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HomeMy WebLinkAboutA017 - Request to Share Cost for the Paving of a 150 Foot Extension of SE 3rd Street in the Kingsbury's Fifth Addition SubdivisionITEM #:20 DATE:11-25-25 DEPT:P&H SUBJECT:REQUEST TO SHARE PAVING COST FOR EXTENSION OF SOUTHEAST 3RD STREET IN RELATION TO KINGSBURY'S FIFTH ADDITION SUBDIVISION COUNCIL ACTION FORM BACKGROUND: Kingsbury's Subdivision 5th Addition is located adjacent to SE 3rd Street, north of Target. Both Lot 2 of the 4th Addition (south side of SE 3rd) and Lots 1-4 of the 5th Addition are currently under contract to be sold. Development of either site would trigger the paving of SE 3rd Street. The City Council received a letter on November 18 from Chuck Winkleblack, representing the property owners WW Holdings Corporation and Ante Opportunity LLC. The letter requests an amendment to the Kingsbury's Subdivision 5th Addition development agreement to have the City share in the cost of approximately a 150 foot extension of Southeast 3rd Street towards the rear of Target (See Attachment A - Location Map). City Council referred the request to the November 25 agenda. The Public Improvement Agreement and associated Development Agreement for Kingsbury's Subdivision Final Plat for both the 4th Addition and 5th Addition have been in place since 2022. The agreement addressed the timing of various public improvements with a focus on paving of SE 3rd Street. The agreement requires the developer to complete the SE 3rd Street extension at the time of development, if the City has not completed the extension of SE 3rd Street in conjunction with the a larger "Cherry Street Extension" project (See the Addendum for more information on the Development Agreement history). At the time of agreement in 2022, the City had planned to make street improvements in conjunction with a broader street network improvement with a Cherry Street extension. However, the 2023 conceptual design and traffic modeling for the Cherry Street Extension did not demonstrate an improvement to traffic in the vicinity. The Cherry Street project, therefore, did not proceed and its funding was re-programmed to other priorities. Since that time, the Cherry Street project is no longer included within the City's Capital Improvement Plan. The extension is still conceptually shown within Ames Plan 2040 as a street extension that could serve future development if a property owner sought to rezone and develop land to the east of this location. REQUEST: Both Lot 2 of the 4th Addition (south side of SE 3rd) and Lots 1-4 of the 5th Addition are under contract to be sold and with development of either site the paving of SE 3rd would be triggered. Mr. Winkleblack, representing the sellers, proposes that the property owners on both sides of Southeast 3rd Street each individually pay 25% of the cost of extending the approximately 150-foot section of SE 3rd, and that the City of Ames cover the remaining 50% 1 of the cost (estimated at $30,000). The road would then be paved in 2026. Although there is no requirement for the City to pave the street, t he owners make this request because there was a presumption from 2022 that the additional cost of paving the street in order to develop the two sites would be avoided through the City's Cherry Street Extension project. The road extension paving is for a commercial collector street. The length of the extension may be less than 152 feet due to grade change that would need to be matched on the adjacent property in the future. At a minimum an extension would need to extend at least 100 feet plus the width of the driveway approaches for access to the lots. A final design would have to be approved by the Public Works Director. The property owners have received an estimate for paving the street right-of-way for approximately $60,000. City staff believes this estimate is accurate, however, formal improvement plans have not been reviewed. Based on this estimate, and under the proposal from Mr. Winkleblack and the property owners, the City would be responsible for approximately $30,000 of the cost upon development of either of the two lots in question. Construction costs would involve grading, pavement and curb and gutter. The proposal would have the developer complete the work and the City reimburse the developer for the City's share. The request is unique with a proposal to share the cost of a public improvement. Typically, such a simple proposal is not viable