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HomeMy WebLinkAbout2021-10 Lot 3, Middle Creek Development AgreementRESOLUTION NO. 10 Series of 2021 A RESOLUTION APPROVING A DEVELOPMENT AGREEMENT WITH TRIUMPH DEVELOPMENT WEST LLC FOR THE DEVELOPMENT OF LOT 3, MIDDLE CREEK WHEREAS, the Town owns the real property described as Lot 3, Amended Final Plat Middle Creek Subdivision, a Resubdivision of Lot 1, County of Eagle, State of Colorado (the "Property"); WHEREAS, the Town has agreed to provide a long-term ground lease of the Property to Triumph Development West LLC (“Triumph”), so Triumph can redevelop the Property, in cooperation with the Town, as a 100% deed-restricted employee housing project including at least 144 beds (the "Project") pursuant to the terms of the Development Agreement for Lot 3, Middle Creek, attached hereto as Exhibit A and made a part hereof by this reference (the “Agreement”). NOW THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF VAIL, COLORADO THAT: Section 1. The Town Council hereby approves the Agreement in substantially the same form as attached hereto as Exhibit A, and in a form approved by the Town attorney, and authorizes the Town Manager to execute the Agreement on behalf of the Town. Section 2. This Resolution shall take effect immediately upon its passage. INTRODUCED, PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Vail held this 2nd day of March 2021. _________________________ Dave Chapin, Town Mayor ATTEST: _____________________________ Tammy Nagel, Town Clerk 2/25/2021 C:\USERS\LCAMPBELL\APPDATA\LOCAL\MICROSOFT\WINDOWS\INETCACHE\CONTENT.OUTLOOK\KLAW43TZ\MC DA- A022421.DOCX DEVELOPMENT AGREEMENT (Lot 3, Middle Creek) THIS DEVELOPMENT AGREEMENT (the "Agreement") is made this ____ day of _______________, 2021 (the "Effective Date"), by and between the Town of Vail, a Colorado home rule municipality with an address of 75 South Frontage Road, Vail, CO 81657 (the "Town") and Triumph Development West LLC, a Delaware limited liability company with an address of 12 Vail Road, Suite 700, Vail, CO 81657 (“Triumph”) (each individually a "Party" and collectively the "Parties"). WHEREAS, the Town owns the real property described as Lot 3, Amended Final Plat Middle Creek Subdivision, a Resubdivision of Lot 1, County of Eagle, State of Colorado (the "Property"); WHEREAS, the Town has agreed to provide a long-term ground lease of the Property to Triumph, so Triumph can redevelop the Property, in cooperation with the Town, as a 100% deed-restricted employee housing project including at least 144 beds (the "Project"); WHEREAS the Property and the Project are subject to a deed restriction for the benefit of the Town recorded at __________________ (the "Deed Restriction"); WHEREAS, the Parties entered into a Pre-Development Agreement dated February 2, 2021 regarding the Property; WHEREAS, to allow the Project to proceed, the Parties intend to enter into a separate long-term ground lease for the Property (the "Ground Lease"); and WHEREAS, the Parties wish to further elaborate on the terms of the process and parameters of the Project. 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. Purpose. The purpose of this Agreement is to set forth the terms and conditions under which the Project will proceed. All terms and conditions in this Agreement are in addition to any requirements of the Vail Town Code (the "Code"), state and federal law and other Town ordinances, and are not intended to supersede any requirements contained therein. All capitalized terms not defined herein shall have the meaning set forth in the Pre-Development Agreement. To the extent there is any conflict between this Agreement and the Pre-Development Agreement, this Agreement shall control. 2. Term and Termination. This Agreement shall commence on the Effective Date, and shall terminate two years following issuance of the final certificate of occupancy for the Project; provided that, if the Parties have not executed the Ground Lease on or before June 28, 2021, this Agreement shall automatically terminate without further action of the Parties. 2 2/25/2021 C:\USERS\LCAMPBELL\APPDATA\LOCAL\MICROSOFT\WINDOWS\INETCACHE\CONTENT.OUTLOOK\KLAW43TZ\MC DA- A022421.DOCX 3. Taxation. 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 Triumph's development entity held by the Vail Local Housing Authority, a Colorado statutory housing authority (the "VLHA"). 4. Triumph's Obligations. a. Triumph shall be responsible for payment of the Town's typical and customary building permit application fees and plan review fees for review of all plans for the Property. No work shall be commenced without all licenses, permits, and authorizations required by applicable law. b. Triumph shall be solely responsible to procure financing for the Project. c. Triumph shall, at its sole cost, cause the construction of all new improvements on the Property, including buildings, structures, signage, streets, sidewalks, utilities and other improvements necessary for the Project, including renewable energy options and multi-modal transportation options (collectively the "Improvements"). The Parties will cooperate to establish the number of units to be constructed and the appropriate unit types for the Project, provided that the Project shall include a minimum of 144 beds. d. If the Project has been finally approved by the Town by June 28, 2021, Triumph shall: i. Submit a complete building permit application for the Project on or before September 1, 2021; ii. If the Town issues a building permit before September 30, 2021, commence construction of the Improvements on or before September 30, 2021; and iii. If the Town issues a building permit before September 30, 2021, obtain a certificate of occupancy for the Improvements on or before November 30, 2022. e. If the Project has not been finally approved by the Town by June 28, 2021, or if Triumph has submitted a complete building permit application on or before September 1, 2021, but the Town has not issued a building permit before September 30, 2021, Triumph shall: i. Submit a complete building permit application for the Project or before March 15, 2022; ii. Commence construction of the Improvements on or before April 15, 2022; and iii. Obtain a certificate of occupancy for the Improvements on or before August 31, 2023. 