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HomeMy WebLinkAboutResolution - 2004-R0507 - Development Agreement For The Design And Construction Of Milwaukee Ave. - 10_11_2004Resolution No. 2004-RO507 October 11, 2004 Item No. 41 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Development Agreement between the City of Lubbock and Hubwest Development, L.L.C. and Canyon Hub Holdings, L.P., for the design and construction of Milwaukee Avenue. Said Development Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this 11th day of October 2004. ATTEST: Re cca Garza, City Secretary APPROV AS TO CONTENT: Craig FAmer Director of Planning and Transportation APPROVED AS TO FORM: Richard K. Casner First Assistant City Attorney ke/ccdocs/PavingMilwaukee.Hodges3b res October 6, 2004 Resolution No. 2004-RO507 October 11, 2004 Item No. 41 STATE OF TEXAS § COUNTY OF LUBBOCK § DEVELOPMENT AGREEMENT for DESIGN and CONSTRUCTION of MILWAUKEE AVENUE This Development Agreement ("Agreement") is entered by and between the City of Lubbock, Texas, a Texas home rule municipal corporation (the "City"), Hubwest Development, L.L.C., a Texas limited liability company (the "Developer"), and Canyon Hub Holdings, L.P., a Texas limited partnership ("Owner"). WITNESSETH: WHEREAS, Developer is the developer of certain real property adjacent to Milwaukee Avenue, located within the corporate limits of the City owned by Canyon Hub Holdings, L.P., a Texas limited partnership; and WHEREAS, Developer and Owner are required, pursuant to Chapter 25 of the Code of Ordinances of the City, to participate in the paving of Milwaukee Avenue, and to bear the cost of such participation; and WHEREAS, the City, to realize cost savings due to economies of scale and due to drainage and infrastructure installation, such as stormwater, water, sewer, and other utility pipelines, desires to design and construct Milwaukee Avenue, from 34t" Street to 92nd Street, as a single project; and Milwaukee Paving Project Agreement Page 1 of21 WHEREAS, the Developer and Owner, due to the economic benefit they will enjoy from the construction of such improvements in the manner desired by the City, joins the City in such desire; and WHEREAS, the City, Developer and Owner now desire to enter into this Agreement wherein Developer and Owner, as applicable, unconditionally agree to pay to City its allocated portion of the cost related to the design and paving of Milwaukee Avenue and the installation of the utility infrastructure, being drainage, water and sewer. NOW, THEREFORE, in consideration of the mutual covenants and obligations herein, the City, Developer and Owner agree as follows: SECTION 1. Developer Participation 1.01 Developer shall, on or before October 15, 2004, submit an Irrevocable Letter of Credit, issued by American Bank of Texas, a bank, as defined by Section 31.002 of the Texas Finance Code, in the amount of the Estimated Amount, as described in Section 1.03, payable conditioned upon presentment and no other conditions, containing at least a one (1) year effective term and otherwise suitable in form to the City, to secure its obligations under this Agreement, said funds to be used for the street paving, drainage, water and sewer construction of Milwaukee Avenue, as set forth in Section 1.03, below. The description of the project, as set forth herein, is depicted on Exhibit "A", attached hereto (the "Milwaukee Project"). The City, in the event Developer shall tender the cash payment as contemplated by this Section 1.01, shall place such funds in escrow, in the event an Escrow Account may be established on or before the time set Milwaukee Paving Project Agreement Page 2 of 21 forth in Section 1.04, below, as provided in and subject to Section 1.06, below. 1.02 The City shall prepare schematic drawings of the proposed Milwaukee Project, showing both horizontal and vertical dimensions, which shall be submitted to Developer for his review and comment no later than November 1, 2004 (the "Preliminary Drawings"). City shall provide to Developer a metes and bounds legal description of such lands necessary for the Milwaukee Project on or before February 1, 2005, based upon the Preliminary Drawings. Owner shall dedicate to City, on or before March 1, 2005, at no cost to. the City, all lands and real property interests so described, for the paving and drainage, water, sewer and street lighting construction of the Milwaukee Project. The total dedication for the roadway shall not exceed one hundred ten feet (110') in width, with the exception of additional width at the intersections for right -turn lanes or corner clips. 