1e. Approve Special Assessment Agreement with Lakeview Hills Investment Companya
1 MEMORANDUM
I e.., .
CITY OF
CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937 -1900 • FAX (612) 937 -5739
' TO: Don Ashworth, City Manager
FROM: Charles Folch, Director of Public Works /City Engineer
DATE: October 20, 1994
memo* t �3i rtl�f r
is 1 000 1r6
SUBJ: Approve Special Assessment Agreement with Lakeview Hills Investment
Company and Lakeview Hills Investment Group
Project No. 93 -32
r, Ky
i
Many of the Council members will recall a aring held this past June concerning the
Lyman Boulevard and Lake Riley Area Trunk7tility 1provement Project. At the public hearing
representatives of the Lakeview Hills Investnt Grou
me estified that they had not received proper
notification of the previous neighborhood neeting or public hearing. Staff explained that, as
' required by law, notices were sent to fli� fee owner property according to Carver County
records, which in this case was Lakeview Hills Investme t Company. Apparently, these notices
were not being forwarded on to theakeview Hills Inve `ment Group who had purchased the
' property on contract for deed Th circumstances did no nitiate cordial relations between the
City and Lakeview Hills Investtent Group. Asa sign of pd faith the City Council delayed
action on the project to alla►�v `the property owner ample ti review the feasibility study. I
am confident that this issue is behind us now.
k � Al
Following a fe ��ngsaltlt�1 t. a ame 'apparent
to staff that there we b some significant extenuating circumstances associate this property. Z . }4�
First of all, the future Trunl 44ighw#y 212 corridor decimates the north � ter of the property
and timing for MnDOT's land acgnr9i�ffon �j urea �� became aware that a
remortgage on the property was in progress an fiIy, issues arose in conjunction with potential
:.
subdivision of the property. It also became a° went to staff that the "test of benefit" for special
assessments against "existing income" prope ch as apartments can be significantly different
than that common to residential property.
Based on the aforementioned circumstances, the property can be viewed as having three subareas,
each unique in their own way. Most of the northern quarter of the property will be lost to the
future Trunk Highway 212 corridor. The center portion of the property contains the existing 170 -
Irl
Don Ashworth
October 20, 1994
' Page 2
' unit apartment buildings and is connected to city sewer; however, water is provided through their
own private well. The southerly portion of the property is intended to be subdivided off and sold
for development. Given the uniqueness of this property, it appears appropriate that a special
assessment agreement with the property owner be executed which will define the particular
assessments for each subarea of the property.
' Since the timing of MnDOT's right -of -way acquisition is not known and the proposed area of
taking can only be estimated based on current MnDOT information, the road and utility
assessments to this area are proposed to be deferred for a period of 10 years since it is anticipated
that the right -of -way acquisition will occur within this period. If the right -of -way taking occurs
prior to the expiration of this 10 -year period, the assessments will become due and the exact
assessment amount will be based on the established rate and adjusted based on any deviations
from the remaining area proposed at this time.
The center area of the property has been defined with imaginary lines based on meeting future
subdivision requirements for current maximum density allowed. Since the existing apartment
complexes are on city sewer and private well, assessments to this area will include costs for the
upgrade of Lake Riley/Lyman Boulevards and future water hook -up charges to be paid based on
the City's hook -up rate at the time that their existing well should fail and they would be required
to connect to city water. The southerly portion of the property would be assessed for trunk sewer
and water and road improvements at this time consistent with other potentially developable
' property associated with this project.
' is upon, it is believed that this special assessment agreement represents a fair assessment
methodology and revenue schedule given the extenuating circumstances with this property and
the agreement of the property owner to dedicate the land needed for the road right -of -way and
improvements. The City Attorney has reviewed this document and Mr. Steve Liefschultz
representing Lakeview Hills Investment Group, has submitted a letter of consensus to this
agreement. ( It -is. therefore recommended that the special assessment agreement etween the City
' of Chanhassen, Lakeview Hills Investment Company and Lakeview Hills Investibent Group dated
October 24, 1994 be approved.) ,
' ktm
Attachments: 1. Special Assessment Agreement dated October 24, 1994.
