HomeMy WebLinkAboutDoc 485 - Tetherow Agrmt Extension RevDeschutes County Board of Commissioners
1300 NW Wall St., Suite 200, Bend, OR 97701-1960
(541) 388-6570 -Fax (541) 385-3202 -www.deschutes.org
AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of 08/06/12
Please see directions for completing this document on the next page.
DATE: 7111112
FROM: Will Groves. CDD 388-6518
TITLE OF AGENDA ITEM:
Consideration and Signature of Document No. 2012-485, Amending Deschutes County Contract No.
2007-380 to Extend the Tetherow Overnight Accommodations Improvement Agreement for Two
Years, Change the Location of the 198 units of Overnight Lodging, and to Denote Weston Investment
Co. LLC as Both the Developer of Those Units and the Holder ofthe Related Irrevocable Letter of
Credit..
PUBLIC HEARING ON THIS DATE? No
BACKGROUND AND POLICY IMPLICATIONS:
On July 23, 2007, the Deschutes County Board of County Commissioners ("Board") approved the
Improvement Agreement ("Agreement") for the financial assurance of the required 150 units of
Overnight Lodging for the Tetherow Destination Resort ("Resort") on Tract AS of the Resort property.
The County and Developer subsequently amended the Agreement five times. Amendment Nos. 1
through 5 referenced above allowed flexibility regarding the surety, increased the number of units of
Overnight Lodging subject to the Agreement from 150 to 198 units, revised the site plans, costs
estimates and financial assurance amount, revised the type of financial assurance to substitute an
Irrevocable Letter of Credit (the "ILOC") for the original surety bond, and extended the date(s) of
expiration of the Agreement several times. The existing amended Agreement terminates 9/24/2012.
VRE Lodge Homes, LLC, (VRE), VRE Bend LLC (VRE Bend) and Weston Investment Co. LLC,
(Weston) recently entered into an agreement to transfer their respective landholdings within the resort
and gained approval for a site plan, Site Plan (SP -12-11), to develop the 198 units of Overnight
Lodging on Tract AA rather than Tract AB of the Resort property.
Weston will be the property owner and developer of Tract AA once this improvement agreement is
signed and transfer the 198 units of Overnight Lodging from Tract AB to AA. In that way, the
company that owns the land will also be the company that provided the funds for the ILOC to secure
the construction ofthe OVernigh Lodging. This necessitates an amendment to the Agreement to reflect
the change in location of the 198 units of Overnight Lodging and to denote Weston as both the
Developer of those units and the holder of the related ILOC. This amendment will also extend the
Agreement for 2 years with the option for the developer to request up to three l-yr extensions.
CDD staff will provide the new Exhibits A, C, and H at the time of the Board meeting discussing IA
amendment.
FISCAL IMPLICATIONS:
The original amount of the security was in the form of a bond in the amount of $16,000,000. In 2008,
the Board of County Commissioners agreed to reduce the security to $8,690,000. In 2009, the
developer switched the bond for an Irrevocable Letter of Credit (ILOC). The current amendment
maintains that security amount. Staff asked Susan Ross, the County Property and Facilities director, to
review the current site plan and the cost estimate and to provide an opinion of whether the proposed
units can be built for the amount of security in the current ILOC. Her opinion was that it is not
adequate to build the number and type of units proposed and the number would be in excess of
$8,750,000.
Requiring an increase in the security, however, will likely result in the settlement arrived at among the
parties to faiL Having the lot owned by the same company that provided the security will more likely
result in the overnight lodging units being built. Additionally, all the parties have told County staff that
they want to see the units built because that is the only way for the resort to actually be viable.
RECOMMENDATION & ACTION REQUESTED:
Motion: Approval and signature of document No. 2012-485.
In the alternative, direct staff as to any amendments desired for the agreement or the security.
ATTENDANCE: Will Groves, Legal
DISTRIBUTION OF DOCUMENTS:
Original to Will Groves who will work with the applicant for recording in the County Official Records
and in the Commissioners Journal and placing the original ILOC extension in the Clerk's safe.