1.03 (a) The City has determined an estimate of the cost of Developer's share of the Milwaukee Project, said estimate being the sum of Seven Hundred One Thousand Forty Dollars ($701,040) (the "Estimated Amount"). The Estimated Amount includes fifty percent (50%) of the difference between (i) estimated paving costs, if concrete paving is utilized; and (ii) estimated paving costs, if asphalt paving is utilized. A schedule depicting the items of the Milwaukee Project and estimated costs thereof is attached hereto as Exhibit "B". Developer agrees and stipulates to City that the estimate is a Milwaukee Paving Project Agreement Page 3 of 21 reasonable cost for Developer's share of the Milwaukee Project cost. Further, Developer stipulates and agrees that the Estimated Amount is merely an estimate, and that the cost of Developer's share of the Milwaukee Project could be lesser or greater than the Estimated Amount. Developer, notwithstanding the Estimated Amount set forth herein, but subject to the limitations in subsection (b), agrees to pay to City the actual bid cost, as determined by the response to the City's request for bids awarded by the City Council of the City of Lubbock and excluding any additional costs associated with change orders to the public works contract, of the Milwaukee Project (the "Actual Bid Cost"). (b) Notwithstanding the payment obligation of Developer to pay the Actual Bid Cost of the Milwaukee Project, in the event the Actual Bid Cost of the Milwaukee Project is, as set forth in Section 1.04 and Section 1.05, herein, exceeds the Estimated Amount by more than five per cent (5%), the City and Developer agree to negotiate in good faith the costs in excess of the Estimated Amount. In the event Developer and City cannot agree as to the costs to be paid by Developer for the Milwaukee Project, the City may, at its option, either (i) continue construction activities regarding the Milwaukee Project, in which event the Developer would be obligated to pay to the City or Escrow Agent, the sum of the Estimated Amount plus an additional five percent (5%) of the Estimated Amount; or (ii) abandon the Milwaukee Project, at which time any and all obligations Milwaukee Paving Project Agreement Page 4 of21 of City and Developer as set forth herein shall terminate and shall be null and void. (c) It is expressly agreed and understood that the City may or may not bid the Milwaukee Project as an asphalt paving project. If it is not bid, the amount utilized for the Estimated Amount computation, as set forth in Table B, Column 3, on Exhibit `B", attached hereto, shall be utilized as the actual costs for such paving method. 1.04 The City shall construct the Milwaukee Project in accordance with all applicable laws, and will competitively bid construction of the project where required by applicable law. Developer stipulates and agrees that the City may competitively bid areas of Milwaukee Avenue not located within the areas of the Milwaukee Project. After bids are received and the City staff determines the lowest responsible bidder to be recommended to the City Council for award, City shall notify Developer of the amount of such bid recommended for award (the "Notice of Intended Award"). No later than three (3) days after receipt of the Notice of Intended Award, or ten (10) days prior to the meeting of the City Council wherein the award of the bid is to be considered, whichever is the later to occur, the Developer shall pay to the Escrow Agent (as defined in Section 1.06, below) the Actual Bid Cost of the Milwaukee Project, as described in Section 1.03, above, subject to the limitations in subsection 1.03. 1.05 In the event the City shall award a bid not recommended to the City Council, as contained within the Notice of Intended Award, and in the Milwaukee Paving Project Agreement Page 5 of21 event the actual awarded bid is larger than the bid contained within the Notice of Intended Award, Developer shall, within three (3) days after the meeting of the City Council of the City wherein such bid is awarded, submit to the City or Escrow Agent the difference between (1) the amount deposited pursuant to the Notice of Intended Award; and (2) the Actual Bid Cost, subject to the limitations in subsection 1.03. Conversely, in the event the actual awarded bid requires a smaller sum than paid by Developer to City pursuant to the Notice of Intended Award, the City shall, within ten (10) days after the meeting of the City Council of the City wherein such bid is awarded, refund or cause the refund of the difference between (1) the amount deposited pursuant to the Notice of the Intended Award; and (2) the Actual Bid Cost. 1.06 (a) When the Escrow Agreement is entered into, as provided herein, any funds