HomeMy WebLinkAbout~Master - Approving Amendment to Contract Rezoning Agreement to Allow a Letter of Credit in lieu of Cash Security RESOLUTION NO. 23-049
RESOLUTION ON AMENDMENT TO CONTRACT REZONING AGREEMENT FOR
798 N. 500TH AVENUE (NORTH SUNSET RIDGE)
TO ALLOW FOR ACCEPTANCE OF A LETTER OF CREDIT
IN LIEU OF CASH SECURITY
FOR THE CITY OF AMES,IOWA
WHEREAS, Hunziker Development Group, the owner of 28.58 acres of property located
at 798 North 500th Avenue applied to amend the previously approved Rezoning Master Plan for
the North Sunset Ridge development. The site is located to the north of the existing Sunset Ridge
Subdivision on land annexed to the City in February 2022. The current zoning of Floating
Suburban Residential Low-Density (FS-RL) and Master Plan was approved by the City Council
on August 9, 2022; and,
WHEREAS,with the rezoning,the developer entered into a Contract Rezoning Agreement
that included provision for a financial contribution to the extension for sanitary sewer line through
the site and a separate section regarding a Master Plan for the zoning approval. The developer is
required to provide a one-time payment to the City in the amount of$604,725 within 14 days of
the award of the contract for construction of the sanitary sewer extension, or approval of final plat,
whichever occurs first. The City would hold the funds in an interest-bearing escrow account for
payments related to the sanitary sewer construction. The City awarded the contract for this project
at its January 10, 2023, meeting; and,
WHEREAS, in addition to a request to amend the existing Master Plan related to the
configuration of access points and total number of units, the developer also requested an
amendment to the rezoning agreement to allow temporarily substituting a letter of credit for the
cash security. Accepting the letter of credit would defer cash payment to the City until March 31,
2023, which would coincide with the start of construction of the sanitary sewer project; and,
WHEREAS,this request is unusual in that it is a change of terms to the agreement and City
practice is to require cash security when there is a defined contribution to a project rather than a
percentage share. Taking cash as security allows the City to earn some interest on the contribution
as a slight hedge against inflated construction costs when the date of the project is unknown. In
this instance, the project amount is known due to the award of the contract for the project, the
project costs will not increase over the next two months. Therefore, satisfying this request should
not set a precedent.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa,
that the change to allow for acceptance of a Letter of Credit in the amount of$604,725, in lieu of
cash security, until March 31, 2023 is hereby approved.
ADOPTED THIS 24th day of January, 2023.
Renee kall, City Clerk John A. Haila, Mayor
Introduced by: Gartin
Seconded by: Betcher
Voting aye: Beatty-Hansen, Betcher, Corrieri, Gartin, Junck, Rollins
Voting nay: None Absent: None
Resolution declared adopted and signed by the Mayor this 24th day of January, 2023.