2. Letter from Lakeview Hills Investment Group dated October 19, 1994.
c: Dave Mitchell, OSM
Steve Liefschultz, Lakeview Hills Investment Group
g Aeng\charler1ccllakev iew
SPECIAL ASSESSMENT AGREEMENT F11
AGREEMENT dated October 24, 1994, by, between, and among the City of Chanhassen, '
a Minnesota municipal corporation ( "City "), and Lakeview Hills Investment Company
( "Company "), and Lakeview Hills Investment Group ( "Group "). [Company and Group shall be '
collectively referred to as "Developer "].
Recitals I
A. Company is the fee owner of the property legally described on the attached Exhibit
A (the "subject property"). Group is purchasing the subject property on a contract for deed from I
the Company.
B. The City intends to construct certain improvements (the "Improvements ") described '
on pages 6 through 17, inclusive in the Feasibility Report for Lake Riley Area Trunk Utility
Improvements and Lyman Boulevard Reconstruction -- City Project No. 93 -32 (the "Feasibility
Report") dated May 9, 1994 and prepared by Orr - Schelen - Mayeron & Associates, Inc. The '
Feasibility report contains a proposed assessment against the subject property.
C. The parties wish to delineate the amount and timing for the payment of the special '
assessment.
NOW, THEREFORE, in consideration of their mutual covenants the parties agree as
follows:
1. The following special assessments (the "Part 3S Assessments ") against the subject '
property are agreed upon and confirmed:
$51,240.00 Trunk Sanitary Sewer '
$67,100.00 Trunk Watermain
$59,877.00 Road Improvements '
The Part 3S Assessments shall be spread over ten (10) years, without deferment, together with
7.5% interest on the unpaid balance. The first installment shall be due and payable in 1997. '
Interest shall accrue from January 1, 1996.
2. The following additional assessments (the "Part IN Assessments ") against the I
subject property are agreed upon and confirmed:
$18,480.00 Trunk Sanitary Sewer
$24,200.00 Trunk Watermain
$10,670.00 Road Improvements
The Part IN Assessments shall be deferred without interest until January 1, 2006. If the
Minnesota Department of Transportation or any other governmental body acquires any part of
Part IN identified on Exhibit A hereto before the deferment ends, then the Part IN Assessments
referred to in this paragraph will be reduced to the amounts obtained by multiplying each of said
assessments by the following fraction:
' SQUARE FOOTAGE OF PART IN REMAINING
AFTER ACQUISITION BY MnDOT
2.75 X 43,560
When the deferment ends, the Part IN Assessments shall spread over fourteen (14) years.
' Interest at the rate of 7.5% on the unpaid balance shall accrue from January 1, 2006. The first
installment shall be due and payable in 2007.
' 3. The following additional special assessment (the "Part 2 Assessment ") against the
subject property is agreed upon and confirmed:
' $68,000.00 Road Improvements
The Part 2 Assessment shall be deferred without interest until January 1, 2006. When the
' deferment ends, the Part 2 Assessment shall be spread over fourteen (14) years. Interest at the
rate of 7.5% shall accrue from January 1, 2006. The first installment shall be due and payable
in 2007.
4. In lieu of a in a special assessment with respect to Part 2 identified on Exhibit
p Y g p p
A hereto, for trunk watermain, if the existing apartment complex on Part 2 connects to public
water, there shall be due and payable in cash a water hookup charge for 170 units. The unit
charge shall be based upon sixty percent (60 %) of the single - family residence water hookup
charge rate in effect at the time the charge is paid but shall not be more than the amount obtained
by multiplying $140,250 (the amount of the water hookup charge as of the date of this Special
Assessment Agreement based on 170 units and a rate equal to 60% of the water hookup charge
' for single- family residences) times the change, during the period from the date of this Agreement
to the date the existing apartment complex is so connected, in the Construction Cost Index (the
"CCI ") as described in the City's ordinances. If. (i) the existing apartment complex is torn down
' and replaced with a complex containing larger apartment units; (ii) the apartments in the existing
apartment complex are enlarged; or (iii) any other improvements are made to Part 2 which
improvements would significantly increase the water consumption at the existing apartment
complex, the unit rate for the hookup charge shall be based on the single - family residence water
hookup charge rate in effect at the time the charge is paid times the number of units based on
then current zoning and usage of Part 2 but subject to any reduction as set forth in the then latest
' edition of the service availability charge (SAC) procedures manual published by the Metropolitan
Water Control Commission or its successor agency. The number of units charged shall, however,
not be reduced below 113.