received by City from Developer for the Estimated Amount or Actual Bid Cost of the Milwaukee Project, as applicable, subject to the conditions below, shall be placed in an Escrow Account (herein so called) with a bank, as defined by Section 31.002 of the Texas Finance Code (the "Escrow Agent'), to be determined or selected by City in accordance with all applicable laws. The City, Developer and Escrow Agent shall negotiate in good faith to enter into an Escrow Agreement (herein so called) governing the deposit, maintenance and withdrawals of the Escrow Account, and providing (i) that the account bear interest at a rate acceptable to City and Developer; (ii) for fees for all services to be Milwaukee Paving Project Agreement Page 6 of 21 provided by the Escrow Agent or any other party related to the Escrow Account (the "Escrow Fee") acceptable to City and Developer; (iii) that the City may withdraw funds or cause the refund of funds from the Escrow Account conditioned solely upon the request by City for such funds and no other condition; (iv) if, in accordance with Section 1.08, Developer assumes the responsibility for and contracts for any incomplete engineering, prior to award of construction bid and assumes the responsibility for and contracts for the construction of the portion of Milwaukee identified in Exhibit "A", attached hereto (and called the Milwaukee Project herein), City shall make partial withdrawals from the Escrow Account to reimburse Developer for progress payments to the Contractor. However, in no case shall the withdrawals exceed the sum of moneys paid or to be paid to the engineers and contractor for the completion of the Milwaukee Project, and is subject to City acceptance of the improvements related to the Milwaukee Project. (v) that the Developer shall be solely responsible for the payment of the Escrow Fee; (vi) that the interest earned on the Escrow Account shall be applied first to payment of the Escrow Fee and, if any funds are remaining, remitted to Developer, together with all such remaining funds, if such funds exist after completion and acceptance of the Milwaukee project; and (vii) any other terms or provisions required by the City, in its discretion, and otherwise be in form and substance satisfactory to City. Milwaukee Paving Project Agreement Page 7 of 21 (b) Notwithstanding anything to the contrary herein, City may withdraw funds from the Escrow Account at times and in the amounts deemed necessary or advisable by the City to pay the actual costs associated with the Milwaukee Project. No consents, documentations, representations or any other matter, other than the written request of City, by and through its City Manager or his/her delegee, a copy of which shall be provided to Developer when submitted, shall be required for disbursement of the requested funds by Escrow Agent. After deposit into the Escrow Account, the Irrevocable Letter of Credit for the benefit of City, as described in Section 1.04, above, shall be released by City. In the event the Irrevocable Letter of Credit shall be dishonored, for any reason, Developer shall tender to City or Escrow Agent on or before the ten (10) days after being given notice of such dishonor, all funds due under this Agreement. (c) It is expressly agreed and understood that entering into an Escrow Agreement requires contractual commitment from parties not subject to this Agreement. Developer and City agree to negotiate in good faith in attempting to enter into an Escrow Agreement as described above. However, in the event a final written Escrow Agreement may not be entered into by Developer, City and Escrow Agent on or before the date Developer is to deposit the funds to Escrow Agent, as set forth is Section 1.04, above, Developer shall deposit such funds directly to the City and any term or provision herein allowing payment to City or Escrow Agent Milwaukee Paving Project Agreement Page 8 of 2l shall be deemed amended to provide for payment solely to City. The City shall pay no interest on such funds held by it. 1.07 The City shall proceed in a reasonably diligent manner to substantial completion of the Milwaukee Project, subject to Section 6.01, according to the following milestones: The Milwaukee Project shall be put out for bid no later than April 1, 2005 (the "Bid Date"); the bid shall be awarded by the City no later than May 1, 2005 (the "Award Date"); construction of the Milwaukee Project shall be 50% complete, as reasonably determined by the City, no later than December 1, 2005 ("Interim Completion Date"), and the Milwaukee Project shall be substantially complete to the point wherein (a) the subject portion of Milwaukee Avenue (as described