due to public bidding requirements for public i mpro v ements . However, since the estimated value of all the improvements related to paving, regardless of who constructs the road, is below public bidding threshold of $89,000, the City can contribute to an improvement without the formal public bidding requirement. This means that if Council were to choose to agree to the request, the developer would be responsible for its implementation and the City reimburse the developer for up to $30,000. The City would not have to prioritize this street improvement and be responsible for its construction. ALTERNATIVES: 1. Direct staff to draft an amendment to the Development Agreement for Public Improvement obligations with the property owners in the Kingsbury's Subdivision 5th Addition for cost sharing of 50% or up to $30,000 for the construction of the remaining unbuilt 152 feet of Southeast 3rd Street abutting Lot 3 of Kingsbury's 5th owned by WW Holdings and Lot 2 of Kingsbury's 4th Addition owned by Ante Opportunity LLC. Under this alternative, the final length of the extension is to be approved by the Public Works Director with approval of Improvement Plans, subject to the project cost meeting the requirements of state law regarding public improvements. 2. Take no action and require the property owners to construct the remaining unbuilt 152 feet of Southeast 3rd Street based on the existing Development Agreement. 2 CITY MANAGER'S RECOMMENDED ACTION: City staff believes the proposal to share costs for the extension of 152 feet of Southeast 3rd Street is reasonable in light of the scope of the street project, the City's prior intent to complete the whole project with a larger extension project, and that the overall extension of a "Southeast Connector" is an illustrative project within the MTP. Agreeing to this proposal could be viewed as a cost savings compared to the City completing the whole project in the future. Additionally, the proposal would assist two property owners who may likely soon develop their properties. Uniquely, because of the scale of the project, financial participation would not require that the City become responsible for the project and alter the current CIP. Instead, the developer would be able to complete the project and be reimbursed. If Council desires to share in the cost, the Road Use Tax Fund has a balance that is available to reimburse the developer upon completion of the project. If Council believes the proposal is appropriate, City staff will draft an amended Development Agreement with the proposed cost sharing conditions for street construction laid out in this report and return for Council consideration at a City Council meeting in December. Therefore, It is the recommendation of the City Manager that the City Council adopt Alternative #1, as described above. ATTACHMENT(S): Addendum SE 3rd Street.pdf Attachment A- Kingsbury Subdivision SE 3rd Street Location & Lots.pdf Attachment B- Kingsbury's 5th Addition - Supplemental Agreement for Public Improvements.pdf Attachment C-Kingsbury Subdivision Request Letter.jpg 3 Addendum Plat History Kingsbury’s 4th Addition was platted in 2020 and consisted of two lots. One large lot north of Southeast 3rd Street and one smaller lot south of Southeast 3 rd Street directly east of Target. The street 150 feet of street right-of-way was originally dedicated with the 4th Addition Final Plat as well as the original Agreement for Public Improvements. In 2022 the owner of both lots in Kingsbury’s 4 th Addition sold the lot north of Southeast 3rd Street to WW Holdings. As a result WW Holdings wanted to further subdivide the single large lot north of Southeast 3rd Street into 4 lots for development. This triggered the creation of Kingsbury’s Subdivision 5th Addition in 2022. Public Improvement Development Agreements An Agreement for Public Improvements was initially approved with the Kingsbury’s 4th Addition that secured public improvements as well as development obligations for both lots of the 4th Addition in relation to the Southeast 3rd Street extension requirement. An amended Development Agreement for Public Improvements was created at the time of the 5th Addition Plat as the responsibility for costs associated with Public Improvements changed due to the ownership split from the original the 4th Addition and the creation of additional Lots with the 5th Addition which required an amended financial security as none of the improvements required by the 4th