DESCHUTES COUNTY DOCUMENT SUMMARY
(NOTE: This form is required to be submitted with ALL contracts and other agreements, regardless of whether the document is to be
on a Board agenda or can be Signed by the County Administrator or Department Director. If the document is to be on a Board
agenda, the Agenda Request Form is also required. If this form is not included with the document, the document will be returned to
the Department. Please submit documents to the Board Secretary for tracking purposes, and not directly to Legal Counsel, the
County Administrator or the Commissioners. In addition to submitting this form with your documents, please submit this form
electronically to the Board Secretary.)
Please complete all sections above the Official Review line.
Date: :7/11/121 Department: ICDDI
Contractor/Supplier/Consultant Name: Weston Investment~
Contractor Contact: ISteven Hultbergl Contractor Phone #:
1541.585.36971
Type of Document: Amendment to Improvement Agreement. Amending Deschutes
County Contract No. 2007-380 to Extend the Tetherow Overnight Accommodations
Improvement Agreement for Two Years, Change the Location of the 198 units of
Overnight Lodging, and to Denote Weston Investment Co. LLC as Both the Developer
of Those Units and the Holder of the Related Irrevocable Letter of Credit..
Goods and/or Services: Financial security for overnight accomodations aproved under
SP-12-11.
Background & History: On July 23,2007, the Deschutes County Board of County
Commissioners ("Board") approved Improvement Agreement for the financial assurance
of the required 150 units of Overnight Lodging for the Tetherow Destination Resort
("Resort") on Tract AB of the Resort property. The County and Developer subsequently
amended the Agreement five times. Amendment Nos. 1 through 5 referenced above
allowed flexibility regarding the surety, increased the number of units of Overnight
Lodging subject to the Agreement from 150 to 198 units, revised the site plans, costs
estimates and financial assurance amount, revised the type of financial assurance to
substitute an Irrevocable Letter of Credit (the "ILOC") for the original surety bond, and
extended the date(s) of expiration of the Agreement several times.
VRE Lodge Homes, LLC, (VRE) and Weston Investment Co. LLC, (Weston) recently
entered into an agreement to transfer their respective landholdings within the resort and
gained approval for a site plan to develop the 198 units of Overnight Lodging on Tract
AA rather than Tract AB of the Resort property. Immediately following all signatures
obtained in the Agreement amendment, Weston will own and develop Tract AA, which
has received approval via Site Plan (SP-12-11) to transfer the 198 units of Overnight
Lodging from Tract AB to AA. VRE and Weston wish to amend the Agreement to reflect
the change in location of the 198 units of Overnight Lodging and to denote Weston as
both the Developer of those units and the holder of the related ILOC. This amendment
will also extend the Agreement for another 2 years ..
Agreement Starting Date: ~~ Ending Date: [ :L~
Annual Value or Total Payment: • tO I (}V1)
D Insurance Certificate Received (check box)
7116/2012
Insurance Expiration Date: <--I_-oJ
Check all that apply: o RFP, Solicitation or Bid Process o Informal quotes «$150K)
ty"Exempt from RFP, Solicitation O~Bid Process (specify -see DCC §2.37)
pJ.fL-() Cc. (<(. tl3. t1; ciA-I
Funding Source: {Included in current budget? 0 Yes 0 No ;J/4
If No, has budget amendment been submitted? 0 Yes 0 No
Is this a Grant Agreement providing revenue to the County? 0 Yes ~ No
Special conditions attached to this grant:
Deadlines for reporting to the grantor:
If a new FTE will be hired with grant funds, confirm that Personnel has been notified that
it is a grant-funded position so that this will be noted in the offer letter: 0 Yes ~No
Contact information for the person responsible for grant compliance:
Name:
Phone #:
'---------'
Departmental Contact and Title: Will Groves, Senior Planner
Phone #: x6518
Department Director Approval: ___________
Signature Date
Distribution of Document: Who gets the original document and/or copies after it has
been signed? Include complete information if the document is to be mailed.
Official Review:
County Signature Required {check one)~CC D Department Director (if <$25K)
, BOCC Order No. _____).
