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Home My WebLink About20090803 - VI-08 MEMO To: Honorable Mayor and City Council From: Nick Egger Date: July 27, 2009 th Re: Approve Utility Agreement - 314 East 7 Street The City Council is asked to approve a utility agreement with C & G Homes, Inc. and Gary th Heselton relating to property at 314 East 7 Street. Several years ago, the primary structure on this property was destroyed by fire and the remaining structure was removed. The original water and sewer utility service lines which formally serviced the property remained connected to municipal sewer and water utility mains located beneath Tyler Street. th As part of the street and utility reconstruction project in 2008, East 7 Street was reconstructed and new sewer and water utility services were installed into the boulevard from which the property owner can connect sewer and water utility services to future improvements on the property. Generally, City regulations would require the owner to disconnect, at its expense, the existing utility lines from utility mains beneath Tyler Street now that the new sewer and water utility services have been installed. However, disconnection of the original utility lines may result in damage and loss of integrity to the surface and base of Tyler Street. To avoid this potential damage, City staff recommends that the City waive the requirement that the owner disconnect the original utility lines on the condition that the owner agrees to perform that work in the future if deemed necessary by the City. The enclosed agreement would obligate the owner to remove the lines if deemed necessary and to correct any damages that may result from deferring removal of those utility lines. The agreement also provides that if the owner fails to perform the work as required by the City, the City may complete that work and assess the cost against the property. RECOMMENDATION Staff recommends approval of the attached agreement which has now been approved by the property owner. i AGRF,EMENT REGARDING DISCONNECTION OF SEWER AND WATER SER IjICE LINES AND WAI i~ER OF PROCEDURAL IRREGULARITYANDASSESSMENTAPPEAL THISAGREEMENT, is made this _ day of , 2009, between the City of Hastings, a Minnesota Municipal Corporation (hereinafter referred to as "City") having a principle address of 101 East 4`" Street, Hastings, Minnesota, 55033, and C and G Homes, Inc., a Minnesota Corporation (hereinafter referred to as "Owner") having a principle address of 629 East 2"d Street, Hastings, Minnesota, 55033. WHEREAS, Owner is the owner of real property located generally at 314 East 7`" Street, Hastings, Minnesota 55033 and legally described as follows: Lot 1 except the East 56 feet thereof and also except the South 15 feet of the West 6 feet of the East 62 feet of said Lot 1, and all of Lot 2, Block 50, Town of Hastings, Dakota Coanty, Minnesota. WHEREAS, the primary structure on the Property was destroyed by fire and the remaining structure was subsequently removed; WHEREAS, the original water and sewer utility service lines which formally serviced the Property (hereinafter "Original Utility Lines"}remain connected to municipal sewer and water utility mains located beneath Tyler Street lying east of the Property; WHEREAS, as part of a municipal street and utility reconstruction project in 2009, East 7`" Street was reconstructed and new sewer and water utility services were installed into the boulevard of East 7`~ Street for Owner to connect sewer and water utility services to future improvements on the Property; WHEREAS, municipal regulations require Owner to disconnect, at its expense, the Original Utility Lines from the utility mains beneath Tyler Street now that the new sewer and water utility services are installed to serve the Property from East 7`~ Street; WHEREAS, disconnection of the Original Utility Lines from the utility mains beneath Tyler Street may result in minor damage and loss of integrity to the surface and base of Tyler Street; WHEREAS, failure to disconnect the Original Utility Lines from the utility mains beneath Tyler Street may lead to conditions requiring corrective action in the future which may include, but are not limited to, leaking pipes, surface settlement resulting from broken pipes, or interference with other construction projects; WHEREAS, City is willing to waive the current requirement that Owner disconnect and remove the Original Utility Lines on the conditions that Owner, its successors and assigns agree: (1) to remove at its cost the Original Utility Lines if deemed necessary by City; (2) to repair and remedy at its cost any unwanted conditions caused by the Original Utility Lines remaining connected and in place and to indemnify and hold harmless City for any resulting damage or claims; (3) that if Owner fails to perform in a timely manner, City may complete the needed work; (4) that City may assess the cost of any such work against the Property as provided in this agreement; and WHEREAS, Owner understands that the conditions and potential problems which may result from the Original Utility Lines remaining connected and in place are not certain and cannot be fully identified or described with certainty but Owner desires to assume all future responsibility and costs of correcting such conditions and damage. 