' 5. It is anticipated that the Developer maybe developing, platting, replatting, zoning,
and rezoning various portions of the subject property. The City agrees that all actions taken by
it with respect to any proposed development, platting, replatting, zoning, rezoning, or other land
use request relative to any portion of the subject property or with respect to any increase in
special assessments in connection with such action shall be made without reference to this Special
Assessment Agreement on the basis of the applicable codes and ordinances of the City.
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6. The Developer waives any and all procedural and substantive objections to the
special assessments, including but not limited to hearing requirements and any claim that the
assessments exceed the benefit to the subject property. The Developer waives any appear rights
to Minn. Stat. § 429.081.
'
otherwise available pursuant
7. The Developer agrees to convey to the City, without cost, a strip of land for road
right -of -way, public utilities and drainage including a construction easement, in accordance with
'
the following:
a. The strip of land shall be not more than 80 feet wide in the
'
approximate location of Lake Riley Boulevard, the exact location of said strip of
land to be subject to the mutual agreement of the City and the Developer.
b. The City shall provide the appropriate legal description of the strip
of land and a land survey by a Registered Land surveyor to allow the Developer
'
to cause the subject property to be platted with the road right -of -way platted as a
separate parcel of land.
land
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C. Subsequent to agreement on the location of the strip of and the
creation of the legal description therefore, but prior to the completion of the
platting of such parcel as a separate parcel, the Developer will grant the City an
'
easement to permit the City immediate access to the road right -of -way for the
construction of road and utilities thereon.
'
d. The said strip of land is being conveyed to the City for the limited
purpose of permitting the City to construct thereon a public infrastructure and no
other rights, title or interests in the subject property are to be deemed to have been
'
conveyed therewith. Without limiting the generality of the foregoing, the
conveyance of the road right -of -way shall not be deemed to increase or decrease
Developer's rights of access to the balance of the subject property and to Lake
'
Riley from the road to be constructed on the road right -of -way.
e. Said strip of land is being conveyed to the City in connection with '
the present and pending development of the subject property and the various
portions thereof. '
f. All construction and reconstruction on the road right -of -way parcel
and on any other portion of the roadway of which said parcel is a part shall be ,
done in such manner so as to permit reasonably convenient, uninterrupted access
to all portions of the subject property from both directions on said road right -of-
way parcel. '
8. The dates set forth at Paragraphs 1 through 4 of this Special Assessment
Agreement assume that the Improvements will have been constructed and the assessment hearing
will have been held in a timely fashion in 1996 so as to permit the interest on the assessment
described in Paragraph 1 to commence on January 1, 1996. If, however, the Improvements are
completed and the assessment hearing is held at a later date, all of the dates specified in
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Paragraphs 1 through 4 for the commencement of interest, the deferment periods, and the
amortization periods will be correspondingly extended by a period equal to such delay. In the
event that the City fails to take action to authorize construction of all of the Improvements,
Developer may, at its option, terminate this Special Assessment Agreement in which event this
Special Assessment Agreement shall be null and void, no special assessment may be levied
against the Subject Property pursuant thereto and the Developer shall retain all procedural and
' substantive objections to any other special assessment proposed to be levied in connection with
any portion of the Improvements. The City agrees that, in the event that the City takes action
' to authorize construction of all of the Improvements, the City will construct all of the
Improvements in accordance with the City's normal construction practices.
' 9. Neither the Developer nor their respective partners, agents or employees shall be
personally liable for or be subject to any recourse for the payment of any special assessment or
interest described herein.