Date -yi/h ! "2../ .;
I
I•
D Administrator Of >$25K but <$150K; if >$150
~
Legal ~!"7tlIIII'1"f-__ ~
Document Number 2iJlz.,-lI Vcf
7/16/2012
Mary A. Hodge
Vice President
Commercial Real Estate
MAC P6101-l21
1300 SW 5th Avenue. 12th Floor
Portland, OR 97201
Tel: 5038863112
Fax: 5038861705
mary.ahodge@wellsfargocom
July 17, 2012
Deschutes County, Oregon
117 NW Lafayette
Bend, OR 97701
Attention: Deschutes County Planning Director
Re: Wells Fargo Bank, NA
Letter of Credit No. NZS648008
Dear Sir or Madam:
Wells Fargo hereby acknowledges it will not serve written notice of non~renewal of the expiration date
of the referenced letter of credit prior to its current expiry, September 30, 2012. Therefore, the current
expiration date of said letter of credit is hereby acknowledged to be September 30, 2013. This Letter of
Credit remains as valid security for the Improvement Agreement and all terms expressed in Amendment
NO.6.
Very truly yours,
WELLS FARGO BANK, N.A.
Mary Hodge
Vice President
cc; Keith Vernon
2154 NE Broadway
Portland, OR 97232
Together we'll go far
Well. Fargo BanI<, N A
REVIEWED
LEGAL COUNSEL
After recording, return to:
Deschutes County
Community Development Department
117 NW Lafayette Street For Recording Stamp Only
Bend, Oregon 97701
AMENDMENT NO.6 TO IMPROVEMENT AGREEMENT,
Deschutes County Document No. 2007-380 (Overnight Lodging)
That certain Improvement Agreement, Deschutes County Document No. 2007-380, recorded in the
Deschutes County Official records at 2007-53411, ("Agreement") by and between DESCHUTES
COUNTY OREGON, a political subdivision of the State of Oregon ("County") and ARROWOOD
DEVELOPMENT, LLC, an Oregon limited liability company, dated August 29, 2007, together with:
Amendment No.1, Deschutes County Document No. 2007-493, recorded in the Deschutes County
Official Records at 2007-53412;
Amendment No.2, Deschutes County Document No. 2008-576, recorded in the Deschutes County
Official Records at 2008-43806;
Amendment No.3, Deschutes County Document No. 2009-510, recorded in the Deschutes County
Official Records at 2009-42805;
Amendment No.4, Deschutes County Document No. 201 0-289, recorded in the Deschutes County
Official Records at 2010-37552; and
Amendment No.5, Deschutes County Document No. 2011-509, recorded in the Deschutes County
Official Records at 2011-29853;
is amended as set forth below, effective upon signature of all parties hereto ("Amendment No.6") and
those parties being DESCHUTES COUNTY OREGON ("County'), a political subdivision of the State
of Oregon ("County"), WESTON INVESTMENT CO. LLC ("Weston"), an Oregon limited liability
company, VRE BEND, LLC, a Missouri limited liability company ("VRE Bend"), VRE LODGE
HOMES, LLC ("VRE"), a Missouri limited liability company, the latter being the successor in interest
to Arrowood Development, LLC. All other provisions of the Agreement remain the same and in full
force.
RECITALS
1. On July 23, 2007, the Deschutes County Board of County Commissioners ("Board") approved
the Agreement.
2. The Agreement provided for the financial assurance of the required 150 units of Overnight
Lodging for the Tetherow Destination Resort ("Resort") on Tract AB ofthe Resort property.
3. The County and Developer subsequently amended the Agreement five times, as listed in the
first paragraph to this Amendment No.6.
Page 1 of 6 -AMENDMENT NO.6 TO IMPROVEMENT AGREEMENT, Deschutes County
Document No. 2012-485
4. Amendment Nos. 1 through 5 referenced above allowed flexibility regarding the surety,
increased the number of units of Overnight Lodging subject to the Agreement from 150 to 198
units, revised the site plans, costs estimates and financial assurance amount, revised the type of
financial assurance to substitute an Irrevocable Letter of Credit (the "ILOC") for the original
surety bond, and extended the date(s) of expiration of the Agreement several times.
5. Due to changes in ownership of the Resort parcel upon which the 198 units of Overnight
Lodging were approved, VRE signed Amendment Nos. 4 and 5 as the "Successor to
Developer."
6. Due to the substitution of the ILOC in place of the original surety bond, Weston and Wells
Fargo Bank, N.A., the facilitator and provider of the ILOC respectively, also signed
Amendment Nos. 4 and 5 to consent to the amendments.
7. VRE Bend, VRE and Weston recently entered into an agreement to transfer some of their
respective landholdings within the resort and gained approval for a site plan to develop the 198
units of Overnight Lodging on Tract AA rather than Tract AB of the Resort property.
