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.