Addition had been installed yet and the 5th Addition created additional lots including Lot 3 which had no constructed street frontage. Owner Responsibilities & City Street Project Timing At the time of the 5th Addition Final Plat, the property owner requesting the new plat, assumed responsibility for the majority of the public improvements that were constructed immediately, such as extension of any necessary water and sewer lines. However, in the case of the Southeast 3rd Street surface curb, gutter and paving, a 152-foot section of unbuilt street was deferred. The agreement did not obligate the City to build the extension at any point in time, but essentially allowed a deferral for the owner of the paving. If the owners of Lot 3 of Kingsbury's 5th or Lot 2 of Kingsbury's 4th developed either of the lots before the Cherry Avenue extension project, the owner of the lots to the north of Southeast 3rd would be required to build the street extension, including to the benefit of the property owner of Lot 2 of Kingsbury's 4th on the south side of the street as stipulated in the 5th Addition Agreement. Sidewalk Installation Sidewalks were required to be installed along the frontage of Lots 1 and 2 of the 5 th Addition within 36 months of the approval of the Agreement. The deadline for installation was February of 2025. To date no sidewalks have been installed. Sidewalk installation 4 along East 2nd Street to the north is not required until the a development is done on the lot abutting that street. The Kingsbury’s 5th Addition Development Agreement for Public Improvements also covers responsibilities between property owners of the lots on the north and southside of the extension, which includes lot 3 of Kingsbury's 5th owned by WW Holdings and Lot 2 of Kingsbury's 4th Addition owned by Ante Opportunity LLC. 5 413405311 320 410 315 300 215 209 210200 217 1292 127 126 212 121 210 220 204 204 121 130 121 1291 124 129 127 214 213 220 122 130 128 212 217 320 209 SE 3RD ST SE 2ND ST HIGH AVE SUMNER AVE CHERRY AVE S BORNE AVE 1293 119 Kingsbury's Subdivision SE 3rd Street´Legend PARCELS AddressPoint PARCELS AM ES INCORPORATED LIMITS STREET LABELS - ALL @ 50000 FT Private ISU Road City Road County Secondary County Hwy State Hwy US Hwy US Interstate Hwy Lot 3 Kin gsb ury's 5th Ad dition Lot 2 Kin gsb ury's 4th Ad dition Unbuilt Portion of SE 3rd Street 6 Instrument 4: 2022-01357 02/11/2022 01 :20:31 PM Total Pages: 700OTHER Recording Fee: $ 37.00 Stacie Herridge,, Reclordelr', Story County IowaReturnto: mill 1 VC1141%rifkY i 1Y Y 11 M 1uAmesCityClerk1 11111 Box 811 Ames IA 50010 Prepared by and upon recordation retorm to! Robert W. Goodwin 2211 Philadelphia Street Suite 101 Ames Iowa 50010 515-232-7390 SUPPLEMENTAL AGREEMENT FOR PUBLIC IMPROVEMENTS This Supplemental Agreement For Public Improvements is made by and between the City of Ames, Iowa and WW Holdings Corporation. A. DEFINITIONS. The following terms are defined: A.1 "City"means the City of Ames, Iowa. A.2 "WW"means WW Holdings Corporation. B. ATTACHMENTS. The Preliminary Plat Kingsbury's Addition, Ames, Iowa, Exhibit A, consisting of two (2) sheets, is attached hereto and incorporated herein by this reference for the purpose of aiding in the description and understanding of the terms in this Supplement Agreement For Public Improvements. WHEREAS, WW is the Owner of real property in Ames, Story County, Iowa, legally described as follows: Lot One (1) in Kingsbury's Fourth Addition, Ames, Story County, Iowa. WHEREAS, WW Holdings Corporation is in the process of platting and subdividing Lot One (1) Kingsbury's Fourth Addition, Ames, Story County, Iowa into Kingsbury's Fifth Addition to the City of Ames, Story County, Iowa. WHEREAS,there is a Development Agreement Kingsbury's Third Addition(n/k/a Kingsbury's Fourth Addition) dated May 12, 2020 filed in the office of the Story County Recorder as Instrument No. 2020-05055 with DET Land Company, L.C., which owned Lot 1, Lot A and Lot 2 as shown in the attached Exhibit A Sheet 1. Lot A was dedicated to the City of Ames, Iowa pursuant to that Agreement. I 7 WHEREAS, there is an Amendment To Agreement For Public Improvements hereinafter"Amendment") dated August 24, 2020 filed in the office of the Story County Recorder as Instrument No. 2020-11151 on September 24, 2020. That Agreement recognizes that WW has become the Owner of Lot 1 as shown in Exhibit A Sheet 1. WW is developing Lot 1 into four lots (1-4) as shown in Exhibit A Sheet 2. NOW THEREFORE, the Parties hereto agree as follows: 1. The event that will require paving SE 3`d Street and installing a sidewalk along SE 3`d Street as shown in Exhibit A Sheet 2 is the issuance of a Minor or Major Site Development Plan for Lot 3 of the Fifth Addition owned by WW, or the development of Lot 2 of the 41h Addition, which is owned by DET Land Company, L.C.. As agreed by and between WW and DET Land Company, L.C. in the Amendment To Agreement For Public Improvements dated August 24, 2020, WW shall be responsible to pave SE 3`d Street and install the sidewalk along the north side of SE 3`d Street, both according to City standards. 