3 2/25/2021 C:\USERS\LCAMPBELL\APPDATA\LOCAL\MICROSOFT\WINDOWS\INETCACHE\CONTENT.OUTLOOK\KLAW43TZ\MC DA- A022421.DOCX f. Triumph shall at all times comply with all applicable law, including without limitation all current and future federal, state and local statutes, regulations, ordinances and rules relating to: the emission, discharge, release or threatened release of a Hazardous Material into the air, surface water, groundwater or land; the manufacturing, processing, use, generation, treatment, storage, disposal, transportation, handling, removal, remediation or investigation of a Hazardous Material; and the protection of human health, safety or the indoor or outdoor environmental, including without limitation the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, et seq. ("CERCLA"); the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq. ("RCRA"); the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq.; the Clean Water Act, 33 U.S.C. § 1251, et seq.; the Clean Air Act; the Federal Water Pollution Control Act; the Occupational Safety and Health Act; all applicable environmental statutes of the State of Colorado; and all other federal, state or local statutes, laws, ordinances, resolutions, codes, rules, regulations, orders or decrees regulating, relating to, or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material, as now or at any time hereafter in effect. g. Triumph shall have no right, authority or power to bind the Town or any interest of the Town 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 Town's interest in the Property liable for any lien or right of lien for any labor, materials or other charge or expense. h. Triumph shall not be considered the agent of the Town in the construction, erection or operation of any Improvements. i. If Triumph fails to complete the Improvements as required by this Agreement, 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 Triumph. j. Triumph acknowledges that it will not be entitled to any Employee Housing Unit credit for the Project under Sections 12-23-7 and 12-24-7 of the Code. k. On May 5, 2021, if the Parties have executed a development agreement for the Timber Ridge Project, then Triumph agrees that it shall have permanently and irrevocably waived and abandoned any and all rights it may have in the applications and approved plans for the Booth Heights Project, as defined in Section 4.a. of the Pre- Development Agreement. Notwithstanding the foregoing, based on representations made to the Town, it is the Town's understanding that Triumph does not hold any development rights with respect to the Booth Heights Project, which development rights, if any, would benefit the property on which the Booth Heights Project is located and the owner thereof. 4 2/25/2021 C:\USERS\LCAMPBELL\APPDATA\LOCAL\MICROSOFT\WINDOWS\INETCACHE\CONTENT.OUTLOOK\KLAW43TZ\MC DA- A022421.DOCX l. Triumph hereby represents and warrants to the Town that all of the following are true and correct as of the date of signature and the Effective Date: this Agreement has been duly authorized and executed by Triumph as the legal, valid and binding obligation of Triumph, and is enforceable as to Triumph in accordance with its terms; the person executing this Agreement on behalf of Triumph is duly authorized and empowered to execute and deliver this Agreement on behalf of Triumph; to the best of Triumph's knowledge, there is no pending or threatened litigation, administrative proceeding or other proceeding pending or threatened against Triumph which, if decided or determined adversely, would have a material adverse effect on the ability of Triumph to undertake its obligations under this Agreement, other than the claims threatened by Vail Resorts in the January 18, 2021 letter to Triumph erroneously dated January 18, 2020; to the best of Triumph's knowledge, there is no fact or condition of the Property that may have a material adverse effect on Triumph's ability to develop the Property as contemplated; Triumph is the sole owner of the approved plans for the Booth Heights Project (but not the development rights for the Booth Heights Project); and neither the execution of this Agreement nor the consummation of the transaction contemplated by this Agreement will constitute a breach under any contract, agreement or obligation to which Triumph is a party or by which Triumph is bound or affected. m. Triumph hereby agrees to indemnify and hold harmless the Town, its officers, employees and agents from any and all suits, actions and claims of every nature and description caused by, arising from or on account of any act or omission of Triumph, or of any other person or entity for whose act or omission Triumph is liable, with respect to construction of the Improvements (each a "Claim" and collectively the "Claims"); and Triumph shall pay