in Exhibit "A" and referred to in this Agreement as the "Milwaukee Project") is open for the travel of traffic; and (b) the intersection of Milwaukee Avenue and the Brownfield Highway and the traffic signals controlling the travel of traffic at such intersection is operational, on or before March 1, 2006 ("Substantial Completion Date") (the Bid; Date, Award Date, Interim Completion Date and Substantial Completion Date, are collectively referred to herein as the "Milestones"). The Interim Completion Date and the Substantial Completion Date shall be extended by weather and other force majeure events as provided in the Paving Contract, as defined below. The failure to reach such Milestones shall not be considered, for any purpose, as an event of default hereunder and shall only entitle Developer (i) in the event the Bid Date and Award Date Milestones are not met, as Milwaukee Paving Project Agreement Page 9 of 21 the sole and exclusive course of action upon such events, to elect to complete the Milwaukee Project, as contemplated by Section 1.08(c), below; and (ii) in the event of that the Substantial Completion Date Milestone is not met, as the sole and exclusive course of action upon such event, Developer may exercise the rights provided in Section 1.08(b), subject to the terms of Section 1.08(b) 1.08 (a) It is expressly agreed and understood that the City will require, in the paving contract for the Milwaukee Project (the "Paving Contract'), that the contractor who is awarded the bid (the "Paving Contractor") agrees to meet both the Interim Completion Date and the Substantial Completion Date, and the City further agrees to enforce such deadlines against the Paving Contractor by all appropriate action, as reasonably determined by the City, including, where deemed necessary or advisable by the City, issuing notice of default to the Paving Contractor and its bonding company, and if reasonably deemed necessary or advisable by the City, by enforcing the default provisions and remedies under the Paving Contract and the performance bond, and by taking such other action as is deemed by the City to be reasonably necessary to ensure that the Milwaukee Project is diligently prosecuted to completion. (b) Additionally, the City will contractually provide for liquidated damages in the Paving Contract from the contractor under the Paving Contract as liquidated damages for the failure to timely meet the Substantial Completion Date, in the amount of $10,000 per day until the Milwaukee Paving Project Agreement Page 10 of 2l Milwaukee Project (i.e., as described in Exhibit "A") is substantially complete. The City agrees to pay Developer liquidated damages, only if, as and when such liquidated damages are actually collected or offset by the City from the Paving Contractor, either by agreement between City and Paving Contractor, by acquiescence of Paving Contractor after notice by City of its intent to offset final payment by the liquidated damages due and owing City by Paving Contractor, or by full and final judgment, under the terms of the Paving Contract for the failure of the Paving Contractor to meet the Substantial Completion Date for the Milwaukee Project, and only for the Milwaukee Project. In no event shall Developer or any other third party be entitled to any funds not actually received, as described above, by City as liquidated damages under the Paving Contract, for the failure of the Paving Contractor to meet the Substantial Completion Date for the Milwaukee Project, and only for the Milwaukee Project. However, in the event the City deems, in its judgment, that liquidated damages are due and owing for the Milwaukee Project under the Paving Contract, as described above, the City will diligently pursue the recovery of such liquidated damages. (c) In the event that the City fails to meet the Bid Date or Award Date Milestones specified herein, Developer may, at its option, upon thirty (30) days written notice to the City, complete the Milwaukee Project with its own funds, in part as secured by the Irrevocable Letter of Credit, as described in Section 1.01, and/or escrow funds, as provided in Section Milwaukee Paving Project Agreement Page l t of 21 1.06, if funds have been deposited by Developer, and the City shall pay to Developer the lesser of $1,232,000 or 30% of the total contract price of the Milwaukee Project and related public improvements projects as contemplated by Subchapter C of Chapter 212 of the Texas Local Government Code upon completion of the Milwaukee Project and such other public improvement projects. All construction activities undertaken by Developer related to the Milwaukee Project and such related public