2. The event that will require installing a sidewalk along the northwest portion of Lot 4 of the Fifth Addition as shown in Exhibit A Sheet 2 is the issuance of a Minor or Major Site Development Plan for said Lot 4. WW shall be responsible for the installation of said sidewalk, according to City standards. 3. Nothing herein shall be construed to release or modify the amount of security deposited with the city required under the Amendment filed September 24, 2020 as Instrument No. 2020-11151. 4. Sidewalks must be installed along Lots 1 and 2 within 36 months if no development occurs before. 5. WW is required to construct certain improvements and utilities (the "Improvements") within the real estate as shown on the attached Exhibit `B' and incorporated herein by reference. WW shall deposit with the City Clerk cash security in the amount of 67,340 to secure the Improvements. The parties agree that the City may construct the Improvements in the event that WW, or its successors and/or assigns, fail to do so as agreed, and to cover the cost with the cash security deposited with the City Clerk. Upon the satisfactory completion of the said Improvements, including paying the reasonable engineering and inspections fees therefor, the Clerk may release the security to the party posting the same. 6. The City acknowledges that WW has provided to the City cash security in the amount of$67,340 to secure the public improvements required in paragraph 5 above. The financial security calculation is attached to and made a part of this document as Exhibit `B'. 7. Upon the approval of this Agreement, it is acknowledged that the City Clerk will release to WW the existing $17,315 line of credit held under the terms of the Amendment for Lot 1 of Kingsbury's Fourth Additiuon, Ames, Iowa. 8. This Agreement shall be binding on all successors and assigns of the parties hereto. 2 8 WW HOLDINGS CORPORATIO By: Ryan E. is, President and Director STATE OF IOWA, COUNTY OF STORY, SS: This instrument was acknowledged before me on February Z1 , 2022, by Ryan E. Davis, President and Director of WW Holdings Corporation. a"W;-'j -- JONI C RENTSCHLER No Public in and for the State of Iowa Commission Number 815743 My Co m- ;onW 3 9 Passed and approved on t C 6, 2022, by Resolution No. adopted by the City Council of the City of Ames, Iowa. Y ;*CITY OF AMES, IOWA A, dk J figsh L N * x John A. Haila, Mayor P Attest: A C Diane R. Voss, City Clerk STATE OF IOWA, COUNTY OF STORY, SS: 2022, byThisinstrumentwasacknowledgedbeforemeon John A. Haila and Diane R. Voss, as Mayor and City Clerk, respectively, of the City of Ames, Iowa. 0 titi Notary blic in and for the State of Iowa AMY L.COLWELL Commission iWimbvh 812138 MY TTnt i 10 j _ _ on Il a Mill I I1 - 11 \` -- -,F-% a c T-- -4- I gw Jti gig I j i i Ji 1asa—i i I I -tag EM ig N G Cc D NO, ox X-. I— Exhibit A Sheet 1 11 15- ltt 43 Milt RIM V R ji. 5 g c-0 f 4 PEI Z FIAM 1 rill, fl!l If- lqf 7 —T IFIt IF 41v 5 Ric—1 1 orcll ox ` 4 l m illb so.;a,I 3 M Exhibit A Sheet 2 12 Kingsbury's Fifth Addition, Ames, Story County, Iowa Exhibit `B' Financial Security Calculation Public huprovements Item/Purpose Unit Quantity Unit Cost Improvement Costs Remainin Hydrant Assembly EA 2 4,500.00 9,000.00 Water Main,8-inch valve&Sleeve EA 1 2,430.00 2,430.00 Water Main,Trenched,PVC 8-inch LF 248 50.00 12,400.00 Sanita Sewer Manhold,SW-301,48-inch Dia. EA 2 7,500.00 15,000.00 Sanitary Sewer,Gravity,Trenched PVC,8-inch LF 198 50.00 9,900.00 Sidewalk Pavement,PCC,4" SY 431 35.00 15,085.00 Sidewalk Pavement,PCC,6"thick(Lot 1,41' SY 5.6 75.00 420.00 Addition Detectable Warning Panels(Lot 1,41 Addition) SF 8 30.00 240.00 COSESCO(erosion control)(Lot 1,41 Addition) AC 5.7 500.00 2,865.00 TOTAL 67,340.00 G City Department of Public Works Approved By: Tracy Peterson, .E., Municipal Engineer 13 14