8. At the time of the application for the site plan modification for Tracts AA and AB, Weston was
the Applicant and VRE Bend and VRE were the respective owners of said tracts for which the
site plan for the 198 units of Overnight Lodging ("OLUs") transferred the OLUs from Tract
AB to AA and was approved in Deschutes County File No. SP-12-II.
9. Immediately following completed signatures on this agreement, Weston will be the property
owner and Developer of Tract AA.
19. VRE Bend, VRE and Weston wish to amend the Agreement to reflect the change in location of
the 198 OLUs and to denote Weston as both the Developer of those units and the holder of the
related ILOC.
11. County, VRE Bend, VRE and Weston agree that all four parties are necessary signatories to
this Amendment No.6 but that the obligation to build the OLUs is solely the obligation of the
owner of Tract AA and the fLOC is applicable only to the obligation to build the OLUs on
Tract AA.
IT IS HEREBY AGREED BY AND BETWEEN COUNTY, VRE BEND, VRE AND
WESTON, for and in consideration of mutual promises hereinafter stated, as follows:
1. Recitals. The Recitals to the Agreement, Amendment Nos. 1 through 5 and the Recitals to this
Amendment No. 6 set forth above are hereby incorporated herein as if fully set out, shall
constitute contractual provisions and are not mere recitals.
Page 2 of 6 -AMENDMENT NO.6 TO IMPROVEMENT AGREEMENT, Deschutes County
Document No. 2012-485
2. Real Property Description.
2.1 County releases its interest in Tract AB, the real property that was the subject of the
Agreement and Amendment Nos. 1 through 5, described as approximately 11 acres
within Township 18 South, Range 11 East, Section 12, Tax Lot 2000, more particularly
described on Exhibit A attached to the Agreement.
2.2. The real property subject to the Agreement, as amended by this Amendment No.6,
shall be Tract AA, hereinafter the "Real Property," is described as: 12.189 acres within
Township 18 South, Range 11 East, Section 12, Tax Lot 2100 and Section 11, Tax Lot
100, more particularly described on Exhibit A, attached to this Amendment No.6.
3. Exhibits. The exhibits listed and attached to the Agreement and Amendment Nos. 1 through 5,
as amended below and attached to this Amendment No.6, are hereby incorporated herein by
reference.
3.1 Exhibit A -Legal description of Real Property, per Section 2.2 of this Amendment No.
6.
3.3 Exhibit C -Deschutes County Site Plan approval, File No. SP-12-11, replacing SP-07-6
attached to the Agreement.
3.6. Exhibit H -Verification by Wells Fargo of amendments to and extension of expiration
date of Irrevocable Letter of Credit No. NZS648008 consistent with this Amendment
No.6.
4. Identification of Overnight Lodging Required Improvements.
4.1 Developer shall complete, or cause to be installed and completed, the improvements
required by the land use approval in SP-12-11, set forth in Exhibit C, to the extent that
same remain to be completed ("Overnight Lodging Required Improvements").
4.2 These Overnight Lodging Required Improvements consist of 198 separate rentable units
for Overnight Lodging, as that term is defined in Deschutes County Code ("DCC")
19.04.040.
5. Construction of Overnight Lodging Required Improvements.
5.3 Developer shall cause the Overnight Lodging Required Improvements to be inspected
by and receive final written construction approval from County and/or the State of
Oregon not later than two (2) years from the date this Amendment No. 6 to the
Agreement is recorded in the Deschutes County Official Records ("Completion Date").
5.4 Developer may submit a written request to the County for up to three (3) one-year
extensions from the Completion Date for the completion of the Overnight Required
Improvements.
Page 3 of 6 -AMENDMENT NO.6 TO IMPROVEMENT AGREEMENT, Deschutes County
Document No. 2012-485
10. Right to Draw on Security
10.3 Should Developer fail to complete the Overnight Lodging Required Improvements
within the time period referred to in Section 10.2, then County may cause incomplete or
unsatisfactory Overnight Lodging Required Improvements to be completed.
10.4. Upon failure of the Developer to complete the Required Improvements by the
Applicable Completion Date set forth in Section 5, County may draw upon the Security
for any and all costs and expenses incurred or anticipated to be incurred by County, as
determined by County, in the completion of the applicable portion ofthe Overnight
Lodging Required Improvements.