any and all judgments rendered against the Town as the result of any Claim, together with all reasonable expenses and attorney fees incurred by the Town in defending any Claim. Triumph further agrees to indemnify and hold harmless the Town, its officers, employees and agents from any claim against the Town by the owner of any property interest in the Booth Heights Project, which claim is based upon the effect or alleged effect of this Agreement upon such owner's interest, including without limitation claims of diminution of value, inverse condemnation and violation of vested property rights. n. Triumph acknowledges that, if the Town is presented with applications to proceed with the Booth Heights Project, and such applications comply with all applicable Town regulations and the approved development plans for the Booth Heights Project, the Town will not be in a position to deny such applications, regardless of who asserts an ownership interest in such approved development plans, and must approve any such applications regardless of any assertion by Triumph that it is the sole owner of the approved plans for the Booth Heights Project. 5. Town's Obligations. a. The Town shall sign all necessary development applications for the Project as a co-applicant. The Town will have sole ownership rights to all application materials and approved development plans, and Triumph acknowledges that the Town may 5 2/25/2021 C:\USERS\LCAMPBELL\APPDATA\LOCAL\MICROSOFT\WINDOWS\INETCACHE\CONTENT.OUTLOOK\KLAW43TZ\MC DA- A022421.DOCX proceed with the Project, regardless of whether Triumph remains a co-applicant, and regardless of whether this Agreement is terminated for any reason. b. The Town shall be responsible for the cost of the preparation of the design documents for the Project from the Effective Date through the date on which the Project is finally approved by the Town, in an amount not to exceed $390,000. Following such final approval, Triumph shall be responsible for all costs of the Project. c. For preparation of the design documents for the Project, all contractor selection and the scope of work for such contractors shall be subject to the prior approval of the Town, which shall not be unreasonably withheld. d. The Town shall pay Triumph a development fee (the "Management Fee") in connection with the Project, in an amount not to exceed $300,000. The payment schedule for the management fee shall be based upon the schedule of completion of key design development/entitlement process milestones, as set forth in Exhibit A, attached hereto and incorporated herein by this reference. 6. Security for Completion of Improvements. Triumph shall require the general contractor responsible for constructing the Improvements to provide a performance bond to Triumph 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. Triumph shall provide a copy of such performance bond to the Town prior to commencing construction. 7. Insurance. Throughout the term of this Agreement, Triumph shall maintain the following insurance, and certificates of such insurance shall be furnished to the Town within 30 days of the Effective Date and at each subsequent policy renewal date: a. Commercial general liability insurance, including contractual liability, with limits of not less than $2,000,000 per occurrence for bodily injury, personal injury and property damage, naming the Town as an additional insured. 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 or Triumph from becoming a co-insurer of any partial loss. c. During the course of any construction or repair of Improvements, Builders' Risk Insurance. 8. Triumph Default and Remedies. a. Each of the following is a Triumph default of this Agreement: i. If Triumph fails to perform any of its obligations under this Agreement and fails to remedy the same within 30 days after Triumph is given a written notice specifying the same; provided that, if the nature of the violation is such that it 6 2/25/2021 C:\USERS\LCAMPBELL\APPDATA\LOCAL\MICROSOFT\WINDOWS\INETCACHE\CONTENT.OUTLOOK\KLAW43TZ\MC DA- A022421.DOCX cannot reasonably be remedied within 30 days, and Triumph provides evidence to the Town 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 90 days of the original notice of violation. ii. If an involuntary petition is filed against Triumph under a bankruptcy or insolvency law or under the reorganization provisions of any law, or when a receiver of Triumph, or of all or substantially all of the property of Triumph, is appointed without acquiescence, and such petition or appointment is not discharged or stayed within 120 days after the happening of such event. iii. If Triumph makes an assignment of its property for the benefit of creditors or files a voluntary petition under a bankruptcy or insolvency law, or seeks relief under any other law for the benefit of debtors. iv. If, prior to May 5, 2021, Triumph assigns, sells or otherwise transfers to any third party any right or interest it may have in the applications or approved plans for the Booth Heights Project. b. If a Triumph default occurs, the Town may, in its sole discretion and without waiving any other rights under this Agreement or available to the Town: i. Withhold issuance of certificates of occupancy not yet issued for any structures 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 Triumph; iii. Cause the removal of any partially constructed Improvements and return the Property to the condition it was prior to the commencement of construction, and recover the costs of such removal from Triumph; and iv. Demand the immediate refund of all costs paid by the Town for the Project pursuant to Section 5.b., which refund shall be paid in full by Triumph within 30 days of such demand. c. In addition to the specific remedies set forth herein, the Town 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 may include lost rents. d. If the Town proceeds to complete the Improvements, Triumph shall, at the request of the Party completing the Improvements, promptly deliver a copy of all of Triumph's plans and specifications related to the Improvements. 