by VLHA. To the extent the Property is not tax- exempt, the Town shall refund 100%
of any property taxes, net of the Eagle County Treasurer's fee, collected by the Town on the Property
or Improvements, within 60 days of collection.
3. Obligations of Developer. Developer covenants and agrees as follows:
a. The Development shall at all times be subject to the Vail Town Code, and Developer
shall be responsible for payment of the Town's typical and customary plan review fees for review of
all plans for the Property.
b. Developer shall be responsible for all demolition and building permit fees for permits
issued by the Town in connection with the Development. Developer agrees to pay all building permit
fees associated with the Development within 5 business days after the Effective Date.
C. Developer shall be solely responsible to procure financing for the Development. If
Developer wishes to use federal funds for the Development, it shall be Developer's sole responsibility
to procure such funds.
d. At no time shall the Development eliminate access to or the ability to safely occupy or
operate the Timber Ridge housing units currently existing the Adjacent Property.
e. Developer shall, at its sole cost, construct new improvements on the Property in
accordance with the construction standards set forth herein and other applicable law.
"Improvements" means any buildings, structures, signage, streets, sidewalks, utilities or other
improvements necessary for the Development and constructed or installed by or for Developer on the
Property. Developer shall commence construction of the Improvements by September 30, 2014,
unless a later date is mutually agreed to by both Parties, and shall achieve substantial completion of
the Improvements on or before the date that is 16 months after the date that Developer commences
construction of the Improvements, unless a later date is mutually agreed to by both Parties.
f. Prior to issuance of a certificate of occupancy, Developer shall apply for and record a
revocable right -of -way permit for any and all private property improvements located within Town
rights -of -way.
g. Prior to the issuance of a certificate of occupancy, Developer shall make a one time
payment in lieu of transportation improvements to the Town for mitigation of development impacts
on the Town's transportation systems of $170,000.
4. Obligations of the VLHA. The VLHA covenants and agrees as follows:
a. The VLHA shall participate as a limited member of Developer for purposes of
obtaining an exemption from ad valorem property taxes for the Property and the Improvements
pursuant to C.R.S. § 29 -4 -227, subject to all terms and conditions of Developer's operating
agreement as approved and executed by the VLHA. The VLHA agrees that it will, from the Effective
Date through and including August 31, 2064, participate as a member of any future Colorado limited
liability company that is an owner or tenant of the Property and the Improvements, so long as the
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terms and conditions of the operating agreement of any such future Colorado limited liability
company are substantially similar to the terms of Developer's operating agreement and such
participation is permitted by law.
b. While the VLHA is the owner of fee simple title to the Property and Developer has a
loan on the Property, the VLHA shall join in any mortgage, deed of trust, or other security instrument
required by any lender to Developer, for purposes of subjecting the VLHA's fee simple interest in the
Property to the lien created by such instrument, at any time and from time to time after the Effective
Date and through and including August 31, 2064, so long as the VLHA is legally permitted to join in
such instrument.
Construction of Improvements.
a. All construction, alterations, renovations, repairs, refurbishment and other work on the
Property shall be performed in compliance with this Agreement, the Deed Restriction, the Vail Town
Code and the following:
i. Work shall be done in a workmanlike manner, in full compliance with all
applicable building codes, ordinances, and other laws or regulations of all governmental
authorities having jurisdiction.
ii. No work shall be commenced without all licenses, permits, and authorizations
required by applicable law.
iii. Developer shall have no right, authority or power to bind the VLHA or any
interest of the VLHA in the Property for any claim for labor or for material or for any other
charge or expense incurred in constructing any Improvements or performing any alteration,
renovation, repair, refurbishment or other work, nor to render the VLHA's interest in the
Property liable for any lien or right of lien for any labor, materials or other charge or expense.
iv. Developer shall not be considered the agent of the Town or the VLHA in the
construction, erection or operation of any Improvements.
b. If Developer fails to complete the Improvements as required by this Agreement,
VLHA and the Town shall have the right, but not the obligation, to: complete the Improvements;
restore the Property to the condition it was prior to commencement of construction of the
Improvements; or restore the Property to a condition that the Town deems safe while awaiting
completion of the Improvements by another party; and to charge the costs thereof to Developer.
6. Development Fee. Developer shall be entitled to a development fee (the "Development Fee ")
in connection with the Development. The amount of the Development Fee shall not exceed the
maximum development fee allowed by the Colorado Housing and Finance Authority under its
qualified allocation plan adopted on October 25, 2012 and approved by the governor on January 16,
2013. The Development Fee may be paid from any project sources including, without limitation, debt
proceeds, equity proceeds, and income from the Development.
7. Term. This Agreement shall commence on the Effective Date, and shall terminate on August
31, 2064.