29. Liens
29.4. The Agreement as amended by Amendments 1 through 6 shall have priority on the
subject property over all other interest holders other than the owner.
39. Notice
39.2. Delivery may be by personal delivery, facsimile, or mailing the same, postage prepaid.
c. Any communication or notice mailed shall be deemed delivered five (5) days
after mailing. If mailed, any notice under this Agreement shall be mailed by first
class postage or delivered as follows:
To Weston: To County:
Weston Investment Co. LLC County Administrator
2154 NE Broadway, Suite 200 Deschutes County Administration
Portland, OR 97232-1590 1300 NW Wall Street, Ste 200
Fax No. 503-284-5458 Bend, OR 97701
Fax No. 541-388-4752
To VRE Bend and/or VRE
Henry Warshaw
VRE Bend, L.L.C.
VRE Lodge Homes, L.L.C.
100 South Brentwood Boulevard, Suite 240
Clayton, Missouri 63105-1635
/1/
Page 4 of 6 -AMENDMENT NO.6 TO IMPROVEMENT AGREEMENT, Deschutes County
Document No. 2012-485
43. Release. County hereby relieves VRE and VRE Bend, the fonner owners ofTetherow
Development Tract AA, and their affiliates (collectively in this paragraph 43, "VRE") from any
and all obligations under this Agreement.
COUNTY:
Dated ______-', 2012 BOARD OF COUNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
ANTHONY DEB ONE, Chair
ALAN UNGER, Vice-Chair
ATTEST:
Recording Secretary TAMMY BANEY, Commissioner
STATE OF OREGON )
)ss.
County of Deschutes )
On , 2012, before me, a Notary Public, personally appeared ANTHONY
DEBONE, ALAN UNGER and TAMMY BANEY, the above-named Board of County Commissioners
of Deschutes County, Oregon, and acknowledged the foregoing instrument on behalf of Deschutes
County, Oregon.
Notary Public, State of Oregon
My Commission Expires: _____
(Signatures Continue on the Following Page)
Page 5 of 6 -AMENDMENT NO.6 TO IMPROVEMENT AGREEMENT, Deschutes County
Document No. 2012-485
WESTON: WESTON INVESTMENT CO. LLC, an Oregon
limited liability company
By: Weston Trust Corp., an Oregon corporation
Its: Manager
By:___________
Joseph E. Weston, Authorized Representative
STATE OF OREGON )
)ss.
County of )
The foregoing instrument was acknowledged before me this __ day of , 2012, by
Joseph E. Weston, President of Weston Trust Corp., Manager of Weston Investment Co. LLC, an
Oregon limited liability company, on its behalf.
Notary Public for Oregon
My commission expires: ______
VRE and VRE BEND: VRE LODGE HOMES, L.L.C., and
VRE BEND, LLC, each a Missouri limited liability
company
By: Ocala First Corporation, Inc, a Florida
corporation
Their: Manager
By:__________
Henry Warshaw, President
STATE OF MISSOURI
County ofSt. Louis
)
)ss.
)
The foregoing instrument was acknowledged before me this __ day of , 2012, by
Henry Warshaw, President of Ocala First Corporation, Inc, Manager of VRE Lodge Homes, LLC and
VRE Bend, L.L.C., each a Missouri limited liability company, on their behalf.
Notary Public for Missouri
My commission expires: ______
Page 6 of6 -AMENDMENT NO.6 TO IMPROVEMENT AGREEMENT, Deschutes County
Document No. 2012-485
Exhibit A
Legal Description of Tract AA
Development Tract AA, Tetherow Phase 1, Deschutes County, Oregon, according to the Plat of
Tetherow Phase 1 recorded in the official records of Deschutes County, Oregon on September
24,2007 in Plat Cabinet H at page 470 and as a Document No. 2007-51564.
Legal Description of Tract AB
All that portion ofland located in Section 12, Township 18 South, Range 11 East, Willamette
Meridian, in Deschutes County, Oregon, more particularly described as follows: Development
Tract AB ofTetherow, Phase 1, as per the plat thereof recorded in Volume 2007, Page 51564,
Official Records, Deschutes County, Oregon.
Page 1 of 1-Exhibit A to AMENDMENT NO.6 TO IMPROVEMENT AGREEMENT,
Deschutes County Document No. 2007-380 (Overnight Lodging), DC Doc No. 2012-485
