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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 811512014 IVWS- STORAGEIDESKTOPS SITNAGELIDESKTOPITINfBER RIDGE DA -2.DOC INTRODUCED, PASSED AND ADOPTED this 19th day of August, 2014. A drew P. Daly, or 8//5/20/4 II VWS- STORAGEIDESKTOPSSI TNAGELIDESKTOPITIMBER RIDGE DA -2.DOC 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. 811512014 Q: I USERSI VAIDTIMBER RIDGE- NEWIAGRIDA -9.DOC 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 8115/2014 Q: I USERSI VAIL I TIMBER RIDGE- NEWIAGMDA -9. DOC 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. 811511014 Q: IUSERSIVAIVTIMBER RIDGE- NEWIAGMDA -RDOC 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. 8/15/2014 Q: I USERSI VAIDTIMBER RIDGE- NEWIAGRIDA -9.DOC 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. 8/15/2014 Q: I USERSIVAMTIMBER RIDGE- NEWUGMDA -9.DOC 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. 811512014 Q: I USERSI VAIUTIAMER RIDGE- NEMAGMDA -9.DOC 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 8//5/2014 Q: I USERSI VAMTIMBER RIDGE- NEWIAGRIDA -9.DOC 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 811512014 Q: WSERS(VAIDTIMBER RIDGE- NEWAGROA -RDOC 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. 811512014 Q: I USERSI VAIUTIMBER RIDGE- NEWIAGRIDA -RDOC