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HomeMy WebLinkAbout~Master - Modifications to Covenant and Developer's Agreement for Eastgate Subdivision RESOLUTION NO. 15-735 RESOLUTION APPROVING MODIFICATIONS TO COVENANT AND DEVELOPMENT AGREEMENT FOR EASTGATE SUBDIVISION FOR THE CITY OF AMES WHEREAS, First National Bank owns 12 lots within the Eastgate Subdivision (near East 13th Street and Dayton Avenue); and, WHEREAS, in 1998, the original Eastgate developer signed a development agreement promising payment for improvements to roads and utilities in the area; and, WHEREAS,the development was then the subject of a bankruptcy proceeding,and in 2001, the City entered into a covenant that modified the owner's public infrastructure obligations; the covenant was intended to clarify the owner's obligations and more strictly bind the property owner to pay for improvements earlier than required under the development agreement; and, WHEREAS, the property was ultimately acquired by First National Bank through the bankruptcy proceeding; and, WHEREAS, the covenant requires payment to the City for the estimated costs of widening Dayton Avenue for a turn lane and for connections to water and sewer service, and this payment is to be made upon the sale or transfer of each lot; and, WHEREAS, the water and sewer connection fees have all been paid, and only the road widening cost remains outstanding;the road widening cost was revised in 2004 to reflect increased construction costs; and, WHEREAS,the amount outstanding for the 12 lots remaining in the subdivision is$94,710, and First National Bank has requested that it be allowed to sell the properties to its holding company, Ames National Corporation, without being required to pay the outstanding road assessment; and, WHEREAS,the rationale for this transfer is that federal regulations prohibit national banks from holding real estate for periods greater than ten years, and December 15 is the ten-year anniversary of First National Bank's acquisition of the properties; and, WHEREAS, in a previous staff report, City staff recommended that deferring payment for the road widening costs should be made contingent upon a revision in the amount owed, since construction costs have increased since the time when the assessment was last revised; and, WHEREAS, First National Bank has requested that the construction cost not be revised, because this transaction is to a corporation with essentially the same ownership, and it further believes an increase in the assessment amount will make the lots more difficult to sell for development; and, WHEREAS, it is City staff s belief that the City Council has the option in the future to unilaterally revise the construction cost estimate in response to construction cost inflation, and, therefore, adjust the amount owed per lot for the widening of Dayton Avenue; and, WHEREAS, this request to transfer the ownership of the property does not preclude adjustments in the construction cost estimate from being made in the future; and, WHEREAS, modifying the covenant and development agreement will have two additional effects: first, it will allow the development agreement to be clarified as to what components remain incomplete, and in what manner those components have been superseded by the covenant; second, it will extend the duration of the covenant another 21 years from the date of revision, which is currently only binding until February 2022. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa, that the amendments to the Covenant and Development Agreement with First National Bank for the Eastgate Subdivision, allowing the properties to be sold to Ames National Corporation without payment for the road widening costs, are hereby approved, and with the change indicating that the fees would be payable upon the sale and/or development of the lot(s). ADOPTED THIS 8t1i day of December, 2015. C�LA 1 144A.0 A0,940 UV. 67�' Diane R. Voss, City Clerk Ann H. Campbell, Mayor Introduced by: Goodman Seconded by: Corrieri Voting aye: Betcher, Corrieri, Gartin, Goodman,Nelson, Orazem Voting nay: None Absent: None Resolution declared adopted and signed by the Mayor this 8t1i day of December, 2015.