improvement projects included within the total contract price referred to above, shall be subject to the prior approval of the City Engineer and in accordance with the specifications of the remainder of the construction of Milwaukee Avenue from 30 Street to 92nd Street. In the event Developer shall undertake, in whole or in part, any engineering or construction activities as set forth in Sections 1.08(c), either through itself or its contractors, Developer shall procure and carry the identical insurance coverage as required to be procured and carried by the City's contractors (as set forth in the invitation to bid such project), and otherwise comply with each provision of such contractual arrangements related to such insurance requirements, related to the City's engineering and construction of Milwaukee Avenue. In the event Developer shall undertake, in whole or in part, any engineering or construction activities as set forth in Section 1.08(c), Developer shall execute a performance bond for the construction of the Milwaukee Paving Project Agreement Page 12 of 21 Milwaukee Project and all other public improvements contemplated herein (in accordance with Chapter 2253 of the Texas Government Code) and comply with all other applicable laws related to private performance of public improvements, including without limitation, Subchapter C of Chapter 212 of the Local Government Code. SECTION 2. Ten 2.01 The term of this Agreement shall begin on the date of execution of this Agreement by City and end upon the complete performance of all obligations by each party to this Agreement. SECTION-3. Indemr& 3.01 Developer and Owner agree to defend, indemnify, and hold City, its officers, agents, employees, and elected officials, harmless from and against any and all claims, lawsuits, liabilities, judgments, costs and expenses for any harm for which recovery of damages is sought that may arise out of, be occasioned by or related to Developer's or Owner's breach of any of the terms or provisions of this Agreementor resulting from or related to Developer's or Owner's contractors', agents', employees' invitees', or licensees' activities under this Agreement. SECTION 4. Events of Default / Remedies 4.01 A default shall exist if either party fails to perform or observe any material covenant or obligation contained in this Agreement, or if any material representation provided for herein is not true or correct. The non - defaulting party shall notify the defaulting party in writing upon becoming Milwaukee Paving Project Agreement Page 13 of21 aware of any event that constitutes a default. Such notice shall specify the nature of the default and what action, if any, the non -defaulting party requires or proposes to require with respect to curing the default. 4.02 If a default shall occur and be continuing, after ten (10) days written notice to cure such default, (i) in the event of a continuing default by City, Developer may pursue any and all remedies it may be entitled to, at law, contract, or equity, excepting termination and rescission; or (ii) in the event of a continuing default by Developer, City may, at its option, terminate this Agreement and/or pursue any and all remedies it may be entitled to at law, contract or equity. It is agreed that failure to declare this Agreement terminated upon the default of Developer for any of the reasons set forth above shall not be construed as a waiver of any of the City's rights hereunder or otherwise bar or preclude City from declaring this Agreement terminated as a result of any subsequent violation of any of the terms or conditions of this Agreement. All of such remedies are expressly cumulative and the exercise of one or more remedies shall not preclude the simultaneous or subsequent exercise of different or additional remedies. SECTION >. Miscellaneous 5.01 This Agreement is performable in Lubbock County, Texas, and venue for any action arising out of this Agreement shall be exclusively in Lubbock County, Texas. This Agreement shall governed and construed in accordance with the laws of the State of Texas. Milwaukee Paving Project Agreement Page 14 of 21 5.02 Any notice required by this Agreement shall be deemed to be properly served, if (i) provided in person or by telephonic facsimile; or (ii) deposited in the United States mail by certified letter, return receipt requested, addressed to the recipient at recipient's address shown below, subject to the right of either party to designate a different address by notice given in the manner just described. Notice shall be deemed to be received when delivered if provided in person or by telephonic facsimile or, if deposited in the United States mail, as