2 Y NOW THEREFOREINCONSIDERATIONof the City's willingness to waive the current requirement that Owner disconnect and remove the Original Utility Lines, the parties make the following agreement: A. City waives the current requirement that Owner disconnect and remove the Original Utility Lines. B. Upon written demand by City, Owner at its cost shall disconnect and remove the Original Utility Lines and reasonably restore any disturbed areas to their original conditions. C. If Owner fails to perform as required herein, City may undertake all work necessary to disconnect and remove the Original Utility Lines and Owner shall immediately reimburse City for all costs incurred. D. If Owner fails to timely reimburse City for all such costs, Owner, for itself, its successors and assigns, agrees to have the Property assessed for the full amount expended by City to disconnect and remove the Original Utility Lines and to restore the area to its original condition. The exact amount of this assessment is unknown at this time but will be determined by City in its reasonable discretion. E. If the full amount expended by City to disconnect and remove the Original Utility Lines and to restore the area to its original condition is $10,000.00 or less, any assessments shall be paid over a period of five years but if the amount to be assessed is over $10,000.00, the assessment shall be paid over a ten year period. In addition, interest shall accrue on the unpaid assessment at a rate equal to the interest rate applied by the City of Hastings for other assessments in the year the work is 3 r performed. If no such assessments are certified for other properties in the City of Hastings during that year, the interest rate shall be equal to the interest rate imposed on the most recent assessment certified by the City of Hastings. Owner, for itself, its successors and assigns, agrees that City can assess an additional $5.00 per year ($25.00 for a five year assessment period or $50.00 for a ten year assessment) which represents the annual assessment fee imposed by Dakota County for this assessment. F. Owner, for itself, its successors and assigns, agrees that City can certify this assessment to Dakota County for collection with the real estate taxes without the necessity of City complying with any of the procedural or notice requirements outlined in Minnesota Statutes Chapter 429, or amendments thereto. G. In further consideration of City's agreement to waive the current requirement that the Original Utility Lines be removed, Owner, for itself, its successors and assigns, also agrees to waive any right to appeal the amount assessed against the Property for these repair costs, whether the basis for the appeal is that the assessment exceeds the benefits to the Property or on any other basis whatsoever. H. Where reference is made herein to Owner, reference shall be to Owner, its successors and assigns as to the Property and the rights and obligations hereunder shall run with the land and shall burden the Property and all subsequent Owners thereof. I. Owner shall indemnify and hold harmless City for any damages or claims resulting from the Original Utility Lines remaining connected and in place pursuant to this agreement. 4 The City and Owner enter and sign this agreement with full understanding of their legal rights and acknowledge they have had sufficient opportunity to discuss this matter with an attorney of their choosing. Dated: 2009. CITY OF HASTINGS, A Minnesota Municipal Corporation By: Paul J. Hicks, Its Mayor (SEAL) sy: Dated: ~ "" /~ ~/ ~ , 2009. Melanie Mesko Lee, Assistant City Administrator/City Clerk OWNER: C and G Homes, Inc. Gary Heselton, Its President ACKNOWLEDGMENT STATE OF MINNESOTA ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this _ day of , 2009, by Paul J. Hicks and Melanie Mesko Lee, the Mayor and Assistant City Administrator/City Clerk of the City of Hastings, a Minnesota Municipal Corporation. Notary Public 5 ACKNOWLEDGMENT STATE OF MINNESOTA ) ss. COUNTY OF DAKOTA ) ~~ The foregoing instrument was acknowledged before me this j~ day o , 2009, by Gary Heselton as President of C and G Homes, Inc., on behalf of the Corporation. ~.,,~.....-..,.....y,.~. ,~ .- Kl ; ~~y l.EOLA C SIEBEN C ;.~~"9~;t~ z P~Ol"ARY PUBLIC-MINNESOTA ~- 'dv commission Expires Jan. 31, 2012 ~` Anne ~.:.inn,~.L.nhana.<e~rfnnN..v4,+.+~..,-wtr- THIS INSTRUMENT DRAFTED BY: FL UEGEL LA W FIRM P.A. 1303 South Frontage Road, Suite #5 Hastings, MN 55033 651-438-9777 (DAN) ,, . ~ C, ,/ Not Public PERSONAL GUARANTY In consideration and contemporaneously with the City of Hastings entering into an agreement, a copy of which is attached, by which the City waives certain requirements of C and G Homes, Inc., which agreement will benefit personally Gary Heselton, Gary Heselton hereby agrees to personally guarantee all performance of C and G Homes, Inc., under the attached agreement. Gary Heselton 6 ACKNOWLEDGMENT STATE OF MINNESOTA ) ss. COUNTY OF DAKOTA ) ~~,, The foregoing instrument was acknowledged before me thisl~t day of - ~ , 2009, by Gary Heselton. ,_ ~~~ ~~ LEOLA C SIEBEN u Lf ~~,~,~ ~( tVOTARY PU6LIC-MINNESOTA { ~'' +t"~ i , ,~dv Commission F_Koires Jan. 3t, 2012 NO I'y pUbI1C b..,+..~.. ,.,. ti.. ~. , ..., e,... 7