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AGENDA ITEM REVIEW FORM |
5.F.
Regular City Council Meeting
- Meeting Date:
- 06/22/2022
- Department Head:
- Kay Macuil
- Submitted By:
- Kay Macuil, City Attorney, Attorney's Office
Action Requested:
Motion
Resolution
Resolution
ITEM:
Discussion and possible action on any and all matters regarding Resolution No. 2222. A resolution of the Mayor and City Council of the City of San Luis, Arizona, approving the entering into a Pledgehold Agreement with Riedel Holdings to post land for assurances to construct a wastewater lift station and other commitments related to Los Mezquites Subdivision. (Glenn Gimbut, Assistant City Attorney)
SUMMARY:
Background
On December 21, 2021, City Council approved Resolution 2204 authorizing a Development Agreement with Riedel Holdings, LLC, for Los Mezquites Subdivision (the second attachment to this agenda item). Under Section 2.2 of that agreement, Riedel Holdings, LLC agreed to improvements needed at the discretion of the city's Public Works director. One of the listed improvements is a wastewater lift station, which is needed. Los Mezquites is phased out into 4 units. The lift station serves all units in addition to Von Verde and state lands to the south. The lift station is known as the Los Mezquites/Von Verde Lift Station, located on Avenue D between County 23½ Street and County 24th Street.
Summary of Pledgehold Agreement
Assurance for a Lift Station
The Pledgehold Agreement allows for other construction of Units 3 and 4 to go forward in exchange, the city has a guarantee of land it can sell to pay for building the lift station if Riedel Holdings were not to construct it for any reason.
Chicago Title Company will hold Los Mezquites Unit 4 (about 74.8 acres) as collateral under this Pledgehold Agreement.
Assurance for Los Mezquites Unit 2
Public Works has approved an Engineers Cost Estimate of $3,473,505.85 for the construction of Los Mezquites Unit 2. (The cost estimate is the third attachment to this Agenda Item). A letter of credit in the amount of $3,370,612.00 will be finalized upon the signing of the Pledgehold Agreement. The Pledgehold Agreement provides for another $250,000 of additional assurances for Los Mezquites Unit 2, which more than covers the shortfall from the Engineer's Cost Estimate.
Assurance for Los Mezquites Units 1 and 2 Road and Intersection Improvements
The Pledgehold Agreement assures the city that Riedel Holdings will construct the road and intersection improvements required by the traffic study that are related to Los Mezquites Units 1 and 2. The city will be responsible for right-of-way acquisition. Riedel Holdings will be responsible for the construction.
On December 21, 2021, City Council approved Resolution 2204 authorizing a Development Agreement with Riedel Holdings, LLC, for Los Mezquites Subdivision (the second attachment to this agenda item). Under Section 2.2 of that agreement, Riedel Holdings, LLC agreed to improvements needed at the discretion of the city's Public Works director. One of the listed improvements is a wastewater lift station, which is needed. Los Mezquites is phased out into 4 units. The lift station serves all units in addition to Von Verde and state lands to the south. The lift station is known as the Los Mezquites/Von Verde Lift Station, located on Avenue D between County 23½ Street and County 24th Street.
Summary of Pledgehold Agreement
Assurance for a Lift Station
The Pledgehold Agreement allows for other construction of Units 3 and 4 to go forward in exchange, the city has a guarantee of land it can sell to pay for building the lift station if Riedel Holdings were not to construct it for any reason.
Chicago Title Company will hold Los Mezquites Unit 4 (about 74.8 acres) as collateral under this Pledgehold Agreement.
Assurance for Los Mezquites Unit 2
Public Works has approved an Engineers Cost Estimate of $3,473,505.85 for the construction of Los Mezquites Unit 2. (The cost estimate is the third attachment to this Agenda Item). A letter of credit in the amount of $3,370,612.00 will be finalized upon the signing of the Pledgehold Agreement. The Pledgehold Agreement provides for another $250,000 of additional assurances for Los Mezquites Unit 2, which more than covers the shortfall from the Engineer's Cost Estimate.
Assurance for Los Mezquites Units 1 and 2 Road and Intersection Improvements
The Pledgehold Agreement assures the city that Riedel Holdings will construct the road and intersection improvements required by the traffic study that are related to Los Mezquites Units 1 and 2. The city will be responsible for right-of-way acquisition. Riedel Holdings will be responsible for the construction.
RECOMMENDATION / SUGGESTED MOTION:
I MOVE TO APPROVE AND ADOPT RESOLUTION NO. 2222 AND THE PLEDGEHOLD AGREEMENT.
Fiscal Impact
- IS THERE FISCAL IMPACT ASSOCIATED WITH THIS ITEM:
- See fiscal impact statement
- CITY/STATE/FEDERAL FUNDS:
- See fiscal impact statement
- TOTAL:
- See fiscal impact statement
- BUDGETED AMOUNT:
- See fiscal impact statement
- AVAILABLE AMOUNT TO TRANSFER:
- See fiscal impact statement
- ACCT NAME & GL#/REMAINING BALANCE BEFORE PURCHASE:
- See fiscal impact statement
FISCAL IMPACT STATEMENT (IF THIS IS A BUDGET TRANSFER, YOU MUST ATTACH THE BUDGET ADJUSTMENT FORM):
There is no fiscal impact. If Los Mezquites were abandoned before the completion of the infrastructure construction, the city would sell the land at auction to pay for the completion of the subdivision. The Engineer's estimates of cost is under today's best estimate given that Riedel Holdings purchased materials months ago at better prices. So, if the city were to complete the subdivision, it is possible that the land sale would not pay for all the costs.