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Security for Completion of Improvements.
a. Developer shall require the general contractor responsible for constructing the
Improvements to provide a performance bond to Developer to guarantee the construction of the
Improvements, and the Town shall be named as an obligee under such bond. The performance bond
shall be equal to the full amount of the cost of construction of the Improvements. Developer shall
provide a copy of such performance bond to the Town prior to commencing construction of the
Improvements.
b. Developer shall cause Gorman & Company, Inc. to agree, in writing, for the benefit of
the Town and the VLHA, to complete construction of the Improvements in the event of a default by
Developer's general contractor.
9. Insurance. Throughout the term of this Agreement, Developer shall maintain the following
insurance, and certificates of such insurance shall be furnished to the Town and the VLHA within 30
days of the Effective Date and at each subsequent policy renewal date:
a. Commercial general liability insurance, including contractual liability, with limits ofnot
less than $2,000,000 per occurrence for bodily injury, personal injury and property damage, naming
the Town and the VLHA as additional insureds.
b. Fire and extended coverage insurance covering the Property for injury or damage by
the elements, or through any other cause, in an amount not less than the full actual replacement cost
of the Property and Improvements, and sufficient to prevent the Town, the VLHA or Developer from
becoming a co- insurer of any partial loss.
During the course of any construction or repair of Improvements, Builders' Risk
Insurance.
10. Developer Default and Remedies.
a. Each of the following is a Developer default of this Agreement:
L If Developer fails to perform any of its obligations under this Agreement and
fails to remedy the same within 30 days after Developer is given a written notice specifying
the same; provided that, if the nature of the violation is such that it cannot reasonably be
remedied within 30 days, and Developer provides evidence to the Town and the VLHA that
the violation cannot reasonably be remedied within 30 days, then the violation shall be
remedied as soon as reasonably practicable, but in any case, within 180 days of the original
notice of violation.
ii. If an involuntary petition is filed against Developer under a bankruptcy or
insolvency law or under the reorganization provisions of any law, or when a receiver of
Developer, or of all or substantially all of the property of Developer, is appointed without
acquiescence, and such petition or appointment is not discharged or stayed within 120 days
after the happening of such event.
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iii. If Developer makes an assignment of its property for the benefit ofcreditors or
files a voluntary petition under a bankruptcy or insolvency law, or seeks relief under any other
law for the benefit of debtors.
b. If a Developer default occurs, the Town or the VLHA, as appropriate, may, in their
sole discretion and without waiving any other rights under this Agreement or available to the Town or
the VLHA:
i. Withhold issuance of certificates of occupancy not yet issued for any buildings
on the Property until said default has been remedied;
ii. Cause construction of all or part of the Improvements to be completed, and
recover the costs of such completion from Developer or Gorman & Company, Inc.; and
iii. Cause the removal of any partially constructed Improvements and return ofthe
Property to the condition it was prior to the commencement of construction, and recover the
costs of such removal from Developer or Gorman & Company, Inc.
C. In addition to the specific remedies set forth herein, the Town and the VLHA shall
have all other remedies available at law or equity, and the exercise of one remedy shall not preclude
the exercise of any other remedy, and any damages alleged by the VLHA may include lost rents.
d. Ifthe Town or the VLHA proceeds to complete the Improvements, Developer shall, at
the request of the Party completing the Improvements, promptly deliver a copy of all of Developer's
plans and specifications related to the Improvements.
11. Town Default and Remedies.
a. The following is a Town default of this Agreement: if the Town fails perform any of
its obligations under this Agreement and fails to remedy the same within 30 days after the Town is
given a written notice specifying the same; provided that, if the nature of the violation is such that it
cannot reasonably be remedied within 30 days, and the Town provides evidence to Developer that the
violation cannot reasonably be remedied within 30 days, then the violation shall be remedied as soon
as reasonably practicable, but in any case, within 180 days of the original notice of violation.
b. If a Town default occurs, Developer shall have all remedies available at law or equity,
and the exercise of one remedy shall not preclude the exercise of any other remedy, provided that
Developer shall not have the remedy of specific performance against the Town.
12. VLHA Default and Remedies.
a. The following is a VLHA default ofthis Agreement: ifthe VLHA fails perform anyof
its obligations under this Agreement and fails to remedy the same within 30 days after the VLHA is
given a written notice specifying the same; provided that, if the nature of the violation is such that it
cannot reasonably be remedied within 30 days, and the VLHA provides evidence to Developer that
the violation cannot reasonably be remedied within 30 days, then the violation shall be remedied as
soon as reasonably practicable, but in any case, within 180 days of the original notice of violation.