10. In the event of the subdivision of the subject property, the City will cause the
special assessments to be split among Parts 1N, 2 and 3S in such manner as will substantially
result in the Part IN Assessments being allocated to part IN depicted on Exhibit A, the Part 2
Assessments being allocated to Part 2 depicted on Exhibit A and the Part 3S Assessments being
allocated to Part 3S depicted on Exhibit A. In the event of the subdivision of any one or more
' of Parts 1N, 2 and 3S, the City will cause the special assessments to be allocable to such Part
by the preceding sentence to be apportioned among the portions of such Part on an area basis.
LJ
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CITY OF CHANHASSEN
am
and
Donald J. Chmiel, Mayor
Don Ashworth, City Manager /Clerk
LAKEVIEW HILLS INVESTMENT COMPANY
By
Its
and
Its
LAKEVIEW HILLS INVESTMENT GROUP
By
Its
and
Its
STATE OF MINNESOTA )
(ss.
COUNTY OF 1
The foregoing instrument was acknowledged before me this day of ,
1994, by Donald J. Chmiel and by. Don Ashworth, respectively the Mayor and City
Manager /Clerk of the City of Chanhassen, a Minnesota municipal corporation, on behalf of the
corporation and pursuant to the authority granted by its City Council.
Notary Public, County, MN
-5-
STATE OF MINNESOTA )
(ss.
COUNTY OF
The foregoing instrument was acknowledged before me this day of ,
1994, by and by , respectively the
and of Lakeview Hills Investment Company, on its behalf.
Notary Public,
STATE OF MINNESOTA )
(ss.
COUNTY OF
County, MN
The foregoing instrument was acknowledged before me this day of ,
1994, by an d by , respectively the
and of Lakeview Hills Investment Group, on its behalf.
Notary Public,
THIS INSTRUMENT WAS DRAFTED BY:
GRAY, PLANT, MOOTY, MOOTY & BENNETT, P.A.
3400 City Center
33 South Sixth Street
Minneapolis, MN 55402
Telephone: 612 - 343 -2800
THIS INSTRUMENT WAS REDRAFTED ON 10/20/94 BY:
THE CITY OF CHANHASSEN
690 Coulter Drive
P.O. Box 147
Chanhassen, MN 55317
Telephone: 612-937-1900
gAeng\charleslcc \lakev iew.1
County, MN
Ell
EXHIBIT A '
TO
SPECIAL ASSESSMENT AGREEMENT '
Legal Description of Subject Property I
All that part of the Northeast Quarter of the Northeast Quarter, and Government Lot 1, of Section
24, Township 116, Range 23, and the Southeast Quarter of the Southeast Quarter of Section 13, '
Township 116, Range 23, which lies east of a line drawn 641.67 feet West of, measured at a
right angle to and parallel with the East line of the Northeast Quarter of the Northeast Quarter
of said Section 24, Township 116, Range 23 and its extensions. t
LJ
I
TH E REMADA COMPANY
3025 HARBOR LANE
SUITE 315
PLYMOUTH. MN 55447
161 2) SS3.1564
FAX i 553.0435
October 19, 1994
Via FAX (937 -5739) and MAIL
Charles D. Folch, City Engineer
City of Chanhassen
690 Coulter Drive
Chanhassen, Minnesota 55317
RE: Lakeview Hills Assessment
Dear Mr. Folch:
I was advised that the city attorney and our counsel, John Thiel, had worked out the
final revisions to the proposed assessment agreement. I was advised that Mr. Mitchell
would be attaching a revised Exhibit A. This is to advise you that Lakeview Hills
Investment Group is willing to execute the revised agreement and will recommend to
Lakeview Hills Investment Co. that it also execute the revised agreement. Please let me
know if you have any questions. Thank you.
Very truly yours,
Steven B. Liefschultz
Managing General Partner
Lakeview Hills Investment Group
SBL /dsc
cc: John Thiel, Esq. (via fax)
David Mitchell, Esq. (via fax)
CITY OF IASSED
( "AN
Q�U�LIU�L:
OC 2 0 1994
'
ENGINEERiff"U DEPT.
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