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HomeMy WebLinkAboutA016 - Electric Easement dated May 5, 1987 AUG 1 7 'OF AA14 ion GREEN HILLS Company of Ames,Inc. MAR March 3, 1987 Z e Ms. Cheryl Hashem Vice President Compass Insurance Co. 125 South Third, Box 767 Ames, IA 50010 Dear Cheryl: Enclosed is a completed but unsigned application to Merchants Bonding Company to issue a Performance (payment) Bond in connection with our guarantees to the City of Ames for construction of Green Hills Drive. I wish you to confirm in writing the verbal approval which you provided to me last week. As noted in the application, we wish to substitute the Bond in lieu of a first mortgage lien to secure our performance. Our original motivation was our probable desire to construct additional phases to the Health Center, a task made difficult by the City's lien if it were recorded. Now, I am anticipating further problems (or at least- anguish) caused by solving timing problems with our current lender UFS and the City's desire for priority July, 1987 (as agreed). I plan to offer the City its choice of either the mortgage lien (as promised) or the substitute Bond. However, I want to be certain (in writing) that the Bond may be issued, then we will proceed through .City Council approvals. Thank you for your prompt attention to this matter. Sinc r y, rry ate S/ Enclosures cc: Jerry Sharpe, Attorney at Law John Klaus, City Attorney Steve Sc ker Cit Manager Paul Goodland, Mayor 125 South Third,PO.Box 767,Ames,Iowa 50010(515)233-1227 ®� ]D®NIMNG CO. 1f1) 2100 GRAND AVENUE . DES MOINES, IOWA 50312 1Ws form to be used for. All Miscellaneous Bonds. FOR COMPANY USE ONLY Bond No APPLICATION FOR BOND ••• Amount . ....... AGENT..... ................. ................... AT.............................. Premium................... TO MERCHANTS MUTUAL BONDING COMPANY: Effective date .............. Application is hereby made for a bond of suretyship as follows: Expiration date............ 1.Applicant's Name Green Hills,Company of AF4gp.,.,It}e....................................................... ................ Stor,X Construction Co:,. y h�..B�Adng�.God,...33X.G�zt'..4; o��.a>~eS.Af....... .............Amese..a.ZWkerAl.P4rAXLrX$htP.................................................................... If partnership give names of partners;if corporation give names of owners and ownership%. 2.Business Address...P,Q..AQX..767.,..125 Sa..Thir_d........Ames................Stoory ............I Street City coulfty 5tiie 3.Nature of bond required(If Iowa liquor,type of license) ....] eA rf armauc e.Bland........................................ 4.Name and address of obligee(in whose favor bond is required)...The.Ci t....o£.Ames.,.Ames,.Zowa.50010......•..... ..................................................................................................................... 5.Amount of bond.a$z$L.274.(AnaluaUy..del;reasing) 6.Effective date..July.,.L987............................. 7.Has this bond been declined? .....NA..................... If so,by what Company? ...N,IA............................ This Agreement entered into by and between the undersigned applicant or applicants and/or imdenuators,hereinafter called the undersigned,and Merchants Mural Hooding Company.of Des Moines.Iowa,hereinafter called the Company.witnessah: Theundersigned hereby authorizes the.................................................................Bann of................................................................. to give the MERCHANTS MUTUAL BONDINO COMPANY.bereafter called Company,fug idorrnation upon its request,showing the balance of the umdasipad's aoaant at this date.the ran denigoed certifies that the foregoing statements and declarations arc true and,is consideration of the Company executing as surety the bond herein applied for.does hereby promise and agree to pay an anal premium to the Company until such time as the undersigned shall tarnish the Company with evidence satisfactory to it of the full and complete termination of its liability an said bood. The undersigned further agrees to indemnify and save harmless the said Company for,from and against any and all losses,costs,damages and expenses of say nature whatsoever.including Damsel fees and expenses.and reimburse said Company for loss adjusting expenses and compensation at the rate of f 100.00 per day for officers and$30.00 per day for all other personnel.which may accrue to the said Company by reason of the said Company having become surety on said bond. The undersigned hereby further agrees that the vouchers or other evidence of payments made by the said Company under its obligation of suretyship shall be conclusive evidence against the no- deraipned of the fact and extent of the undersigned's liability to the said Company under said obligation of the undersigned,whether said payments were made to discharge a penalty thereunder.incurred ed in the investigation of a chum made thereon or adjusting a lose or claim in connection therewith,or in completing the work covered thereby.and whether voluntarily made or paid after suit and Judgment against said Company. If the Company shall set up a reserve to cover any claim,suit or judpneat under_any such bond,the undersigned will.imowdiaWy upon demamd,deposit