set forth above, (4) days after depositing such notice in the United States mail, as set forth above. For City: Lou Fox, City Manager City of Lubbock P. O. Box 2000 Lubbock, Texas 79457 Facsimile No. 806-775-2051 with copy to: Lang Hertel, City Engineer City of Lubbock P.O. Box 2000 Lubbock, Texas 79457 Facsimile No. 806-775-3074 and: Richard Casner, First Assistant City Attorney City of Lubbock P. O. Box 2000 Lubbock, Texas 79457 Facsimile No. 806-775-3307 Milwaukee Paving Project Agreement Page 15 of 21 For Developer: Hubwest Development, L.L.C. Attn: Charles Hodges 13642 Omega Dallas, Texas 75244-4514 Facsimile No. (972) 960-1129 5.03 In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not in any way affect any other provision hereof and this Agreement shall be considered as if such invalid, illegal or unenforceable provision had never been contained in this Agreement. 5.04 City, Developer and Owner each bind themselves and their successors and assigns to the other party of this Agreement. Developer and Owner represent and warrant to City that they (i) possess the requisite power and authority to execute, deliver and perform this Agreement; (ii) have taken all actions and formalities necessary to authorize Developer and Owner to execute, deliver and perform this Agreement; and (iii) the party executing for and on behalf of Developer and Owner has been duly authorized to act in such behalf for Developer and Owner. Owner represents and warrants to City that Developer is the duly authorized agent of Owner and is duly and fully authorized by Owner to conduct any and all activities related to the development of the Milwaukee Project on behalf of the Owner, as contemplated by this Agreement. Developer and Owner may assign their obligations under this Agreement, provided however, that Developer and Milwaukee Paving Project Agreement Page 16 of 21 Owner shall not be released from liability for performance of any obligation to City contained in this Agreement and will be held as a surety for the performance of this Agreement by any subsequent assignee. 5.05 City, pursuant to Resolution Number 4475, as amended by Resolution Number 2003-R0352, adopted a paving policy (the "Policy") wherein the financial obligations of the paving of streets within the City of Lubbock were apportioned between City and developers. The apportionment of the financial obligations of the paving of the Milwaukee Project, as prescribed by this Agreement, differs in certain respects from that set forth in the Policy. Accordingly, to the extent the Policy conflicts with this Agreement, the terms of this Agreement shall control and the Policy shall be considered to be amended by this Agreement, insofar and only insofar, as the Policy affects the Milwaukee Project. SECTION 6. Non -Appropriation 6.01 City, Developer and Owner herein recognize that the continuation of any agreement at the close of any given fiscal year of the City of Lubbock, Texas, which fiscal year ends on September 30 of each year, shall be subject to Council budget approval of the City, providing for or covering such agreement item as an expenditure therein. The City does not represent that said budget item will actually be adopted as this determination is within the sole discretion of the City Council. The parties enter into this Agreement on the 11th day of October, 2004. Milwaukee Paving Project Agreement Page 17 of 21 ATTEST: Re ca Garza, City Secretary APPRO AS TO CONTENT: C,,I'4Lan"yHerteIoet'i'ty Engineer APPROVED AS TO FORM: Richard K. Casner First Assistant City Attorney CITY OF LUBBOCK DEVELOPER: DEVELO NaiW. Charles Title: Manager Name: Artemio de la Vega Title: Manager MAYOR Milwaukee Paving Project Agreement Page 19 of 21 OWNER: CANYON HUB HOLDINGS, L.P. :T ' 17 �• 11 Richard/Milwaukee Ave paving Hodges Agreement 2.rla.Cheryl September 20, 2004 September 23, 2004 Richard. 10.05.04 Milwaukee Hodges 3a Contract draft. Craig October 8, 2004 Milwaukee Paving Project Agreement Page 19 of 21 p- HUB WEST DEVELOPMENT. L, R kV I WEST TEXAS It LUSOM RAILROAD q -(U6 10JEST DEVELOPMENt. t7- .-- -l---.---- I SOUTH ... ....... PROPOSED EXTENSION OF MLINAUKEE AVENUE EXHIBIT A PROPERTY OWNER MAP 347H STREET TO 98TH STREET HUB WEST DEVELOPMENT LF.SOUTH tz 9 th 0 F-A a rt Resolution No. 2004—RO501 EXHIBIT `B" to Agreement tf, of t elbtwd� M&ww w A..a111. Im san sw" 1e OWNS s41.44 EXHIBIT B-LANDOWNER PARTICIPATION Htb West Developnsof. L.P. South Table SWUM" arw n An In drbewm ba4�1aw1 cone7ata and aspalorAL Tmk B "1113W* WA'bff" ha111 h1d b 11PMww AS" PMO Pfk& a &V4W Richard. 10.05.04 Milwaukee Hodges 3a Contract draft. Craig October g, 2004 Milwaukee Paving Project Agreement Page 21 of 21