7 2/25/2021 C:\USERS\LCAMPBELL\APPDATA\LOCAL\MICROSOFT\WINDOWS\INETCACHE\CONTENT.OUTLOOK\KLAW43TZ\MC DA- A022421.DOCX 9. 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 Triumph 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 90 days of the original notice of violation. b. If a Town default occurs, Triumph 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 Triumph shall not have the remedy of specific performance against the Town. 10. Legal Challenge. As used in this Section, “Legal Challenge” means: any judicial proceeding or other legal action brought by a third party, including referendum or initiative, that challenges this Agreement, the approval of the Project or any of the Town’s resolutions or ordinances approving this Agreement or the Project. If a Legal Challenge occurs, every deadline in this Agreement shall be tolled until 30 days following the entry of a final, non-appealable order resolving such Legal Challenge. 11. Miscellaneous. a. 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. b. Integration. Other than the Ground Lease, Pre-Development Agreement and Deed Restriction, this Agreement represents the entire agreement between the Parties with respect to the subject matter hereof, and all prior or extrinsic agreements, understandings or negotiations shall be deemed merged herein. c. Waiver. No provision of this Agreement may be waived to any extent unless and except to the extent the waiver is specifically set forth in a written instrument executed by the Party to be bound thereby. d. Modification. This Agreement may only be modified by subsequent written agreement of the Parties. e. Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, and venue for any legal action arising out of this Agreement shall be in Eagle County, Colorado. f. No Third Party Beneficiaries. No third party is intended to or shall be a beneficiary of this Agreement, nor shall any third party have any rights to enforce this Agreement in any respect. 8 2/25/2021 C:\USERS\LCAMPBELL\APPDATA\LOCAL\MICROSOFT\WINDOWS\INETCACHE\CONTENT.OUTLOOK\KLAW43TZ\MC DA- A022421.DOCX g.No Joint Venture or Partnership. No form of joint venture or partnership exists between the Parties, and nothing contained in this Agreement shall be construed as making the Town and Triumph joint venturers or partners. h. Notices. A notice under this Agreement shall be in writing and be given by hand delivery or U.S. Mail, postage prepaid, to the address set forth on the first page of this Agreement. Notices shall be effective upon delivery or 3 days after mailing. i. Contingency; No Debt. Pursuant to Article X, § 20 of the Colorado Constitution, any financial obligation of the Town under this Agreement is specifically contingent upon annual appropriation of funds sufficient to perform such obligation. This Agreement shall never constitute a debt or obligation of the Town within any statutory or constitutional provision. j. Governmental Immunity. Nothing herein shall be construed as a waiver of any protections or immunities the Town and its officials, representatives, attorneys and employees may have under the Colorado Governmental Immunity Act, C.R.S. § 24-10- 101, et seq., as amended. k. Force Majeure. Neither Party shall be in breach of this Agreement if a 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, pandemics or the authority and orders of government. l. 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. TOWN OF VAIL, COLORADO ________________________________ Scott Robson, Town Manager ATTEST: _________________________________ Tammy Nagel, Town Clerk 9 2/25/2021 C:\USERS\LCAMPBELL\APPDATA\LOCAL\MICROSOFT\WINDOWS\INETCACHE\CONTENT.OUTLOOK\KLAW43TZ\MC DA- A022421.DOCX TRIUMPH DEVELOPMENT WEST LLC By:_____________________________ Name:___________________________ Title:____________________________ STATE OF COLORADO ) ) ss. COUNTY OF _____________) The foregoing instrument was acknowledged before me this ____ day of ____________, 2021, by _____________________ as _________________________ of Triumph Development West LLC, a Delaware limited liability company. My commission expires: __________________ _______________________________ Notary Public 10 2/25/2021 C:\USERS\LCAMPBELL\APPDATA\LOCAL\MICROSOFT\WINDOWS\INETCACHE\CONTENT.OUTLOOK\KLAW43TZ\MC DA- A022421.DOCX EXHIBIT A Management Fee Milestones The milestones for payment of the Management Fee are as follows: Approval by the Town of the budget, scope of work and schedule for the design development and entitlement process by February 2, 2021 $50,000 Execution of a final development agreement, ground lease $50,000 Planning and Environmental Commission development application submittal to the Town or development application submittal to the Town on or before March 15, 2021 $75,000 . Final Planning and Environmental Commission and Design Review Board action on the development applications $75,000 Issuance of a building permit and execution of an operating agreement to include the VLHA on or before September 30, 2021 $50,000 Total Management Fee $300,000