with the Company a sum of money equal to such reserve,such sum to be held by the Company as collateral security op such bond.and such arm and any other agony or property which shag have been,or shall beraRer be,pledged as collateral security on any such bond shag,unless otherwise agreed in waiting by the Company,be available.in the discretion of the Company,an collateral security on any other bonds coming within the scope of this Agreement. It is further agreed that the terms and conditions of this application shag also apply to increases and/or decreases in the amount of this bond.and dog also apply to all renewals whether the boad is continuous.renewed by Continuation certificate or by the filing of a new bond. The Company shall have the right,and is hereby authorimed,but not required to fill up any bbnks left herein,and to correct any errors in the description of any of aid bonds,or in said premium or premiums.or is any tame or manes,it being hereby speed that such insertion or corrections,when so merle,shall be prima facie correct.This application shag be liberally confined so as to fatly protect and indemnity the Company.its successors,asips sad rein um. Disclosure to Applicant given pursuant to the Far Credit Reporting Act.You are hereby notified that an investigative consumer report including helormton as to your cbatacter,paaal reputation, persaaal characteristics and mode of living MAY be wined by the Company.You may request in writing from the Company disclosure of the nature and scope of such report if obtained.(Ibis applies to an individual person only.)1 acknowledge I have the read the preceding Disclosure. Datedthe .. .. ... . . . . ..... . .day of .............. ....... ................................... A.D. 19 ..... . . . Witness: . ................................................... .................................................. Appsast In consideration of the MERCHANTS MUTUAL BONDING COMPANY executing the bond herein applied for,I(we)jointly and severally join in the above indemnity agreement. Witness................................................. Indemnitor........................... ................ �Witfiess................................................. Indemofta ............................................. Wtfiess................................................. .Iademfiittir ............................................. Witness............. .............................. ....... .............................................. itor Witness................................................. ........................................................ Indemnitor Witness................................................. Indemfiitor ............................................. Witness................................................. Iadeeinitor.............................................. �Witfiess................................................. .Indemfiiwr.............................................. REVERSE SIDE SHOULD ALSO BE COMPLETED � ADDENDUM TO APPLICATION FOR BOND This application is for the purpose of seeking a bond in the amount of $281,270 to secure repayment of the City of Ames for certain street improvements made in connection with the construction of the Green Hills Community of Ames, a retirement community in Ames, Iowa. Attached is "Agreement for Construction of the Green Hills Road, Gateway Center Subdivision, Ames, Iowa" signed and entered into April 24, 1984 by and between the City of Ames, Iowa and Green Hills Company of Ames and Iowa State University Achievement Fund. As noted in Paragraph 7 of the attached agreement, the original agreement called for security of action by granting to the City a mortgage lien placed upon Lot 6 of the Subdivision carrying the Health Care Center. At this stage, however, such a lien would seriously disrupt the ability of the developer to construct subsequent phases in the Health Center thus creating an undesirable situation. As such we are seeking the substitution of a performance bond for the provided first lien mortgage. The amount secured for performance is specified in Paragraph 5 of the agreement. In brief, the Green Hills Company of Ames, Inc. has guaranteed to the City that in the event that the increased property taxes paid as a result of construction of the improvements on Lot 1 and Lot 6 of the Gateway Center Subdivision, do not pay back in full the cost of constructing and bonding the construction of Green Hills Drive, then the Developer will pay the City that difference in cost. As noted in the attached letter dated February , 1987 from Betty Jo Harker, Director of Finance, City of Ames, the total amount for construction of the project plus interest is calculated at $281,270. Annually, the City of Ames will calculate the amount of property taxes collected on Lots 1 and 6 and deduct from that the base taxes paid in year 0, approximately $10,000. This increment or increase in taxes will be credited against the road cost and interest accrued on debt estimated at $281,270. The amount of the performance bond will reduce therefore yearly, depending on the actual calculated increase in tax taking. The attached schedule illustrates the the anticipated increase in tax payments and therefore the likely result of the performance activity.