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b. If a VLHA default occurs, Developer shall have all remedies available at law or equity,
and the exercise of one remedy shall not preclude the exercise of any other remedy, provided that
Developer shall not have the remedy of specific performance against the VLHA.
13. Notices. Any notice under this Agreement shall be in writing and maybe given by U.S. Mail,
postage prepaid, addressed as set forth herein; or hand - delivery. Notice shall be effective three days
after mailing or immediately upon hand - delivery. The addresses ofthe Parties shall, unless changed in
writing, be as follows:
The Town: Town Manager
Town of Vail
75 South Frontage Road
Vail, CO 81657
The VLHA Town Manager
Town of Vail
75 South Frontage Road
Vail, CO 81657
Developer: Lion's Ridge Apartment Homes, LLC
200 North Main Street
Oregon, WI 53575
Attn: Gary J. Gorman
With a copy to: Willis J. Wright, Jr.
Wright and Company, Inc.
P.O. Box 7270
Avon, CO 81620
14. Costs. Except as otherwise set forth herein, each Party shall be responsible for its own costs
under this Agreement.
15. Modification. This Agreement may only be modified by subsequent written agreement ofthe
Parties.
16. Inte rag tion. This Agreement and any attached exhibits constitute the entire agreement
between Developer, the VLHA and the Town, superseding all prior oral or written communications.
This Agreement shall supersede the Pre - Development Agreement between the Town and Gorman &
Company, Inc. dated November 4, 2013.
17. Binding Effect. This Agreement shall be binding upon and inure to the benefit ofthe Parties
and their respective heirs, successors and assigns.
18. Severability. If any provision of this Agreement is determined to be void by a court of
competent jurisdiction, such determination shall not affect any other provision hereof, and all of the
other provisions shall remain in full force and effect.
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19. Governing Law and Venue. This Agreement shall be governed by the laws of the State of
Colorado, and any legal action concerning the provisions hereof shall be brought in Eagle County,
Colorado.
20. Assignment. Developer may freely transfer or assign any of the rights and obligations of
Developer under this Agreement without the prior written approval of the Town or the VLHA;
provided, however, that Developer shall provide the Town and the VLHA with written notice ofsuch
transfer or assignment within thirty (30) days thereof.
21. Third Parties. There are no intended third -party beneficiaries to this Agreement.
22. Contingency; No Debt. Pursuant to Article X, § 20 of the Colorado Constitution, any
financial obligations of the Town under this Agreement are specifically contingent upon annual
appropriation of funds sufficient to perform such obligations. This Agreement shall never constitute a
debt or obligation of the Town within any statutory or constitutional provision.
23. No Joint Venture. Notwithstanding any provision hereof, the Town shall never be a joint
venture in any private entity or activity that participates in this Agreement, and the Town shall never
be liable or responsible for any debt or obligation of any participant in this Agreement.
24. Force Majeure. No Party shall be in breach of this Agreement if such Party's failure to
perform any of the duties under this Agreement is due to Force Majeure, which shall be defined as the
inability to undertake or perform any of the duties under this Agreement due to acts of God, floods,
storms, fires, sabotage, terrorist attack, strikes, riots, war, labor disputes, forces of nature or the
authority and orders of government.
25. Recording. This Agreement shall be recorded with the Eagle County Clerk and Recorder
subsequent to the Deed Restriction, but prior to any mortgage or other encumbrance on the
Improvements or the Property. The benefits and obligations of the Parties under this Agreement shall
run with the land, and shall be binding on, and enforceable by, any subsequent holder of an interest in
the Improvements or in the Property.
WHEREFORE, the Parties have executed this Agreement as of the Effective Date.
ATTEST:
VAIL LOCAL HOUSING AUTHORITY, a
Colorado statutory housing authority
Steve Lindstrom, Chair
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ATTEST:
Patty McKenney, Town Clerk
STATE OF
ss.
COUNTY OF
TOWN OF VAIL, COLORADO
Andy P. Daly, Mayor
DEVELOPER:
LION'S RIDGE APARTMENT HOMES, LLC
BY GORMAN EMPLOYEE GROUP LION'S
RIDGE, LLC, Manager
BY GORMAN & COMPANY, INC.,
Manager
BY
Gary J. Gorman, President
The foregoing instrument was subscribed, sworn to, and acknowledged before me this
day of August _, 2014, by Gary J. Gorman, the President of Gorman & Company, Inc., the
Manager of Gorman Employee Group Lion's Ridge, LLC, the Manager of Lion's Ridge Apartment
Homes, LLC.
My commission expires:
(S E A L)
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION
Lot 2, Timber Ridge Subdivision, A Resubdivision of Lion's Ridge Subdivision, Block C, A
Resubdivision of Lots 1, 2, 3, 4 & 5, Town of Vail, County of Eagle, State of Colorado.
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